Exhibit 10.1

 

$60,000,000

 

ENPHASE ENERGY, INC.

 

4.00% Convertible Senior Notes due 2023

 

PURCHASE AGREEMENT

 

August 14, 2018

 

CREDIT SUISSE SECURITIES (USA) LLC,
As Representative of the Several Purchasers,
Eleven Madison Avenue,
New York, N.Y. 10010-3629

 

Dear Sirs:

 

1.                            Introductory. Enphase Energy, Inc., a Delaware
corporation (“Company”), agrees with the several initial purchasers named in
Schedule A hereto (“Purchasers”), subject to the terms and conditions stated
herein, to issue and sell to the several Purchasers U.S.$60,000,000 principal
amount of its 4.00% Convertible Senior Notes due 2023 (“Offered Securities”), to
be issued under an indenture, dated as of the Closing Date (“Indenture”),
between the Company and U.S. Bank National Association, as Trustee (the
“Trustee”). The Offered Securities will be convertible into shares of the
Company’s common stock, par value $0.00001 per share (“Common Stock”).

 

An entity affiliated with a director of the Company (the “Affiliated Purchaser”)
has agreed to purchase $5,000,000 aggregate principal amount of the Company’s
4.00% Convertible Senior Notes due 2023 (the “Affiliate Securities”) in a
separate private placement pursuant to the exemption from registration under the
Securities Act provided by Section 4(a)(2) thereof.

 

2.                            Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, the several Purchasers
that:

 

(a)                            Offering Memoranda; Certain Defined Terms.  The
Company has prepared or will prepare the Preliminary Offering Memorandum and the
Final Offering Memorandum.

 

For purposes of this Agreement:

 

“Applicable Time” means 6:35 PM (Eastern time) on the date of this Agreement.

 

“Closing Date” has the meaning set forth in Section 3 hereof.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended.

 

“Exchange Act Reports” means the Company’s Annual Report on Form 10-K most
recently filed with the Commission and all subsequent reports (including
exhibits to the extent incorporated by reference as set forth below) filed by
the Company under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof and which are incorporated by reference in the Preliminary
Offering Memorandum, the Final Offering Memorandum or any Free Writing
Communication, as applicable.

 

“Final Offering Memorandum” means the final offering Memorandum relating to the
Offered Securities to be offered by the Purchasers that discloses the offering
price and other final terms of the Offered Securities and is dated as of the
date of this Agreement (even if finalized and issued subsequent to the date of
this Agreement), including the Exchange Act Reports and any other information
incorporated by reference therein.

 

“Free Writing Communication” means a written communication (as such term is
defined in Rule 405) that constitutes an offer to sell or a solicitation of an
offer to buy the Offered Securities and is made by means other than the
Preliminary Offering Memorandum or the Final Offering Memorandum, including the
Exchange Act Reports.

 

“General Disclosure Package” means the Preliminary Offering Memorandum together
with any Issuer Free Writing Communication existing at the Applicable Time and
the information in which is intended for general distribution to prospective
investors, as evidenced by it being specified in Schedule B hereto.

 

“General Solicitation” means any offer to sell or solicitation of an offer to
buy the Offered Securities by any form of general solicitation or advertising
(as those terms are used in Regulation D under the Securities Act).

 

“Issuer Free Writing Communication” means a Free Writing Communication prepared
by or on behalf of the Company, used or referred to by the Company or containing
a description of the final terms of the Offered Securities or of their offering,
in the form retained in the Company’s records.

 

“Preliminary Offering Memorandum” means the preliminary offering memorandum,
dated August 14, 2018, relating to the Offered Securities to be offered by the
Purchasers, including the Exchange Act Reports and any other information
incorporated by reference therein.

 

“Rules and Regulations” means the rules and regulations of the Commission.

 

“Securities Act” means the United States Securities Act of 1933, as amended.

 

“Securities Laws” means, collectively, the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”), the Securities Act, the Exchange Act, the Rules and

 

2

--------------------------------------------------------------------------------

 

Regulations, the auditing principles, rules, standards and practices applicable
to auditors of “issuers” (as defined in the Sarbanes-Oxley Act) promulgated or
approved by the Public Company Accounting Oversight Board and, as applicable,
the rules of The Nasdaq Stock Market LLC (“Exchange Rules”).

 

“Significant Subsidiary” has the meaning set forth in Article 1, Rule 1-02 of
Regulation S-X promulgated by the Commission, but excludes Enphase Energy,
S.r.l.

 

“Supplemental Marketing Material” means any Issuer Free Writing Communication
other than any Issuer Free Writing Communication specified in Schedule B hereto.
Supplemental Marketing Materials include, but are not limited to, any Issuer
Free Writing Communication listed on Schedule C hereto.

 

“Underlying Shares” shall mean shares of the Common Stock into which the Offered
Securities are convertible.

 

Unless otherwise specified, a reference to a “rule” is to the indicated
rule under the Securities Act.

 

(b)                            Disclosure.  As of its date, the Final Offering
Memorandum does not, and as of the Closing Date, the Final Offering Memorandum
will not, include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.  At the Applicable
Time, neither (i) the General Disclosure Package, nor (ii) any General
Solicitation that is not a Free Writing Communication, made by the Company or by
any Purchaser with the consent of the Company, nor (iii) individual Supplemental
Marketing Material, when considered together with the General Disclosure
Package, included any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
preceding two sentences do not apply to statements in or omissions from the
Preliminary Offering Memorandum or Final Offering Memorandum, the General
Disclosure Package, any General Solicitation or any Supplemental Marketing
Material based upon written information furnished to the Company by any
Purchaser through the Representative specifically for use therein, it being
understood and agreed that the only such information is that described as such
in Section 8(b) hereof. Except as disclosed in the General Disclosure Package,
on the date of this Agreement, the Exchange Act Reports which have been filed by
the Company with the Commission or sent to stockholders pursuant to the Exchange
Act and incorporated by reference in the Preliminary Offering Memorandum or the
Final Offering Memorandum do not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. Such
documents, when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the Rules and Regulations
thereunder.

 

3

--------------------------------------------------------------------------------

 

(c)                             Good Standing of the Company. The Company has
been duly incorporated and is existing and in good standing under the laws of
the State of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the General Disclosure
Package; and the Company is duly qualified to do business as a foreign
corporation and is in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on assets, business,
operations, earnings, properties, condition (financial or otherwise), prospects,
stockholders’ equity (as set forth on the Company’s most recent balance sheet
included in the Exchange Act Reports) or results of operations of the Company
and its subsidiaries taken as a whole, or prevent the consummation of the
transactions contemplated hereby (a “Material Adverse Effect”).

 

(d)                            Subsidiaries. Each Significant Subsidiary of the
Company has been duly incorporated and is existing and in good standing under
the laws of the jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the General Disclosure Package (in each case to the extent such
concepts (or functional equivalents) are applicable in the jurisdiction of
organization of any such Significant Subsidiary); and each Significant
Subsidiary of the Company is duly qualified to do business as a foreign
corporation and is in good standing in all other jurisdictions (in each case to
the extent such concepts (or functional equivalents) are applicable in the
jurisdiction of organization of any such Significant Subsidiary) in which its
ownership or lease of property or the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect; all of the issued and
outstanding capital stock of each Significant Subsidiary of the Company has been
duly authorized and validly issued and is fully paid and non-assessable (in each
case to the extent such concepts (or functional equivalents) are applicable in
the jurisdiction of organization of any such Significant Subsidiary); and,
except as described otherwise in the General Disclosure Package or the Final
Offering Memorandum, the capital stock of each Significant Subsidiary owned by
the Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.

 

(e)                             Indenture.  The Indenture has been duly
authorized by the Company; the Offered Securities have been duly authorized by
the Company; and when the Offered Securities are delivered and paid for pursuant
to this Agreement on the Closing Date, the Indenture will have been duly
executed and delivered, such Offered Securities will have been duly executed,
authenticated, issued and delivered, will conform to the description thereof
contained in the General Disclosure Package, the Final Offering Memorandum and
the Indenture and such Offered Securities will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles, and
entitled to the benefits provided by the Indenture.

 

4

--------------------------------------------------------------------------------

 

(f)                              Offered Securities.  When the Offered
Securities are delivered and paid for in accordance with this Agreement on the
Closing Date, such Offered Securities will be convertible into the Underlying
Shares in accordance with the terms of the Indenture and the Offered Securities;
the maximum number of Underlying Shares initially issuable upon conversion of
such Offered Securities, after taking into account the maximum make-whole
adjustment (the “Conversion Shares”) have been duly authorized and reserved for
issuance upon such conversion, and when issued upon conversion of the Offered
Securities in accordance with the terms of the Indenture and the Offered
Securities, will conform in all material respects to the description of the
Underlying Shares contained in the General Disclosure Package and the Final
Offering Memorandum; the authorized equity capitalization of the Company is as
set forth in the General Disclosure Package; all outstanding shares of capital
stock of the Company are, and when the Underlying Shares have been issued upon
conversion of the Offered Securities in accordance with the terms of the
Indenture and the Offered Securities, the Underlying Shares will be, validly
issued, fully paid and non-assessable; the stockholders of the Company have no
preemptive rights with respect to the issuance by the Company of the Offered
Securities or the Underlying Shares, and none of the outstanding shares of
capital stock of the Company have been issued by the Company in violation of any
preemptive or similar rights of any security holder. The Company has also duly
authorized and reserved for issuance the maximum number of shares of Common
Stock initially issuable upon conversion of the Affiliate Securities, after
taking into account the maximum make-whole adjustment with respect to such
securities.

