Exhibit 10.3
INTERIM AGREEMENT
This Interim Agreement (this “Agreement”) is made as of July 20, 2015, by and
among SunEdison, Inc., a Delaware corporation (“Parent”), SEV Merger Sub Inc., a
Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), and
TerraForm Power, LLC, a Delaware limited liability company (“TERP”) (each, a
“Party”). Capitalized terms used but not defined herein shall have the
respective meanings given to them in the Merger Agreement (as defined below)
unless otherwise specified in this Agreement.
RECITALS
1.    On the date hereof, Parent and Merger Sub have entered into an Agreement
and Plan of Merger (the “Merger Agreement”), by and among Parent, Merger Sub and
Vivint Solar, Inc., a Delaware corporation (the “Company”), pursuant to which
Merger Sub will be merged with and into the Company (the “Merger”), with the
Company becoming the surviving entity and a wholly-owned subsidiary of Parent.
2.    On the date hereof, TERP and Parent have executed a Purchase Agreement,
pursuant to which TERP has agreed to pay $922,000,000 (nine hundred twenty-two
million dollars) (the “Purchase Amount”) to Parent in consideration for the
acquisition of certain subsidiaries of the Company and a note (the “Purchase
Agreement”).
3.    Pursuant to the terms of the Purchase Agreement, Parent and TERP have
agreed that immediately following the Effective Time under the Merger Agreement
(the “Closing”), Parent will cause the Company to transfer to TERP the assets
and interests identified on Exhibit A of the Purchase Agreement that will be
owned by the Company at Closing (the “Carveout Assets”, and such transaction,
the “Carveout Transaction”), with the difference between the value of the
Carveout Assets (the “Carveout Asset Price”) and the Purchase Amount actually
paid at Closing (such difference, the “Advance Amount”) to be considered a
conditional advance on the consideration for additional assets to be transferred
from the Closing until and including December 31, 2015 (the, "Q4 Assets").
Therefore, the parties hereto hereby agree as follows:
1.AGREEMENTS AMONG THE PARTIES.
1.1.    Pre-Closing Decisions. TERP agrees that, notwithstanding the pending
Carveout Transaction or any provision of the Purchase Agreement, all decisions
to be made under and in connection with the Merger Agreement, and the
transactions contemplated thereby, shall be made in agreement by both Parent and
TERP, each acting in its reasonable discretion; provided, however, that all
determinations to be made under and in connection with the Merger Agreement that
pertain to the Carveout Assets shall be made by TERP acting in its sole
discretion.
1.2.    Termination Fee. Any Termination Fee paid by the Company or any of its
affiliates pursuant to the Merger Agreement or otherwise shall be split between
each of Parent and TERP in accordance with their respective Pro Rata Share (as
defined in Section 1.4 below). Promptly (and, in any event, within two (2)
Business Days) after its receipt of the Termination Fee, Parent shall pay, or
cause to be paid, to TERP its Pro Rata Share.

 
 
 

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1.3.    Certain Obligations.
1.3.1.    Other than with respect to the indemnification obligations of TERP set
forth in Section 1.3.2 below, Parent hereby agrees to indemnify, defend and hold
TERP harmless from any and all losses, liabilities, damages, judgments,
settlements and expenses, including reasonable attorneys’ fees (collectively,
"Losses"), in connection with any suit, action or other proceedings brought by
the Company or any other person against TERP, and Parent hereby agrees that it
shall be solely responsible for, and indemnify, defend and hold TERP harmless
from, any amounts payable by Parent or Merger Sub pursuant to Section 4.05(e) or
Section 7.02(b) of the Merger Agreement.
1.3.2.    TERP hereby agrees to indemnify Parent and Merger Sub from any and all
Losses incurred by Parent and/or Merger Sub (including any reasonable increased
out-of-pocket costs to Parent and/or Merger Sub to seek and obtain alternative
financing to otherwise fund the Purchase Amount not funded by TERP) in
connection with any suit, action or other or proceeding brought by the Company
against Parent and/or Merger Sub solely in connection with the breach of TERP’s
obligation to fund the Purchase Amount at the time and on the terms set forth in
the Purchase Agreement if all of the conditions to funding in the Purchase
Agreement were satisfied at the time of such funding failure; provided, however,
that TERP’s indemnification obligations under this Section 1.3.2 shall be
conditioned on (x) neither Parent nor Merger Sub being in breach of its
obligations under the Merger Agreement (other than any obligations breached by
Parent or Merger Sub solely due to the fact that TERP has breached its
obligation to fund its Purchase Amount pursuant to the Purchase Agreement) and
(y) Parent and Merger Sub being, and demonstrating that they are, ready, willing
and able to consummate or cause to be consummated the transactions contemplated
by the Merger Agreement and the Purchase Agreement.
1.4.    Expense Sharing. Each of Parent and TERP agrees that it will be
responsible for its Pro Rata Share of all fees, costs, and expenses (including
those of representatives, advisors, agents, and counsel) incurred by Parent,
TERP and Merger Sub in connection with the Merger Agreement and the transactions
contemplated thereby (the “Merger Expenses”); provided, that TERP shall not
otherwise be liable (and shall not be required to reimburse Parent or Merger
Sub) for any fees, costs or expenses incurred by Parent or Merger Sub in
connection with Parent’s or Merger Sub’s arranging of financing (including any
equity financing); and provided, further, that neither Parent nor Merger Sub
shall otherwise be liable (and shall not be required to reimburse TERP) for any
fees, costs or expenses incurred by TERP in connection with TERP’s arranging of
financing (including any equity financing) of the Purchase Amount; and provided,
further, that the Merger Expenses shall be subject to reallocation in accordance
with Section 1.3.1 or Section 1.3.2 in instances where Section 1.3 applies.
Notwithstanding the foregoing, each of Parent, Merger Sub and TERP (and
following the Closing, the Company) shall bear their own fees, costs and
expenses incurred in connection with the Carveout Transaction. “Pro Rata Share”
shall mean for Parent and Merger Sub jointly: 58% and for TERP 42%.
1.5.    Representations, Warranties and Covenants.
1.5.1.    Each Party hereby represents, warrants and covenants to the other
Parties that none of the information supplied in writing by such Party
specifically for inclusion or incorporation by reference in the Proxy or
Information Statement will cause a breach of the representations and warranties
of Parent or Merger Sub set forth in Section 3.02(i) the Merger Agreement.

