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CONTRATO DE PRESTAÇÃO DE SERVIÇOS DE GESTÃO DE CRÉDITO E SISTEMA
DE FATURA DE ENERGIA ELÉTRICA ONLINE
 
AGREEMENT FOR THE PROVISION OF CREDIT MANAGEMENT SERVICES AND ONLINE ELECTRICITY INVOICE SYSTEM
 
 
Pelo presente instrumento particular e na melhor forma de direito, as partes abaixo indicadas, de um lado:
By this particular instrument and in the best form of law, the parts listed below, on the one hand:
 
 
CONSORCIO DE GERACAO COMPARTILHADA DE ENERGIA ELETRICA ENERGEA, sociedade empresária de responsabilidade limitada, inscrita no Cadastro Nacional de Pessoas Jurídicas do Ministério da Economia ("CNPJ") sob o n° 36.087.207/0001-70, com sede na R NUCLEO RURAL, SITIO BOA ESPERANCA SETOR B, ZONA RURAL, PEDRO TEIXEIRA, MINAS GERAIS - MG, 36.148-000, neste ato representada na forma de seu contrato social, por seus representantes legais abaixo assinado, doravante denominada simplesmente "Contratante";
CONSORCIO DE GERACAO COMPARTILHADA DE ENERGIA ELETRICA ENERGEA, legal entity of legal law legally constituted and registered in the National Registry of Legal Entities (CNPJ) under no. 36.087.207/0001-70, with headquarters at R NUCLEO RURAL, SITIO BOA ESPERANCA SETOR B, ZONA RURAL, PEDRO TEIXEIRA, MINAS GERAIS - MG, 36.148-000, in this act duly represented in the form of its Bylaws by its below signed representatives, herein represented in the form of its Articles of Association hereinafter referred to as "Contracting Party";
 
 
E de outro lado:
And on the other hand:
 
 
ENERGEA BRASIL OPERAÇÕES LTDA., sociedade limitada, regularmente registrada no CNPJ/ME sob o número 41.161.846/0001-90, com sede na Rua Barão de Jaguaripe, n° 280/501, na Cidade e Estado do Rio de Janeiro, CEP 22.421-000, neste ato representada na forma de seu Contrato Social, doravante denominada simplesmente "Contratada";
ENERGEA BRASIL OPERAÇÕES LTDA., a limited liability company, regularly registered in the CNPJ/ME under No. 41.161.846/0001-90, with address at Rua Barão de Jaguaripe, No. 280/501, in the city and State of Rio de Janeiro, CEP 22.421-000, herein represented in the form of its Articles of Association, hereinafter referred to as "Contractor";
 
 
Contratante e Contratada designadas, individualmente, como "Parte" e, conjuntamente, como "Partes".
Contracting Party and Contractor designated individually as "Party" and, together, as "Parties".
 
 
CONSIDERANDO QUE:
WHEREAS:
 
 
    I.       A Contratada desenvolveu um sistema de gestão de faturas de energia elétrica para projetos de geração distribuída ("Sistema") e possui experiência na gestão de diversos projetos de geração distribuída em diferentes distribuidoras;
    I.     The Contractor has developed an electricity invoice management system for distributed generation projects ("System") and has experience in managing several distributed generation projects with different distribution companies;
 
 
  II.       A Contratante possui uma usina de geração solar localizada em Iguatama/MG (o "Projeto") e tem interesse na disponibilização do Sistema desenvolvido pela Contratada e nos serviços relacionados a marketing e aquisição de clientes e de gestão junto a distribuidora e da compensação de energia para o Projeto;
 
   II.     The Contracting Party owns a solar photovoltaic generating plant, located at Iguatama/MG(the "Project") and is interested in the System developed by the Contractor and in the marketing, customer acquisition and management services with the distribution company and energy compensation for the Project;
 
 
AGORA, PORTANTO, em consideração às promessas e acordos mútuos estabelecidos abaixo, e outras considerações justas e valiosas, cujo recebimento e suficiência são reconhecidos por meio deste, as Partes, pretendendo estar legalmente vinculadas por meio deste, concordam em celebrar este Contrato de Prestação de Serviços de Gestão de Crédito e Sistema de Fatura de Energia Elétrica Online (o "Contrato"), neste dia [] ("Data de Assinatura"), de acordo com as seguintes Cláusulas, termos e condições:
NOW THEREFORE, in consideration of the mutual promises and covenants set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree to enter this Agreement for the Provision of Credit Management Services and Online Electricity Invoice System (the "Agreement"), on [] (the "Execution Date") in accordance with the following Clauses, terms and conditions:
 
 
1. DEFINIÇÕES 1. DEFINITIONS
   
1.1 Sem prejuízo das outras definições feitas no presente instrumento, os termos abaixo, no plural ou no singular, no masculino ou no feminino, terão os seguintes significados, quando redigidos conforme indicados abaixo:
 
1.1 Without prejudice to other definitions made in this Agreement, the terms given below, in the plural or in the singular, in the masculine or feminine, shall have the following meanings, when written as indicated below:
 
 
 
(i)             Data Efetiva: Data de início da prestação de serviços pela Contratada à Contratante;
 
(ii)            Cliente: significa todos os membros do Consorcio de Geração Compartilhada de Energia Eletrica Energea;
 
(iii)           Distribuidora: significa a CEMIG;
 
(iv)           Data de Assinatura: [];
 
(v)            Portal Energea: Sistema computacional controlado pela Contratada em ambiente de computação em nuvem ("Cloud computing") para gestão de fatura de energia elétrica;
 
(vi)           Preço ou Remuneração: é a quantia paga mensalmente pelo Contratante à Contratada pelo serviço ora contratado, que variará de acordo com a quantidade de Unidades Consumidoras cadastradas e ativas;
 
(vii)         Valor do Contrato: é o valor da remuneração contratual aplicável ao mês em que ocorreu o evento ensejador da aplicação da multa.
 
 
(viii)        Relatório de Serviço mensal: é um relatório contendo o detalhamento dos Serviços realizados no determinado mês.
 
(ix)           Custo do Serviço de Suporte: é um custo variável relacionado às atividades de suporte realizadas em determinado mês.
 
(i)             Effective Date: Date of initiation of the provision of services by the Contractor to the Contracting Party;
 
(ii)           Customer: means the members of the Consorcio de Geração Compartilhada de Energia Eletrica Energea;
 
(iii)          Distribution Company: means CEMIG;
 
(iv)          Execution Date: [];
 
(v)           Portal Energea: Contracted computer system in cloud computing environment ("Cloud computing") for electricity invoice management;
 
(vi)          Price or Compensation is the amount paid monthly by the Contracting Party to the Contractor for the service contracted, which will vary according to the amount of registered and active Consumer Units;
 
 
(vii)         Contract Value: It is the contractual compensation amount applicable to the month in which the event triggering the imposition of the penalty occurred.
 
(viii)       Monthly Service Report is a report detailing the Services performed in a given month.
 
(ix)          Support Service Cost is a variable cost related to the actual customer service activity performed.
 
 
 
1.2 Interpretação. No presente Contrato, uma referência: 1.2 Interpretation. In this Agreement, a reference to:
 
 
(a) ao singular inclui o plural e vice-versa; (a) the singular will include the plural and vice-versa;
 
 
(b) todas as referências ao masculino, ao feminino e ao gênero neutro incluem todos os outros; (b) any references to the masculine, the feminine and the neutral gender will include each other;
 
 
(c) à expressão "esta Cláusula" será considerada, a menos que seja seguida por uma referência a uma disposição específica, como se referisse a toda a Seção (e não simplesmente àquele(a) subseção, parágrafo ou outra disposição) em que a expressão ocorra; (c) the expression "this Section" will, unless followed by reference to a specific provision, be deemed to refer to the whole Section (not merely the sub section, paragraph or other provision) in which the expression occurs;
 
 
(d) aos títulos de Cláusulas, Anexos e partes e parágrafos de Anexos serve apenas para conveniência e não afeta a interpretação do presente Contrato; (d) headings to Sections, Exhibits and parts and paragraphs of Exhibits are for convenience only and do not affect the interpretation of this Agreement;
 
 
(e) à expressão "por escrito" compreende qualquer comunicação feita por carta, e-mail ou fax; (e) the expression "in writing" includes any communication made by letter, e-mail or fax;
 
 
(f) à expressão "inclui" e "inclusive/incluindo", bem como todas as suas variantes, serão interpretadas apenas como por meio de ilustração ou ênfase e não serão interpretadas como, tampouco terão sentido como se limitassem a generalidade de qualquer um dos termos anteriores; (f) the expression "include" and "including" will be construed as being by way of illustration or emphasis only and will not be construed as, nor will they take effect as, limiting the generality of any preceding words;
 
 
(g) à expressão "dias" no presente Contrato refere-se aos dias de um calendário de 12 (doze) meses nos Estados Unidos; (g) the expression "days" in this Agreement is to days of a 12 (twelve) month United States calendar;
 
 
(h) à expressão "Pessoa" inclui uma referência a qualquer indivíduo, firma, empresa, corporação ou outro órgão corporativo, autoridade governamental ou qualquer iniciativa conjunta, associação ou parceria, conselho de trabalhadores ou órgão representativo de funcionários (independente se tem ou não uma personalidade jurídica distinta) e também inclui uma referência aos sucessores e cessionários permitidos dessa pessoa; (h) the expression "Person" includes a reference to any individual, firm, company, corporation or other body corporate, governmental authority or any joint venture, association or partnership, works council or employee representative body (whether or not having separate legal personality) and also includes a reference to that person's successors and permitted assigns;
 
 
(i) à expressão "Parte" inclui uma referência aos sucessores e cessionários permitidos dessa Parte; (i) the expression "Party" includes a reference to that Party's successors and permitted assigns;
 
 
(j) à Cláusula, introdução, preâmbulo ou anexo, salvo indicado expressamente de outra forma, serve como referência a uma seção, à introdução, ao preâmbulo ou ao anexo do presente Contrato; (j) a Section, preamble, recitals or schedule, unless expressly stated otherwise, is a reference to a section, to the preamble, to the recitals of or schedule to this Agreement;
 
 
(k) a qualquer estatuto ou regulamentação é conforme eventualmente alterada e complementada (e a qualquer disposição sucessora), salvo se o contexto requerer de outra forma. Qualquer referência a qualquer estatuto federal, estadual, municipal ou estrangeiro ou a qualquer lei que se aplique também será considerada como se referisse a todas as regras e regulamentações promulgadas em seus termos, salvo exigência em contrário pelo contexto. (k) any statute or regulation are to it as amended and supplemented from time to time (and, to any successor provisions), unless the context shall otherwise require. Any reference to any federal, state, local or foreign statute or applicable law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.
 
 
2. OBJETO 2. PURPOSE
   
2.1 O objeto deste Contrato é descrever os termos e condições sob os quais a Contratada realizará serviços de marketing e aquisição de clientes e disponibilizará o sistema de Gestão de Faturas de Energia Elétrica Online ("Sistema") à Contratante .
 
2.1 The purpose of this Agreement is to describe the terms and conditions under which Contractor shall provide marketing and customer acquisition services and make available the online electric energy invoice management system ("System") to the Contracting Party .
 
 
2.2 Os Serviços incluem:
 
(1) Serviços relacionados a marketing e aquisição de clientes, direta ou indiretamente ("Serviços de Marketing e Aquisição"), se aplicável.
 
(2) Serviços relacionados a gestão de créditos ("Serviços de Gestão de Crédito" e, em conjunto com os Serviços de Marketing e Aquisição, os "Serviços"), incluindo:
 
a.       Sistema e mecanismo de download e leitura de dados das faturas de energia;
 
b.       Plataforma WEB para gestão de projetos de geração distribuída;
 
c.       Emissão de relatório mensal com base nos dados disponibilizados;
 
d.       Integração com Sistemas de gestão de pagamentos por boletos ou faturas para emissão mensal, quando aplicável;
 
e.       Suporte aos clientes dos consórcios em diferentes níveis de atendimento e controlado por sistema de chamados;
 
f.        Gerenciamento dos consórcios perante a distribuidora, quando aplicável;
 
g.       Gestão de compensação de energia e interface junto a distribuidora;
 
h.       Otimização dos créditos de energia vigentes;
 
i.        Suporte regulatório e tributário nos aspectos referentes ao faturamento de geração distribuída;
 
j.        Cálculo e controle dos valores devidos para pagamento;
 
k.       Verificação e confirmação de faturamento do Projeto e emissão de relatórios mensais para o Cliente e a Contratante; e
 
l.        Suporte técnico da plataforma.
 
2.2 The Services shall include:
 
(1) Services related to marketing and customer acquisition, directly or indirectly ("Marketing and Acquisition Services"), if applicable.
 
 
(2) Services related to the management of credits ("Credit Management Services" and, together with the Marketing and Acquisition Services, the "Services"), including:
 
 
a.           System and mechanism for downloading and reading data from energy invoices;
 
 
b.          WEB platform for distributed generation project management;
 
c.           Issuance of a monthly report based on the data made available;
 
d.          Integration with payment management systems for monthly billing issuance, when applicable;
 
 
e.          Support to clients of consortiums in different service levels, when applicable;
 
 
f.            Management of consortiums with the distribution company, when applicable;
 
g.           Energy compensation management and interface with the distribution company;
 
h.          Optimization of current energy credits;
 
 
i.            Regulatory and tax support in aspects related to distributed generation billing;
 
j.            Calculation and control of the amounts due for payment;
 
k.           Billing verification and confirmation in relation to the Project and issuance of monthly reports for the Customer and Contracting Party; and
 
 
l.            Technical support for the platform.
 
 
 
2.3 É do conhecimento da Contratante que a prestação dos Serviços pela Contratada, com o padrão de qualidade adequado, dependerá do atendimento, por parte da Contratante, dos requisitos e configurações mínimas capazes de proporcionar o recebimento adequado do Serviço fornecido, incluindo: dados gerais e informações de geração do Projeto e suas interrupções, programações de manutenção, informações técnicas, informações sobre alterações na representação junto ao Cliente, discussões comerciais ou contratuais com o Cliente, disponibilização de faturas ou acesso aos sites das Distribuidoras pelo Cliente.
2.3 The Parties agree that the provision of the Services by the Contractor, with the appropriate quality standard, will depend on the Contracting Party providing the necessary information and configurations, including: Project data and generation information and its interruptions, maintenance schedules, technical information, information regarding changes in the representation with the Customer, commercial or contractual discussions with the Customer, invoices and access to the Distribution Company's website.
 
 
 
3. PRAZO DE VIGÊNCIA 3. TERM
   
3.1 Este Contrato será válido e vigorará a partir da Data de Assinatura e permanecerá válido por um período de 20 (vinte) anos, contados da Data Efetiva ("Prazo").
3.1 This Agreement shall be valid and in force as of the Execution Date and shall remain as such for a period of twenty (20) years, counted from Effective Date ("Term").
 