 

(g)                             No Finder’s Fee. Except as disclosed in the
General Disclosure Package, there are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid claim against
the Company or any Purchaser for a brokerage commission, finder’s fee or other
like payment in connection with this offering.

 

(h)                            Absence of Further Requirements. No consent,
approval, authorization, or order of, or filing or registration with, any person
(including any governmental agency or body or any court) is required to be
obtained or made by the Company for the consummation of the transactions
contemplated by this Agreement or the Indenture in connection with the offering,
issuance and sale of the Offered Securities and Underlying Shares by the
Company, except such as have been obtained or made, and such as may be required
under state securities laws.

 

(i)                                Title to Property. The Company and each of
its Significant Subsidiaries have good and marketable title to all personal
property owned by them (excluding Intellectual Property except to the extent
otherwise covered in this Agreement) that are material to the businesses of the
Company or such Significant Subsidiary, in each case free and clear of all
liens, encumbrances and claims, except as described in the General Disclosure
Package or the Final Offering Memorandum, and except those that (i) do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
any of its Subsidiaries or (ii) would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect. Any personal property
described in the General

 

5

--------------------------------------------------------------------------------

 

Disclosure Package or the Final Offering Memorandum as being leased by the
Company and any of its Subsidiaries is held by them under valid, existing and
enforceable leases, with only such exceptions with respect to any particular
lease as do not interfere in any material respect with the conduct of the
business as conducted by them. Neither the Company nor any of its Significant
Subsidiaries owns any real property.

 

(j)                               Absence of Defaults and Conflicts Resulting
from Transaction.  The execution, delivery and performance of the Indenture and
this Agreement by the Company and the issuance and sale of the Offered
Securities and Underlying Shares and the Affiliate Securities and the shares of
Common Stock issuable upon conversion of the Affiliate Securities and compliance
with the terms and provisions thereof will not result in a breach or violation
of any of the terms and provisions of, or constitute a default or a Debt
Repayment Triggering Event (as defined below) under, or result in the imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, (i) the charter or by-laws of the Company
or any of its Significant Subsidiaries, (ii) any statute, rule, regulation or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any of its subsidiaries or any of their
properties, or (iii) any agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the properties of the Company or any of its
subsidiaries is subject, except in the case of clauses (ii) and (iii) for any
breach, violation, default, lien, charge or encumbrance for which waivers or
consents have been obtained as of the Applicable Time or that would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; a “Debt Repayment Triggering Event” means any event or condition
that gives, or with the giving of notice or lapse of time would give, the holder
of any note, debenture, or other evidence of indebtedness (or any person acting
on such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of its
subsidiaries.

 

(k)                            Absence of Existing Defaults and Conflicts.
Neither the Company nor any of its Significant Subsidiaries is (i) in violation
of its charter or by-laws or similar organizational documents; (ii) in default,
and no event or condition has occurred that with the giving of notice or lapse
of time would cause the Company or any of its Subsidiaries to be in default,
under any existing obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other similar agreement or
instrument to which the Company or any of its Significant Subsidiaries is a
party or by which the Company or any of its Significant Subsidiaries is bound or
to which any of the property or assets of the Company or any of its Significant
Subsidiaries are subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of each of clauses (ii) and
(iii) above, for any such violation or default that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. To
the Company’s knowledge, no other party under any material contract or other
agreement to which it or any of its Significant Subsidiaries is a party is in
default in any respect thereunder where such default would have a Material
Adverse Effect.

 

6

--------------------------------------------------------------------------------

 

(l)                                Authorization of Agreement. This Agreement
has been duly authorized, executed and delivered by the Company.

 

(m)                        Possession of Licenses and Permits. The Company and
each of its subsidiaries possess or have obtained, all licenses, certificates,
consents, orders, approvals, permits and other authorizations issued by the
appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as currently conducted,
as described in the General Disclosure Package or the Final Offering Memorandum
(the “Permits”), except where such failure would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Neither the
Company nor any of its subsidiaries have received written notice of any
proceeding relating to revocation or modification of any such Permit or has any
reason to believe that such Permit will not be renewed in the ordinary course,
except where the failure to obtain any such renewal would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(n)                            Absence of Labor Dispute. No material labor
dispute with the employees of the Company or any of its Significant Subsidiaries
exists, except as described in the General Disclosure Package, or, to the
knowledge of the Company, is imminent; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors that would reasonably be
expected to have a Material Adverse Effect.

 

(o)                            Intellectual Property. To its knowledge, the
Company and its Significant Subsidiaries own or possess adequate rights to use
all patents, patent applications, trademarks (both registered and unregistered),
service marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) (collectively, the “Intellectual Property”), necessary for the
conduct of their respective businesses as conducted as of the date hereof,
except to the extent that the failure to own or possess adequate rights to use
such Intellectual Property would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; neither the Company
nor any of its Significant Subsidiaries have received any written notice of any
claim of infringement or conflict which asserted Intellectual Property rights of
others, which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Effect; there are no pending, or to
the Company’s knowledge, threatened judicial proceedings or interference
proceedings against the Company or its Significant Subsidiaries challenging the
Company’s or its Significant Subsidiaries’ rights in or to or the validity of
the scope of any of the Company’s or its Significant Subsidiaries’ owned
material patents, patent applications or proprietary information; to the
Company’s knowledge, no other entity or individual has any right or claim in any
of the Company’s or its Significant Subsidiaries’ owned material patents, patent
applications or any patent to be issued therefrom by virtue of any contract,
license or other agreement entered into between such entity or individual and
the Company or a Significant Subsidiary or by any non-contractual obligation of
the

 

7

--------------------------------------------------------------------------------

 

Company or a Significant Subsidiary, other than by written licenses granted by
the Company or a Significant Subsidiary and other than such rights or claims
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect; the Company and its Subsidiaries have not received
any written notice of any claim challenging the rights of the Company or a
Significant Subsidiary in or to any Intellectual Property owned, licensed or
optioned by the Company or such Significant Subsidiary which claim, if the
subject of an unfavorable decision, would result in a Material Adverse Effect.

 

(p)                            Environmental Laws. The Company and its
Significant Subsidiaries (i) are in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as described in the
General Disclosure Package and the Final Offering Memorandum; and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except, in the case of any of clauses (i),
((ii) or (iii) above, for any such failure to comply or failure to receive
required permits, licenses, other approvals or liability as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

(q)                            Accurate Disclosure.  The statements in the
General Disclosure Package and the Final Offering Memorandum under the headings
“Certain U.S. Federal Income Tax Considerations,” “Description of Notes” and
“Description of Capital Stock,” insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein, are in all
material respects accurate and fair summaries of such legal matters, agreements,
documents or proceedings and present the information required to be shown.

 

(r)                               Absence of Manipulation. The Company has not
taken, directly or indirectly, any action that is designed to or that has
constituted or that would reasonably be expected to cause or result in the
stabilization or manipulation of the price of the Common Stock or any other
security of the Company to facilitate the sale or resale of the Offered
Securities or the Affiliate Securities; provided, however, that no
representation is made with regard to any actions of the Purchasers.

 

(s)                              Statistical and Market-Related Data. Nothing
has come to the attention of the Company that has caused the Company to believe
that the statistical and market-related data included or incorporated by
reference in each of the General Disclosure Package and the Final Offering
Memorandum is not based on or derived from sources that are reliable and
accurate in all material respects.

 

8

--------------------------------------------------------------------------------

 

(t)                               Internal Controls and Compliance with the
Sarbanes-Oxley Act.

 

(i)                                          The Company maintains a system of
internal accounting controls designed to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles in the United States (“GAAP”) and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company’s internal control over financial reporting is effective and the Company
is not aware of any material weaknesses in its internal control over financial
reporting. Since the date of the latest audited financial statements of the
Company included in the General Disclosure Package and the Final Offering
Memorandum, there has been no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting
(other than as set forth in the General Disclosure Package and the Final
Offering Memorandum). The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) that comply with
the requirements of the Exchange Act.

 

(ii)                                       There is and has been no failure on
the part of the Company or, to the knowledge of the Company, any of the
Company’s directors or officers, in their capacities as such, to materially
comply with any applicable provisions of the Sarbanes-Oxley Act and the
rules and regulations promulgated thereunder. Each of the principal executive
officer and the principal financial officer of the Company (or each former
principal executive officer of the Company and each former principal financial
officer of the Company as applicable) has made all certifications required by
Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports,
schedules, forms, statements and other documents required to be filed by it or
furnished by it to the Commission during the past 12 months. For purposes of the
preceding sentence, “principal executive officer” and “principal financial
officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

 

(u)                            Legal and Governmental Proceedings. Except as
described in the General Disclosure Package and the Final Offering Memorandum
(including the Exchange Act Reports), there are no legal, governmental or
regulatory actions, suits or proceedings pending, nor, to the Company’s
knowledge, any legal, governmental or regulatory investigations, to which the
Company or any of its subsidiaries is a party or to which any property of the
Company or any of its subsidiaries is the subject that, individually or in the
aggregate, if determined adversely to the Company or any of its subsidiaries,
would reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform its obligations under
this Agreement; to the Company’s knowledge, no such actions, suits or
proceedings are threatened or contemplated by any governmental or regulatory
authority or threatened by others that,

 

9

--------------------------------------------------------------------------------

 

individually or in the aggregate, if determined adversely to the Company or any
of its Subsidiaries, would reasonably be expected to have a Material Adverse
Effect; and there are no current or pending legal, governmental or regulatory
actions, suits or proceedings or, to the Company’s knowledge, investigations
that would be required under the Securities Act to be described in the General
Disclosure Package and the Final Offering Memorandum if the offer and sale of
the Offered Securities and Underlying Securities were registered under the
Securities Act that are not so described in the General Disclosure Package and
the Final Offering Memorandum (including the Exchange Act Reports).