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1.5.2.    Each Party hereby represents, warrants and covenants to the other
Parties that the information supplied in writing by such Party in connection
with filings or notifications under, or relating to, Antitrust Law is and will
be accurate and complete in all material respects.
1.5.3.    Each Party represents and warrants to the other Parties that (i) such
Party has full power and authority (including full corporate or other entity
power and authority) to execute and deliver this Agreement and to perform its
obligations hereunder; (ii) this Agreement constitutes the valid and legally
binding obligation of such Party, enforceable in accordance with its terms; and
(iii) the execution, delivery and performance of this Agreement and all other
agreements contemplated hereby have been duly authorized by such Party.
1.6.    Indemnification.
1.6.1.    Each Party (an “Indemnifying Party”) shall indemnify, defend and hold
each other Party (an “Indemnified Party”), its respective successors and
assigns, and their respective shareholders, directors, officers, employees and
agents, harmless from and against any and all Losses arising from or relating to
a breach of this Agreement by the Indemnifying Party.
1.6.2.    Without limiting the provisions of the foregoing Section 1.6.1, and
notwithstanding any other provision of this Agreement or any other agreement
between Parent or any of its affiliates (other than TerraForm Power, Inc. or
TERP or any of its subsidiaries), on the one hand, and TERP or any of its
subsidiaries, on the other hand (including, without limitation, the Purchase
Agreement), Parent hereby agrees to indemnify TERP and its subsidiaries and to
hold each of them harmless for any and all Losses arising from or relating to
TERP being required to fund all or part of the Purchase Amount under the
Purchase Agreement in spite of a breach by Parent or Merger Sub of any of their
obligations under this Agreement, without which breach TERP would not have had
to make all or part of such funding. In furtherance of and not in limitation of
the foregoing, Parent shall promptly (and, in any event, on the same Business
Day as TERP funds under the Purchase Agreement) reimburse TERP for the full
amount of such funding which TERP would not have had to make without such breach
by Parent or Merger Sub.
1.7.    Carveout Transaction. Parent shall, concurrently with the Closing,
transfer the Carveout Assets to TERP, and Parent and TERP shall enter into one
or more definitive agreements in addition to the Purchase Agreement with respect
to the Carveout Transaction (together with the Purchase Agreement, the “Carveout
Transaction Agreements”), which Carveout Transaction Agreements shall include
the following terms and conditions and other terms and conditions that Parent
and TERP approve, each acting in their sole but good faith discretion:
1.7.1.    Price for Carveout Assets. The Carveout Asset Price shall be
determined based on the value of the residential solar system operating
portfolios of the Carveout Assets transferred at Closing, determined in a manner
consistent with the financial model exchanged between the Parent and TERP in
connection with the execution of the Purchase Agreement.
1.7.2.    Advance in Consideration of Q4 Assets. Parent shall execute and
deliver to TERP a note (the “Note”) with respect to the Advance Amount, on the
terms and conditions set forth on Exhibit E to the Purchase Agreement.