 
4. OBRIGAÇÕES DAS PARTES
4. PARTIES' OBLIGATIONS
 
 
4.1 Obrigações da Contratada. Sem prejuízo do cumprimento das demais obrigações previstas neste Contrato, a Contratada obriga-se a:
4.1 Contractor's Obligations. Without prejudice to the other obligations provided in this Agreement, the Contractor undertakes to:
 
 
 
i. Cumprir integralmente as obrigações previstas no(s) contrato(s) com o Cliente;
i. Fully comply with the obligations established in the contract(s) with the Customer;
 
 
ii. Prestar os Serviços de acordo com os termos e condições acordados com a Contratante e refletidos no presente Contrato;
ii. Provide the Services in accordance with the terms and conditions agreed with the Contracting Party and reflected in this Agreement;
 
 
iii. informar a Contratante, até o dia útil subsequente à data do evento, de qualquer situação que possa impactar a execução dos Serviços, como exemplo, situações de ordem operacional, legal, regulatória, administrativa ou mesmo a ocorrência de mudança de controle da Contratada, que de alguma forma possa comprometer a boa execução do Contrato ou implique em conflito de interesses com o Contratante;
iii. inform Contracting Party, up to the business day following the date of the event, of any situation that may impact the execution of the Services, for example, operational, legal, regulatory, administrative situations or even the occurrence of a change of control by Contractor, that in any way may compromise the proper performance of the Contract or imply a conflict of interest with the Contracting Party;
 
 
iv. Implementar os padrões de gráficos e relatórios desejados pelo Contratante no 1° (primeiro) mês de prestação de Serviços;
iv. Implement the charting patterns and reports requested by the Contracting Party in the 1st (first) month of Service provision;
 
 
v. Para todas as unidades consumidoras desejadas, incluir os dados históricos de faturas de energia disponíveis online nos Sites das respectivas distribuidoras;
v. For all desired consumer units, include historical data from energy invoices available online on the Sites of their distribution companies;
 
 
vi. Enviar mensalmente relatório da central geradora com clientes adquiridos, valores devidos de faturamento e ações realizadas no mês ("Relatório de Serviço Mensal");
vi. Send monthly report of the generating plant with customers acquired, billing amounts due and actions carried out in the month ("Monthly Service Report");
 
 
vii. Relacionamento junto à distribuidora de energia para verificação do faturamento de geração distribuída;
vii. Relationship with the distribution company to verify distributed generation billing;
 
 
viii. Garantir disponibilidade mínima de 95% do servidor do Portal Energea.
viii. Ensure minimum availability of 95% of the Server of the Energea Portal.
 
 
4.2 Sem prejuízo das demais disposições previstas neste Contrato, o Contratante obriga-se a:
4.2 Without prejudice to the other provisions provided for in this Agreement, the Contracting Party undertakes to:
 
 
 

I.      fornecer à Contratada os dados, documentos e informações que se façam necessários à boa execução do objeto deste Contrato;

i.          provide the Contractor with the data, documents and information that is necessary for the proper performance of the subject matter of this Agreement;

 
 
 
II.     conceder o acesso ao Portal Energea apenas ao seu pessoal ou aos seus subcontratados, desde que tenham por contrato autorização para acesso e visualização dos dados;
ii.         grant access to the Portal Energea only to its staff or subcontractors, provided that they have a contractual authorization to access and view the data;
 
 
 
III.    encaminhar à Contratada de imediato, quaisquer documentos ou informações que forem alteradas ou que possam interferir nos resultados do objeto deste Contrato;
iii.        forward to the Contractor immediately, any documents or information that is amended or that may interfere with the results of the subject matter of this Agreement;
 
 
 
5. SEGURANÇA DA INFORMAÇÃO, SIGILO E CONFIDENCIALIDADE
5. INFORMATION SECURITY AND CONFIDENTIALITY
 
 
5.1 A Contratada se obriga a cumprir todas as normas e padrões corporativos relacionados à segurança da informação do Contratante, respondendo por si e/ou por sua equipe de trabalho, perante o Contratante e/ou terceiros, por todos os danos decorrentes do uso indevido das informações disponibilizadas pelo Contratante, por força deste Contrato.
 
5.1 The Contractor undertakes to comply with all corporate standards related to the security of the Contracting Party information, accounting for himself and/or his work team, before the Contracting Party and/or third parties, for all damages arising from the misuse of the information provided by the Contracting Party, pursuant to this Agreement.
 
 
 
5.2 A Contratada permitirá que o Contratante, ou empresa por ele indicada, faça avaliações dos controles de segurança da informação implementados pela Contratada, comprometendo-se a acatar as recomendações e implementações solicitadas pelo Contratante, no que se refere à segurança da informação.
5.2 The Contractor will allow the Contracting Party, or a company indicated by it, to make evaluations of the information security controls implemented by the Contractor, committing to comply with the recommendations and implementations requested by the Contracting Party, with regard to information security.
 
 
5.3 Para os fins deste Contrato, Informação Confidencial significa toda e qualquer informação que não seja pública, qualquer que seja a sua natureza, esteja ou não marcada como "confidencial", pertencente a qualquer das Partes, aos seus fornecedores ou Contratantes, ou relacionada de qualquer forma com tal Parte, seus negócios, atividades, produtos, serviços, fornecedores ou Contratantes, divulgada e/ou tornada acessível à outra Parte, seja oralmente, por escrito, eletronicamente, digitalmente, visualmente, ou de qualquer outra forma, antes ou depois da Data de Assinatura. Informação Confidencial não inclui a informação que (i) já for conhecida ou obtida de forma independente pela Parte receptora anteriormente à sua divulgação; (ii) tiver se tornado parte do domínio público de modo outro que não pela violação desta Cláusula pela Parte receptora; e (iii) tiver sido legitimamente obtida pela Parte receptora através de outra pessoa ou entidade que não possua obrigação de confidencialidade em relação à Parte divulgadora.
5.3 For the purposes of this Agreement, Confidential Information means any and all information other than public, whatever its nature, is or is not marked as "confidential", belonging to any of the Parties, to its suppliers or Contracting Party, or related in any way to such Party, its business, activities, products, services, suppliers or Contracting Party, disclosed and/or made accessible to the other Party, whether orally, in writing, electronically, visually, or in any other way, before or after the Subscription Date. Confidential Information does not include information that (i) is already known to or obtained independently by the receiving Party prior to its disclosure; (ii) has become part of the public domain in a way other than by the violation of this Clause by the receiving Party; and (iii) has been legitimately obtained by the receiving Party through another person or entity which has no obligation of confidentiality in relation to the disclosing Party.
 
 
 
5.4 A Parte receptora compromete-se a manter a confidencialidade de todas as Informações Confidenciais, não publicar nem divulgar tais informações para terceiros e não as usar para qualquer propósito que não seja o cumprimento deste Contrato.
5.4 The receiving Party undertakes to maintain the confidentiality of all Confidential Information, not to publish or disclose such information to third parties and not use it for any purpose other than compliance with this Agreement.
 
 
5.5 A Parte divulgadora poderá solicitar a qualquer tempo, por escrito, a imediata restituição ou destruição de Informações Confidenciais que tenha revelado em decorrência deste Contrato e quaisquer respectivas fotocópias, reproduções ou outras cópias. Mediante tal solicitação por escrito ou quando do término deste Contrato, a Parte receptora deverá devolver à Parte divulgadora ou destruir quaisquer Informações Confidenciais e quaisquer respectivas cópias, fotocópias ou reproduções. Caso sejam destruídas, a Parte receptora deverá certificar à Parte divulgadora que houve a destruição, mediante entrega de um certificado assinado por seu representante legal devidamente autorizado.
5.5 The Disclosing Party may request at any time in writing for the immediate refund or destruction of Confidential Information which it has disclosed as a result of this Agreement and any of its photocopies, reproductions or other copies. Upon such written request or at the end of this Agreement, the receiving Party shall return to the Disclosing Party or destroy any Confidential Information and any copies, photocopies or reproductions. If destroyed, the receiving Party shall certify to the Disclosing Party that there was destruction by delivering a certificate signed by its duly authorized legal representative.
 
 
5.6 A Parte Receptora deve tornar a Informação Confidencial acessível apenas para os seus Representantes que necessitem do conhecimento de tais dados para fins deste Contrato. A divulgação deve ocorrer apenas dentro do estritamente necessário e ser precedida de comunicação, dirigida a cada Representante, acerca da natureza confidencial da Informação, assim como por compromisso prestado por cada Representante no sentido de manter a Informação em estrita confidencialidade, sob os mesmos termos e condições estipulados nesta Cláusula 5. Em todo caso, a Parte Receptora será responsável por qualquer violação à obrigação de confidencialidade pelos seus Representantes e deverá tomar as medidas apropriadas para impedir o uso ou divulgação da Informação Confidencial de modo não autorizado.
5.6 The Receiving Party shall make confidential information accessible only to its Representatives who need the knowledge of such data for the purposes of this Agreement. Disclosure shall take place only within the strictly necessary and be preceded by communication, addressed to each Representative, about the confidential nature of the Information, as well as by commitment made by each Representative to maintain the Information in strict confidentiality, under the same terms and conditions stipulated in this Clause 5. In any event, the Receiving Party shall be liable for any breach of the obligation of confidentiality by its Representatives and shall take appropriate measures to prevent the use or disclosure of confidential information in an unauthorized manner.
 
 
5.7 Se a Parte Receptora for obrigada por lei ou ordem emitida por juízo ou outra autoridade competente a divulgar qualquer Informação Confidencial, deverá comunicar imediatamente à Parte Divulgadora para que essa última possa tomar as medidas apropriadas para evitar a divulgação. De todo modo, a Parte Receptora deverá divulgar a Informação Confidencial nos limites estritamente necessários para o cumprimento da referida lei ou ordem.
 
5.7 If the Receiving Party is obliged by law or order issued by court or other competent authority to disclose any Confidential Information, it shall immediately notify the Disclosing Party so that the Latter can take appropriate measures to avoid disclosure. In any event, the Receiving Party shall disclose confidential information within the limits strictly necessary for compliance with such law or order.
 
 
5.8 As obrigações estipuladas nessa Cláusula permanecerão em vigor pelo prazo de 2 (dois) anos após o término, por qualquer motivo, deste Contrato.
 
5.8 The obligations stipulated in this Clause shall remain in force for a period of two (2) years after the termination of this Agreement for any reason.
 
 
5.9 As obrigações previstas nesta Cláusula são adicionais e sem prejuízo de quaisquer outros acordos de confidencialidade celebrados entre as Partes. Em caso de conflito, as disposições que sejam mais favoráveis à Parte divulgadora deverão prevalecer.
 
5.9 The obligations provided for in this Clause are additional and without prejudice to any other confidentiality agreements entered into between the Parties. In the event of a conflict, provisions which are more favourable to the Disclosing Party shall prevail.
 
 
6. SOFTWARES E DIREITOS AUTORAIS
6. SOFTWARE AND COPYRIGHT
 
 
6.1 Todos os materiais, softwares, marcas, códigos, tecnologias, nomes e programas utilizados pela Contratada (com exceção dos softwares expressamente identificados como de domínio público) são protegidos por direitos autorais, sendo de propriedade da Contratada ou de terceiros independentes, parceiros da Contratada. O presente Contrato não gera direitos de propriedade e/ou aquisição sob os itens listados acima, pelo Contratante, nem qualquer outro direito sobre estes conteúdos, sendo certo que qualquer violação a esses direitos pelo Contratante ou por terceiro será de responsabilidade do Contratante, implicando a adoção das medidas legais aplicáveis e na imediata rescisão do presente contrato.
6.1 All materials, software, trademarks, codes, technologies, names and programs used by the Contractor (with the exception of software expressly identified as in the public domain) are protected by copyright, being the property of the Contractor or independent third parties, partners of the Contractor. This Agreement does not generate rights of ownership and/or acquisition under the items listed above by the Contracting Party or any other right to these contents, and it is certain that any violation of those rights by the Contracting Party or by a third party shall be the responsibility of the Contracting Party, implying the adoption of applicable legal measures and in the immediate termination of this agreement.
 
 
6.2 A Contratante, na forma da lei civil e penal brasileira, respeitará os direitos autorais dos softwares, hardwares, marcas, tecnologias, nomes, programas, serviços, sistemas, e tudo o mais que, porventura, venha a ter acesso através do serviço ora contratado, respondendo diretamente perante os titulares dos direitos ora referidos pelas perdas, danos, lucros cessantes, e tudo o mais que porventura lhes venha a causar, em razão do uso indevido ou ilegal daqueles direitos;
6.2 The Contracting Party, in the form of Brazilian civil and criminal law, will respect the copyright of the software, hardware, trademarks, technologies, names, programs, services, systems, and everything that may cause them, due to the misuse or illegal use of those rights;
 
 
7. SEGURANÇA E PROTEÇÃO DOS DADOS 7. DATA PROTECTION
 
 
7.1 A Contratada declara e garante o cumprimento da Lei Geral de Proteção de Dados Pessoais, Lei n° 13.709/2018. 7.1 The Contractor declares and guarantees compliance with the General Law for the Protection of Personal Data, Law No. 13,709/2018.
 
 
7.2 Os dados da Contratante serão utilizados, ou de outro modo tratados, apenas para prestar à Contratante o serviço online, incluindo os casos cujos fins são compatíveis com a prestação desses serviços. A Contratada não utilizará, nem de outro modo tratará, os dados da Contratante nem as informações derivadas dos mesmos para qualquer publicidade ou outros fins comerciais semelhantes. Tal como entre as partes, o contratante detém todos os direitos, títulos e interesses nos e para os dados da contratante. A Contratada não adquire direitos sobre os dados da contratante, para além dos direitos concedidos pelo contratante à Contratada para fornecer o serviço online à contratante. Este parágrafo não afeta os direitos da Contratada sobre o software ou serviços licenciados pela Contratada à Contratante. 7.2 The Contracting Party data will be used, or otherwise processed, only to provide the Contracting Party with the online service, including cases whose purposes are compatible with the provision of those services. The Contractor shall not otherwise use the Contracting Party data, or the information derived from it for any advertising or other similar commercial purposes. As between the parties, the Contractor holds all rights, titles and interests in us and for the Contracting Party data. The Contractor does not acquire rights to the Contracting Party data, in addition to the rights granted by the Contracting Party to the Contractor to provide the online service to the Contracting Party. This paragraph does not affect the Rights of the Contractor to the software or services licensed by the Contractor to the Contracting Party.
 
 
7.3 A Contratada não divulgará os Dados da Contratante fora da Contratada nem das respetivas subsidiárias e afiliadas controladas, exceto (1) se o Contratante o indicar, ou (2) se a lei assim o exigir. 7.3 The Contractor shall not disclose the Contracting Party Data outside the Contractor or its subsidiaries, except (1) if the Contracting Party indicates it, or (2) if the law so requires.
 