 

(v)                            Financial Statements.  The consolidated financial
statements of the Company included or incorporated by reference in the General
Disclosure Package and the Final Offering Memorandum, together with the related
notes and schedules, present fairly, in all material respects, the consolidated
financial position of the Company and its subsidiaries as of the dates indicated
and the consolidated results of operations, cash flows and changes in
stockholders’ equity of the Company and its subsidiaries for the periods
specified (subject, in the case of unaudited statements, to normal year-end
audit adjustments) and have been prepared in compliance with the requirements of
the Securities Act and Exchange Act, as applicable, and in conformity with GAAP
applied on a consistent basis (except for such adjustments to accounting
standards and practices as are noted therein and except in the case of unaudited
financial statements to the extent they may exclude footnotes or may be
condensed or summary statements) during the periods involved; the other
financial and statistical data with respect to the Company and its subsidiaries
contained or incorporated by reference in the General Disclosure Package and the
Final Offering Memorandum are accurately and fairly presented and prepared on a
basis consistent with the financial statements and books and records of the
Company; there are no financial statements (historical or pro forma) that would
be required to be included or incorporated by reference in the General
Disclosure Package and the Final Offering Memorandum if the offer and sale of
the Offered Securities and the Underlying Securities were registered under the
Securities Act that are not included or incorporated by reference in the General
Disclosure Package and the Final Offering Memorandum; and the Company and its
subsidiaries do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not described in the
General Disclosure Package and the Final Offering Memorandum.

 

(w)                          No Material Adverse Change in Business. Since the
date of the most recent financial statements of the Company included or
incorporated by reference in the General Disclosure Package and the Final
Offering Memorandum, there has not been (i) any Material Adverse Effect,
(ii) any transaction which is material to the Company and  its subsidiaries
taken as a whole, (iii) any obligation or liability, direct or contingent
(including any off-balance sheet obligations), incurred by the Company or any
Significant Subsidiary, which is material to the Company and its subsidiaries
taken as a whole, (iv) any material change in the capital stock (other than
(A) the grant of additional stock awards under the Company’s existing equity
incentive plans or employee stock purchase plan disclosed in the Exchange Act
Reports, (B) changes in the number of outstanding shares of Common Stock of the
Company due to the issuance of shares upon

 

10

--------------------------------------------------------------------------------

 

the exercise or conversion of securities exercisable for, or convertible into,
Common Stock outstanding on the date hereof, (C) as a result of the issuance or
conversion of the Offered Securities or (D) otherwise publicly announced) or
outstanding long-term indebtedness of the Company or any of its Significant
Subsidiaries or (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company or any such Significant Subsidiary,
other than in each case above (1) in the ordinary course of business, in the
case of any such Significant Subsidiary or (2) as otherwise disclosed in the
General Disclosure Package and the Final Offering Memorandum.

 

(x)                                 Investment Company Act. Neither the Company
nor any of its Significant Subsidiaries is or, after giving effect to the offer
and sale of the Offered Securities or the Affiliate Securities, will be an
“investment company” or an entity “controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as amended (the
“Investment Company Act”).

 

(y)                                 Tax Matters. The Company and each of its
Significant Subsidiaries have filed all federal, state, local and foreign tax
returns which have been required to be filed or has requested extensions
thereof, except where the failure to file would not, individually or in the
aggregate, have a Material Adverse Effect, and paid all taxes required to be
paid thereon (except for cases in which the failure to pay would not have a
Material Adverse Effect, or, except as currently being contested in good faith
and for which reserves required by U.S. GAAP have been created in the financial
statements of the Company). No tax deficiency has been determined adversely to
the Company or any of its Significant Subsidiaries which has had, or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Company has no knowledge of any federal, state or other
governmental tax deficiency, penalty or assessment which has been asserted or
threatened against it which would have a Material Adverse Effect.

 

(z)                                  No Unlawful Payments. Neither the Company
nor, to the Company’s knowledge, any director, officer, employee, agent, or
representative of the Company, has taken or, with respect to the Company, will
take any action in furtherance of an offer, payment, promise to pay, or
authorization or approval of the payment or giving of money, property, gifts or
anything else of value, directly or indirectly, to any “government official”
(including any officer or employee of a government or government-owned or
controlled entity or of a public international organization, or any person
acting in an official capacity for or on behalf of any of the foregoing, or any
political party or party official or candidate for political office) to
influence official action or secure an improper advantage; and the Company has
conducted its business in compliance with applicable anti-corruption laws and
has instituted and maintained and will continue to maintain policies and
procedures designed to promote and achieve compliance with such laws and with
the representation and warranty contained herein.

 

(aa)                          Compliance with Anti-Money-Laundering Laws. The
operations of the Company and its subsidiaries are and have been conducted at
all times in material compliance with all applicable financial recordkeeping and
reporting requirements,

 

11

--------------------------------------------------------------------------------

 

including those of the Bank Secrecy Act, as amended by Title III of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable
anti-money laundering statutes of jurisdictions where the Company and its
subsidiaries conduct business, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Anti-Money Laundering
Laws”), and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or its
subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to
the best knowledge of the Company, threatened.

 

(bb)                          Compliance with Sanctions. (i)  Neither the
Company nor any of its Subsidiaries (collectively, the “Entity”) or, to the
Company’s knowledge, any director, officer, employee, agent, affiliate or
representative of the Entity, is a government, individual, or entity (in this
Section 2(bb), “Person”) that is, or is owned or controlled by a Person that is:

 

(A)                               currently the subject of any sanctions
administered or enforced by the U.S. Department of Treasury’s Office of Foreign
Assets Control, the United Nations Security Council, the European Union, Her
Majesty’s Treasury, the Swiss Secretariat of Economic Affairs or other relevant
sanctions authority (collectively, “Sanctions”), nor

 

(B)                               located, organized or resident in a country or
territory that is the subject of Sanctions.

 

(ii)                                            The Company represents and
covenants that the Entity will not, directly or indirectly, knowingly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other Person:

 

(A)                               to fund or facilitate any activities or
business of or with any Person or in any country or territory that, at the time
of such funding or facilitation, is the subject of Sanctions; or

 

(B)                               in any other manner that will result in a
violation of Sanctions by any Person (including any Person participating in the
offering, whether as underwriter, advisor, investor or otherwise).

 

(iii)                                         The Company represents and
covenants that, except as detailed in the General Disclosure Package and the
Final Offering Memorandum, for the past five years, the Entity has not knowingly
engaged in and is not now knowingly engaged in, any dealings or transactions
with any Person, or in any country or territory, that at the time of the dealing
or transaction is or was the subject of Sanctions.

 

12

--------------------------------------------------------------------------------

 

(cc)                            No Rated Securities. There are no debt
securities or preferred stock of, or guaranteed by, the Company that are rated
by a “nationally recognized statistical rating organization,” as such term is
defined in Section 3(a)(62) of the Exchange Act.

 

(dd)                          Insurance. Except as described in the General
Disclosure Package and the Final Offering Memorandum, the Company and each of
its Significant Subsidiaries carry, or are covered by, insurance in such amounts
and covering such risks as the Company and each of its Significant Subsidiaries
reasonably believe are adequate for the conduct of their business, as customary
for companies of similar size engaged in similar businesses in similar
industries.

 

(ee)                            Class of Securities Not Listed.  No securities
of the same class (within the meaning of Rule 144A(d)(3) under the Securities
Act) as the Offered Securities or the Affiliate Securities are listed on any
national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.

 

(ff)                              No Registration.  The offer and sale of the
Offered Securities by the Company to the several Purchasers and the initial
resale of the Offered Securities by the several Purchasers in the manner
contemplated by the Offering Memorandum will be exempt from the registration
requirements of the Securities Act; and it is not necessary to qualify the
Indenture under the United States Trust Indenture Act of 1939, as amended,
except in connection with any shelf registration statement the Company is
obligated to file in connection with the Affiliate Securities. Upon any
qualification of the Indenture under the Trust Indenture Act, the Indenture will
comply in all material respects with the requirements of the Trust Indenture
Act.

 

(gg)                            General Solicitation.  Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf has
(i) within the six-month period prior to the date hereof, offered or sold in the
United States or to any U.S. person (as such terms are defined in the Securities
Act) the Offered Securities or any security of the same class or series as the
Offered Securities or (ii) offered or will offer or sell the Offered Securities
by means of any General Solicitation that is not a Free Writing Communication
other than General Solicitations listed on Schedule B hereto or those made with
the prior written consent of the Representative. The Company has not entered and
will not enter into any contractual arrangement with respect to the distribution
of the Offered Securities except for this Agreement.