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1.7.3.    Indemnification. With respect to any Carveout Assets transferred to
TERP as part of the Carveout Transaction, as well as the Q4 Assets, Parent shall
indemnify TERP for any losses (including reduction in projected distributions to
TERP from any Carveout Assets or Q4 Assets), damages, liabilities, costs and
expenses suffered or incurred by TERP as a result of:
(i)    the IRS determining that the purchase price of any solar system that is a
part of any Carveout Asset or Q4 Assets exceeded its actual fair market value
(“FMV”) (including, but not limited to, FMV determinations inferred from the
purchase price paid by TERP for such Carveout Asset or Q4 Asset);
(ii)    a breach or inaccuracy in any tax representations or warranties made to
TERP in the documentation for any Carveout Assets or Q4 Assets;
(iii)    any inaccuracy in a tax assumption in any “base case model” approved by
TERP for such Carveout Asset or Q4 Assets;
(iv)    the imposition of any real or personal property taxes upon any solar
system that is a part of any Carveout Asset or Q4 Asset that are in excess of
those projected in the “base case model” approved by TERP for such Carveout
Asset or Q4 Assets within the first 5 years of Closing;
(v)    any transfer taxes being imposed on TERP in connection with the transfer
of ownership of the Carveout Assets or Q4 Assets to TERP;
(vi)    any fines, penalties or other Losses incurred by TERP as a result of any
breach of any consumer protection laws, including any rules or regulations of
the Consumer Financial Protection Bureau, with respect to the Carveout Assets or
Q4 Assets (including the applicable solar systems and customer agreements);
(vii)    the failure to obtain the consent of any third parties with respect to
the transfer of the Carveout Assets to TERP pursuant to the Purchase Agreement
or the Q4 Assets pursuant to the US RSC Dropdown Agreement (as defined below);
(viii)    failure to deliver the Note; and
(ix)    a breach or inaccuracy in any representations or warranties, or any of
the Company’s or its subsidiaries’ covenants in the equity capital contribution
agreement, limited liability company operating agreement, EPC agreement or other
transaction documents relating to any of the Carveout Assets, including
representations, warranties and covenants regarding the applicable solar systems
and customer agreements, compliance with laws and regulations (including
consumer protection laws and regulations) tax items, governmental permits and
approvals, system warranties, environmental and regulatory matters and homeowner
credit metrics and other portfolio composition requirements, including
geographic diversity and technology, all with market standard survival periods
after the Closing Date.
1.7.4.    O&M Agreement. Parent shall perform certain repair obligations and
other services with respect to the Carveout Assets and the Q4 Assets pursuant to
one or more agreements (jointly, the "O&M Agreements") between Parent and TERP,
which shall be entered

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into concurrently with the Closing and be consistent with the terms set forth on
Exhibit A attached hereto.
1.8.    Long-Term Dropdown Framework Agreement. Concurrently with the Closing,
Parent (or a subsidiary of Parent whose obligations are guaranteed by Parent
pursuant to a guarantee reasonably acceptable to TERP) and TERP (or a subsidiary
of TERP whose obligations are guaranteed by TERP pursuant to a guarantee
reasonably acceptable to Parent) shall enter into a long-term framework
agreement (together with any ancillary agreements, the “US RSC Dropdown
Agreement”) for the dropdown of a certain number of US residential and small
commercial solar projects developed and constructed by the Company and its
subsidiaries following the Closing, which US RSC Dropdown Agreement shall also
grant TERP a call right with respect to any such projects beyond the committed
dropdown number, all based on the terms set forth on Exhibit B hereto.
1.9.    Finalization of Agreements. Parent and TERP shall negotiate in good
faith to finalize the forms of the additional Carveout Transaction Agreements,
the O&M Agreements, the US RSC Dropdown Agreement, the Note and any ancillary
agreements that may be necessary or convenient, within thirty (30) days after
the date of this Agreement, and in any event prior to the Closing, provided
that, as regards TERP, the terms of such agreements shall be subject to approval
by its Corporate Governance and Conflicts of Interest Committee.
1.10.    Notices under Merger Agreement. Each of Parent and Merger Sub agree to
promptly provide TERP with copies of any demands, notices, requests, consents,
or other communications that are received by Parent or Merger Sub pursuant to
the Merger Agreement.
2.    MISCELLANEOUS.
2.1.    Termination. This Agreement shall become effective on the date hereof
and shall terminate upon the earliest of (i) the Closing of the Carveout
Transaction and the entry into the US RSC Dropdown Agreement as contemplated
herein and (ii) the termination of the Merger Agreement; provided, however, that
any liability for failure to comply with the terms of this Agreement shall
survive any such termination. Notwithstanding the foregoing, Article 2, and
Sections 1.3, 1.4, 1.5, and 1.6 of this Agreement shall survive indefinitely
following the termination of this Agreement.
2.2.    Amendment. This Agreement may be amended or modified and the provisions
hereof may be waived, only by an agreement in writing signed by each of the
Parties.
2.3.    Severability. In the event that any provision hereof would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
be construed by modifying or limiting it so as to be valid and enforceable to
the maximum extent compatible with applicable law. The provisions hereof are
severable, and any provision hereof being held invalid or unenforceable shall
not invalidate, render unenforceable or otherwise affect any other provision
hereof.
2.4.    No Recourse. Notwithstanding anything that may be expressed or implied
in this Agreement or any document or instrument delivered in connection
herewith, and notwithstanding the fact that certain of the Parties may be
partnerships or limited liability companies, by its acceptance of the benefits
of this Agreement, Parent and each other Party acknowledges and agrees that no
Person other than the Parties has any obligations hereunder and that Parent and
each other Party has no right of recovery under this Agreement or in any
document or instrument delivered in connection herewith, or for any claim based
on, in respect of, or by reason of, such obligations or their creation, against,
and no personal liability shall attach to, the former, current and future equity
holders, controlling persons,