 
7.4 A menos que seja exigido por lei, os Dados da Contratante ou os Dados Pessoais não serão divulgados pela Contratada. Se a Contratada for contactada por agências de aplicação da lei que pretendam obter os Dados da Contratante ou os Dados Pessoais, a Contratada tentará redirecioná-las para solicitarem esses dados diretamente junto da Contratante. Se for obrigada a divulgar os Dados da Contratante ou os Dados Pessoais a agências de aplicação da lei, a Contratada deverá notificar imediatamente o Contratante e fornecer uma cópia da exigência, a menos que esteja legalmente proibida de o fazer. 7.4 Unless required by law, the Contracting Party Data or Personal Data will not be disclosed by the Contractor. If the Contractor is contacted by law enforcement agencies wishing to obtain the Contracting Party Data or Personal Data, the Contractor will attempt to redirect them to request this data directly from the Contracting Party. If you are required to disclose the Contracting Party Data or Personal Data to law enforcement agencies, the Contractor shall immediately notify the Contracting Party and provide a copy of the requirement unless it is legally prohibited from doing so.
 
 
7.5 A Contratada não fornecerá a quaisquer entidades de terceiros: (a) acesso direto, indireto, ilimitado ou sem restrições aos Dados da Contratante ou Dados Pessoais; (b) as chaves de encriptação da plataforma utilizadas para proteger os Dados da Contratante ou os Dados Pessoais, ou a capacidade de violar essa encriptação; ou (c) o acesso aos Dados da Contratante ou Dados Pessoais, caso a Contratada tenha conhecimento de que os dados vão ser utilizados para outros fins que não os descritos no pedido de terceiros. 7.5 The Contractor will not provide any third party entities: (a) direct, indirect, unlimited or unrestricted access to the Contracting Party Data or Personal Data; (b) the encryption keys of the platform used to protect the Contracting Party Data or Personal Data, or the ability to violate such encryption; or (c) access to the Contracting Party Data or Personal Data, if the Contractor is aware that the data will be used for purposes other than those described in the request of third parties.
 
 
7.6 No âmbito do disposto supra, a Contratada poderá fornecer as informações de contato básicas da Contratante a terceiros. 7.6 According to the above provisions, the Contractor may provide the Contracting Party basic contact information to third parties.
 
 
7.7 A duração do tratamento de dados estará limitada à duração do direito da Contratante a utilizar o Serviço Online e até todos os Dados Pessoais serem eliminados ou devolvidos em conformidade com as instruções da Contratante; 7.7 The duration of data processing will be limited to the duration of the Contracting Party right to use the Online Service and until all Personal Data is deleted or returned in accordance with the Instructions OF the Contracting Party;
 
 
7.8 A natureza e a finalidade do tratamento de dados serão a disponibilização do Serviço Online que decorra do contrato de licenciamento em volume da Contratante, e que, salvo disposição em contrário na lei, os dados pessoais não serão retidos, utilizados, vendidos ou divulgados para qualquer outro fim; 7.8 The nature and purpose of the processing of data will be the provision of the Online Service arising from the Contracting Party volume licensing agreement, and which, unless otherwise provided by law, personal data will not be retained, used, sold or disclosed for any other purpose;
 
 
7.9 A Contratada implementará e manterá as medidas técnicas e organizacionais adequadas à proteção dos Dados da Contratante e dos Dados Pessoais. Estas medidas serão estabelecidas numa Política de Segurança da Contratada. A Contratada disponibilizará essa política à Contratante, a par de descrições dos controles de segurança implementados para o Serviço Online, bem como outras informações justificadamente solicitadas pelo Contratante relativamente às práticas e políticas de segurança da Contratada.
 
7.9 The Contractor will implement and maintain the appropriate technical and organizational measures for the protection of the Contracting Party Data and Personal Data. These measures will be established in the Contractor's Security Policy. The Contractor shall make this policy available to the Contracting Party, along with descriptions of the security controls and services implemented for the Online Service, as well as other information justifiably requested by the Contracting Party regarding the employee's security practices and policies.
 
 
7.10 É da exclusiva responsabilidade da Contratante indicar de forma independente se as medidas técnicas e organizacionais para um Serviço Online cumprem os requisitos da Contratante, incluindo quaisquer obrigações em matéria de segurança ao abrigo da Lei Geral de Proteção de Dados ou outras leis e regulamentos de proteção de dados aplicáveis. O Contratante reconhece e concorda que (tendo em conta as técnicas mais avançadas, os custos de aplicação e a natureza, o âmbito, o contexto e as finalidades do tratamento dos respectivos Dados Pessoais, bem como os riscos para os indivíduos) as práticas e políticas de segurança implementadas e mantidas pela Contratada proporcionam um nível de segurança adequado ao risco relativo aos respetivos Dados Pessoais. É da inteira responsabilidade da Contratante a implementação e manutenção das proteções da privacidade e medidas de segurança em componentes que o Contratante fornece ou controla (tais como dispositivos inscritos com a Contratada ou numa máquina virtual ou aplicação de servidor utilizado pela Contratante). 7.10 It is the sole responsibility of the Contracting Party to independently indicate whether the technical and organizational measures for an Online Service comply with the requirements of the Contracting Party, including any security obligations under the General Data Protection Act or other applicable data protection laws and regulations. The Contracting Party acknowledges and agrees that (taking into account the most advanced techniques, application costs and the nature, scope, context and purposes of the processing of the requirements of personal data, as well as the risks to individuals) the security practices and policies implemented and maintained by the Contractor provide an adequate level of security to the risk relating to their Personal Data. It is the Contracting Party entire responsibility to implement and maintain privacy protections and security measures on components that the Contracting Party provides or controls (such as devices registered with the Contractor or on a virtual machine or server application used by the Contracting Party).
 
 
7.11 Se a Contratada tomar conhecimento de uma violação de segurança que resulte na destruição, perda, alteração, divulgação não autorizada ou acesso acidental ou ilícito aos Dados da Contratante ou aos Dados Pessoais durante o respetivo tratamento pela Contratada (individualmente, um "Incidente de Segurança"), a Contratada irá de imediato e sem demora injustificada (1) notificar o Contratante do Incidente de Segurança; (2) investigar o Incidente de Segurança e fornecer à Contratante informações detalhadas sobre o Incidente de Segurança; (3) tomar as medidas razoáveis para mitigar os efeitos e para minimizar quaisquer danos resultantes do Incidente de Segurança. 7.11 If the Contractor becomes aware of a security breach resulting in the destruction, loss, alteration, unauthorized disclosure or accidental or unlawful access to the Contracting Party Data or personal data during its processing by the Contractor (individually, a "Security Incident"), the Contractor will immediately and without undue delay (1) notify the Contracting Party of the Security Incident; (2) investigate the Security Incident and provide the Contracting Party with detailed information on the Security Incident; (3) take reasonable steps to mitigate the effects and to minimize any damage resulting from the Safety Incident.
 
 
 
7.12 O Contratante deverá notificar a Contratada imediatamente de qualquer possível utilização indevida das suas contas ou credenciais de autenticação ou de qualquer incidente de segurança relativo a um Serviço Online. 7.12 The Contracting Party shall immediately notify the Contractor of any possible misuse of his accounts or authentication credentials or any security incident stemming from an Online Service.
 
 
 
7.13 Para os Serviços Online, a Contratada armazenará os Dados da Contratante ativos e inativos em determinadas áreas geográficas principais de acordo com o servidor contratado, devendo sempre ser comunicada mudança de localização e liberar total acesso aos dados; 7.13 For the Online Services, the Contractor will store the Active and Inactive Contracting Party data in certain key geographic areas according to the contracted server, and must always be communicated location change and release full access to the data;
 
 
7.14 Durante o Prazo deste Contrato, o Contratante terá sempre a capacidade de acesso, extração e eliminação dos Dados da Contratante armazenados em cada Serviço Online. 7.14 During the Term of this Agreement, the Contracting Party will always have the ability to access, extract and delete the Contracting Party Data stored on each Online Service.
 
 
7.15 A Contratada irá conservar os Dados da Contratante que permanecem armazenados nos Serviços Online pelos prazos estabelecidos na Lei Geral de Proteção de Dados, mesmo após o término deste Contrato. 7.15 The Contractor will retain the Contracting Party Data that remains stored in the Online Services for the time set forth in the general data protection act, even if after the termination of this Agreement.
 
 
8. PREÇO E CONDIÇÕES DE PAGAMENTO 8. PRICE AND PAYMENT CONDITIONS
 
 
8.1.         Em contrapartida aos Serviços prestados pela Contratada nos termos do presente Contrato, o Contratante concorda em pagar mensalmente o valor de R$ [], e ainda um percentual de performance equivalente a []% da receita mensal efetivamente coletada e referente ao Projeto, pela Contratante ("Preço").
8.1.         In return for the and Services provided by the Contractor pursuant to this Agreement, the Contracting Party agrees to pay the monthly amount of BRL [•], and a performance percentage equivalent to [•]% of the monthly revenue actually collected and related to the Project, by the Contracting Party ("Price").
 
 
 
 
 
8.2.         O Preço a ser pagos pela Contratante serão reajustados anualmente pelo Índice IGP-M, tendo como base a Data Efetiva.
 
8.2.         The Price to be paid by the Contracting Party will be adjusted annually by the IGP-M Index, based on the Effective Date.
 
 
 
8.3.         As Partes concordam que o Preço já contempla todos os tributos e demais encargos a ele inerentes, não havendo, portanto, incidências tributárias e demais encargos similares a serem pagos pelo Contratante. Todas as responsabilidades decorrentes de quaisquer tributos, existentes ou que venham a ser alterados ou criados, correrão por conta exclusiva da Contratada. As Partes efetuarão a retenção e o recolhimento dos tributos que, de acordo com a legislação em vigor, sejam a elas atribuídas à responsabilidade por tal tarefa.
 
8.3.         The Parties agree that the Price already include all taxes and other charges inherent to it, and there are therefore no tax implications and other similar charges to be paid by the Contracting Party. All liabilities arising from any taxes, existing or that may be changed or created, will be borne by the exclusive account of the Contractor. The Parties shall withhold and collect taxes which, in accordance with the legislation in force, are attributed to them to the responsibility for such a task.
 
 
 
8.4.         A Contratada emitirá nota fiscal/fatura relativa aos Serviços mensalmente e enviará à Contratante após a apresentação do relatório de Serviços.
8.4.         The Contractor will issue invoice for the Services monthly and send to the Contracting Party after the presentation of the Service report.
 
 
 
8.5.1 O atraso ou apresentação de forma irregular da fatura pela Contratada, não importará no pagamento, pelo Contratante, de qualquer acréscimo, variação ou correção do Preço.
8.5.1 The delay or presentation irregularly of the invoice by the Contractor shall not result in the payment, by the Contracting Party, of any additional amount, variation or correction of the Price.
 
 
8.5.         O pagamento da Remuneração será efetuado em até 10 (dez) dias úteis, a contar da emissão da nota fiscal/fatura, por meio de TED - Transferência Eletrônica Disponível em conta bancária pertencente à Contratada.
8.5.         The payment of the Price will be made within 10 (ten) business days, from the issuance of the invoice, through TED - Electronic Transfer Available in bank account belonging to the Contractor.
 
 
8.6.         A Contratada tem a faculdade de cobrar do Contratante, em caso de atraso por culpa exclusiva deste, multa correspondente a 2% (dois por cento) e juros de mora de 2% (dois por cento) ao mês, calculados sobre a totalidade do débito vencido e não pago.
8.6.         The Contractor has the option to charge the Contracting Party in case of delay due to exclusive fault of the Contracting Party, fine corresponding to 2% (two percent) and late interest of 2% (two percent) per month, calculated on the total debt due and unpaid.
 
 
9. RESCISÃO 9. TERMINATION
 
 
9.1. As Partes poderão rescindir esse Contrato, de pleno direito, caso ocorram quaisquer dos seguintes eventos:
9.1.         The Parties may terminate this Agreement in full right if any of the following events occur:
 
 
 
 
a)     decurso do Prazo de vigência sem que haja renovação do Prazo;
a)     expiration of the Term without renewal;
 
 
b)     no caso de qualquer das Partes sofrer liquidação, dissolução voluntária ou compulsória, tornar-se insolvente ou falida, requerer ou for objeto de qualquer tipo de concurso de credores ou recuperação judicial;
b)     in the event that either Party is liquidated, voluntarily or compulsory dissolved, becomes insolvent or bankrupt, requires or is the subject of any type of creditors' tenderers or judicial recovery;
 
 
c)     ajuizamento de uma Parte a outra de qualquer ação, execução ou medida judicial, de qualquer natureza, que possa afetar os direitos e obrigações deste Contrato;
c)     filing of any action, enforcement or judicial action of any nature that may affect the rights and obligations of this Agreement;
 
 
d)     caso qualquer das Partes venha a praticar qualquer ato lesivo à administração pública, nos termos deste Contrato e da Lei n° 12.846, de 1° de agosto de 2013, em qualquer um dos seus aspectos, ou se qualquer das Partes tiver motivos para acreditar que tal ato lesivo tenha sido ou tem sido realizado. A rescisão imediata com base nesse item não exime a Parte infratora da obrigação de reparar integralmente eventual dano causado e da aplicação da multa compensatória prevista neste Contrato.
d)     if either Party is to engage in any act that is harmful to the public administration under this Agreement and Law No. 12,846 of 1 August 2013in any of its aspects, or if either Party has reason to believe that such a harmful act has been or has been carried out. Immediate termination on the basis of that item does not exempt the infringing Party from the obligation to fully repair any damage caused and the application of the compensatory fine provided for in this Agreement.
 
 
9.2. A Contratada poderá rescindir esse Contrato caso ocorram quaisquer dos seguintes eventos:
9.2.         The Contractor may terminate this Agreement if any of the following events occur:
 
 
a)     atraso no pagamento pela Contratante superior a 60 (sessenta) dias contados a partir do vencimento do débito;
a)     late payment by the Contracting Party with more than 60 (sixty) days counted from the maturity of the debit;
 
 
b)     constatação de práticas pela Contratante expressamente vedadas.
b)     discovery of practices by the Contracting Party expressly prohibited.
 
 
9.2.1 Em caso de extinção do Contrato com base nas alíneas "a" e "b" da cláusula 9.2 acima, fica resguardado à Contratada o direito de aplicar as multas descritas na Cláusula 9.3.1, além das indenizações previstas neste Contrato, se aplicáveis.
 
9.2.1 In the event of termination of the Agreement on the basis of paragraphs "a" and "b" of clause 9.2 above, the Contractor has right to apply the fines described in Clause 9.3.1, in addition to the indemnifications specified in this Agreement, if applicable.
 