 

(hh)                          Reporting Status.  The Company is subject to
Section 13 or 15(d) of the Exchange Act.

 

3.                            Purchase, Sale and Delivery of Offered Securities.
On the basis of the representations, warranties and agreements and subject to
the terms and conditions set forth herein, the Company agrees to sell to the
several Purchasers, and each of the Purchasers agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 97.0% of the
principal amount thereof plus accrued interest, if any, from August 17, 2018 to
the Closing Date,

 

13

--------------------------------------------------------------------------------

 

the respective principal amounts of Offered Securities set forth opposite the
names of the several Purchasers in Schedule A hereto.

 

The Company will deliver the Offered Securities to or as instructed by the
Representative for the accounts of the several Purchasers in a form reasonably
acceptable to the Representative against payment of the purchase price by the
Purchasers in Federal (same day) funds by wire transfer to an account at a bank
acceptable to the Representative drawn to the order of the Company at the office
of Davis Polk & Wardwell, LLP, 1600 El Camino Real, Menlo Park, California
94025, at 10:00 a.m., New York time, on August 17, 2018, or at such other time
not later than seven full business days thereafter as the Representative and the
Company determine, such time being herein referred to as the “Closing Date.” For
purposes of Rule 15c6-1 under the Exchange Act, the Closing Date (if later than
the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Offered Securities sold
pursuant to the offering. The Offered Securities so to be delivered or evidence
of their issuance will be made available for checking at the above office of
Davis Polk & Wardwell LLP at least 24 hours prior to the Closing Date.

 

4.                            Representations by Purchasers; Resale by
Purchasers.  (a) Each Purchaser severally represents and warrants to the Company
that it is a qualified institutional buyer within the meaning of Rule 144A under
the Securities Act and it is an “accredited investor” within the meaning of
Regulation D under the Securities Act.

 

(b)                                 Each Purchaser severally acknowledges that
the Offered Securities have not been registered under the Securities Act and may
not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except pursuant to an exemption from the registration
requirements of the Securities Act.  Each Purchaser severally represents and
agrees that it has offered and sold the Offered Securities, and will offer and
sell the Offered Securities only in accordance with Rule 144A under the
Securities Act.  Accordingly, such Purchaser, its affiliates and all persons
acting on its or their behalf have complied and will comply with the offering
restrictions requirements of Rule 144A under the Securities Act.

 

(c)                                  Each Purchaser severally agrees that it and
each of its affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities except
for any such arrangements with the other Purchasers or affiliates of the other
Purchasers or with the prior written consent of the Company.

 

(d)                                 Each Purchaser severally agrees that it and
each of its affiliates will not offer or sell the Offered Securities by means of
any form of General Solicitation, other than a permitted communication listed on
Schedule B.  Each Purchaser severally agrees, with respect to the initial
resales made by such Purchaser in reliance on Rule 144A of any of the Offered
Securities, to deliver either with the confirmation of such resale or otherwise
prior to settlement of such resale a notice to the effect that the resale of
such Offered Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A
thereunder.

 

14

--------------------------------------------------------------------------------

 

5.                            Certain Agreements of the Company. The Company
agrees with the several Purchasers that:

 

(a)                                 Amendments and Supplements to Offering
Memoranda.  The Company will promptly advise the Representative of any proposal
to amend or supplement the Preliminary Offering Memorandum or Final Offering
Memorandum and will not effect any such amendment or supplement to which the
Representative reasonably objects; provided that the Company may effect any such
amendment or supplement constituting a filing under the Exchange Act that, in
the opinion of counsel, is required by law. If, at any time prior to the
completion of the initial resale of the Offered Securities by the Purchasers,
there occurs an event or development as a result of which any document included
in the Preliminary Offering Memorandum or Final Offering Memorandum, the General
Disclosure Package or any Supplemental Marketing Material, if republished
immediately following such event or development, included or would include an
untrue statement of a material fact or omitted or would omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, the Company
promptly will notify the Representative of such event and promptly will prepare
and furnish, at its own expense, to the Purchasers and to any dealers at the
request of the Representative, an amendment or supplement which will correct
such statement or omission. Neither the Representative’s consent to, nor the
Purchasers’ delivery to offerees or investors of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 7.

 

(b)                                 Furnishing of Offering Memoranda.  The
Company will furnish to the Representative copies of the Preliminary Offering
Memorandum, each other document comprising a part of the General Disclosure
Package, the Final Offering Memorandum, all amendments and supplements to such
documents and each item of Supplemental Marketing Material, in each case as soon
as available and in such quantities as the Representative reasonably requests.
At any time when the Company is not subject to Section 13 or 15(d) of the
Exchange Act, the Company will promptly furnish or cause to be furnished, upon
request of holders and prospective purchasers of the Offered Securities, to such
holders and purchasers, copies of the information required to be delivered to
holders and prospective purchasers of the Offered Securities pursuant to
Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) in
order to permit compliance with Rule 144A under the Securities Act in connection
with resales by such holders of the Offered Securities. The Company will pay the
expenses of printing and distributing to the holders or prospective purchasers
of the Offered Securities all such documents.

 

(c)                                  General Solicitations. The Company will
furnish to the Representative any proposed General Solicitation to be made by
the Company or on its behalf before its use, and will not make or use any
proposed General Solicitation without the Representative’s prior written
consent.

 

(d)                                 Blue Sky Qualifications. The Company will
arrange for the qualification of the Offered Securities for sale and the
determination of their eligibility for investment

 

15

--------------------------------------------------------------------------------

 

under the laws of such jurisdictions as the Representative designates and will
continue such qualifications in effect so long as required for the initial
resale of the Offered Securities by the Purchasers; provided, that, in
connection therewith, the Company will not be required to file a general consent
to service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified, or subject
itself to taxation for doing business in any jurisdiction in which it is not
otherwise so subject.

 

(e)                                  Reporting Requirements. For so long as the
Offered Securities remain outstanding, the Company will furnish, upon request,
to the Representative and to each of the other Purchasers, as soon as
practicable after the end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish, upon request, to the
Representative (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as the Representative may reasonably request;
provided, that, if the Representative shall request nonpublic confidential
information, the Company shall only be required to provide the Representative
with such information if the Representative shall enter into a customary
confidentiality agreement with the Company with respect thereto. However, so
long as the Company is subject to the reporting requirements of either
Section 13 or Section 15(d) of the Exchange Act and is timely filing reports
with the Commission on its Electronic Data Gathering, Analysis and Retrieval
system, it is not required to furnish such reports or statements to the
Representative or the Purchasers.

 

(f)                                   Transfer Restrictions.  At any time when
any Offered Securities are deemed “restricted securities” under Rule 144, the
Company will inform the Representative, each of the other Purchasers and, upon
request, any holder of Offered Securities if any event has occurred that would
result in additional interest being payable on such Offered Securities under the
terms of the Indenture as a result of such securities not being “freely
tradable” (as defined in the Indenture).

 

(g)                                  No Resales by Affiliates.  The Company will
not, and will not permit any of its “controlled” affiliates (as defined in
Rule 144) to, resell any of the Offered Securities that have been reacquired by
any of them, except for Offered Securities purchased by the Company or any such
affiliates and resold in a transaction registered under the Securities Act or
pursuant to an exemption from the registration requirements of the Securities
Act in a transaction that results in such Offered Securities no longer being
deemed “restricted securities” under Rule 144. For the avoidance of doubt, these
restrictions shall not apply with respect to the purchase by the Affiliated
Purchaser of the Affiliate Securities from the Company.

 

(h)                                 Investment Company.  During the period of
one year after the Closing Date, the Company will not be or become, an open-end
investment company, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the Investment
Company Act.

 

16

--------------------------------------------------------------------------------

 

(i)                                     Payment of Expenses. The Company will
pay all expenses incident to the performance of its obligations under this
Agreement and the Indenture, including but not limited to (i) the fees and
expenses of the Trustee and its professional advisers; (ii) all expenses in
connection with the execution, issue, authentication, packaging and initial
delivery of the Offered Securities, the preparation and printing of this
Agreement, the Offered Securities, the Indenture, the Preliminary Offering
Memorandum, any other documents comprising any part of the General Disclosure
Package, the Final Offering Memorandum, all amendments and supplements thereto,
each item of Supplemental Marketing Material and any other document relating to
the issuance, offer, sale and delivery of the Offered Securities; (iii) the cost
of any advertising approved in advance by the Company in connection with the
issue of the Offered Securities; (iv) any expenses (including fees and
disbursements of counsel to the Purchasers) incurred in connection with
qualification of the Offered Securities for sale under the laws of such
jurisdictions in the United States and Canada as the Representative designates
and the preparation and printing of memoranda relating thereto; provided that
the amount payable by the Company with respect to fees and disbursements of
counsel for the Purchasers pursuant to this clause (iv) shall not exceed
$10,000); (v) any fees charged by investment rating agencies for the rating of
the Securities, (vi) expenses incurred in distributing the Preliminary Offering
Memorandum, any other documents comprising any part of the General Disclosure
Package, the Final Offering Memorandum (including any amendments and supplements
thereto) and any Supplemental Marketing Material to the Purchasers; (vii) any
stamp or transfer taxes in connection with the original sale and issuance of the
Offered Securities and (viii) the cost of listing the Conversion Shares in
accordance with the rules of The Nasdaq Stock Market LLC. The Company will also
pay or reimburse the Purchasers (to the extent incurred by them) for costs and
expenses of the Purchasers and the Company’s officers and employees and any
other expenses of the Purchasers and the Company relating to investor
presentations or any “road show” in connection with the offering and sale of the
Offered Securities including, without limitation, any travel expenses of the
Company’s officers and employees and any other expenses of the Company.  The
Company shall also pay all expenses incurred in connection with the offer and
sale of the Affiliate Securities (including pursuant to any registration rights
granted to the Affiliated Purchaser). It is understood, however, that, except as
provided in this Agreement, the Purchasers shall pay all of their own costs and
expenses, including the fees and disbursements of their counsel, transfer taxes
on resale of any of the Offered Securities by them and any advertising expenses
in connection with any offers they may make.