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directors, officers, employees, agents, affiliates, members, managers, general
or limited partners or assignees of the Parties or any former, current or future
stockholder, controlling person, director, officer, employee, general or limited
partner, member, manager, affiliate, agent or assignee of any of the foregoing,
in each case, other than the Parties hereto (collectively, each a “Non-Recourse
Party”), through Parent, Merger Sub, the Company or otherwise, whether by or
through attempted piercing of the corporate veil, by or through a claim by or on
behalf of Parent, Merger Sub or the Company against any Non‑Recourse Party, by
the enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute, regulation or applicable law, or otherwise. Nothing set
forth in this Agreement shall confer or give or shall be construed to confer or
give to any Person other than the Parties hereto (including any Person acting in
a representative capacity) any rights or remedies against any Person other than
as expressly set forth herein.
2.5.    Further Assurances. Each Party agrees to act in good faith and to
execute such further documents and perform such further acts as may be
reasonably required to carry out the provisions of the Merger Agreement and the
transactions contemplated thereby and effectuate the Carveout Transaction.
2.6.    Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
non-U.S. statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word “including” shall mean including without limitation.
2.7.    Governing Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE DEEMED
TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED
BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF TO THE EXTENT THAT SUCH PRINCIPLES WOULD
DIRECT A MATTER TO ANOTHER JURISDICTION. Each Party hereby irrevocably submit to
the exclusive personal jurisdiction of the Court of Chancery of the State of
Delaware, or to the extent such court does not have subject matter jurisdiction,
the United States District Court for the District of Delaware (the “Chosen
Courts”) solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and in respect of the transactions contemplated hereby, and hereby waive, and
agree not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or is
not maintainable in the Chosen Courts or that the Chosen Courts are an
inconvenient forum or that the venue thereof may not be appropriate, or that
this Agreement or any such document may not be enforced in or by such Chosen
Courts, and the Parties hereto irrevocably agree that all claims relating to
such action, suit or proceeding shall be heard and determined in the Chosen
Courts. The Parties hereby consent to and grant any such Chosen Court
jurisdiction over the person of such parties and, to the extent permitted by
Law, over the subject matter of such dispute and agree that mailing of process
or other papers in connection with any such action, suit or proceeding in the
manner provided in this Section 2.7 or in such other manner as may be permitted
by law shall be valid, effective and sufficient service thereof.
2.8.    WAIVER OF JURY TRIAL. EACH OF PARENT, MERGER SUB, AND TERP ACKNOWLEDGES
AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PERSON
HEREBY IRREVOCABLY AND UNCONDITIONALLY

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WAIVES ANY RIGHT SUCH PERSON MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF PARENT, MERGER
SUB AND TERP CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY TO THIS AGREEMENT HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION, SUIT OR
PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) SUCH PERSON UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) SUCH PERSON MAKES THIS
WAIVER VOLUNTARILY AND (d) SUCH PERSON HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 2.8.
2.9.    Exercise of Rights and Remedies. No delay of or omission in the exercise
of any right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in any
such breach or default, or of any similar breach or default occurring later, nor
shall any such delay, omission or waiver of any single breach or default be
deemed a waiver of any other breach or default occurring before or after such
waiver. For the avoidance of doubt, nothing in the Purchase Agreement shall
prejudice any rights of TERP under this Agreement.
2.10.    Other Agreements. This Agreement, together with the agreements
referenced herein, constitutes the entire agreement, and supersedes all prior
agreements, understandings, negotiations and statements, both written and oral,
among the parties or any of their affiliates with respect to the subject matter
contained herein except for such other agreements as are referenced herein which
shall continue in full force and effect in accordance with their terms.
2.11.    Assignment. This Agreement may not be assigned by any Party or by
operation of law or otherwise without the prior written consent of each of the
other Parties, except for any collateral assignment of rights hereunder to any
Party’s financing parties. Any attempted assignment in violation of this
Section 2.11 shall be null and void.
2.12.    No Representations or Duty. (a) Except as expressly provided herein,
each Party specifically understands and agrees that no Party has made or will
make any representation or warranty with respect to the terms, value or any
other aspect of the transactions contemplated hereby, and each Party explicitly
disclaims any warranty, express or implied, with respect to such matters from
any other Party. In addition, each Party specifically acknowledges, represents
and warrants that it is not relying on any other Party (i) for its due diligence
concerning, or evaluation of, the Company or its assets or businesses, including
but not limited to the Carveout Assets, (ii) for its decision with respect to
making any investment contemplated hereby or (iii) with respect to tax and other
economic considerations involved in such investment.
(b) In making any determination contemplated by this Agreement, each Party may
make such determination in its sole and absolute discretion, taking into account
only such Party’s own views, self-interest, objectives and concerns, except as
expressly provided herein. No Party shall have any fiduciary or other duty to
any other Party except as expressly set forth in this Agreement.

