EARNOUT AGREEMENT, dated as of February 17, 2021 (this Agreement), by and between LEN X, LLC, a Florida limited liability company (Member), and Sunnova Energy International Inc., a Delaware corporation (Acquiror). The Member and Acquiror are referred to herein collectively as the Parties and individually as a Party.
WHEREAS, concurrently with, and as a condition to, the execution and delivery of this Agreement, SunStreet Energy Group, LLC, a Delaware limited liability company (the Company), Member, Moonroad Acquisition LLC, a Delaware limited liability company (Merger Sub), and Acquiror are entering into an Agreement and Plan of Merger, dated as of the date hereof (as may be amended, modified or supplemented from time to time in accordance with its terms, the Merger Agreement);
WHEREAS, the Merger Agreement provides for, among other things, the merger of the Company with and into the Merger Sub, with the Merger Sub surviving as a wholly owned Subsidiary of Acquiror (the Merger), in exchange for certain consideration issuable to Member at the closing of the Merger (the Closing) as well as pursuant to this Agreement, on the terms and subject to the conditions set forth therein and herein;
WHEREAS, Member and Acquiror wish to enter into this Agreement to set forth the further terms pursuant to which Member may be eligible to receive certain additional consideration in respect of the Merger following the Closing, upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Parties intend that, for U.S. federal income tax purposes, the Merger, including the terms of this Agreement, shall qualify for, and be treated in accordance with, the Intended Tax Treatment as defined in Section 8.7(a) of the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
Section 1.1 Defined Terms.
(a) For all purposes of this Agreement, the following terms shall have the following respective meanings. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement.
Arbitrator shall mean an arbitrator selected in accordance with Section 4.14 or, if Acquiror and Member shall otherwise agree in writing, an independent accounting firm or other Person mutually selected by Acquiror and Member.
Cumulative Earnout Amount shall mean 2,777,784 shares of Acquiror Common Stock.