 

(j)                                    Use of Proceeds. The Company will use the
net proceeds received in connection with this offering in the manner described
in the “Use of Proceeds” section of the General Disclosure Package and, except
as disclosed in the General Disclosure Package, the Company does not intend to
use any of the proceeds from the sale of the Offered Securities hereunder to
repay any outstanding debt owed to any affiliate of any Purchaser.

 

(k)                                 Absence of Manipulation. In connection with
the offering, until the Representative shall have notified the Company and the
other Purchasers of the

 

17

--------------------------------------------------------------------------------

 

completion of the resale of the Offered Securities, which notice shall be
promptly provided upon such completion, neither the Company nor any of its
controlled affiliates will, either alone or with one or more other persons, bid
for or purchase for any account in which it or any of its affiliates has a
beneficial interest any Offered Securities or attempt to induce any person to
purchase any Offered Securities; and neither it nor any of its affiliates will
make bids or purchases for the purpose of creating actual, or apparent, active
trading in, or of raising the price of, the Offered Securities.

 

(l)                                     Restriction on Sale of Securities. For
the period specified below (the “Lock-Up Period”), the Company will not,
directly or indirectly, take any of the following actions with respect to shares
of its Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock (“Lock-Up Securities”): (i) offer, sell, issue,
contract to sell, pledge or otherwise dispose of Lock-Up Securities; (ii) offer,
sell, issue, contract to sell, contract to purchase or grant any option, right
or warrant to purchase Lock-Up Securities; (iii) enter into any swap, hedge or
any other agreement that transfers, in whole or in part, the economic
consequences of ownership of Lock-Up Securities; (iv) establish or increase a
put equivalent position or liquidate or decrease a call equivalent position in
Lock-Up Securities within the meaning of Section 16 of the Exchange Act or
(v) file with the Commission a registration statement under the Securities Act
relating to Lock-Up Securities, or publicly disclose the intention to take any
such action, without the prior written consent of the Representative, except
(A) the issuance by the Company of (x) the Offered Securities to be sold
hereunder or any Underlying Shares issued upon conversion thereof or (y) the
Affiliate Securities or any shares of Common Stock issued upon conversion
thereof; (B) the issuance by the Company of Lock-Up Securities upon the exercise
of an option or warrant, the vesting or settlement of any restricted stock units
or other equity compensation awards or the conversion of a security outstanding
on the date hereof; (C) the grant of options, restricted stock units or other
equity compensation awards, including any time-based or performance-based
awards, or the issuance of Lock-Up Securities by the Company to employees,
officers, directors, advisors or consultants of the Company in each case
pursuant to equity incentive, stock option, inducement award and employee stock
purchase plans described in the General Disclosure Package and the Final
Offering Memorandum, and the issuance by the Company of any Lock-Up Securities
upon the exercise, vesting or settlement of such equity compensation awards; or
(D) the filing of any registration statement on (x) Form S-8 in respect of any
equity compensation plans or arrangements maintained by the Company, (y) as
required by the Stockholder’s Agreement between the Company and SunPower
Corporation (“SunPower”) entered into in connection with that certain asset
purchase agreement dated June 12, 2018 between the Company and SunPower or
(z) as required by any agreement with respect to resale registration rights
granted to the Affiliated Purchaser with respect to the Affiliate Securities or
the Common Stock issuable upon conversion thereof. The Company will not at any
time directly or indirectly, take any action referred to in clauses (i) through
(v) above with respect to any securities under circumstances where such offer,
sale, pledge, contract or disposition would cause the exemption afforded by
Section 4(a)(2) of the Securities Act to cease to be applicable to the offer and
sale of the Offered Securities by the Company to the several Purchasers. The
initial Lock-

 

18

--------------------------------------------------------------------------------

 

Up Period will commence on the date hereof and continue for 90 days after the
date hereof or such earlier date that the Representative consents to in writing.

 

6.                            Free Writing Communications. (a) Issuer Free
Writing Communications. The Company represents and agrees that, unless it
obtains the prior consent of the Representative, and each Purchaser represents
and agrees that, unless it obtains the prior consent of the Company and the
Representative, it has not made and will not make any offer relating to the
Offered Securities or the Affiliate Securities that would constitute an Issuer
Free Writing Communication.

 

(b)                                 Term Sheets.  The Company consents to the
use by any Purchaser of a Free Writing Communication that (i) contains only
(A) information describing the preliminary terms of the Offered Securities or
their offering or (B) information that describes the final terms of the Offered
Securities or their offering (and the terms of the Affiliate Securities and the
concurrent private placement) and that is included in the Final Offering
Memorandum or (ii) does not contain any material information about the Company
or its securities that was provided by or on behalf of the Company, it being
understood and agreed that the Company shall not be responsible to any Purchaser
for liability arising from any inaccuracy in such Free Writing Communications
referred to in clause (i) or (ii) as compared with the information in the
Preliminary Offering Memorandum, the Final Offering Memorandum or the General
Disclosure Package.

 

7.                            Conditions of the Obligations of the Purchasers.
The obligations of the several Purchasers to purchase and pay for the Offered
Securities on the Closing Date, will be subject to the accuracy of the
representations and warranties of the Company herein (as though made on the
Closing Date), to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:

 

(a)                                 Accountants’ Comfort Letters. The
Representative shall have received letters, dated, respectively, the date hereof
and the Closing Date, in form and substance satisfactory to the Purchasers, of
Deloitte & Touche LLP confirming that they are a registered public accounting
firm and independent public accountants within the meaning of the Securities
Laws and containing statements and information of the type or identity included
in accountant’s comfort letters to underwriters with respect to the financial
statements and certain financial information of the Company included or
incorporated by reference into the General Disclosure Package and the Final
Offering Memorandum (except that, in any letter dated the Closing Date, the
specified date referred to therein shall be a date no more than three days prior
to the Closing Date).

 

(b)                                 No Material Adverse Change. Subsequent to
the execution and delivery of this Agreement, there shall not have occurred
(i) any change, or any development or event involving a prospective change, in
the condition (financial or otherwise), results of operations, business,
properties or prospects of the Company which, in the judgment of the
Representative, is material and adverse and makes it impractical or inadvisable
to market the Offered Securities; (ii) any suspension or material limitation of
trading in securities generally on The New York Stock Exchange or The Nasdaq
Global Market, or

 

19

--------------------------------------------------------------------------------

 

any setting of minimum or maximum prices for trading on such exchange; (iii) any
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market; or (iv) any major disruption of settlements of
securities, payment, or clearance services in the United States or any other
country where such securities are listed.

 

(c)                                  Lock-Up Agreements. The “lock-up”
agreements, each substantially in the form of Exhibit A hereto, between the
Representative and each executive officer (within the meaning of
Rule 16a-1(f) under the Exchange Act) and director of the Company and certain
other stockholders of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities, delivered to
the Representative on or before the date hereof, shall be in full force and
effect on the Closing Date.

 

(d)                                 Opinions of Counsel for Company. The
Representative shall have received on the Closing Date, an opinion of Arnold &
Porter Kaye Scholer LLP, outside counsel for the Company, together with a
negative assurance letter, each dated the Closing Date, in the form agreed upon
as of the date hereof.

 

(e)                                  Opinion of Counsel for Purchasers. The
Representative shall have received on the Closing Date, an opinion of Davis
Polk & Wardwell LLP, counsel for the Purchasers, with respect to such matters as
the Representative may require, together with a negative assurance letter, each
dated the Closing Date, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters.

 

(f)                                   Officer’s Certificate. The Representative
shall have received on the Closing Date, a certificate, dated the Closing Date,
of an executive officer of the Company and a principal financial or accounting
officer of the Company in which such officers shall state that: the
representations and warranties of the Company in this Agreement are true and
correct; the Company has complied, in all material respects, with all agreements
and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and that subsequent to the date of the most
recent financial statements in the General Disclosure Package, there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company except as set forth
in the General Disclosure Package or as described in such certificate.

 

(g)                                  Listing. A “Listing of Additional Shares
Notification Form” relating to the Conversion Shares and the shares of common
stock issuable upon conversion of the Affiliate Securities shall have been
submitted to The Nasdaq Stock Market LLC, and the Company shall have received
confirmation from The Nasdaq Stock Market LLC that it has completed its review
of such form.

 

The Company will furnish the Representative with such conformed copies of such
opinions, certificates, letters and documents as the Representative reasonably
requests. The Representative

 

20

--------------------------------------------------------------------------------

 

may in its sole discretion waive on behalf of the Purchasers compliance with any
conditions to the obligations of the Purchasers hereunder.