 
9.3. As duas Partes poderão, ainda, rescindir o presente Contrato, sem causa, mediante prévia notificação, por escrito, à outra Parta, com pelo menos 6 (seis) meses de antecedência.
9.3.         Both Parties may also terminate this Agreement, without cause, by prior notice, in writing, to the other Party, with at least six (6) months in advance.
 
 
9.3.1 Se a rescisão ocorrer, a Parta que solicitar a rescisão deverá realizar o pagamento equivalente a 6 (seis) meses do último valor pago ou valor previsto de faturamento no mês da rescisão, o que for maior.
 
9.3.1 If the termination occurs the Party that requests the termination must make a payment equivalent to 6 (six) months of the last amount paid or expected amount of billing in the month of termination, whichever is greater.
 
 
 
9.4.         Em qualquer uma das hipóteses de rescisão previstas neste Contrato, a Contratada se compromete a devolver ao Contratante, no prazo acordado entre as Partes, todos os documentos físicos e/ou digitais que estiverem sob a sua posse ou destruí-los de forma segura e ecologicamente correta, conforme acordado com o Contratante.
 
9.4.         In any event of termination provided for in this Agreement, the Contractor undertakes to return to the Contracting Party within the agreed time limit between the Parties all physical and/or digital documents that are under their possession or destroy them safely, as agreed with the Contracting Party.
 
 
 
10. DISPOSIÇÕES GERAIS
10. GENERAL PROVISIONS
 
 
10.1.      A Contratante não tem poderes para supervisionar, dar instruções ou de outro modo regulamentar as operações da Contratada ou de seus empregados ou subcontratadas. ficando, no entanto, resguardado à Contratante o direito de somente permitir o ingresso de funcionários da Contratada ou de terceiros quando estes estiverem devidamente credenciados e identificados, o que deverá ocorrer exclusivamente por parte da Contratada.
10.1.     The Contracting Party has no powers to supervise, give instructions or otherwise regulate the operations of the Contractor or its employees or subcontractors. However, the Contracting Party has the right to only allow the Contractor's employees or third parties to enter when they are duly accredited and identified, which shall occur exclusively by the Contractor.
 
 
 
10.2.      As obrigações mútuas ora ajustadas suspender-se-ão quando, na execução do presente Contrato, ocorrerem circunstâncias alheias ao controle, à ação e à vontade das Partes, causadas por motivos de força maior ou caso fortuito, conforme previsto no Art. 393 do Código Civil Brasileiro e desde que sua ocorrência seja alegada e comprovada em 72 (setenta e duas) horas.
 
10.2.     The mutual obligations adjusted hereafter shall be suspended when, in the performance of this Agreement, circumstances are unrelated to the control, action and will of the Parties, caused by reasons of force majeure or fortuitous case, as provided for in Art. 393 of the Brazilian Civil Code and provided that its occurrence is alleged and proven in 72 (seventy-two) hours.
 
 
 
10.3.      As Partes se obrigam a comunicar eventuais mudanças de endereços de recebimento das correspondências, sob pena de considerarem-se devidamente entregues aquelas enviadas aos endereços constantes no preâmbulo deste Contrato.
 
10.3.     The Parties undertake to report any changes in the addresses of receipt of the correspondence, otherwise those sent to the addresses contained in the preamble to this Agreement are duly deemed to be delivered.
 
 
10.4.      Exceto conforme autorizado neste Contrato, nenhum termo ou condição ora estipulado deve ser interpretado de forma a pretender-se criar entre as Partes qualquer relação de "joint venture", relação de parceria, sociedade em conta de participação, representação comercial, mandato, responsabilidade solidária, sendo cada uma única, integral e exclusivamente responsável por seus atos e obrigações e pelo cumprimento da respectiva legislação aplicável a sua atividade e aos Serviços.
 
10.4.     Except as authorized in this Agreement, no term or condition stipulated herein shall be construed in such a way as to intend to create between the Parties any joint venture relationship, partnership relationship, company in participation account, representation commercial, mandate, joint responsibility, each being solely, fully and exclusively responsible for its acts and obligations and compliance with their applicable legislation to its activity and to the Services.
 
 
 
10.5.      A tolerância das Partes não implica em renúncia, perdão, novação ou alteração do pactuado neste instrumento.
10.5.     The tolerance of the Parties does not imply the waiver, forgiveness, renovation or amendment of the agreed-on in this instrument.
 
 
 
10.6.      Este Contrato não poderá ser alterado de nenhuma forma exceto mediante termo aditivo assinado pelas Partes.
10.6.     This Agreement may not be amended in any way except by an additive term signed by the Parties.
 
 
10.7.      Caso qualquer disposição contida neste Contrato seja posteriormente considerada nula, ilícita ou inexequível, a exequibilidade das disposições remanescentes não ficará afetada ou prejudicada. A disposição considerada nula, ilícita ou inexequível será, conforme o disposto em lei, substituída por outra, válida, lícita e/ou exequível, que produzirá efeitos do modo mais próximo possível da disposição que substituir.
10.7.     If any provision contained in this Agreement is subsequently deemed void, unlawful or unenforceable, the enforceability of the remaining provisions shall not be affected or impaired. The provision considered null, unlawful or unenforceable shall, as provided by law, replaced by another, valid, lawful and/or enforceable, which will take effect as closely as possible as possible to the provision it replaces.
 
 
 
10.8.      A Contratada não poderá utilizar ou permitir o uso por sua equipe de trabalho e/ou subcontratadas, de qualquer sinal distintivo da Contratante, a exemplo de suas marcas, nomes de domínios, nomes empresariais ou qualquer direito de propriedade intelectual, sem autorização prévia e escrita da Contratante.
10.8.     The Contractor may not use or allow use by its work team and/or subcontractors, of any distinctive sign of the Contracting Party, such as its trademarks, domain names, business names or any intellectual property right, without prior written authorization from the Contracting Party.
 
 
 
10.9.      Exceto conforme estabelecido nesta Cláusula, nenhuma das Partes poderá, nem terá poderes para, ceder este Contrato sem o consentimento prévio por escrito da outra Parte, ficando excetuado o direito do Contratante de ceder seus direitos e obrigações nos termos deste Contrato a qualquer das empresas pertencentes a seu conglomerado econômico, sejam atuais ou futuras.
10.9.     Except as set forth in this Clause, neither Party may nor shall you have the power to assign this Agreement without the prior written consent of the other Party, except for the right of the Contracting Party to assign its rights and obligations under this Agreement to any of the undertakings belonging to its economic conglomerate, whether current or future.
 
 
 
10.10.   Durante a negociação e a execução deste contrato, nenhuma das partes ofereceu ou poderá oferecer, dar ou se comprometer a dar a quem quer que seja, ou aceitar ou se comprometer a aceitar de quem quer que seja, tanto por conta própria quanto através de outrem, qualquer pagamento, doação, compensação, vantagens financeiras ou não financeiras ou benefícios de qualquer espécie que constituam prática ilegal ou de corrupção sob as leis de qualquer país, especialmente sob a Lei Federal n° 12.846/13, seja de forma direta ou indireta quanto ao objeto deste contrato, ou de outra forma que não relacionada a este contrato, devendo garantir, ainda, que seus prepostos e colaboradores ajam da mesma forma. O descumprimento dessa cláusula por quaisquer das partes será considerada como hipótese de resolução do contrato, sem prejuízo da aplicação da cláusula de indenização.
10.10.   During the negotiation and execution of this contract, neither party has offered or may offer, give or commit to giving anyone, or accept or undertake to accept from anyone, either on their own and through others, any payment, donation, compensation, financial or non-financial advantages or benefits of any kind that constitute illegal practice or corruption under the laws of any country, especially under Federal Law No. 12,846/13, either directly or indirectly subject matter of this contract, or otherwise not related to this contract, and must also ensure that its prepositions and employees act in the same way. Failure to comply with this clause by any of the parties shall be considered as a possibility of resolving the contract, without prejudice to the application of the indemnification clause.
 
 
 
10.11.   O presente Contrato e as disputas que dele derivarem serão regidas pelas leis da República Federativa do Brasil.
 
10.11.   This Contract and the disputes that derive from it will be governed by the laws of the Federative Republic of Brazil.
 
 
 
10.12.   No caso de qualquer reivindicação ou controvérsia decorrente do presente Contrato, a ele relacionado ou resultante de sua violação, as Partes envidarão seus melhores esforços para solucionar a questão de forma amigável.
 
10.12.   In the event of any claim or controversy arising out of this Agreement, related to it or resulting from its breach, the Parties shall make their best efforts to resolve the matter in a friendly manner.
 
 
 
10.13.   As Partes elegem o foro de São Paulo, Estado de São Paulo, como único competente para dirimir quaisquer questões oriundas do presente Contrato, com a exclusão de qualquer outro, por mais privilegiado que seja
 
10.13.   The Parties shall elect the forum of São Paulo, State São Paulo, as the sole competent to resolve any issues arising from this Agreement, excluding any other, however privileged that it is
 
 
 
E, ESTANDO ASSIM JUSTAS E Contratadas, celebram as Partes o presente Contrato em 2 (duas) vias de igual teor e forma, tudo para um só efeito, na presença das testemunhas abaixo assinadas e identificadas.
 
And, THUS JUST AND CONTRACTED, the Parties enter into this Agreement in 2 (two) copies of equal content and form, all for one purpose, in the presence of the witnesses signed and identified below.
 
 
 
Rio de Janeiro, [] de dezembro de 2023.
 
Rio de Janeiro, December [], 2023.
 
 
 
 
 
 
 
 
[Signature Page]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II AND III 5 port2_1a_part2and3.htm
As filed with the Securities and Exchange Commission on January 9, 2024 (Amendment No. 1)
 
Part II - Information Required in Offering Circular
 
Preliminary Offering Circular dated January 9, 2024
 
 
AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE. WE MAY ELECT TO SATISFY OUR OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.
 
 
Energea Portfolio 2 LLC
Up to $50,000,000 in Class A Investor Shares
 
 
January 9, 2024
 
This Offering Circular Follows the Form 1-A Disclosure Format
 
Energea Portfolio 2 LLC (the "Company", "us", "we", "our" and similar terms) is a limited liability company organized under the laws of Delaware to invest in the acquisition, development, and operation of community solar energy projects in Brazil (each a "Project"). The Company's day-to-day operations are managed by Energea Global LLC (the "Manager"). The Company is offering up to $50.0 million in limited liability company interests designated as "Class A Investor Shares" (the "Offering"), which represents the value of the Class A Investor Shares available to be offered as of the date of this offering circular out of the rolling 12-month maximum offering amount of $75.0 million of our Class A Investor Shares pursuant to Regulation A ("Regulation A") of the Securities Act of 1933, as amended (the "Securities Act"). Through December 26, 2023, a prior offering sold 14,241,631 Class A Investor Shares and raised approximately $11,923,332.92 in capital (the "Prior Offering"). The current price of the Class A Investor Shares is $0.90 per Class A Investor Share, and the minimum initial investment is $100.
We are selling Class A Investor Shares directly to the public through our Manager's website, www.energea.com, (the "Platform"). Neither the Company nor any affiliated entity involved in the Offering is a member firm of the Financial Industry Regulatory Authority, Inc. ("FINRA"), and no person associated with us will be deemed to be a broker solely by reason of his or her participation in the sale of our Class A Investor Shares. Investors will not pay upfront selling commissions or broker fees in connection with the purchase of Class A Investor Shares. We will reimburse our Manager for certain expenses incurred on our behalf, and pay our Manager certain fees, as described further under "Compensation of Directors and Executive Officers".
 
 
Price to Public
Underwriting Discount and Commissions
Proceeds to Issuer
Proceeds to Other Persons
Per Each Class A Investor Share:
$0.90
-
$0.90
-
Total
$50,000,000
-
$50,000,000
-
 
This is a "best efforts" offering. The Offering will continue as soon as our offering statement is "qualified" by the SEC and will end on the date we raise the maximum amount being offered, unless earlier terminated by the Company.
 
The purchase of these securities involves a high degree of risk. Before investing, you should read this entire offering circular and exhibits hereto, including "Risk Factors" beginning on page 4.
 
Page i
 
THE SEC DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS JUDGEMENT UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITING MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.
 
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)© OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV FOR MORE INFORMATION, SEE "LIMIT ON AMOUNT A NON-ACCREDITED INVESTOR CAN INVEST".
 
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
Page ii
 
TABLE OF CONTENTS
 
Section
Page Number
1
 
 
3
3
         Our Business
3
         The Offering
3
3
     Risk Factors
4
 
 
10
 
 
11
 
 
11
 
 
13
13
13
14
16
     Competition
17
     Our Revenue
17
18
19
19
19
19
19
         Taxation of Dividends
20
         Foreign Tax Credit
20
20
21
         Alternative Minimum Tax
21
         Taxable Year
21
21
21
22
         Land Leases
22
         Project Rental Contracts
23
24
         Construction Contracts
25
26
27
27
28
 
 
28
28
     Projects Sold
29
     Projects Owned
29
 
 
30
30
31
         Interconnection
31
     Distributions
32
33
33
33
34
34
34
     Leverage
35
35
35
 
 
36
36
36
36
37
39
39
 
 
39
     Overview
39
40
     Co-Investment
40
41
41
41
 
 
42
 
 
42
43
 
 
44
44
44
     Voting Rights
44
45
45
         Formation of Ownership
45
         Shares and Ownership
45
         Management
45
46
47
         Personal Liability
47
         Distributions
47
47
         Death, Disability, Etc.
47
47
         "Drag-Along" Right
48
         Electronic Delivery
48
         Amendment
48
         Information Rights
48
49
         Preemptive Rights
49
49
         Withholding
49
         No Guarantee
49
49
         Rights of Common Shares
51
     How to Invest
51
52
 
 
53
 
 
54
55
57
58
59
60
61
61
64
         Note 3: Line of Credit
64
65
         Note 5: Leases
65
         Note 6: Commitments
66
         Note 7: Members' Equity
67
         Note 8: Income Taxes
67
 
 
69
 
 
70
70
 
 
71
 
Page iii
 
Caution Regarding Forward-Looking Statements
 
We make statements in this offering circular that are forward-looking statements within the meaning of the federal securities laws. The words "outlook," "believe," "estimate," "potential," "projected," "expect," "anticipate," "intend," "plan," "seek," "may," "could" and similar expressions or statements regarding future periods are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this offering circular or in the information incorporated by reference into this offering circular.
 
