MEMBERSHIP INTEREST PURCHASE AGREEMENT between WGL ENERGY SYSTEMS, INC., WGSW, INC., and TERRAFORM ARCADIA HOLDINGS, LLC dated as of July 19, 2019

(b)          (i) On and after the Closing Date, if a beneficiary of any Unreleased Support Obligation with respect to which the applicable Seller or its Affiliates (excluding the Companies and the Company Subsidiaries) has not been released draws or collects on any such Unreleased Support Obligation or the applicable Seller and/or its Affiliates (excluding the Companies and the Company Subsidiaries), as applicable, incur a cost or expense on account of any such Unreleased Support Obligation and (ii) the event or condition giving rise to such drawing or demand under any such Unreleased Support Obligation has occurred on or after the Closing Date, Buyer shall, within fifteen (15) days after the applicable Seller notifies Buyer in writing of such drawing or payment, reimburse the applicable Seller and/or such Affiliate thereof, as applicable, for the amount of a drawing or payment under such Unreleased Support Obligation paid or incurred by the applicable Seller and/or such Affiliates, as applicable, in connection with such Unreleased Support Obligation.  Notwithstanding anything to the contrary provided herein, if the event or condition giving rise to such drawing or demand under any such Unreleased Support Obligation has occurred before the Closing Date, Buyer shall not be responsible for any such cost, expense or loss arising under such Unreleased Support Obligation and all such costs, expenses or losses shall be borne solely by the applicable Seller and/or its applicable Affiliates.  To the extent that any such payment or reimbursement is not made as provided above within fifteen (15) days after the applicable Seller notifies Buyer in writing of such drawing or payment recoverable pursuant to the first sentence of this Section 6.13(b), such drawing or payment shall bear interest (y) in respect of any Unreleased Support Obligation that accrues interest, at the rate per annum at which such Unreleased Support Obligation accrues interest or (z) in respect of any Unreleased Support Obligation that does not accrue interest, at a rate equal to Reference Rate plus one and one-half percent (1.5%) per annum, in either case, from the date that Buyer shall have been obligated to reimburse the applicable Seller and/or its Affiliates under this Section 6.13(b) through the date of payment.  Buyer shall indemnify the applicable Seller and/or its applicable Affiliates for any reasonable and documented expenses incurred by the applicable Seller and/or its Affiliates solely in connection with enforcing Buyer’s obligation to make any reimbursement that is required but not timely made pursuant to this Section 6.13(b).

 

Section 6.14          SFGF II’s Approved Project Company Purchase Obligations.

 

(a)           With respect to the Projects listed on Schedule 6.14(a) at Closing, Buyer agrees that, from and after the Closing Date, as owner of one hundred percent (100%) of the SFGF II Membership Interests:  if and to the extent that Buyer determines in good faith that based on the information provided by Sellers, that all conditions precedent to Section 4.1(a) (the “Objective Conditions”) of the SFGF II MPA will be met with respect to any such Project,  in accordance with the terms and conditions set forth in the SFGF II MPA and the SFGF II LLC Agreement, Buyer, as “Managing Member” of SFGF II shall seek the approval of the holders of the SFGF II Class A Units for each such Project to be considered an “Approved Project” such that SFGF II will purchase the “Approved Project Company” under the SFGF II MPA prior to its Completion Deadline.

 

(b)          Buyer agrees that in the event any of the Projects listed on Schedule 6.14(a) at Closing  is not purchased by SFGF II pursuant to Section 6.14(a), notwithstanding that the Objective Conditions have been met with respect to any such Project, as a result of the failure of the holders of the SFGF II Class A Units to provide approval under Section 6.03(x) of the SFGF II LLC Agreement, then Buyer shall, subject to terms and conditions substantially similar to the terms and conditions set forth in the SFGF II MPA  (including (x) that such Project will have only achieved “Interim Completion” (as defined in the SFGF II MPA) at the time of such purchase and (y) that WGL Seller complete such Project on substantially similar terms as set forth in Section 3.1 of the SFGF II MPA) or as otherwise mutually agreed by the Buyer and WGL Seller, purchase such Project from WGL Seller for the price set forth on Schedule 6.14(a); provided that WGL Seller provides Buyer with at least ten (10) Business Days prior written notice.