 

8.                            Indemnification and Contribution.

 

(a)                                 Indemnification of Purchasers. The Company
will indemnify and hold harmless each Purchaser, its partners, members,
directors, officers, employees, agents, affiliates and each person, if any, who
controls such Purchaser within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (each, an “Indemnified Party”), against any
and all losses, claims, damages or liabilities, joint or several, to which such
Indemnified Party may become subject, under the Securities Act, the Exchange
Act, other Federal or state statutory law or regulation or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Preliminary Offering Memorandum or the
Final Offering Memorandum, in each case as amended or supplemented, any Issuer
Free Writing Communication, any General Solicitation made by the Company
(including, in each case, the Exchange Act Reports, as applicable), or arise out
of or are based upon the omission or alleged omission of a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and will reimburse each Indemnified
Party for any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating, preparing or defending against any loss,
claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Indemnified Party is a party thereto), whether
threatened or commenced, and in connection with the enforcement of this
provision with respect to any of the above as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Purchaser through the
Representative specifically for use therein, it being understood and agreed that
the only such information furnished by any Purchaser consists of the information
described as such in subsection (b) below.

 

(b)                                 Indemnification of Company. Each Purchaser
will severally and not jointly indemnify and hold harmless the Company, each of
its directors and each of its officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (each, a “Purchaser Indemnified Party”), against any losses,
claims, damages or liabilities to which such Purchaser Indemnified Party may
become subject, under the Securities Act, the Exchange Act, other Federal or
state statutory law or regulation or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Preliminary Offering Memorandum or the Final Offering
Memorandum, in each case as amended or supplemented, any Issuer Free Writing
Communication, or arise out of or are based upon the omission or the alleged
omission of a material fact necessary to make the

 

21

--------------------------------------------------------------------------------

 

statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Purchaser through the Representative
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by such Purchaser Indemnified Party in connection with
investigating, preparing or defending against any such loss, claim, damage,
liability, action, litigation, investigation or proceeding whatsoever (whether
or not such Purchaser Indemnified Party is a party thereto), whether threatened
or commenced, based upon any such untrue statement or omission, or any such
alleged untrue statement or omission as such expenses are incurred, it being
understood and agreed that the only such information furnished by any Purchaser
consists of the following information in the Preliminary Offering Memorandum and
the Final Offering Memorandum furnished on behalf of each Purchaser: the
information contained in the tenth and eleventh paragraphs under the caption
“Plan of Distribution”; provided, however, that the Purchasers shall not be
liable for any losses, claims, damages or liabilities arising out of or based
upon the Company’s failure to perform its obligations under Section 5(a) of this
Agreement.

 

(c)                                  Actions against Parties; Notification.
Promptly after receipt by an indemnified party under this Section of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under subsection
(a) or (b) above, notify the indemnifying party of the commencement thereof; but
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under subsection (a) or (b) above except to the
extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under subsection (a) or
(b) above. In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (1) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (2) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or

 

22

--------------------------------------------------------------------------------

 

related proceedings in the same jurisdiction, be liable for (i) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Purchasers and all persons, if any, who control any Purchaser within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act or who are affiliates of any Purchaser within the meaning of Rule 405 under
the Securities Act and (ii) the fees and expenses of more than one separate firm
(in addition to any local counsel) for the Company, its directors, its officers
and each person, if any, who controls the Company within the meaning of either
such Section, and that all such fees and expenses shall be reimbursed as they
are incurred. In the case of any such separate firm for the Purchasers and such
control persons and affiliates of any Purchasers, such firm shall be designated
in writing by the Representative. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company, such
firm shall be designated in writing by the Company. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (A) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (B) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.

 

(d)                                 Contribution. If the indemnification
provided for in this Section is unavailable or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Purchasers
on the other from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Purchasers on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Purchasers on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by the Purchasers. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Purchasers
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to

 

23

--------------------------------------------------------------------------------

 

contribute any amount in excess of the amount by which the total price at which
the Securities purchased by it were resold exceeds the amount of any damages
which such Purchaser has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Purchasers’ obligations in this
subsection (d) to contribute are several in proportion to their respective
purchase obligations and not joint. The Company and the Purchasers agree that it
would not be just and equitable if contribution pursuant to this
Section 8(d) were determined by pro rata allocation (even if the Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 8(d).

 

9.                            Default of Purchasers. If any Purchaser or
Purchasers default in their obligations to purchase Offered Securities hereunder
on the Closing Date and the aggregate principal amount of Offered Securities
that such defaulting Purchaser or Purchasers agreed but failed to purchase does
not exceed 10% of the aggregate principal amount of Offered Securities that the
Purchasers are obligated to purchase on the Closing Date, the Representative may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Purchasers, but if no such
arrangements are made by the Closing Date, the non-defaulting Purchasers shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Offered Securities that such defaulting Purchasers agreed but
failed to purchase on the Closing Date. If any Purchaser or Purchasers so
default and the aggregate principal amount of Offered Securities with respect to
which such default or defaults occur exceeds 10% of the aggregate principal
amount of Offered Securities that the Purchasers are obligated to purchase on
the Closing Date and arrangements satisfactory to the Representative and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Purchaser or the Company, except as
provided in Section 10. As used in this Agreement, the term “Purchaser” includes
any person substituted for a Purchaser under this Section. Nothing herein will
relieve a defaulting Purchaser from liability for its default.

 

10.                     Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Purchaser, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If the purchase of
the Offered Securities by the Purchasers is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 9
hereof, the Company will reimburse the Purchasers for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities, and the respective
obligations of the Company and the Purchasers pursuant to Section 8 hereof shall
remain in effect. In addition, if any Offered Securities have been purchased
hereunder, the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect.

 

24

--------------------------------------------------------------------------------

 

11.                     Notices. All communications hereunder will be in writing
and, if sent to the Purchasers, will be mailed, delivered or telegraphed and
confirmed to the Representative c/o Credit Suisse Securities (USA) LLC, Eleven
Madison Avenue, New York, N.Y. 10010-3629, Attention: IBCM-Legal, or, if sent to
the Company, will be mailed, delivered or telegraphed and confirmed to Enphase
Energy, Inc., 1420 N. McDowell Blvd., Petaluma, CA 94954, Attention: Eric
Branderiz, with a copy (which shall not constitute notice hereunder) to Arnold &
Porter Kaye Scholer LLP, 250 West 55th Street, New York, NY 10019-9710,
Attention: Michael Penney and Christopher P. Peterson; provided, however, that
any notice to a Purchaser pursuant to Section 8 will be mailed, delivered or
telegraphed and confirmed to such Purchaser.

 

12.                     Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8, and no
other person will have any right or obligation hereunder; except that holders of
Offered Securities shall be entitled to enforce the agreements for their benefit
contained in the second and third sentences of Section 5(b) hereof against the
Company as if such holders were parties thereto.

 

13.                     Representation of Purchasers. The Representative will
act for the several Purchasers in connection with this purchase, and any action
under this Agreement taken by the Representative will be binding upon all the
Purchasers.

 

14.                     Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same agreement.

 

15.                     Absence of Fiduciary Relationship. The Company
acknowledges and agrees that:

 

(a)                                 No Other Relationship. The Representative
has been retained solely to act as a Purchaser in connection with the initial
purchase, offering and resale of the Offered Securities and that no fiduciary,
advisory or agency relationship between the Company and the Representative has
been created in respect of any of the transactions contemplated by this
Agreement or the Preliminary Offering Memorandum or Final Offering Memorandum,
irrespective of whether the Representative has advised or is advising the
Company on other matters;

 

(b)                                 Arm’s-Length Negotiations. The purchase
price of the Offered Securities set forth in this Agreement was established by
the Company following discussions and arm’s-length negotiations with the
Representative and the Company is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement;

 

(c)                                  Absence of Obligation to Disclose. The
Company has been advised that the Representative and its affiliates are engaged
in a broad range of transactions which may involve interests that differ from
those of the Company and that the Representative has no obligation to disclose
such interests and transactions to the Company by virtue of any fiduciary,
advisory or agency relationship; and

 

25

--------------------------------------------------------------------------------

 

(d)                                 Waiver. The Company waives, to the fullest
extent permitted by law, any claims it may have against the Representative for
breach of fiduciary duty or alleged breach of fiduciary duty in connection with
the sale of Offered Securities, and agrees that the Representative shall have no
liability (whether direct or indirect) to the Company in respect of such a
fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf
of or in right of the Company, including stockholders, employees or creditors of
the Company.

 

16.                     Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

The Company hereby submits to the non-exclusive jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. The Company irrevocably and unconditionally waives any
objection to the laying of venue of any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby in Federal
and state courts in the Borough of Manhattan in The City of New York and
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such suit or proceeding in any such court has been brought
in an inconvenient forum.

 

17.                     Integration. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes and replaces all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.

 

26

--------------------------------------------------------------------------------

 

If the foregoing is in accordance with the Representative’s understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.

 

 

Very truly yours,

 

 

 

ENPHASE ENERGY, INC.

 

 

 

By:

/s/ Eric Branderiz

 

 

Name:

Eric Branderiz

 

 

Title:

VP and Chief Financial Officer

 

[Signature page to the Purchase Agreement]

 

--------------------------------------------------------------------------------

 

The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written.