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2.13.    Counterparts. This Agreement may be executed in one or more
counterparts, and by the different Parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
2.14.    Notices. All demands, notices, requests, consents, and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered by courier service, messenger, or telecopy at, or if duly
deposited in the mails, by certified or registered mail, postage prepaid --
return receipt requested, to each Party at the address set forth on the
signature pages hereto, or any other address designated by such Party in writing
to the other Parties.
2.15.    Specific Performance. The parties agree that irreparable damage may
occur and that the parties may not have any adequate remedy at law in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that, in the event of any breach or threatened breach by any other party of any
covenant or obligation contained in this Agreement, the non-breaching party
shall be entitled to seek an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement, without the necessity of posting bonds or similar undertakings in
connection therewith, this being in addition to any other remedy which may be
available to such non-breaching party at law or in equity, including monetary
damages.

[Signature pages follow]

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IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement (or
caused this Agreement to be executed on its behalf by its officer or
representative thereunto duly authorized) as of the date first above written.

SUNEDISON, INC.

By: /s/ Ahmad Chatila    
Name: Ahmad Chatila    
Title: President and Chief Financial Officer    

SEV MERGER SUB, INC.

 
By: /s/ Brian Wuebbels    
Name: Brian Wuebbels    
Title: President    

Address for Notices:

13736 Riverport Drive; Suite 180
Maryland Heights, MO 63043
Attn: CFO & General Counsel

 
 
 

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TERRAFORM POWER, LLC

By: /s/ Alejandro Hernandez    
Name: Alejandro Hernandez    
Title: Chief Financial Officer    

Address for Notices:

7550 Wisconsin Ave, 9th Floor
Bethesda, MD 20814
Attn: CFO & General Counsel

 
 
 

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EXHIBIT A

TERMS OF O&M AGREEMENTS

[See Attached]

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SUMMARY OF TERMS AND CONDITIONS

O&M AGREEMENTS FOR VIVINT SOLAR DROPDOWNS

A. PARTIES TO THE TRANSACTION:

Vivint Solar:
Vivint Solar, Inc., a Delaware corporation

TerraForm:
TerraForm Power, LLC, a Delaware limited liability company

SunEdison Guarantor:
SunEdison, Inc., a Delaware corporation

Service
Provider(s):
SunEdison/Vivint Solar affiliate(s)

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B. OVERVIEW OF AGREEMENT:

General:
It is expected that TerraForm will acquire (directly or indirectly) a fleet of
operating residential rooftop photovoltaic solar energy systems (the “Operating
Portfolio”), including through the acquisition of the “sponsor” interest in a
series of tax equity financing vehicles. Some of these financing vehicles are
open to future assets placed in service. It is also expected that SunEdison
Guarantor will acquire (directly or indirectly) a sales pipeline of residential
rooftop photovoltaic solar energy systems that are expected to be placed into
service and conveyed to TerraForm through the fourth quarter of 2015 and which
will be subject to certain existing servicing arrangements (the “Expected
Portfolio” and with the Operating Portfolio, the “Portfolio”).

Pursuant to one or more agreements Vivint Solar will agree to undertake certain
repair obligations with respect to the Portfolio.

Additionally, Vivint Solar will, or will cause one or more of the Service
Providers to, enter into one or more service contracts to provide ongoing
operations and maintenance, asset management, and other agreed services to the
extent not provided for under existing contractual arrangements with respect to
the Portfolio.

Furthermore, Vivint Solar will agree to provide ongoing operations and
maintenance, asset management, and other agreed services with respect to (i) any
other systems developed, sourced, or constructed by Vivint Solar under previous
(pre-acquisition) arrangements and subsequently acquired by TerraForm (directly
or indirectly) and are also not currently subject an agreed servicing
arrangement and (ii) future systems (that may be developed, sourced, or
constructed by SunEdison that are expected to be, but are not currently, sold or
otherwise transferred to TerraForm (primarily through future tax equity
vehicles) (the “Future Portfolio”).
                

C. SUMMARY OF RETROFIT REPAIRS:

Terms:
Vivint Solar agrees to inspect the Portfolio within 18 months of acquisition of
the Portfolio, and to upgrade, repair, retrofit, or otherwise ensure the
Portfolio is in compliance with the customer agreements, applicable laws,
including local codes, major equipment manufacturer’s recommendations and
warranties, and Prudent Solar Industry Practices, in each case as determined in

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TerraForm’s reasonable discretion in consultation with Vivint Solar.

For purposes of this term sheet, “Prudent Industry Practices” shall include
those practices, methods, acts and equipment, as changed from time to time, that
are engaged in or approved by a significant portion of the residential
photovoltaic solar energy electrical generation industry operating in the
applicable jurisdiction in which a PV system is located that, at a particular
time, in the exercise of reasonable judgment in light of the facts known or that
should reasonably have been known at the time a decision was made, would have
been expected to accomplish the desired result in a manner consistent with
applicable law (including consumer protection laws), codes, standards, equipment
manufacturer’s recommendations, reliability, safety, environmental protection,
dependability, efficiency and economy. Prudent Industry Practices are not
intended to be limited to the optimum practices, methods or acts to the
exclusion of all others, but rather to be a spectrum of good and proper
practices, methods and acts.