 

(c)          With respect to the Project listed on Schedule 6.14(c) at Closing,   Buyer shall, subject to terms and conditions substantially similar to the terms and conditions set forth in the SFGF II MPA (including (x) that such Project will have only achieved “Interim Completion” (as defined in the SFGF II MIPA) at the time of such purchase and (y) that WGL Seller complete such Project on substantially similar terms as set forth in Section 3.1 of the SFGF II MPA) or as otherwise mutually agreed by the Buyer and WGL Seller, purchase such Project from WGL Seller for the price set forth on Schedule 6.14(c); provided that WGL Seller provides Buyer with at least ten (10) Business Days prior written notice.

 

(d)           As of the Closing, Seller shall update (i) Schedule 6.14(a) to remove any Project set forth therein that is already owned by SFGF II at such time and (ii) Schedule 6.14(c) to remove the Project set forth therein if such Project is already owned by Arcadia Solar at Closing, provided that, for the sake of clarity, through its purchase and acquisition of Arcadia Solar, the Parties hereby agree that (A) Buyer shall only be required to purchase the Project set forth on Schedule 6.14(c) at Closing subject to substantially similar terms and conditions as set forth in the SFGF II MPA (including (x) that such Project will have only achieved “Interim Completion” (as defined in the SFGF II MIPA) at the time of Closing and (y) that WGL Seller complete such Project on substantially similar terms as set forth in Section 3.1 of the SFGF II MPA) and (B) if the conditions set forth in clause (A) of this Section 6.14(d)(ii) are not met, such Project shall remain on Schedule 6.14(c) at Closing.

 

Section 6.15         Remediation Expenditures.  Seller shall, prior to the Closing of the Transactions, use commercially reasonable efforts to complete all of the remediation projects and other ordinary course repairs and equipment replacements set forth on Schedule 6.15.  If any such remediation is not fully completed as of the Closing, Seller shall reimburse Buyer for all expenses associated with completing such remediation and other repairs and replacements after the Closing.

 

Section 6.16          [RESERVED]

 

Section 6.17          Residential Solar Service Provider.  On or prior to September 15, 2019, if Buyer has not favorably concluded its internal review process with respect each Residential Solar Service Provider, then WGL Seller shall use commercially reasonable efforts to assist Buyer in replacing any Residential Solar Service Provider which does not pass Buyer’s internal review process, under any applicable servicing arrangement or Contract to which such Residential Solar Service Provider is party with either Lease Dimensions Inc. or another service provider acceptable to Buyer.

 

Section 6.18         Audit Support.  Upon the written request of Buyer, Sellers shall make their Representatives and counsel available to Buyer for the purpose of supporting Buyer in response to any IRS audit of a Company’s or a Company Subsidiary’s Taxes or Tax Returns for taxable periods:  (a) prior to the Closing Date; and (b) taxable year immediately following the year that the Closing is consummated for a service fee payable by Buyer to WGL Seller equal to the market standard rate at the time for equivalent services.

 

Section 6.19        Charter Documents.  Following the Effective Date and prior to the Closing Date, Sellers shall use commercially reasonable efforts to provide to Buyer copies of the Charter Documents of each Company and Company Subsidiary, and to help identify any Company or Company Subsidiary which has a Charter Document under which the day to day management of the Company or Company Subsidiary is delegated to a natural person, and work collaboratively with Buyer to  amend and restate any such Charter Documents effective as of the Closing Date in a manner which is in form and substance reasonably satisfactory to the Buyer and expressly permitted by any required third party approvals.

 

Section 6.20          Project Insurance Claims.  Sellers shall use commercially reasonable efforts: (a) promptly on or following the Effective Date, to deliver to Buyer a list of all claims made under the Project Insurance in the three (3) years prior to the Effective Date; and (b) on or prior to the Closing Date, to update such list of claims to add any claims made under the Project Insurance after the Effective Date and prior to the Closing Date.