The forward-looking statements included in this offering circular are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:
 
 
·
our ability to effectively deploy the proceeds raised in our Offering;
 
 
 
 
·
ability to attract and retain Investors to the Platform;
 
 
 
 
·
risks associated with breaches of our data security;
 
 
 
 
·
public health crises, pandemics and epidemics, such as those caused by new strains of viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and, most recently, the novel coronavirus (COVID-19);
 
 
 
 
·
climate change and natural disasters that could adversely affect our Projects and our business;
 
 
 
 
·
changes in economic conditions generally and the renewable energy and securities markets specifically;
 
 
 
 
·
limited ability to dispose of assets because of the relative illiquidity of renewable energy Projects;
 
 
 
 
·
our failure to obtain necessary outside financing;
 
 
 
 
·
risks associated with derivatives or hedging activity;
 
 
 
 
·
intense competition in Brazilian renewable energy markets that may limit our ability to attract or retain energy offtakers;
 
 
 
 
·
defaults under Supporting Contracts (see "Summary of Supporting Contracts");
 
 
 
 
·
increased interest rates and operating costs;
 
 
 
 
·
the risk associated with potential breach or expiration of a ground lease, if any;
 
 
 
 
·
our failure to successfully construct, interconnect, operate or maintain the Projects;
 
Page 1
 
 
·
exposure to liability relating to environmental and health and safety matters;
 
 
 
 
·
the failure of Projects to yield anticipated results;
 
 
 
 
·
our level of debt and the terms and limitations imposed on us by our debt agreements;
 
 
 
 
·
our ability to retain our executive officers and other key personnel of our Manager;
 
 
 
 
·
the ability of our Manager to source, originate and service our loans;
 
 
 
 
·
the ability for our engineering, procurement and construction contractors and equipment manufacturers to honor their contracts including warranties and guarantees;
 
 
 
 
·
regulatory changes impacting our business or our assets (including changes to the laws governing the taxation of corporations and SEC guidance related to Regulation A, or the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"));
 
 
 
 
·
changes in business conditions and the market value of our Projects, including changes in renewable energy policy, interest rates, prepayment risk, operator or borrower defaults or bankruptcy, and generally the increased risk of loss if our investments fail to perform as expected;
 
 
 
 
·
our ability to implement effective conflicts of interest policies and procedures among the various renewable energy investment opportunities sponsored by our Manager;
 
 
 
 
·
our compliance with applicable local, state and federal laws, including the Investment Advisers Act of 1940, as amended (the "Advisers Act"), the Investment Company Act of 1940, as amended, and other laws; and
 
 
 
 
·
changes to U.S. generally accepted accounting principles ("U.S. GAAP").
 
Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements included in this offering circular. All forward-looking statements are made as of the date of this offering circular and the risk that actual results will differ materially from the expectations expressed in this offering circular will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this offering circular, whether because of new information, future events, changed circumstances or any other reason. Considering the significant uncertainties inherent in the forward-looking statements included in this offering circular, including, without limitation, the those named above and those named under "Risks of Investing" herein, the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this offering circular will be achieved.
 
Page 2
 
Summary and Risk Factors
 
Executive Summary
 
Our Business
 
Energea Portfolio 2 LLC (the "Company") is a limited liability company organized under the laws of Delaware. The Company has elected to be treated as a corporation for tax purposes. The Company's day-to-day operations are managed by Energea Global LLC (the "Manager").
 
The Company was created to invest in the acquisition, development, and operation of community solar energy projects in Brazil (each a "Project"). The Projects will be rented to groups of households and businesses (which we collectively refer to as "Subscribers") for monthly payments based on the amount of electricity produced by the Project and credited to them. To date, the Projects have produced a stable and predictable stream of cash flow from Subscribers paying their monthly energy bills. As the Company earns revenue from the sale of energy to Subscribers, it uses the revenue to pay for operating expenses (see "Our Operating Costs and Expenses") and distributes the remaining cash to Class A Shareholders.
 
Projects are owned by special-purpose entities (each, a "SPE"). Each SPE is organized as a Brazilian Limitada or Ltda, the Brazilian equivalent of a U.S. limited liability company. Under Brazilian law, the assets and liabilities of a Ltda are distinct. Thus, the liabilities of Projects held in one SPE will not affect the assets of another Project held in a different SPE.
 
The Offering
 
The Company is offering up to $50 million of Class A Investor Shares, which represents the value of the Class A Investor Shares available to be offered as of the date of this offering circular out of the rolling 12-month maximum offering amount of $50 million of our Class A Investor Shares pursuant to Regulation A. The proceeds of our Offering will be used to develop and construct Projects currently owned by the Company and other Projects which the Company might acquire in the future. The Prior Offering raised $11,923,181.54 and issued a total of 14,241,631 shares from a previous Regulation A offering that was initially qualified by the SEC on August 13, 2020.
 
Company Operations and Other Matters
 
Cash flow from Projects can be generated in three ways: (i) payments from Land Leases, Project Rental Contracts and Operations and Maintenance Contracts, (ii) proceeds from the sale or refinance of Projects and (iii) Liquidated Damages (i.e. delay penalties) from contractors under Construction Agreements as further described in "Summary of Supporting Contracts" and "Distributions". Cash flow will first be used to pay operating costs and expenses (see "Our Operating Costs and Expenses"). The remaining cash flow, if any, is distributed to the owners of our Class A Investor Shares ("Investors") who will have the right to receive:
 
 
·
A 7% per year preferred return; plus
 
 
 
 
·
70% of any additional cash flow.
 
The Manager is entitled to receive certain distributions from the Company that we refer to as the Manager's "Promoted Interest" (see "Compensation to Directors and Executive Officers" and "Calculating Distributions").
 
CAUTION: ALTHOUGH THE CASH FLOW FROM OUR PROJECTS WILL LARGELY BE ESTABLISHED BY CONTRACT IN ADVANCE, THERE IS NO GUARANTEE THAT OUR PROJECTS WILL GENERATE ANY POSITIVE CASH FLOW.
 
Investors in the Class A Investor Shares will have no voting rights.
 
Page 3
 
Risk Factors
 
BUYING CLASS A INVESTOR SHARES IS SPECULATIVE AND INVOLVES SIGNIFICANT RISK, INCLUDING THE RISK THAT INVESTORS COULD LOSE SOME OR ALL OF THEIR MONEY. THIS SECTION DESCRIBES SOME OF THE MOST SIGNIFICANT FACTORS THAT THE COMPANY BELIEVES MAKE AN INVESTMENT IN THE CLASS A INVESTOR SHARES RISKY. THE ORDER IN WHICH THESE FACTORS ARE DISCUSSED IS NOT INTENDED TO SUGGEST THAT SOME FACTORS ARE MORE IMPORTANT THAN OTHERS. You should carefully consider the following risk factors in conjunction with the other information contained in this offering circular before purchasing the CLASS A INVESTOR SHARES.
 
Risks Associated with Renewable Energy Projects: The market for renewable energy is changing rapidly. If renewable technology proves unsuitable for widespread commercial deployment or if demand for renewable energy products, especially solar energy products, fails to develop sufficiently, our Projects might not be able to generate enough revenues to achieve and sustain profitability. The factors influencing the widespread adoption of renewable energy technology include but are not limited to: cost-effectiveness of renewable energy technologies as compared with conventional technologies; performance and reliability of renewable energy products as compared with conventional energy products; and the success of other enabling technologies such as battery storage and Distributed Energy Resource Management Systems ("DERMS").
 
Fluctuations in Income: Land Leases, Project Rental Contracts, and Operations and Maintenance Contracts typically provide for fluctuations in rent based on changes in energy prices and/or changes in consumer prices. Thus, it is possible that our income from one or more Projects could decrease.
 
Distributions to Investors: Whether to distribute operating cash flow or capital proceeds and how much to distribute, is at the sole discretion of the Manager. No returns are guaranteed, and investors will receive distributions only if the Company generates distributable cash flow from the Projects.
 
Competition: There are many solar developers actively building community solar projects in Brazil. Some are multi-national independent power producers (such as ENEL, Brookfield and Engie). In addition to these large established players, there are several smaller developers the Company views as direct competition. Aggressive pricing by competitors or the entrance of new competitors could reduce the Company's profitability and ability to acquire and develop Projects and Subscribers.
 
Our Subscribers Might Default: The Company rents Projects to consortiums and cooperatives of Subscribers, not to utilities. Some Subscribers may default. Although we expect other Subscribers to quickly take their place, if enough Subscribers default, it would affect our ability to generate cash flows from Projects and reduce anticipated returns to Investors. 
 
We Might Own Only a Small Number of Projects: If the Company is successful in raising the maximum offering amount of $50.0 million in this Offering, the Company would likely acquire or invest in between 10 and 20 Projects. If the Company raises significantly less than the maximum offering amount, it may not be able to invest in as many Projects. If the Company owns only a small number of Projects, Investors will be exposed to greater concentration risk.
 
Possible Changes in Governmental Policies: The Projects depend on a Brazilian Electricity Regulatory Agency ("ANEEL") policy called Normative Resolution No. 482, which allows Subscribers who generate solar power to offset electric costs at any locations within the same utility network. This policy could expire, phase-out over time, require renewal by the applicable authority, or become a victim of political pressure. ANEEL has instituted several changes to the policy over the past three years. Some of those changes have positively affected our business while others have had a negative impact. The new policies could disfavor solar projects in general and our Projects in particular.
 
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Delays in Connecting to Power Grid: The Projects must be physically connected to the power grid, a process that involves sophisticated engineering and government regulation. Delays are not uncommon. For example, the utility involved might be required to perform physical upgrades to allow for the safe and consistent generation, distribution, and/or transmission of electricity from a Project to the grid. Delays in the performance of the interconnecting utility's obligations to make such grid upgrades can negatively impact the financial performance of the Projects.
 
Operational Risks: The Projects are subject to operating and technical risks, including risk of mechanical breakdown, failure to perform according to design specifications, labor and other work interruptions and other unanticipated events that adversely affect operations. The success of each Project, once built, depends in part upon efficient operations and maintenance.
 
Construction and Development Risks: In some cases, the Company will invest in Projects before construction is complete. Construction of any kind involves risk, including labor unrest, bad weather, design flaws, the unavailability of materials, fluctuations in the cost of materials, and labor shortages. Delays are common, which could adversely affect the economics of a Project.
 
Equipment Supply Constraints: The construction of renewable energy facilities relies on the availability of certain equipment that may be in limited supply, such as solar modules, trackers, inverters and monitoring systems. Much of this equipment comes from China. There is no guarantee that the production of this equipment will match demand and this may adversely impact the ability to construct and the cost of the Projects.
 
Disputes with Utility Companies Over Credit Management: The Company may encounter challenges when dealing with utility companies regarding the minting, verification, transfer and allocation of energy credits produced by the Projects. We rely on utility companies to transmit energy, in the form of credits, to Subscriber's energy bills, to realize revenue. Failure by the utility companies to perform this important role effectively can pose financial risks to the Projects.
 
Rapid Acceptance of Changes in Ratio: Pursuant to Brazilian energy regulations, each month, Company must submit a document to the utility company with jurisdiction over the Project which instructs the utility company to allocate energy to the Subscribers known as a "Ratio". Subscribers may use more or less energy each month and the Ratio must be updated frequently to prevent excess credits being allocated to any particular Subscriber or to replace a Subscriber who hasn't paid with a new Subscriber. If the utility company does not accept and update the allocation Ratio according to Brazilian energy regulations, revenue from credits may be postponed or result in lost revenue for the effected Projects.
 
Finding Customers to Subscribe to Our Projects: Attracting and retaining Subscribers to use the energy credits from our Projects is critical to realizing the maximum amount of revenue from each Project. Identifying and reaching out to potential Subscribers, convincing them to use our solar energy and addressing their specific needs are vital for each Project's success. If we are unable to fully subscribe the Projects, revenues may be lower than projected.
 
Discount Rates We Offer Our Customers to Become Subscribers: Offering competitive discount rates to entice residences and businesses to become Subscribers is critical for the success of the Company. Setting appropriate rates that balance profitability with incentives is a delicate balancing act. If other solar companies offer more competitive discount rates for Subscribers, we may be unable to find Subscribers willing to procure energy credits from our Projects.
 
Page 5
 
Commissions We Have To Pay to Find New Subscribers: The Projects pay commissions to salespeople who work for third party commercialization companies. These companies specialize in connecting Subscribers to solar projects like our Projects. Calculating and managing these commissions to ensure they align with the Project's financial projections is essential to control costs and maximize revenue. If companies we compete with pay higher commissions to commercialization companies, we may have to increase our commissions to retain the service which could have a negative impact on net income.
 
Risks Associated with Investments Outside the U.S.: All of the Company's Projects will be in Brazil. Projects located in developing countries, such as Brazil, may be subject to certain risks that generally do not apply to investments in developed countries such as the United States. Such risks include the following:
 
 
·
Historically, the markets of developing countries have been more volatile than the markets of developed countries.
 
 
 
 
·
Developing countries may have less developed legal and accounting systems. The legal systems of developing countries might be less reliable in terms of enforcing contracts.
 
 
 
 
·
The governments of developing countries may be more unstable and more likely to impose capital controls, nationalize a company or industry, place restrictions on foreign ownership and on withdrawing money from the country, and/or impose punitive taxes that could adversely affect prices.
 
 
 
 
·
The economies of developing countries may be dependent on relatively few industries that are more susceptible to local and global changes.
 
 
 
 
·
Brazil faces security challenges, and the Projects can be vulnerable to theft, vandalism, and damage. Ensuring robust security measures is essential to mitigate these risks and protect project assets. If we are unable to properly secure the Projects, the Projects could be negatively affected by crime, which could reduce our net income.
 
 
 
 
·
Some areas in Brazil are influenced or controlled by local non-governmental groups called "militias". Local militias may impact the security and operations of the Projects. Investors should carefully assess the presence of militias in Project locations and consider how this could affect our operations.
 
 
 
 
·
Development challenges, such as land acquisition, permitting delays, and poor infrastructure, can hinder progress and increase costs of the Projects. Navigating these obstacles is crucial to the successful development of our Projects. Ineffective land acquisition practices, slow reaction to permitting delays or selecting sites with poor infrastructure can negatively affect the financial performance of the Projects and the Company.
 
Foreign Currency Exposure: The contracts entered into by the Projects will be denominated in Brazilian real ("BRL"). Contracts denominated in BRL will be subject to fluctuations in exchange rates between BRL and the United States dollar ("USD"), which could impact the Company's returns. While the Manager might be able to hedge the Company's foreign currency exposure to some degree, such hedging may be expensive and may not be entirely effective.
 
Imprecise Language Translations: All of the Company's legal contracts in Brazil will be written in both English and Portuguese. Given that these languages have different historical and cultural roots, it is possible that some of the materials or proceedings may not directly translate across languages and any deviation from the Company's intentions, especially with respect to some of the more technical terms or work involved, may cause disruptions or misunderstandings that may negatively impact the Projects.
 
Page 6
 
Risks Upon Disposition of Investments: If the Company sells a Project, it might be required to make representations about the business and financial affairs of the Project, and to indemnify the purchaser if those representations prove to be inaccurate or misleading. These arrangements may result in contingent liabilities, which might ultimately require Investors to return some or all of the distributions they have received.
 
Regulatory Risks: The Projects will be subject to extensive regulatory requirements, including those imposed by Brazilian environmental, safety, labor and other regulatory and political authorities. These regulatory requirements will impose substantial costs on the Projects. Further, should any Project fail to comply with one or more regulatory requirements, it could result in substantial fines and penalties or a shutdown of the Project. 
 