Commitment:
To the extent not covered by any existing service or construction agreements
with respect to the Portfolio, Vivint Solar’s liability for such repair and
retrofit as described immediately above shall be limited to $100m.

Guaranty:
The repair and retrofit payment obligations of Vivint Solar will be guaranteed
by SunEdison Guarantor

Standard of Performance:
Vivint Solar warrants that it, or the Service Providers, will perform such
repairs in a good and workmanlike manner and that all such repairs shall be free
from defects in workmanship for a period of twelve (12) months after the
completion of any such service. If any such service or repair provided fails to
satisfy such warranty, Vivint Solar shall perform (or cause the Service
Providers to perform), upon notification by TerraForm to Vivint Solar at Vivint
Solar’s own cost and expense and without additional charge to TerraForm, the
services necessary to repair, re-perform, or otherwise correct any such defect
or deficiency promptly, even if such performance to address such defect or
deficiency shall exceed such twelve month warranty period.

D.    SUMMARY OF SERVICE OBLIGATIONS
Terms:
The parties will enter into a master operation and maintenance and
administrative service agreement (the “O&M Agreement”) with a

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term of ten years unless terminated earlier pursuant to the terms thereof.
Notwithstanding the foregoing, the O&M Agreement shall automatically renew for
one (1)-year at the end of the initial term or any other prior term, as
applicable, unless either Vivint Solar or TerraForm, no later than sixty (60)
days prior to expiration of the then current term, provides written notice to
the other Party that the O&M Agreement shall terminate upon expiration of such
term.
O&M Scope:
To the extent not covered by any existing service agreement with respect to the
Portfolio and for no additional consideration, Service Provider will keep all
systems in good repair, good operating condition, appearance and working order
in compliance with the customer agreements, applicable warranties, the
manufacturer’s recommendations and such Provider’s standard practices (but in no
event less than Prudent Industry Practices) and (ii) properly service all
components of all systems following the manufacturer’s written operating and
servicing procedures. Such services will include, but not be limited to, the
following:

1.
Such Service Provider will, at its sole cost and expense, promptly furnish or
cause to be furnished to Terraform or its subsidiary (as applicable, the “System
Owner”) such information as may be requested by System Owner in writing to
enable System Owner to file any reports required to be filed by System Owner
with any Governmental Authority because of System Owner’s ownership of or other
interest in any PV system.

2.
Such Service Provider will, at its sole cost and expense on behalf of System
Owner, as required under the applicable customer agreements, the manufacturer’s
recommendations and such Service Provider’s standard practices (but in no event
less than Prudent Industry Practices), promptly replace or cause to be replaced
all parts that may from time to time be incorporated or installed in or attached
to a PV system and that may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever; provided that for agreed upon
non-covered services the Service Provider will be reimbursed by System Owner.

3.
Such Service Provider will furnish or cause to be furnished to System Owner
promptly upon becoming aware of the existence thereof, a notice stating that a
breach of, or a default under, any

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contractual obligation of such Service Provider or System Owner in respect of
any Project has occurred with respect to a customer agreement or this Agreement
and specifying the nature and period of existence thereof and what action such
Service Provider has taken or is taking or proposes to take with respect
thereto; and from time to time such other information regarding the PV Systems
or the projects as System Owner may reasonably request.

Service Provider such other O&M services and informational reporting as
otherwise agreed to by the parties as are customary.

Asset Management Scope:
To the extent not covered by any existing service agreement with respect to the
Portfolio and for no additional consideration, Service Providers will, at their
sole cost and expense, administer or cause to be administered all customer
agreements and residential PV systems. Such Service Provider’s obligations under
will include, but not limited to, the following:

1.
Service Provider will (a) deliver periodic bills to all host customers, (b) use
commercially reasonable efforts to, on behalf of TerraForm, collect from all
host customers all monies due under the customer agreements, (c) manage all
communications with or among host customers and (d) cause compliance with
customer agreements. Service Providers will assist TerraForm in the enforcement
of all customer agreements.

2.
Service Provider shall manage and enforce, on behalf of System Owner, all
warranty claims with respect to the Portfolio (to the extent the applicable
warranties are retained by the original owner, Service Provider shall cause the
original owner to enforce the applicable warranty claims), and obtain and
maintain on behalf of System Owner, but at Service Provider’s sole cost and
expense, customary insurance with respect to the Portfolio; provided that System
Owner provides such full and complete cooperation as Service Provider may
reasonably require.

3.
Such Provider will give prompt written notice to System Owner of each accident
likely to result in material damages or claims for material damages against any
residential PV system or any such Person or likely to result in a material
adverse change to the financial or business condition of System Owner.

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4.
In the event that as a consequence of the exercise of remedies under a Customer
Agreement, a PV system is to be removed from the Host Customer’s property, (a)
such Provider will remove such PV system from such Host Customer’s real property
(and store such PV System) and (b) such Provider will use commercially
reasonable efforts to remarket and redeploy such PV system following any such
removal.

5.
Service Provider will manage the transfer of customer agreements for customers
who sell or change residences, and, where required by System Owner, evaluate the
credit of replacement customers and/or assist System Owner in redeploying the
system.