 

Section 6.21         Portfolio Economic Benefits.  It is the Parties’ intent that in the event of Closing that occurs after September 1, 2019, the Buyer shall be entitled to the economic benefits (less the economic obligations and economic burdens, but including associated Tax benefits and burdens to the applicable Company and/or Seller (assuming a Tax rate equal to the then-highest marginal federal income tax rate applicable to U.S. corporations, as in effect from time to time)) associated with all of the Companies, Company Subsidiaries and Projects, including any economic burden associated with any drawdown or claim related to any Unreleased Support Obligations which results from an event occurring on or after September 1, 2019 but prior to the Closing (the “Portfolio Economic Benefits”), assuming that the Closing had occurred on September 1, 2019.  In the event that the Closing does not occur by September 1, 2019, then if any Portfolio Economic Benefits are not contributed to or retained by the applicable Company during the period from September 1, 2019 until the Closing, they shall be referred to as “Portfolio Leakage Amounts”, and shall be reflected as an adjustment to the Purchase Price in accordance with Section 2.02 and Section 2.04.  In such case, Sellers shall deliver the Portfolio Economic Report to Buyer on a monthly basis from and after September 1, 2019.  The calculation of the Portfolio Economic Benefits shall be made in accordance with the Portfolio Economic Report; provided that Buyer shall have a right to review any Portfolio Economic Report during the adjustment period contemplated by Section 2.04.  For the sake of clarity, if the Closing has not occurred by September 1, 2019, Sellers shall deliver a Portfolio Economic Report from and after September 1, 2019 until the earlier of the Closing or a termination of this Agreement under Article X.

Section 6.22        Existing Litigation.  From and following the Effective Date and until the Closing Date, each Seller, as applicable, shall, or shall cause the applicable Company Subsidiary, to diligently pursue the prosecution, settlement or compromise of each Existing Litigation.  From and following the Closing Date, each Seller and Buyer (at their own cost) shall cooperate in good faith to pursue the prosecution, settlement or compromise of the Existing Litigation identified as item 1 on Schedule 3.12(a) (GL Georgia Project Group LLC v. Chief Manufacturing, Inc.), and: (i) the Sellers shall be entitled to the economic benefits  associated with resolution of such Existing Litigation for the period prior to September 1, 2019; and (ii) the Buyer shall be entitled to the economic benefits  associated with resolution of such Existing Litigation for the period from and after September 1, 2019.

 

Section 6.23          Property Tax Appeals.  From and following the Effective Date and until the Closing Date, each Seller, as applicable, shall, or shall cause the applicable Company Subsidiary to diligently pursue the prosecution, settlement or compromise of the applicable Seller Tax Appeals.  From and following the Closing Date, each Seller and Buyer (at their own cost) shall cooperate in good faith to pursue the prosecution, settlement or compromise of each of the Seller Tax Appeals, and: (i) the Sellers shall be entitled to the economic benefits associated with resolution of such Seller Tax Appeals for the period prior to September 1, 2019; and (ii) the Buyer shall be entitled to the economic benefits associated with resolution of such Seller Tax Appeals for the period from and after September 1, 2019.

 

Section 6.24        Fuel Cell Project FERC Filing.  WGL Seller agrees to cooperate with Buyer, at Buyer’s expense, in connection with Buyer’s preparation and submission to FERC of a petition for declaratory order regarding the non-traditional utility status of the fuel cell energy Projects listed in Annex II within ten (10) days following the satisfaction of the condition set forth in Section 8.03(g).

 

ARTICLE VII

Tax Matters

 

 

 

(a)          Buyer shall cause such Tax Return to be prepared (in a manner consistent with practices followed in prior taxable periods and in compliance with Law except as required by a change in Law or fact) and shall deliver a draft of such Tax Return to Sellers for Sellers’ review and approval at least thirty (30) days prior to the due date (including extensions) for filing such Tax Return;

 

(b)           Sellers and Buyer shall cooperate and consult with each other in order to finalize such Tax Return; and

 

(c)           thereafter, subject to Sellers’ payment to Buyer of any portion of such Tax in compliance with this Section 7.02 with respect to the Straddle Period, Buyer shall cause such Tax Return to be executed and duly and timely filed with the appropriate Tax authority and shall pay all Taxes shown as due and payable on such Tax Return.