Unavailability of Insurance Against Certain Catastrophic Losses: Certain losses of a catastrophic nature, such as earthquakes, wars, terrorist attacks or other similar events, may be either uninsurable or insurable at such high rates that to maintain such coverage would cause an adverse impact on the related Project. As a result, not all Projects may be insured against all possible risks. If a major uninsured loss occurs, the Company could lose both the amount it invested in and anticipated profits from the affected Projects.
 
Potential Environmental Liability: The Projects, like any large-scale physical plant, could cause environmental contamination under some circumstances. Further, the SPE could be found liable for environmental contamination that occurred before the Project was built. The cost of remediation and penalties could be very large.
 
Liability for Personal Injury and Damage to Property: The Company could be held liable for accidents and injuries at the Project site. The SPE will carry insurance to protect against the potential losses, but the insurance might not be adequate.
 
We Might Raise More than $50,000,000: Under Regulation A, the Company is allowed to raise a maximum of $75,000,000 in any rolling 12-month period. Should the Company raise the maximum offering amount, it might decide to raise more, in a subsequent rolling 12-month period, or pursuant to a private placement or other offering.
 
Global or National Economic Conditions: An economic slowdown in Brazil could affect our Subscribers and therefore our Projects.
 
No Participation in Management: Investors will have no voting rights and no right to participate in the management of the Company or the Projects. Instead, the Manager will make all decisions. You will have the ability to replace our management team only under very limited circumstances, as described in "Summary of LLC Agreement and Authorizing Resolution."
 
Reliance on Management: The success of the Company and its Projects will depend in part on the skills of our Manager and its management team. If our Manager fails to retain its key personnel, the Company and its Investors could suffer.
 
Sale of Other Securities: The Company could, at any time, sell Class A Investor Shares other than those being offered by this Offering, for example, in a private placement, or could sell other classes of securities to raise additional capital. A different class of securities could have greater rights than those associated with the Class A Investor Shares, including but not limited to preferential rights to distributions.
 
Page 7
 
Limitations on Rights in Investment Agreement: To purchase Class A Investor Shares, you are required to sign our Investment Agreement. The Investment Agreement will limit your rights in several important ways if you believe you have claims against us arising from the purchase of your Class A Investor Shares:
 
 
·
Any claims arising from your purchase of Class A Investor Shares must be brought in the state or federal courts located in Wilmington, Delaware, which might not be convenient to you.
 
 
 
 
·
You would not be entitled to recover any lost profits or special, consequential, or punitive damages. However, that limitation does not apply to claims arising under Federal securities laws.
 
Manager's Drag-Along Rights: The Manager may decide to sell the Projects or the Company at any time. Should the Manager decide to sell the Company, Investors could be forced to sell their Class A Investor Shares at the direction of the Manager according to the Manager's drag-along rights granted to them in the Operating Agreement (see "Summary of LLC Agreement and Authorizing Resolution.").
 
Forum Selection Provision: Our Investment Agreement and our LLC Agreement both provide that disputes will be handled solely in the state or federal courts located in the state of Delaware. We included this provision primarily because (i) the Company is organized under Delaware law, (ii) Delaware courts have developed significant expertise and experience in corporate and commercial law matters and investment-related disputes (which typically involve very complex legal questions), particularly with respect to alternative entities (such as LLCs), and have developed a reputation for resolving disputes in these areas in an efficient manner, and (iii) Delaware has a large and well-developed body of case law in the areas of corporate and alternative entities law and investment-related disputes, providing predictability and stability for the Company and its Investors. This provision could be unfavorable to an Investor to the extent a court in a different jurisdiction would be more likely to find in favor of an Investor or be more geographically convenient to an Investor. It is possible that a judge would find this provision unenforceable and allow an Investor to file a lawsuit in a different jurisdiction.
 
Section 27 of the Exchange Act provides that Federal courts have exclusive jurisdiction over lawsuits brought under the Exchange Act, and that such lawsuits may be brought in any Federal district where the defendant is found or is an inhabitant or transacts business. Section 22 of the Securities Act provides that Federal courts have concurrent jurisdiction with State courts over lawsuits brought under the Securities Act, and that such lawsuits may be brought in any Federal district where the defendant is found or is an inhabitant or transacts business. Investors cannot waive our (or their) compliance with Federal securities laws. Hence, to the extent the forum selection provisions of the Investment Agreement or the LLC Agreement conflict with these Federal statutes, the Federal statutes would prevail.
 
Waiver of Right to Jury Trial: The Investment Agreement and the LLC Agreement both provide that legal claims will be decided only by a judge, not by a jury. The provision in the LLC Agreement will apply not only to an Investor who purchases Class A Investor Shares in the Offering, but also to anyone who acquires Class A Investor Shares in secondary trading. Having legal claims decided by a judge rather than by a jury could be favorable or unfavorable to the interests of an owner of Class A Investor Shares, depending on the parties and the nature of the legal claims involved. It is possible that a judge would find the waiver of a jury trial unenforceable and allow an owner of Class A Investor Shares to have his, her, or its legal claim decided by a jury. In any case, the waiver of a jury trial in both the Investment Agreement and the LLC Agreement do not apply to claims arising under the Federal securities laws.
 
Page 8
 
Conflicts of Interest: The interests of the Company and the Manager could conflict with the interests of Investors in a number of ways, including:
 
 
·
Our Manager and its officers are not required to devote all of their time and effort to the Company and are only required to devote such time to our affairs as their duties require.
 
 
 
 
·
Our Manager will receive fees based, in part, on the amount of cash flow the Projects generate. The Manager might, therefore, have an incentive to raise more capital, and invest in more Projects, than they would otherwise, leading them to invest in borderline Projects.
 
 
 
 
·
The entire business of the Manager consists of investing in solar projects, including solar projects in Brazil. There could be conflicts between Projects they decide to invest in through the Company and projects they invest in through other vehicles.
 
Risk of Failure to Comply with Securities Laws: The Offering relies on an exemption from registration with the SEC pursuant to Regulation A. If the Offering did not qualify for exemption from registration under the Securities Act, the Company could be subject to penalties imposed by the federal government and state regulators, as well as to lawsuits from Investors.
 
We may be subject to claims from our Class A Investors: During the Prior Offering, we conducted offerings of Class A Investor Shares on a continuous basis under Rule 251(d)(3)(i)(F) of Regulation A. In order for an offering to qualify as continuous under Rule 251(d)(3)(i)(F) of Regulation A, we are required to provide a post qualification amendment to our offering statement to update information about the Company at least annually. We were not aware of this requirement and were under the belief that if we continued to file all required information with respect to periodic reports under Forms 1-SA and 1-K and new material developments about the Company under From 1-Us, that we had satisfied our filing obligations under Regulation A. The Company was subsequently advised by the staff of the SEC that in order to continue our offering, we were required to comply with the annual amendment filing requirement.
 
No Market for the Class A Investor Shares; Limits on Transferability: An Investor who wishes to sell or otherwise transfer their Class A Investor Shares may be limited because:
 
 
·
There will be no established market for the Class A Investor Shares, meaning the Investor could have a hard time finding a buyer for its shares.
 
 
 
 
·
Although the Company offers a limited right of redemption, there is no guarantee that an Investor who wants to sell his, her, or its Class A Investor will be able to do so.
 
 
 
 
·
Class A Investor Shares may not be transferred without the Company's consent, which we can withhold in our sole discretion. The Company also has a right of first refusal to purchase any Class A Investor Shares proposed to be transferred.
 
Corporate Governance Risk: As a non-listed company conducting an exempt offering pursuant to Regulation A, the Company is not subject to a number of corporate governance requirements that an issuer conducting a registered offering or listed on a national stock exchange would be. For example, the Company does not have (i) a board of directors of which a majority consists of "independent" directors under the listing standards of a national stock exchange, (ii) an audit committee composed entirely of independent directors and a written audit committee charter meeting a national stock exchange's requirements, (iii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting a national stock exchange's requirements, (iv) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of a national stock exchange, and (v) independent audits of the Company's internal controls.
 
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The Company is an "Emerging Growth Company" Under the JOBS Act: Today, the Company qualifies as an "emerging growth company" under the JOBS Act of 2012. If the Company were to become a public company (e.g., following a registered offering of its securities) and continued to qualify as an emerging growth company, it would be able to take advantage of certain exemptions from the reporting requirements under the Exchange Act and exemptions from certain investor protection measures under the Sarbanes Oxley Act of 2002. Using these exemptions could benefit the Company by reducing compliance costs but could also mean that Investors receive less information and fewer protections than they would otherwise. However, these exemptions - and the status of the Company as an "emerging growth company" in the first place - will not be relevant unless and until the Company becomes a public reporting company.
 
The Company has elected to delay complying with any new or revised financial accounting standard until the date that a company that is not an "issuer" (as defined under section 2(a) of the Sarbanes-Oxley Act of 2002) is required to comply with such new or revised accounting standard, if such standard also applies to companies that are not issuers. As a result, owners of Class A Investor Shares might not receive the same disclosures as if the Company had not made this election.
 
Breaches of Security: It is possible that our Platform, systems or the systems of third-party service providers could be "hacked," leading to the theft or disclosure of confidential information Investors provide to us. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched, the Company, Manager and our service providers may be unable to anticipate these techniques or to implement adequate defensive measures.
 
Unanticipated changes in our tax laws that may impact us, the enactment of new tax legislation, or exposure to additional income tax liabilities could affect our profitability: We are obligated to comply with income tax laws in the regions where we operate, including recent changes like the Inflation Reduction Act. These evolving tax regulations could impact our financial health. We also face potential tax audits that may result in additional tax assessments, with uncertain outcomes. Changes to our effective tax rate, driven by shifts in our operational structure, could have significant effects on our financial well-being.
 
Dilution
 
The sale of shares is exclusively facilitated through the Platform, where shares are available at a fixed price per Class A Investor Share. The price was determined by our Manager (see "Price of Class A Investor Shares"). The Company sells shares to raise capital for the purchase and construction of Projects. As new Investors purchase Class A Investor Shares, existing Investors may be temporarily diluted until new Projects are acquired, constructed and contribute to monthly cash flow.
 
One notable aspect of our policy is that there are no shares allocated to executives, officers, promoters, or any affiliated individuals as compensation or commissions. We firmly adhere to a level playing field philosophy, ensuring that all individuals associated with the Company, regardless of their roles, have no privileged access to shares beyond what is offered through the Platform. This strict adherence to equity underscores our dedication to treating every Investor equally.
 
Page 10
 
Plan of Distribution and Selling Securityholders
 
The Company is offering to sell up to an additional $50,000,000 of Class A Investor Shares to the public. This Offering is being conducted as a continuous offering pursuant to Rule 251(d)(3) of Regulation A, meaning that while the offering of securities is continuous, active sales of securities may happen sporadically over the term of the Offering. Further, the acceptance of subscriptions, whether via the Platform or otherwise, may be briefly paused at times to allow us to effectively and accurately process and settle subscriptions that have been received.
 
The Offering will commence as soon as this offering statement is "qualified" by the SEC and will end on the sooner of (i) a date determined by the Company, or (ii) the date the Offering is required to terminate by law.
 
Only the Company is offering securities in this Offering. None of our existing officers, directors, or stockholders is offering or selling any of their securities of the Company in this Offering.
 
The Company is not using an underwriter or broker to sell the Class A Investor Shares and is not paying commissions. Class A Investor Shares will be offered and sold only through the Platform.
 
This is a "best efforts" offering. This Offering does not have a minimum to close. Even if a very small number of Class A Investor Shares are sold, the Company does not plan to return funds to subscribers.
 
The Company reserves the right to reject any subscription to purchase Class A Investor Shares in this Offering in whole or in part and for any reason (or no reason). If the Company rejects an investment, it will promptly return all the Investor's money without interest or deduction.
 
Anyone can buy Class A Investor Shares. The Manager does not intend to limit investment to people with a certain income level or net worth, although there are limits on how much non-accredited investors may invest in this Offering (see "Limit on the Amount a Non-Accredited Investor Can Invest").
 
After the Offering has been "qualified" by the SEC, the Manager intends to advertise the Offering using the Platform and through other means, including public advertisements, social media and audio-visual materials, in each case, only as we authorize and in compliance with the rules and regulations of Regulation A. Although these materials will not contain information that conflicts with the information in this offering circular and will be prepared with a view to presenting a balanced discussion of risk and reward with respect to the Class A Investor Shares, the advertising materials will not give a complete understanding of this Offering, the Company, or the Class A Investor Shares and are not to be considered part of this offering circular.
 
The Offering is made only by means of this offering circular and prospective Investors must read and rely on the information provided in this offering circular in connection with their decision to invest in Class A Investor Shares.
 
Use of Proceeds
 
The table below sets forth our estimated use of proceeds from this Offering assuming we sell $50.0 million in Class A Investor Shares.
 
The Manager previously spent $82,244 on start-up costs in connection with our Prior Offering, including legal, accounting and state filing fees relating to the initial preparation and qualification of that offering. The Company anticipates spending an additional $60,000 for the cost of preparing and qualifying this Offering.
 
The Company and the Projects have operating expenses. We expect to pay for the operating expenses with cash flow from the Projects, but if the Projects have not earned enough revenue to pay for any given operating expense, the Manager may use the proceeds from this Offering to pay such operating expense. The types of operating expenses at the Project and Company level are described in "Our Operating Costs and Expenses".
 
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All of the net proceeds of this Offering, after start-up costs and expenses, will be used to acquire, develop and construct Projects. To fully fund the construction of the Projects currently owned by the Company, we would need to invest a further $20,533,151 (although some Projects may be sold prior to construction depending on market conditions and the success of this Offering). Any capital we raise in addition to the amount needed to construct current Projects will be invested into new Projects that will be secured by the Development Companies and approved by the Investment Committee.
 
The capital raised in this Offering will not be used to compensate officers or directors as the Company has no employees. However, offering proceeds may be used to pay fees owed to the Manager and its affiliates (see "Compensation of Directors and Executive Officers").
 
The Manager may make short term advances to the Company to make payments on an as-needed basis. The Manager has also secured a loan on behalf of the Company. We do not anticipate any additional sources of capital apart from funds from operations, the advances, funds generated through this Offering and the loan to fund the acquisition, development and construction of Projects and to cover start-up costs and expenses. For further information about the Company's borrowing, please refer to the "Leverage" section below.
 
It is important to note that no capital will be allocated to any Project until it has received formal approval from the Investment Committee and has been reported in accordance with the appropriate procedures. In the interim, we may invest in short-term, highly liquid investments. Such short-term investments will not earn as high of a return as we expect to earn on our investments in Projects.
 