6.
Service Provider will provide quarterly unaudited and annual audited financial
statements in time periods to be agreed for each tax equity fund and will
prepare and file, or cause to be prepared and filed by certified public
accountants acting on behalf of System Owner, on a timely basis, all federal,
state and local tax returns and related information and filings required to be
filed by System Owner, will maintain bank accounts and complete and accurate
books and records, and will manage compliance with tax equity and other
financing agreements (including required reporting),and Service Provider shall
bear the costs and expenses of the foregoing (including costs and expense of
third party professionals, including tax and audit)

7.
Service Providers will provide any additional administrative services with
respect to the Portfolio as otherwise agreed to by the parties.

Pricing:
The aggregate fees for all O&M and asset management services under the O&M
Agreement and under any existing services agreements relating to the Portfolio
shall not exceed $25.50/kW per year for the period ending December 31, 2016,
escalating at up to 2.0% per year thereafter, until the tenth anniversary of the
Closing Date.

E.    FUTURE SERVICING:    
General:
Pursuant to one or more servicing agreements to be mutually agreed upon, Vivint
Solar will provide operations and maintenance, asset management, and other
agreed services with respect to the Future

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Portfolio. Such agreements are expected to be between Vivint Solar and/or the
Service Providers and future tax equity funds of which TerraForm has an interest
and contain standard market terms and conditions at the time of execution.
SunEdison and Vivint Solar currently anticipate the year 1 pricing for such
services to be $32/kW/year for 2016 funds; $31/kW/year for 2017 funds;
$30/kW/year for 2018 funds; $29/kW/year for 2019 funds; and $28/kW/year for 2020
funds assuming current market terms and conditions and scope of services, in
each case to escalate at a rate of 2% per year.

To the extent any additional services are separately requested by TerraForm,
TerraForm and Vivint Solar may enter into a separate master agreement mutually
acceptable to the parties.

F.    MISCELLANEOUS:
Governing Law:
New York

Confidentiality:
The parties agree that the contents of this Term Sheet are confidential and may
not be released to any unrelated parties without the prior written consent of
the other party.

Assignment:
Vivint Solar will be permitted to transfer its obligations to an affiliate so
long as such affiliate is creditworthy, based on criteria to be decided, or such
affiliate’s obligations are guaranteed by SunEdison, Inc or Vivint Solar.

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EXHIBIT B

TERMS OF US RSC DROPDOWN AGREEMENT

[See Attached]

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Summary of the Take/Pay Agreement
This Summary outlines certain terms of the Take/Pay Agreement referred to in the
Commitment Letter, of which this Annex E is a part. Certain capitalized terms
used herein are defined in the Commitment Letter.
Purchaser:
TerraForm Power, LLC, a Delaware limited liability company, or a designated
subsidiary thereof (the “Purchaser”).

Seller:
Vivint Solar, Inc., a Delaware corporation (the “Seller”).

Term:
From the Closing Date of the Term Facility until December 31, 2020.

Take/Pay Obligation; Purchases:
During the Term, Purchaser shall be obligated to purchase from Seller and its
subsidiaries, and Seller and its subsidiaries shall be obligated to sell to
Purchaser, from time to time (subject to minimum size and timing requirements
set forth in the definitive documentation), the “cash” or “sponsor” equity
position in tax equity partnerships or funds arranged by Seller for purchasing
residential solar systems (the “Solar Residential Systems”) developed and
constructed by Seller in an amount up to the Annual Maximum Commitment (as
defined below) and subject to the satisfaction (or waiver by the Purchaser) of
the Purchase Conditions (as defined below) provided, that if the Fair Market
Value (as defined below) is materially higher than the Target Return Price (as
defined below) at any such time, then, Seller shall conduct a third party
marketing effort for a reasonable, to be agreed upon period of time to locate a
third party buyer. If Seller is able to locate a third party buyer at a price
materially higher than the Target Return Price described herein, Purchaser shall
have a right of first refusal to purchase the Solar Residential Systems at the
third party price. In the event Seller is unable to locate a third party buyer
upon conclusion of such marketing period, Purchaser shall purchase the project
in accordance with the terms described herein. Such purchases will occur
concurrent with corresponding purchases by tax equity investors in such equity
partnerships or funds and will be occurring on a regular basis as assets are
ready to be contributed. The exact timing for such purchases is to be agreed but
expected to occur on a monthly basis and the proceeds of which will be deposited
into a borrower revenue account. True-ups would be expected to occur consistent
with past practices, but the amounts of the true-ups are expected to be minimal
and capable of being supported by funds available in such revenue account. If
that is not the case, reserve accounts to support such true-ups may be required.