 

Section 7.03          Tax Indemnification.

 

(a)          Sellers shall indemnify the Company and Buyer and hold them harmless from and against all Taxes of the Companies for all Pre-Closing Tax Periods (“Pre-Closing Taxes”) and Sellers shall reimburse Buyer for any such Taxes pursuant to this Section 7.03 within thirty (30) days after payment of such Taxes by Buyer or the Company; provided that, Sellers shall not be required to indemnify Buyer for any penalties resulting from Buyer’s failure to timely file any Tax Return.

 

 

(a)          in the case of ad valorem or property Taxes, the amount of such Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of days in the Straddle Period ending on the Closing Date and the denominator of which is the number of days in the entire Straddle Period; and

 

(b)           in the case of any other Tax, the amount which would be payable computed on a closing of the books basis as if the relevant Tax period ended as of the close of business on the Closing Date.

 

 

Section 7.06         Tax Refunds and Credits.  Sellers and Buyer each agree to pay to the other Parties any refund or rebate received (whether by payment, credit, offset or otherwise) by it or any of its Affiliates, in respect of any Taxes for which the other Party is liable, within thirty (30) days after receipt of such refund or rebate.  Sellers and Buyer shall cooperate to take any necessary steps to claim any such refund or rebate.  Schedule 7.06 lists each anticipated property tax refund claim.

 

 

Section 7.08        Tax Treatment of Indemnification Payments.  Any indemnification payments pursuant to this Article VII shall be treated as an adjustment to the Purchase Price by the Parties for Tax purposes, unless otherwise required by Law in which case such indemnification payments shall be grossed-up and paid on an after-tax basis.

Section 7.10          Transfer Taxes.  All Transfer Taxes imposed on Buyer, a Seller or a Company by Law as a result of this Agreement shall be paid by Buyer.  Buyer shall timely file all Tax Returns for any Transfer Tax as required by Law and shall notify Seller when such filings have been made.  This Section 7.10 shall not apply to any Transfer Taxes resulting from the Project Asset Transfer, which the applicable Seller shall be solely responsible for paying.

Section 7.11          Overlap with Indemnification.  Other than with respect to claims for Recapture Liability which shall be governed by Article IX, to the extent that any obligation or responsibility pursuant to Article IX may overlap with an obligation or responsibility pursuant to this Article VII, the provisions of this Article VII shall govern.

ARTICLE VIII

Conditions to Closing

Section 8.01          Conditions to Obligations of All Parties.  The obligations of each Party to consummate the Transactions shall be subject to the fulfillment (or waiver by each Party), at or prior to the Closing, of each of the following conditions:

(a)           No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the Transactions illegal, otherwise restraining or prohibiting consummation of such Transactions or causing any of the Transactions to be rescinded following completion thereof.

(b)           Solely with respect to the Projects, Companies and Company Subsidiaries being directly or indirectly conveyed, assigned or otherwise transferred to Buyer on the Closing Date, Sellers shall have received all consents, authorizations, orders and approvals from the Governmental Authorities and other Persons listed on Schedule 3.05 and Buyer shall have received all consents, authorizations, orders and approvals from the Governmental Authorities listed on Schedule 5.02, in each case, in form and substance reasonably satisfactory to Buyer and Sellers, and no such consent, authorization, order and approval shall have been revoked.

(c)           Sellers shall have delivered written notice to Buyer of Sellers’ account or accounts for payment by Buyer of the Closing Payment at least two (2) Business Days prior to the Closing Date.

(d)           All HSR Act approvals shall have been obtained or waiting periods shall have expired or been terminated, if applicable with respect to the Transaction.

(e)           WGSW Seller and Buyer shall have entered into a mutually agreeable Purchase and Sale Agreement for the sale by WGSW Seller to Buyer of WGSW Seller’s entire ownership interest in the portfolio of residential solar assets owned by ASD Solar, LP as of the Effective Date, with a base purchase price set forth on Annex V, on substantive terms similar to those contained in this Agreement as may be applicable to such ownership interest.