We might invest in Projects using the Manager's capital before we have raised enough capital from Investors. In that case, we will replace the Manager's capital with capital from Investors as soon as we raise it. To the extent the Manager or its affiliates invest capital, they will do so on the same price and terms as other Investors.
 
The Company is not paying commissions to underwriters, brokers, or anyone else in connection with the sale or distribution of the Class A Investor Shares. In some cases, retirement custodians, investment advisers, and other intermediaries will offer to invest on behalf of their clients. In such cases, the custodian, adviser, or intermediary will be paid a fee from their client's invested funds. In such cases, the client (rather than the Company) is paying those fees.
 
Historically, the Company has taken all its Offering proceeds and invested them into start-up costs and the acquisition, development and construction of Projects and its future plan is to continue to utilize all proceeds for subsequent Projects. Please refer to the table below where we outline the use of proceeds from inception through June 30, 2023:
 
Sources and Uses
Amount 
Sources 
 
Amount Previously Raised (pursuant to Regulation A)
$8,224,365
Maximum Amount to be Raise from this Offering
$50,000,000
Proceeds from the Sale of Projects 
$238,752
Interest from short term investments 
$17,652
Loans 
$4,553,001
Total 
$63,033,770
 
 
Uses 
 
Cash on Hand and Equivalents
$1,472,737
Start-up Costs 
$91,633
Loan Interest
$1,047,393
Company Operating Expenses
$582,078
Loan to a related entity
$120,607
Distributions to Investors
$689,138
Current Investments Projects 
$9,030,185
Anticipated Investments in New Projects 
$50,000,000
Total
$63,033,770
 
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Description of Business
 
Offices and Employees
 
The Company's offices are located at 52 Main Street, Chester, CT 06412. The Company itself has no employees. Rather, the Company has engaged the Manager to manage the Company and utilizes employees and services provided by the Manager as described more fully in the section "Directors, Executive Officers & Significant Employees".
 
Company Overview
 
Energea Portfolio 2 LLC is a limited liability company, treated as a corporation for tax purposes, and organized under the laws of Delaware as of January 13, 2020. The Company and its day-to-day operations are managed by the Manager, Energea Global LLC. The Company was created to invest in the acquisition, development, construction and operation of community solar energy Projects in Brazil. The Projects will be rented to Subscribers (who are aggregated into legal groups called "Consortium"). Subscribers make monthly payments based on the amount of electricity produced by the Project and credited to them.
 
First, the Projects rent the solar asset to a Consortium through a combination of three agreements (Land Leases, Project Rental Contracts and Project Operations and Maintenance Contracts), then, Subscribers join the Consortium in order to benefit from the power produced by the Project under Terms of Adhesion (see "Summary of Supporting Contracts").
 
Projects are each owned by a single-purpose entities ("SPE"). Each SPE is organized as a Brazilian Limitada or Ltda, the Brazilian equivalent of a U.S. limited liability company. Under Brazilian law, the assets, and liabilities of a Ltda are distinct. Thus, the liabilities of a Project held in one SPE will not affect the assets of another Project held in a different SPE.
 
As of the date of this offering circular, the Company owns 100% of each SPE, although there could be instances where the Company is a partner in a SPE with another party, such as the Development Company (as defined below). In all cases, the Company will exercise management control over the SPE.
 
The revenue from our Projects consists primarily of the payments we receive from Subscribers each month. The Company will make a profit if revenues from Projects exceed their expenses plus those expenses of the Company (see "Our Operating Costs and Expenses").
 
While we have opportunistically sold Projects in the past (see "Projects Sold"), the Company generally plans to hold the Projects indefinitely, creating a reliable stream of cash flow for Investors. Should the Company decide to sell Projects in the future, however, the Manager would consider the following factors:
 
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·
Yield and Cashflow: Many investment funds look for reliable cashflows generating a targeted yield. With both revenue and most expenses locked in by contract, the cash flow from any Project or portfolio of Projects should be predictable and consistent for as long as 25 years.
 
 
 
 
·
Project Consolidation: Some of the Projects will be too small or unusual for institutional buyers to consider purchasing on their own. The Company could package these Projects into a larger, more standardized portfolio that will be attractive to these larger, more efficiency-focused players. In the aggregate, a portfolio of Projects might be expected to generate 50+ megawatts of power with relatively uniform power contracts, engineering standards, and underwriting criteria. A portfolio of that size can bear the fees and diligence associated with an institutional-grade transaction or securitization.
 
 
 
 
·
Cash Flow Stabilization: When the Company buys a Project, it will typically share the construction risk with the Development Company that originated the Project. Larger investors are generally unwilling to take on construction risk and will invest only in projects that are already generating positive cash flow, referred to as "stabilization". Thus, the Company may acquire Projects before stabilization and sell them after stabilization. Institutional investor interest in the Portfolio should increase as the portfolio stabilizes.
 
 
 
 
·
Increase in Residual Value: When the Company acquires a Project, the appraisal is based solely on the cash flows projected from executed Project Rental Contracts, with no residual value assumed for the Project. There is a high probability that a Project will continue to create revenue after its initial contract period in the form of a contract extension, repositioning, or sale of energy into the merchant energy markets. This creates a sort of built-in "found value" for our Projects, which may be realized upon sale.  
 
Investment Strategy 
 
The Company sources most of its Projects from third parties in Brazil who specialize in developing solar projects ("Development Companies"). Energea Brazil, an affiliate of the Manager, is a Development Company. The Company's relationship with Development Companies may take several different forms. A Development Company might identify a potential project and permit, engineer and construct it, might provide operations and maintenance support for a Project after it is built, or might sell a Project to us and exit entirely.
 
Development Companies are compensated for their work and their risk. This compensation may take the form of a developer fee or a continued economic interest in the SPE. As of the date of this offering circular, no Development Companies have any economic interest in the SPEs. However, where a Project is originated through Energea Brazil, Energea Brazil will cap the related-party development fee at 5.0% of the overall Project's cost, which we believe is below the standard market rate for developing a Project.
 
We believe that we will be able to continue to source new Projects in Brazil for several reasons, including the fact that the cost of electricity in Brazil has risen over time. We believe this rise in energy costs has occurred for several reasons:
 
 
·
Even with the relatively low rates of economic growth Brazil has experienced in recent years, as compared to other developing countries, its energy needs continue to grow as the country modernizes and increases its use of electronic devices.
 
 
 
 
·
Brazil has relied extensively on electricity generated from hydropower. However, hydroelectricity fluctuates with the seasons and most large hydroelectric projects have already been developed, so new projects come online at more expensive pricing.
 
 
 
 
·
Previous governments subsidized energy costs for decades. Recent changes in government have removed these subsidies, so the true cost of energy is now being passed through to end-users.
 
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We believe the cost of electricity in Brazil will continue to rise for the foreseeable future.
 
We seek a price for electricity that is simultaneously high enough to be profitable for our Investors and low enough to draw Customers to our Consortiums. In markets where solar equipment is installed directly on a customer's property, larger discounts are generally required to provide adequate incentive for a deal. In Brazil, where solar energy is generated remotely and with little or no inconvenience to the Subscriber, we anticipate discounts off energy provided by the utility company between 15-25%. The Company has several hundred Subscribers as of the date of this Offering with an average discount rate of 19.15%.
 
We primarily invest in Projects with the following characteristics:
 
 
·
Power Capacity: The Brazilian market for utility-size solar projects (10+ megawatts) is efficient and competitive, with many large players. We intend to focus on the smaller market, with projects of between one-hundred kilowatts and five megawatts. The capacity of a solar project is determined in accordance with "standard testing conditions" established by certain laboratories worldwide. The actual output of a solar project fluctuates with solar irradiance.
 
 
 
 
·
Subscribers: The Subscribers for a given Project will be private households and small businesses, organized into a single entity, typically taking the form of a limitada managed by the Company, as a consortium for commercial and residential Subscribers ("Consortium"). For a one-megawatt Project, we would expect the Consortium to include, on average, about 2,000 Subscribers. Subscribers may opt out of a Consortium at any time and will be replaced by other Subscribers from a waiting list.
 
 
 
 
·
Project Rentals: A SPE will rent each Project to a Consortium so that, in form, Subscribers are generating their own electricity, while the rent paid by the Consortium is effectively a payment for their use of the Project. Typically, a Project Rental Contract will have a term of 20 years.
 
 
·
Operation and Maintenance: When the SPE rents a Project to a Consortium, the Consortium will simultaneously hire the SPE to operate and maintain the Project on a turnkey basis, and the SPE will hire a third party to perform some or all of those services.
 
 
 
 
·
Locations: We select locations based primarily on:
 
 
 
 
 
o Brazilian states which have the most advantageous tax and energy economics;
 
 
 
 
 
o Efficient access for maintenance;
 
 
 
 
 
o Interconnection points with the electricity grid;
 
 
 
 
 
o Solar irradiance; and
 
 
 
 
 
o Acceptable security risks. The Company tries to avoid selecting Projects in locations with high crime areas which could expose the project to an increased risk of theft and vandalism.
 
 
 
 
·
Right to Land: Typically, we lease the land where the Projects are built, pursuant to a lease that continues for at least the duration of the Project Rental Contract with our Subscriber and gives us, as tenant, the right to extend.
 
Page 15
 
 
·
Connecting Projects to the Local Electric Grid: The Projects will not be connected directly to Subscribers. Instead, they will be connected to the local electric grid. As a member of a consortium, which has rights to the Project via the Project Rental Contract, Subscribers will be entitled to a credit on their electric bill.
 
 
 
 
·
Our Solar Equipment: We use the equipment standardly used across the solar industry: solar panels, which turn sunlight into electrical energy; and inverters, which convert direct current from panels to alternating current used in homes and businesses. We buy our equipment only from certain manufacturers known for high quality and financial strength.
 
 
 
 
·
Compliance with Brazilian Laws Applicable to Solar Projects: Each Project will comply with Normative Resolution ANEEL n° 482/2012 ("Ren 482"), the primary law governing community solar electricity systems in Brazil.
 
 
 
 
·
When the Company Invests in Projects: Normally, the Company will not invest in a Project until certain conditions are satisfied. Among these:
 
 
 
 
 
o The SPE has executed contracts for the lease of the underlying land, for engineering, and for the construction of the Project, for the rental of the Project to a consortium, a full list of committed Subscribers and for operations and maintenance;
 
 
 
 
 
o The electric utility has confirmed that the Project can connect with the electric grid;
 
 
 
 
 
o All environmental and installation permits have been obtained;
 
 
 
 
 
o We have executed installation service agreements (e.g., for all civil and site work, electrical installation, installation of racking, etc.); and
 
 
 
 
 
o We have obtained insurance.
 
Thus, in most cases Investors are not exposed to any Project-level risks until all these conditions are satisfied. However, the Manager might make exceptions for exceptionally promising Projects. The Manager will have sole discretion over whether to acquire or invest in a Project. See "Risks of Investing" for more information.
Investment Committee
 
When we find a Project that meets the fundamental criteria described above, we consider the Project for investment at a multi-disciplinary committee of experienced renewable energy executives of the Manager ("Investment Committee"). As of the date of this offering circular, the Investment Committee consists of a Managing Partner (Mike Silvestrini), General Counsel (Isabella Mendonca), a Financial Analyst (Arthur Issa) and the Director of Construction (David Rutty). To approve a Project for funding, a unanimous approval of the Project by the Investment Committee is required to move forward. A copy of the memorandum prepared by the Manager for each Project and used by the Investment Committee to make an investment decision is provided to Investors on the Platform and in our filings with the SEC.
 
Page 16
 
Competition
 
Our net income depends, in large part, on our ability to source, acquire and manage investments with attractive risk-adjusted yields. We compete with many other entities engaged in renewable energy in the Brazilian market, including individuals, corporations, private funds, and other entities engaged in renewable energy investment activities, many of which have greater financial resources and lower costs of capital available to them than we have. In addition, there are numerous companies with asset acquisition objectives similar to our Manager, and others may be organized in the future, which may increase competition for the investments suitable for us.
 
Competitive variables include market presence and visibility, amount of capital to be invested per Project and underwriting standards. To the extent that a competitor is willing to risk larger amounts of capital in a particular transaction or to employ more liberal underwriting standards when evaluating potential investments than we are, our investment volume and profit margins could be impacted. Our competitors may also be willing to accept lower returns on their investments and may succeed in buying projects that we have targeted for acquisition. Although we believe we are well positioned to compete effectively in each facet of our business, there is enormous competition in the market and there can be no assurance that we will compete effectively or that we will not encounter increased competition in the future that could limit our ability to conduct our business effectively.
 
Our Revenue
 
The revenue from our Projects consists primarily of the payments we receive from Subscribers under Land Leases, Project Rental Contracts and Project Operations and Maintenance Contracts. The Company also produces cash flow by selling Projects opportunistically. The Company's total revenue during its most recent fiscal year was $40,051 which is broken down below:
 
Revenue Recognition
Amount
Subscriber Payments
$40,051
Purchase and Sale Agreement for Environmental Commodities
$0
Sale of Projects
$0
 
Our Revenue Recognition Policy follows ASC-606 which is a five-step procedure:
 
Procedure
Example
Step 1 - Identify the Contract
Project Rental Contract
Step 2 - Identify the Performance Obligations
Delivery of electricity from solar plant
Step 3 - Determine the Transaction Price
Amount contractually signed with Subscriber
Step 4 - Allocate the Transaction Price
Obligation is satisfied by transferring control of the electricity produced to the Subscriber
Step 5 - Recognize Revenue
At a point in time when the Subscriber is invoiced
 
Page 17
 
Our Operating Costs and Expenses
 
The Company incurs a variety of costs and expenses, including:
 
 
·
banking fees;
 
 
 
 
·
legal expenses;
 
 
 
 
·
payments to the Manager for fees and carried interest;
 
 
 
 
·
fees to wire money from Brazil to the U.S.;
 
 
 
 
·
payments to U.S. states to comply with their respective securities law ("Blue Sky Laws");
 
 
 
 
·
debt service and transactional payments (where we borrow money at the Company level);
 
 
 
 
·
annual financial audit expenses;
 
 
 
 
·
depreciation;
 
 
 
 
·
U.S. and Brazilian taxes.
 
The Projects also incur a variety of costs and expenses, including:
 
 
·
payments to third parties to operate and maintain the Projects;
 
 
 
 
·
lease payments to landowners;
 
 
 
 
·
debt service and transactional payments (where we borrow money at the Project level);
 
 
 
 
·
utilities;
 
 
 
 
·
on-site security; 
 
 
 
 
·
payments to the third party that manages Subscriber electric bill credits;
 
 
 
 
·
Brazilian taxes;
 
 
 
 
·
banking fees;
 
 
 
 
·
depreciation;
 
 
 
 
·
project insurance.
 
The Company's total operating expenses for the fiscal year ended December 31, 2022, were $233,342 and as of June 30, 2023 were $213,984.
 