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The contribution obligation of Purchaser with respect to such Solar Residential
Systems will equal the lesser of (a) Fair Market Value (as defined below) of
such cash or sponsor equity position at the time of the purchase, as supported
by an appraisal delivered by a Qualified Appraiser (as defined below), as
calculated in dollars per watt, and (b) a price (the “Target Return Price”),
calculated in dollars per watt, that, as of the time of such Purchase, is
expected to achieve the target return parameters for the Purchaser set forth in
the table below based on the Pricing Assumptions:

Year
2016
2017
2018
2019
2020
IRR – Pre-tax 30 Year Unlevered
7.75%
7.75%
8.00%
8.00%
8.00%
C/C – Year 1 Unlevered
8.50%
8.50%
8.50%
8.50%
8.50%
C/C – 20 Year Avg. Unlevered
9.00%
9.00%
9.00%
9.00%
9.00%

“Fair Market Value” means, with respect to any Solar Residential System or group
of Solar Energy Systems, the price at which such Solar Energy System or group of
Solar Energy Systems would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and both having
reasonable knowledge of the relevant facts.

 
“Qualified Appraiser” means a nationally recognized third-party appraiser that
(i) is qualified to appraise independent solar electric generating businesses,
(ii) has been engaged in the appraisal or business valuation and consulting
business for no fewer than five years, (iii) is not an affiliate of either
Purchaser or Seller and (iv) is mutually agreed upon by both Purchaser and
Seller.

In connection with each purchase of Solar Residential Systems, Purchaser and
Seller shall negotiate in good faith to enter into a purchase and sale agreement
and other associated documentation with tax equity providers arranged by Seller,
containing the terms set forth herein and other terms as may be agreed between
Purchaser and Seller with respect to such purchase.

For the avoidance of doubt, Purchaser’s obligation to pay its portion of the
purchase prices for Solar Residential Systems under the Take/Pay Agreement shall
be netted and offset against the amount of prepayments for systems transferred
to Purchaser as of the end of 2015 pursuant to the TERP Prepayment (to be
defined based on the aggregate portion of purchase prices of solar systems
expected to be transferred to Purchaser by the end of 2015 in a manner agreeable
to the parties).

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Annual Maximum Commitment:
In each calendar year of the Term, Purchaser shall not be required to purchase
Solar Residential Systems having aggregate megawatts (DC) (when considered
together with all other such purchases in such calendar year from Seller and its
subsidiaries) in excess of 450 megawatts (DC) during the 2016 calendar or in
excess of 500 megawatts (DC) during any subsequent calendar year (the “Annual
Maximum Commitment”), which Annual Maximum Commitment shall be reduced to zero
megawatts (DC) if the Term Facility expires or is satisfied, terminated, repaid,
refinanced or renewed, other than in connection with a foreclosure or other
exercise of remedies in respect thereof, prior to the expiration of the Term
hereof.

Purchaser Call Right:
At any time during the Term, Purchaser shall have a call right option, in its
sole discretion, to purchase the solar systems developed and constructed by
Seller in excess of the Annual Maximum Commitment at a purchase price equal to
the Fair Market Value thereof.

Pricing Assumptions:
The Pricing Assumptions are as follows:

    
•
the average FICO score of the customers leasing or purchasing power from such
Solar Residential Systems shall be greater than 740;

•
renewable energy credit pricing shall reflect then current market pricing for a
3-year forward hedge with merchant SREC prices reflected after that period
through the end of the Term, at the discretion of Purchaser;

•
30-year underwriting term and agreed geographic concentration limits;

•
residual value given to years 21-30 based on a to be agreed haircut to revenue;

•
the annual default rate of the customers leasing or purchasing power from such
Solar Residential Systems shall be less than an amount to be agreed and customer
agreements shall be generally consistent with past practices for Seller’s and
Purchaser’s existing tax equity funds and comply with consumer laws;

•
the energy production estimate process shall be confirmed by an independent
engineer to be agreed between Purchaser and Seller; and

•
all such Solar Residential Systems shall be comprised of modules/inverters and
shall be covered by equipment warranties reasonably acceptable to Purchaser. It
is understood and agreed that the Pricing Assumptions shall generally be
consistent with and in any shall not be more restrictive, when taken as a whole,
with customary

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practices for Seller’s and Purchaser’s existing tax equity funds.

Representations and Warranties:
Customary for tax equity fund purchase arrangements, but in no event more
restrictive than what is required by the applicable tax equity investors in the
applicable tax equity partnership or funds that are purchasing the applicable
systems.

Conditions Precedent:
Customary for tax equity fund purchase arrangements, but in no event more
restrictive than what is required by the applicable tax equity investors in the
applicable tax equity partnership or funds that are purchasing the applicable
systems.

Covenants:
Customary for tax equity fund purchase arrangements, but in no event more
restrictive than what is required by the applicable tax equity investors in the
applicable tax equity partnership or funds that are purchasing the applicable
systems.

Amendment and Waiver:
The Take/Pay Agreement may only be amended, supplemented, waived or otherwise
modified with the prior written consent of each of Seller and Purchaser and,
subject to materiality qualifiers to be agreed, the lenders under the Term
Facility.

Assignments:
No party to the Take/Pay Agreement may assign any of its rights or obligations
thereunder to any other person without the prior written consent of the other
party; provided that, the Seller may collaterally assign its rights under the
Take/Pay Agreement to the “secured parties” as to be defined and under the Term
Facility, and Purchaser shall enter into a customary consent to collateral
assignment with such secured parties, or a representative thereof, on the
Closing Date of the Term Facility.

Governing Law:
New York.