Section 8.02          Conditions to Obligations of Buyer.  The obligations of Buyer to consummate the Transactions shall be subject to the fulfillment or waiver by Buyer, at or prior to the Closing, of each of the following conditions:

(a)          The representations and warranties of each Seller contained in Article III and Article IV shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Material Adverse Effect on the Companies.

(b)          Each Seller shall have performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date, except where the failure to perform any such agreements, covenants and conditions would not reasonably be expected to be material to the applicable Company or Company Subsidiary.

(c)          Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of each Seller (in his or her capacity as such, and not in a personal capacity), that each of the conditions set forth in Section 8.02(a) and Section 8.02(b) have been satisfied.

(d)          Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of each Seller (in his or her capacity as such, and not in a personal capacity) certifying:  (i) that attached thereto are true and complete copies of all resolutions adopted by the board of directors of such Seller authorizing the execution, delivery and performance of this Agreement and the consummation of the Transactions; and (ii) the names and signatures of the officers of such Seller authorized to sign the documents to be delivered hereunder.

(e)           Each Seller shall have executed and delivered to Buyer the Transaction Documents to which it is a party.

(f)           Each Seller shall have delivered to Buyer written resignations, effective as of the Closing Date, of all officers, managers and directors (if any) of its respective Companies and the respective Company Subsidiaries.

(g)           Buyer shall have received releases of liability by Seller and its affiliates of the Company and the Company Subsidiaries, in a form reasonably satisfactory to Buyer.

(h)          Buyer shall have received evidence reasonably satisfactory to Buyer that (i) the Echo Master Lease Agreement, each Transaction Document (as defined in the Echo Master Lease Agreement) and all security interests, indebtedness or Encumbrances (other than Permitted Encumbrances) created or granted under or in connection with any such agreement shall have been irrevocably discharged, released or terminated (including by the filing of uniform commercial code termination statements), (ii) all of the Project Assets owned by WGSW Seller as “Lessor” under the Echo Master Lease Agreement as of the Effective Date have been irrevocably transferred to SF Echo, free and clear of all Encumbrances (other than Permitted Encumbrances) other than Permitted Liens; and (iii) any and all intercompany loans on Schedule 3.19 have been irrevocably discharged in full.

(i)            Buyer shall have received, in form and substance reasonably satisfactory to Buyer, amendments to or a further amendment and restatement of the Echo Assignment Agreement.

(j)            All O&M Agreements, AMAs and DAS Agreements to which a Seller or an Affiliate thereof is a party have been terminated or assigned to Buyer or the applicable Company or Company Subsidiary, as applicable.

(k)           The Project Asset Transfer has been completed, other than Projects which represent less than 50 megawatts of capacity.

(l)            Buyer shall have received a copy of each Project Asset Transfer Agreement.

(m)          Seller shall have provided Buyer with access (including by electronic delivery) to the books and records of the Company, the Company Subsidiaries and the Projects relating to periods prior to the Closing Date (in each case, for the immediately preceding three (3) years), to the extent such books are records are reasonably available to the Company or any Company Affiliate.

(n)           Buyer has received appraisals and cost segregation reports in respect of each applicable Project for which Seller possesses appraisals and cost segregation reports.

(o)          With respect to each applicable Project, Buyer has received a detailed breakdown of the costs and expenses incurred by Seller or its Affiliates with respect to each such Project, including: (i) the commercial operation date; and (ii) if applicable, the delivery commencement date.