 

 

 

CREDIT SUISSE SECURITIES (USA) LLC

 

 

 

By:

/s/ Ted Michaels

 

 

Name:

Ted Michaels

 

 

Title:

Managing Director

 

 

 

 

 

Acting on behalf of itself and as the Representative of the several Purchasers.

 

 

[Signature page to the Purchase Agreement]

 

--------------------------------------------------------------------------------

 

SCHEDULE A

 

Purchaser

 

Principal Amount of
Offered Securities

 

Credit Suisse Securities (USA) LLC

 

$

60,000,000

 

Total

 

$

60,000,000

 

 

--------------------------------------------------------------------------------

 

SCHEDULE B

 

1.                                      Issuer Free Writing Communications
(included in the General Disclosure Package)

 

1.                            Final term sheet, dated August 14, 2018, a copy of
which is attached as Exhibit B hereto.

 

2.                                      Other Information Included in the
General Disclosure Package

 

The following information is also included in the General Disclosure Package:

 

None

 

3.                                      Permitted General Solicitations other
than Information Included Above

 

None

 

--------------------------------------------------------------------------------

 

SCHEDULE C

 

1.                                      Supplemental Marketing Materials

 

Electronic Roadshow relating to the Offered Securities dated August 2018.

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Form of Lock-Up Letter

 

Enphase Energy, Inc.

1420 N. McDowell Blvd.

Petaluma, CA 94954

 

Credit Suisse Securities (USA) LLC

As Representative of the Several Purchasers

Eleven Madison Avenue

New York, NY 10010-3629

 

Dear Sirs:

 

As an inducement to the Purchasers to execute the Purchase Agreement ( the
“Purchase Agreement”), pursuant to which an offering (the “Offering”) will be
made of Convertible Senior Notes due 2023 (the “Securities”), of Enphase
Energy, Inc., and any successor (by merger or otherwise) thereto (the
“Company”), which are convertible into shares of common stock of the Company,
par value $0.00001 per share (the “Common Stock”), the undersigned hereby agrees
that during the period specified in the following paragraph (the “Lock-Up
Period”), the undersigned will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable or exercisable for any shares of
Common Stock, enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such aforementioned transaction is to be settled by delivery of the Common
Stock or such other securities, in cash or otherwise, or publicly disclose the
intention to make any such offer, sale, pledge or disposition, or to enter into
any such transaction, swap, hedge or other arrangement, without, in each case,
the prior written consent of Credit Suisse Securities (USA) LLC (“Credit
Suisse”); provided, that if the undersigned is an executive officer of the
Company, the foregoing restrictions shall no longer apply at such time as the
undersigned ceases to be an executive officer of the Company. In addition, the
undersigned agrees that, without the prior written consent of Credit Suisse, it
will not, during the Lock-Up Period, make any demand for or exercise any right
with respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for the Common Stock.

 

The Lock-Up Period will commence on the date of this Lock-Up Agreement and
continue and include the date 90 days after the date of the Purchase Agreement,
to which Credit Suisse is or is expected to become a party.

 

Deemed dispositions of any restricted stock unit awards granted by the Company
to the undersigned upon the vesting or settlement of such awards in accordance
with their terms shall not be subject to this Lock-Up Agreement, provided that
Common Stock acquired upon the vesting or settlement of such restricted stock
unit awards shall be subject to the restrictions imposed by this Lock-Up
Agreement, giving effect to the exceptions provided herein.

 

Notwithstanding the foregoing, the undersigned may (1) transfer shares of Common
Stock or securities convertible into or exchangeable or exercisable for Common
Stock by gift or gifts, will or intestacy to a member or members of his or her
immediate family, to a trust formed for the benefit of any such person, or to a
partnership, the partners of which are exclusively the undersigned and/or a
member or members of his or her immediate family and/or a charity, provided that
(i) the transferee execute a copy of this Lock-Up Agreement, (ii) no filing by
any party (donor, donee, transferor or transferee) under Section 16(a) of the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”) (other than
a filing on Form 5 made after the expiration of the Lock-Up Period), and
(iii) no such transfer may include a disposition for value; (2) sales pursuant
to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act
(any such plan, a “10b5-1 Plan”) in effect on the date hereof and disclosed to
Credit Suisse; (3) enter into a 10b5-1 Plan during the Lock-Up Period if sales
under such plan do

 

--------------------------------------------------------------------------------

 

not occur until after the expiration of the Lock-Up Period and no disclosure
regarding the entry into such plan is made during the Lock-Up Period;
(4) exercise outstanding options or warrants to purchase Common Stock in
accordance with their terms; provided (a) the shares received upon exercise of
the options or warrants are subject to the terms of this Lock-Up Agreement and
(b) any filing under Section 16(a) of the Exchange Act shall clearly indicate in
the footnotes thereto that (i) the filing relates to the exercise of options or
warrants, as the case may be, (ii) no shares were sold by the reporting person
(other than sales to satisfy tax withholding obligations in connection with the
exercise of an option or warrant pursuant to Company equity compensation plans
or arrangements in effect on the date hereof and disclosed in the Company’s
public filings with the U.S. Securities and Exchange Commission; provided that
any public filing, report or announcement of such transfer shall disclose that
the sale was for the purpose of covering such taxes payable) and (iii) the
shares of Common Stock received upon exercise of the options or warrants are
subject to a lock-up agreement with Credit Suisse; (5) transfer shares of Common
Stock to the Company to satisfy tax withholding obligations in connection with
the vesting of restricted stock units pursuant to Company equity compensation
plans or arrangements in effect on the date hereof and disclosed in the
Company’s public filings with the U.S. Securities and Exchange Commission;
provided that any public filing, report or announcement of such transfer shall
disclose that the sale or transfer was for the purpose of covering such taxes
payable; and (6) transfer shares of Common Stock or securities convertible into
or exchangeable or exercisable for Common Stock pursuant to a sale or an offer
to all holders of the Common Stock to purchase outstanding Common Stock, whether
pursuant to a merger, tender offer or otherwise, to a bona fide third party or
group of bona fide third parties that is approved by the Board of Directors of
the Company and involving a Change of Control (as defined below); provided that
in the event the merger, tender offer or other transaction is not completed, the
securities owned by the undersigned shall remain subject to the restrictions
contained in this Lock-Up Agreement. For purposes of this paragraph, “immediate
family” means the spouse, domestic partner, lineal descendants, father, mother,
brother or sister of the transferor. For the purposes of clause (6) of this
paragraph, “Change of Control” shall mean the consummation of any bona fide
third-party tender offer, merger or other similar transaction or series of
transactions, the result of which is that any “person” (as defined in
Section 13(d)(3) of the Exchange Act), or group of persons, other than the
Company, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of
the Exchange Act) of 50% of total voting power of the voting stock of the
Company (or the surviving entity if other than the Company).

 

In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Common Stock if such transfer would constitute a violation or breach of this
Lock-Up Agreement.

 

This Lock-Up Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned. This Lock-Up
Agreement shall lapse and become null and void if (a) the Offering shall not
have occurred on or before September 1, 2018; (b) the Company notifies Credit
Suisse in writing that it does not intend to proceed with the Offering or (c) if
the Purchase Agreement (other than the provisions thereof which survive
termination) shall terminate or be terminated for any reason prior to payment
for and delivery of the Securities to be sold thereunder. This Lock-Up Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York.

 

[Signature page follows]

 

--------------------------------------------------------------------------------

 

 

Very truly yours,

 

 

 

 

 

[Name of stockholder]

 

[Signature page to Lock-up Agreement]

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

Final Term Sheet

 

--------------------------------------------------------------------------------

 

PRICING TERM SHEET

STRICTLY CONFIDENTIAL

 

DATED AUGUST 14, 2018

 

[g183082kw09i001.jpg]

 

ENPHASE ENERGY, INC.

 

$60,000,000 4.00% CONVERTIBLE SENIOR NOTES DUE 2023

 

The information in this pricing term sheet supplements Enphase Energy, Inc.’s
preliminary offering memorandum, dated August 14, 2018 (the “Preliminary
Offering Memorandum”), and supersedes the information in the Preliminary
Offering Memorandum to the extent inconsistent with the information in the
Preliminary Offering Memorandum. In all other respects, this term sheet is
qualified in its entirety by reference to the Preliminary Offering Memorandum,
including all other documents incorporated by reference therein. References to
“we,” “our” and “us” refer to Enphase Energy, Inc. and not to its consolidated
subsidiaries. Terms used herein but not defined herein shall have the respective
meanings as set forth in the Preliminary Offering Memorandum. All references to
dollar amounts are references to U.S. dollars.

 

Issuer:

 

Enphase Energy, Inc., a Delaware corporation.

 

 

 

Ticker/Exchange for Common Stock:

 

“ENPH”/The Nasdaq Global Market.

 

 

 

Securities:

 

4.00% Convertible Senior Notes due 2023 (the “notes”).

 

 

 

Aggregate Principal Amount:

 

$60,000,000.

 

 

 

Denominations:

 

$1,000 and multiples of $1,000 in excess thereof.

 

 

 

Ranking:

 

Senior unsecured.

 

 

 

Maturity:

 

August 1, 2023, unless earlier converted or repurchased.