(p)          Except for the SFEE Tax Equity Guaranty, which shall remain in place in its form as of the Effective Date following the Closing Date, each Tax Equity Guaranty shall be amended, amended and restated and/or assigned to Buyer or an Affiliate thereof (in each case, as permitted pursuant to, and in accordance with, the terms and conditions of the applicable limited liability company agreement of SFGF, SFGF II, SFEE and SFRC) such that: (i) the WGL Tax Equity Guarantor remains responsible for and retains the obligations under the applicable WGL Tax Equity Guaranty for all Liabilities relating to or pertaining to the applicable Projects, Company and Company Subsidiaries arising under, or related to, the period prior to the Closing Date and any Recapture Liability; and (ii) Buyer or an Affiliate thereof (in each case, as permitted pursuant to, and in accordance with, the terms and conditions of the applicable limited liability company agreement of SFGF, SFGF II, SFEE and SFRC) assumes the obligations for all Liabilities relating to or pertaining to the applicable Projects, Company and Company Subsidiaries arising under, or related to, the period from and following the Closing Date.

(q)           No Material Adverse Effect with respect to the Companies (collectively) shall have occurred after the Effective Date that is continuing.

(r)            Sellers have delivered or complied with, as applicable, all the items listed on Annex I.

(s)            Buyer shall have received evidence reasonably satisfactory to it that each covenant and agreement set forth in Section 6.06(f) shall have been completed and satisfied in all respects.

Section 8.03          Conditions to Obligations of Sellers.  The obligations of Sellers to consummate the Transactions shall be subject to the fulfillment or Seller’s waiver, at or prior to the Closing, of each of the following conditions:

(a)         The representations and warranties of Buyer contained in Article V shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect), except where the failure of such representations and warranties to be true and correct would not materially impair Buyer’s authority, right or ability to consummate the Transactions.

(b)           Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date.

(c)           Sellers shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer (in his or her capacity as such, and not in a personal capacity), that each of the conditions set forth in Section 8.03(a) and Section 8.03(b) have been satisfied.

(d)           Sellers shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer (in his or her capacity as such, and not in a personal capacity) certifying: (i) that Buyer has all necessary corporate approvals; and (ii) the names and signatures of the officers of Buyer authorized to sign the documents to be delivered hereunder.

(e)           Buyer shall have executed and delivered to Sellers the Transaction Documents to which it is a party.

(f)            Buyer shall have delivered to Sellers cash in an amount equal to the Closing Payment (less the Deposit and the interest accrued thereon, which shall be transferred from the account held by the Escrow Agent to Sellers pursuant to the Escrow Agreement) by wire transfer in immediately available funds, to an account or accounts designated by Sellers.

ARTICLE IX

Indemnification

(a)           In no event shall Sellers have any obligation to indemnify any Buyer Indemnified Party for any claim pursuant to Section 9.02(a) (other than: (i) for the Tax Representations and the Fundamental Representations; or (ii) in the case of Fraud) if the Losses incurred by the Buyer Indemnified Party with respect to such claim are less than or equal to $100,000 (the “Claim Threshold”).

(b)          Sellers shall not be liable to any Buyer Indemnified Party for indemnification under Section 9.02(a) (other than: (i) for the Tax Representations and the Fundamental Representations; or (ii) in the case of Fraud) until the aggregate amount of all Losses incurred by the Buyer Indemnified Party, subject to the Claim Threshold, equals or exceeds an amount equal to one-half percent (0.5%) of the Purchase Price (the “Deductible”), in which event Sellers shall be liable for all Losses to the extent such Loss are in excess of the Deductible.

(c)           The aggregate amount of all Losses for which Sellers shall be liable to any Buyer Indemnified Party for indemnification under:

(i)           Section 9.02(a) (other than: (i) for the Tax Representations, the Title Representations, and the Fundamental Representations; or (ii) in the case of Fraud) shall not exceed an amount equal to ten percent (10%) of the Purchase Price;

(ii)          Section 9.02(a) (with respect to any inaccuracy or breach of any Title Representations) shall not exceed the applicable portion of the Purchase Price set forth on Annex IV relating to the Projects affected by such inaccuracy or breach and

(iii)         Section 9.02(a) (with respect to any inaccuracy or breach of any Fundamental Representations or Tax Representations), Section 9.02(b), and Section 9.02(d) shall not exceed the Purchase Price;

(d)           The aggregate amount of all Losses for which Buyer shall be liable to any Seller Indemnified Party for indemnification under:

(i)           Section 9.03(a) (other than the Buyer Fundamental Representations) shall not exceed an amount equal to ten percent (10%) of the Purchase Price;

(ii)          Section 9.03(a) (with respect to any inaccuracy or breach of any Buyer Fundamental Representations) or Section 9.03(b) shall not exceed the Purchase Price.

(e)          Payments by an Indemnifying Party pursuant to Section 9.02 or Section 9.03, as applicable, in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party (or the Company) in respect of any such claim; provided, however, the Indemnified Party shall not be obligated to seek recovery under any insurance policies.

(f)           Each Indemnified Party hereby acknowledges its obligations under the common law doctrine of mitigation, as it may apply to any Losses claimed by such Party under this Article IX.

(g)          IN NO EVENT SHALL ANY INDEMNIFYING PARTY BE LIABLE TO ANY INDEMNIFIED PARTY FOR ANY PUNITIVE, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY LOSSES OR DAMAGES OF ANY NATURE, OR ANY DAMAGES BASED ON ANY TYPE OF MULTIPLE REGARDLESS OF WHETHER SAID CLAIM IS BASED ON CONTRACT, TORT, STRICT LIABILITY, OR OTHER THEORY OF LAW OR OTHERWISE AND WHETHER OR NOT ARISING FROM THE OTHER PARTY’S OR ANY OF ITS AFFILIATES’ NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES’ SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT (COLLECTIVELY, “NON-REIMBURSABLE DAMAGES”).  THE FOREGOING LIMITATIONS SHALL NOT APPLY TO DAMAGES: (I) THAT ARE ASSERTED BY AN UNAFFILIATED THIRD PARTY FOR WHICH A PARTY IS EXPRESSLY ENTITLED TO INDEMNIFICATION UNDER THIS AGREEMENT; OR (II) RESULTING FROM A CLAIM RELATED TO BUYER’S BREACH OF CONFIDENTIAL INFORMATION OR INTELLECTUAL PROPERTY RIGHTS WITH RESPECT TO THE PROJECTS.

Section 9.05          Indemnification Procedures.

(a)          Third-Party Claims.  If any Indemnified Party receives notice of the assertion or commencement of any Action or other legal proceeding made or brought by any Person who is not a Party to this Agreement or an Affiliate of a Party to this Agreement or a Representative or counsel of the foregoing (a “Third-Party Claim”) against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party prompt written notice thereof.  The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure.  Such notice by the Indemnified Party shall describe the Third-Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party.  The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third-Party Claim at the Indemnifying Party’s sole cost and expense and by the Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, in advance of its exercise of such right, the Indemnifying Party shall deliver to the Indemnified Party an acknowledgement in writing of the unqualified obligation of the Indemnifying Party to indemnify the Indemnified Party for such claim; provided, however, such right of the Indemnifying Party shall not apply to any claims that relate to or involve: (i) alleged violations of criminal law; (ii) any claim seeking specific performance or injunctive relief; or (iii) an amount in controversy that is in excess of the liability limitations for the applicable subject matter in this Agreement.  In the event that the Indemnifying Party assumes the defense of any Third-Party Claim, subject to Section 9.05(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and on behalf of the Indemnified Party.  The Indemnified Party shall have the right, at its own cost and expense, to participate in the defense of any Third-Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof.  If the Indemnifying Party elects not to compromise or defend such Third-Party Claim or fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, the Indemnified Party may, subject to Section 9.05(b), pay, compromise or defend such Third-Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third-Party Claim.  Sellers and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third-Party Claim, including making available (subject to the provisions of Section 6.05) records relating to such Third-Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third-Party Claim.

	WGL ENERGY SYSTEMS, INC.

By

/s/ ▇▇▇▇▇ ▇▇▇▇▇

WGSW, INC.

By

/s/ ▇▇▇▇▇ ▇▇▇▇▇

	Name:	▇▇▇▇▇ ▇▇▇▇▇
	Title:	President

TERRAFORM ARCADIA HOLDINGS, LLC

By

/s/ ▇▇▇▇▇▇▇ ▇▇▇▇

	Name:	▇▇▇▇▇▇▇ ▇▇▇▇
	Title:	General Counsel