 

 

 

Affiliate Private Placement:

 

An affiliate of ours, Thurman John Rodgers, who is a director and a stockholder,
has committed to purchase through a trust controlled by him (the “Affiliated
Purchaser”) $5.0 million aggregate principal amount of our 4.00% Convertible
Senior Notes due 2023 in a concurrent private placement. We refer to our 4.00%
Convertible Senior Notes due 2023 purchased by the Affiliate Purchaser as the
“Affiliate notes.” The Affiliate notes are expected to be sold at the same
price, and constitute part of the same series, as the notes offered hereby.
However, the Affiliate notes will initially be issued in certificated form, will
not initially be fungible with the notes offered hereby and will be subject to
different transfer restrictions than the notes offered hereby. In addition to
the initial purchasers’ discount with respect to the notes, the Company will pay
a fee to the initial purchasers in respect of the Affiliate notes. This offering
is not conditioned upon the closing of the sale and purchase of the Affiliate
notes by the Affiliate Purchaser.

 

 

 

No Redemption:

 

We may not redeem the notes prior to the maturity date and no “sinking fund” is
provided for the notes, which means that we are not required to redeem or retire
the notes periodically.

 

--------------------------------------------------------------------------------

 

Fundamental Change:

 

If we undergo a “fundamental change” (as defined in the Preliminary Offering
Memorandum under “Description of Notes—Fundamental Change Permits Holders to
Require Us to Repurchase Notes”), subject to certain conditions, holders may
require us to repurchase for cash all or part of their notes in principal
amounts of $1,000 or a multiple thereof. The fundamental change repurchase price
will be equal to 100% of the principal amount of the notes to be repurchased,
plus accrued and unpaid interest to, but excluding, the fundamental change
repurchase date. See “Description of Notes— Fundamental Change Permits Holders
to Require Us to Repurchase Notes” in the Preliminary Offering Memorandum.

 

 

 

Interest and Interest Payment Dates:

 

4.00% per year.

 

Interest will accrue from August 17, 2018 and will be payable semiannually in
arrears on February 1 and August 1 of each year, beginning on February 1, 2019.
We will pay additional interest, if any, at our election as the sole remedy
relating to the failure to comply with our reporting obligations as described
under “Description of Notes—Events of Default” and under the circumstances
described under Description of Notes—No Registration Rights; Additional
Interest” in the Preliminary Offering Memorandum.” For the avoidance of doubt,
no additional interest shall accrue on the Affiliate notes as a result of any
failure by us to comply with our obligations under “Description of Notes—No
Registration Rights; Additional Interest” in the Preliminary Offering Memorandum

 

 

 

Regular Record Dates:

 

January 15 and July 15 of each year, immediately preceding the February 1 or
August 1 interest payment date, as the case may be.

 

 

 

Issue Price:

 

100% of principal, plus accrued interest, if any, from August 17, 2018 if
settlement occurs after that date.

 

 

 

Last Reported Sale Price of Our Common Stock on August 14, 2018:

 

$5.05 per share.

 

 

 

Initial Conversion Rate:

 

180.0180 shares of common stock per $1,000 principal amount of the notes,
subject to adjustment under the Indenture.

 

 

 

Initial Conversion Price:

 

Approximately $5.56 per share of common stock, subject to adjustment under the
Indenture.

 

 

 

Conversion Premium:

 

Approximately 10.0% above the last reported sale price of our common stock on
August 14, 2018.

 

 

 

Settlement Method:

 

Shares of our common stock (together with cash in lieu of any fractional share),
as described in the “Description of Notes—Conversion Rights—Settlement upon
Conversion” in the Preliminary Offering Memorandum.

 

 

 

Sole Book-Running Manager:

 

Credit Suisse Securities (USA) LLC

 

 

 

Pricing Date:

 

August 14, 2018.

 

 

 

Trade Date:

 

August 15, 2018.

 

 

 

Expected Settlement Date:

 

August 17, 2018 (T+2).

 

 

 

CUSIP Number (144A):

 

29355A AA5

 

 

 

ISIN (144A):

 

US29355AAA51

 

 

 

Listing:

 

None.

 

--------------------------------------------------------------------------------

 

Net Proceeds:

 

We estimate that the net proceeds from the sale of the notes will be
approximately $57.6 million, after deducting the initial purchasers’ discount
and estimated offering expenses payable by us. We estimate that the net proceeds
from the sale of the Affiliate notes will be approximately $4.9 million.

 

 

 

Use of Proceeds:

 

We expect to use the net proceeds from the sale of the notes and the Affiliate
notes for general corporate purposes, which may include the repayment of
indebtedness, working capital, and potential acquisitions and strategic
transactions. See “Use of Proceeds” in the Preliminary Offering Memorandum.

 

[Remainder of Page Intentionally Blank]

 

--------------------------------------------------------------------------------

 

Description of Notes—Conversion Rights—Increase in Conversion Rate upon
Conversion upon a Make-Whole

Fundamental Change

 

Holders who convert their notes in connection with a make-whole fundamental
change occurring prior to the maturity date of the notes may be entitled to an
increase in the conversion rate for the notes so surrendered for conversion.

 

The following table sets forth the number of additional shares by which the
conversion rate for the notes will be increased per $1,000 principal amount of
notes for each stock price and effective date set forth below:

 

 

 

Stock Price

 

Effective Date

 

$5.05

 

$5.25

 

$5.50

 

$5.75

 

$6.00

 

$7.00

 

$8.00

 

$9.00

 

$10.00

 

$15.00

 

$20.00

 

August 17, 2018

 

18.0018

 

18.0018

 

18.0018

 

18.0018

 

18.0018

 

15.4053

 

11.8361

 

9.3557

 

7.4882

 

2.3303

 

0.3554

 

August 1, 2019

 

18.0018

 

18.0018

 

18.0018

 

18.0018

 

18.0018

 

13.2449

 

10.1253

 

8.0240

 

6.4567

 

2.0706

 

0.3351

 

August 1, 2020

 

18.0018

 

18.0018

 

18.0018

 

17.5618

 

15.5732

 

10.6280

 

8.0530

 

6.4039

 

5.1884

 

1.7284

 

0.2818

 

August 1, 2021

 

18.0018

 

18.0018

 

16.4429

 

13.8625

 

11.8863

 

7.5353

 

5.6510

 

4.5257

 

3.6986

 

1.2881

 

0.2079

 

August 1, 2022

 

18.0018

 

15.7306

 

11.8162

 

9.0366

 

7.1112

 

3.8624

 

2.9215

 

2.3793

 

1.9619

 

0.7142

 

0.1092

 

August 1, 2023

 

18.0018

 

10.4582

 

1.8002

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

 

The exact stock prices and effective dates or redemption notice dates may not be
set forth in the table above, in which case:

 

·                  If the stock price is between two stock prices in the table
or the effective date is between two effective dates in the table, the number of
additional shares by which the conversion rate will be increased will be
determined by a straight-line interpolation between the number of additional
shares set forth for the higher and lower stock prices and the earlier and later
effective dates, as applicable, based on a 365-day year.

 

·                  If the stock price is greater than $20.00 per share (subject
to adjustment in the same manner as the stock prices set forth in the column
headings of the table above), no additional shares will be added to the
conversion rate.

 

·                  If the stock price is less than $5.05 per share (subject to
adjustment in the same manner as the stock prices set forth in the column
headings of the table above), no additional shares will be added to the
conversion rate.

 

Notwithstanding the foregoing, in no event will the conversion rate per $1,000
principal amount of notes exceed 198.0198 shares of common stock, subject to
adjustment in the same manner as the conversion rate as set forth in the
Preliminary Offering Memorandum under “Description of Notes-Conversion
Rights-Conversion Rate Adjustments.”

 

Our obligation to increase the conversion rate for notes converted in connection
with a make-whole fundamental change could be considered a penalty, in which
case the enforceability thereof would be subject to general principles of
reasonableness and equitable remedies.

 

[Remainder of Page Intentionally Blank]

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

This communication is intended for the sole use of the person to whom it is
provided by the sender. This material is confidential and is for your
information only and is not intended to be used by anyone other than you. This
information does not purport to be a complete description of the notes or the
offering. This communication does not constitute an offer to sell or the
solicitation of an offer to buy any notes in any jurisdiction to any person to
whom it is unlawful to make such offer or solicitation in such jurisdiction.

 

The notes and the shares of common stock issuable upon conversion of the notes
have not been and will not be registered under the U.S. Securities Act of 1933,
as amended (the “Securities Act”), or any other securities laws, and may not be
offered or sold within the United States or any other jurisdiction, except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and any other applicable
securities laws. The initial purchasers are initially offering the notes only to
qualified institutional buyers as defined in, and in reliance on, Rule 144A
under the Securities Act.

 

The notes and the shares of common stock issuable upon conversion of the notes
are not transferable except in accordance with the restrictions described under
“Transfer Restrictions” in the Preliminary Offering Memorandum.

 

A copy of the Preliminary Offering Memorandum for the offering of the notes may
be obtained by contacting Credit Suisse Securities (USA) LLC, Attention:
Prospectus Department, One Madison Avenue, New York, NY 10010, or by telephone
at (800) 221-1037, or by email at newyork.prospectus@credit-suisse.com.

 

Any legends, disclaimers or other notices that may appear below are not
applicable to this communication and should be disregarded. Such legends,
disclaimers or other notices have been automatically generated as a result of
this communication having been sent via Bloomberg or another system.

 

--------------------------------------------------------------------------------