Page 18
 
U.S. and Brazilian Taxes
 
The following summarizes the most significant Brazilian taxes that will be imposed on the SPEs and the Company, as well as the Federal income tax consequences of acquiring Class A Investor Shares. This summary is based on the current tax laws of Brazil, the current U.S. Internal Revenue Code (the "Code"), the current regulations issued by the Internal Revenue Service ("Regulations"), and current administrative rulings and court decisions, all as they exist today. All of these tax laws could change in the future.
 
This is only a summary, applicable to a generic Investor. Your personal situation could differ. We encourage you to consult with your own tax advisor before investing.
 
Brazilian Taxes
 
Brazilian Tax System Generally
 
Like the United States, taxes in Brazil are imposed at the federal, state, and local level.
 
The federal government will impose the following taxes on each SPE:
 
 
·
A corporate income tax equal to (i) 15% of the SPE's taxable income, plus (ii) 10% of the SPE's taxable income per month in excess of R$20,000.
 
 
 
 
·
A social contribution tax equal to 9% of the taxable income of the SPE.
 
 
 
 
·
A corporate sales tax equal to 1.65% of the SPE's gross sales revenue.
 
 
 
 
·
A social security tax equal to 7.6% of the SPE's gross sales revenue.
 
 
 
 
·
A tax on some purchased goods (like a sales tax) imposed at 10%.
 
The SPEs will be entitled to depreciation deductions with respect to certain equipment.
 
At the state level, each SPE will be subject to a tax on purchased goods (e.g., solar equipment). The ICMS rates vary by state but will typically be imposed at 18%.
 
At the local level, many municipalities impose a tax on revenues from services provided (e.g., the services an SPE will provide to the Consortium under a Project Operation and Maintenance Agreement). These taxes are typically imposed at a rate of 5%.
 
NOTE: Brazil does not impose a tax on the Company itself or on Investors, nor does it require SPEs to withhold any taxes from distributions to the Company investor (Company or Individual) for permanent investors.
 
U.S. Federal Income Taxes
 
Classification as a Corporation
 
The Company will be treated as a corporation for federal income tax purposes. As a corporation, Cash received by investors will be treated as a combination of return of capital or qualified dividends. Qualified dividends will be taxed at the capital gains tax rate of either 0%, 15%, or 20%, depending on the investor's income tax bracket.
 
Page 19
 
The General Intangible Low-Tax Income "GILTI" tax on foreign investments is more favorable to our investors under a corporate tax structure as opposed to a partnership, where the tax on international assets would be levied on individuals. Under a partnership an investor would be responsible for 37% of all foreign profits generated from an international investment. A corporate tax structure allows the corporation to realize foreign tax credits. Under this corporate tax reporting structure, the corporate entity would only pay 21% tax on 50% of the foreign profits after foreign tax credits have been applied.
 
When the Company closes its books each year, it will post a profit/loss for that tax year. In accordance with the IRS, taxable dividends can only result from profit/loss of an "LLC treated as a corporation" which is how the Company is classified. When the Company's profit/loss for the year is less than the total distributions (which is often the case), the remaining distributions get filed in Box 3 of the Investor's 1099-DIV as non-dividend distributions. These distributions are non-taxable and are filed as a return of capital (and subtracted from the basis). When the Investor sells their shares or are bought out at the end of the portfolio's lifespan, the basis is what is used to determine the capital gains or losses realized by the sale of the shares.
 
Taxation of Dividends
 
The income of the Company will consist primarily of cash available for distribution ("CAFD") received from the SPEs in the form of a dividend. Because the SPEs will be foreign corporations, these dividends will be "non-qualified dividends" within the meaning of the Code and therefore subject to tax at ordinary income tax rates ("qualified dividends," including dividends from most U.S. corporations, are subject to tax at preferential rates).
 
Foreign Tax Credit
 
The Company, but not the Investors, might be entitled to credits for taxes paid by the SPEs in Brazil.
 
Sale or Exchange of Class A Investor Shares
 
In general, the sale of Class A Investor Shares by an Investor will be treated as a sale of a capital asset. The amount of gain from such a sale will generally be equal to the difference between the selling price and the Investor's tax basis. Such gain will generally be eligible for favorable long-term capital gain treatment if the Class A Investor Shares were held for at least 12 months. However, to the extent any of the sale proceeds are attributable to substantially appreciated inventory items or unrealized receivables, as defined in Code section 751, the Investor will recognize ordinary income.
 
A gift of Class A Investor Shares will be taxable if the donor-owner's share of the Company's debt is greater than his or her adjusted basis in the gifted interest. The gift could also give rise to federal gift tax liability. If the gift is made as a charitable contribution, the donor-owner is likely to realize gain greater than would be realized with respect to a non-charitable gift, since in general the owner will not be able to offset the entire amount of his adjusted basis in the donated Class A Investor Shares against the amount considered to be realized as a result of the gift (i.e., the debt of the Company).
 
Transfer of Class A Investor Shares by reason of death would not in general be a taxable event, although it is possible that the IRS would treat such a transfer as taxable where the decedent-owner's share of debt exceeds the pre-death basis of his interest. The decedent-owner's transferee will take a basis in the Class A Investor Shares equal to its fair market value at death (or, in certain circumstances, on the date six (6) months after death), increased by the transferee's share of debt. For this purpose, the fair market value will not include the decedent's share of taxable income to the extent attributable to the pre-death portion of the taxable year.
 
Page 20
 
Treatment of Distributions
 
Upon the receipt of any distribution of cash or other property, including a distribution in liquidation of the Company, an Investor generally will recognize income only to the extent that the amount of cash and marketable securities he, she, or it receives exceed the basis of his, her, or its Class A Investor Shares. Any such gain generally will be considered as gain from the sale of Class A Investor Shares.
 
Alternative Minimum Tax
 
The Code imposes an alternative minimum tax on individuals and corporations. Certain items of the Company's income and loss may be required to be taken into account in determining the alternative minimum tax liability of Investors.
 
Taxable Year
 
The Company will report its income and losses using the calendar year. In general, each Investor will report his, her, or its share of the Company's income and losses for the taxable year of such Investor that includes December 31st, i.e., the calendar year for individuals and other owners using the calendar year.
 
Tax Returns and Information; Audits; Penalties; Interest
 
The Company will furnish each Investor with the information needed to be included in his or her federal income tax returns. Each Investor is personally responsible for preparing and filing all personal tax returns that may be required as a result of his purchase of Class A Investor Shares. The tax returns of the Company will be prepared by accountants selected by the Company.
 
If the tax returns of the Company are audited, it is possible that substantial legal and accounting fees will have to be paid to substantiate our position and such fees would reduce the cash otherwise distributable to Investors.
 
Each Investor must either report Company items on his or her tax return consistent with the treatment on the information return of the Company or file a statement with his tax return identifying and explaining the inconsistency. Otherwise the IRS may treat such inconsistency as a computational error and re-compute and assess the tax without the usual procedural protections applicable to federal income tax deficiency proceedings.
 
The Code imposes interest and a variety of potential penalties on underpayments of tax.
 
Other U.S. Tax Consequences
 
The foregoing discussion addresses only selected issues involving Federal income taxes and does not address the impact of other taxes on an investment in the Company, including federal estate, gift, or generation-skipping taxes, or State and local income or inheritance taxes. Prospective Investors should consult their own tax advisors with respect to such matters.
 
Page 21
 
Summary of Supporting Contracts
 
The Company will cause the SPEs to enter into six main contracts for each Project:
 
 
·
Land Leases: The SPE will lease (rather than buy) the land where the Project is located, pursuant to a contract we refer to as a "Land Lease."
 
 
 
 
·
Project Rental Contracts: In all cases, the SPEs will rent the Projects to a Consortium of Subscribers (so that the Subscribers are, in form, generating their own solar power) pursuant to a contract we refer to as a "Project Rental Contract."
 
 
 
 
·
Operations and Maintenance Contracts: As the SPE rents the Project to a Consortium of Subscribers pursuant to a Project Rental Contract, the Consortium simultaneously hires the SPE to operate and maintain the Project pursuant to a contract referred to as an "Operations and Maintenance Contract."
 
 
 
 
·
Construction Contracts: To build the Projects the SPE will hire a third party to provide engineering, procurement, and construction services pursuant to a contract referred to as a "Construction Contract."
 
 
 
 
·
Project Maintenance Contracts: The SPE will then hire Energea Brazil to operate and maintain the Projects pursuant to a contract referred to as a "Project Maintenance Contract" (see "Interest of Management and Others in Certain Transactions").
 
 
 
 
·
Credit Management Agreements: Each Project produces energy credits. To convert those energy credits into revenue, the SPE must hire a service provider to onboard Subscribers and administrate the allocation of energy to each Subscriber on a monthly basis. These services are performed by Energea Brazil under the terms and conditions set forth in a Credit Management Agreement (see "Interest of Management and Others in Certain Transactions").
 
Each of these contracts are bi-lingual, both in English and in Portuguese, the national language of Brazil. Although the final terms and conditions and contract title might differ from Project to Project, the rights and obligations of the parties will generally be consistent across all of the Projects.
 
Land Leases
 
The principal terms of a typical Land Lease are as follows:
 
 
·
The initial term is typically the same as the term of the Project Rental Contract. However, the SPE will have the right to extend the term for up to 30 years.
 
 
 
 
·
The rent typically escalates with the Brazilian consumer price index (the Indice Nacional de Precos ao Consumidor Amplo).
 
 
 
 
·
The SPE is responsible for taxes, water fees, power, sewage and any other services or utilities.
 
 
 
 
·
The SPE can do anything on the land necessary to build a Project, including opening roads, workshops, buildings, warehouses, offices, and other complimentary and ancillary installations so long as they are approved by the applicable legal authorities. The SPE is also permitted to make any improvements to the land it deems necessary so long as these improvements do not impact the structural integrity of any buildings and we give the lessor advance notice.
 
Page 22
 
 
·
The SPE is liable for any direct damages that occur to the land and must hold the lessor harmless against any claims, liabilities, direct damages, losses, or expenses caused by these damages unless the lessor was the party who caused such damages.
 
 
 
 
·
The SPE is also responsible for any environmental liabilities that occurred during the Land Lease term, while the lessor is responsible for any environmental liabilities before or after the Land Lease term. In connection with any environmental liabilities, the parties both agree to hold each other harmless for any claims, liabilities, or damages that each party is responsible for under the Land Lease. However, all liability for either party for any liabilities under the Land Lease (including environmental) will be limited to the direct damages and penalties imposed without regard to consequential damages and/or loss of profits.
 
 
 
 
·
The SPE has a right of first refusal to purchase the land if the lessor wants to sell it.
 
 
 
 
·
The lessor may terminate at any time. However, if the termination is for any reason other than our failure to pay rent for more than three months, the lessor is required to pay a penalty to compensate the SPE for the loss of revenue from the Project.
 
 
 
 
·
The SPE may also terminate at any time. The SPE would not be subject to any penalty but would be required to remove the Project and repair any damage to the land.
 
 
 
 
·
Disputes would be resolved by arbitration in Rio de Janeiro under the rules of the Federation of Industries of the State of Sao Paulo (also known in Brazil as the Federação das Industrias do Estado de Sao Paulo).
 
Project Rental Contracts
 
The principal terms of typical Project Rental Contracts are as follows:
 
 
·
The Consortium rents the Project for 25 years.
 
 
 
 
·
The SPE is responsible for obtaining and maintaining any necessary authorizations or approvals for operating the Project.
 
 
 
 
·
The SPE retains title to the Project.
 
 
 
 
·
The SPE will receive a direct pass-through of 90% of all revenue collected by the consortium, from Subscribers as compensation under this agreement.
 
 
 
 
·
Disputes would be resolved by arbitration in Rio de Janeiro under the rules of the Federation of Industries of the State of Sao Paulo (also known in Brazil as the Federação das Industrias do Estado de Sao Paulo).
 
Page 23
 
Operations and Maintenance Contracts
 
The principal terms of typical Operations and Maintenance Contracts are as follows:
 
 
·
The SPE is responsible for providing all services required to maintain and operate the Project, including:
 
 
 
 
 
o Inspect the solar array at least twice per year;
 
 
 
 
 
o Inspect the inverter at least twice per year;
 
 
 
 
 
o Make adjustments to the Project to maximize power generation;
 
 
 
 
 
o Coordinate inspections and repairs with relevant authorities;
 
 
 
 
 
o Provide reports identifying (i) power production at 15 minute intervals; (ii) actual power production versus estimated production; and (iii) losses from transformers and inverters;
 
 
 
 
 
o Serve as a liaison with utilities, component manufacturers, and their respective agents;
 
 
 
 
 
o Maintain minimum quantities of replacement materials in inventory;
 
 
 
 
 
o Coordinate electrical system/component repairs with the Subscriber's electrician;
 
 
 
 
 
o Make requested repairs within level of service expectations; and
 
 
 
 
 
o Perform preventative maintenance as required.
 
 
 
 
·
All services will be performed in accordance with their respective owner/operator manuals, applicable manufacturer and vendor warranties and specification, prudent operating practices and applicable laws.
 
 
 
 
·
The initial term is the same as the Project Rental Contract, which can be extended by mutual agreement of the parties.
 
 
 
 
·
The SPE will receive a direct pass-through of 10% of all revenue collected by the Consortium from Subscribers as compensation under this agreement.
 
 
 
 
·
Disputes would be resolved by arbitration in Rio de Janeiro under the rules of the Federation of Industries of the State of Sao Paulo (also known in Brazil as the Federacao das Industrias do Estado de Sao Paulo).
 
Page 24
 
Construction Contracts
 
The principal terms of typical Construction Contracts are as follows:
 
 
·
The contractor will provide all the services needed to design and build a Project on a turnkey basis, including:
 
 
 
 
 
o Producing estimates of the potential electrical capacity;
 
 
 
 
 
o Creating engineering drawings;
 
 
 
 
 
o Supplying materials; and
 
 
 
 
 
o Installing, assembling, and testing the equipment.
 
 
 
 
·
For its services, the contractor will be entitled to a fixed fee.
 
 
 
 
·
The fixed fee will be paid in accordance with a schedule based on progress milestones.
 
 
 
 
·
The contractor will (i) be responsible for payment of all taxes, charges, tax contributions, and social security contributions related to the services performed; and ensure that all of its personnel are duly registered, are performing services in accordance with Brazilian law, and are paid all wages, salary, labor, and social security charges for their work.
 
 
 
 
·
The contractor will provide the SPE with certain warranties for its services and the equipment supplied.
 
 
 
 
·
The contractor must maintain certain specified insurance coverages.
 
 
 
 
·
The contractor is subject to various penalties for failure to perform including Liquidated Damages.
 
 
 
 
·
Disputes would be resolved by arbitration by the Chamber of Business Arbitration in Brazil (also known in Brazil as the Camara de Mediacao e Arbitragem Empresarial - Brasil).
 
Page 25
 
Project Maintenance Contracts
 
The principal terms of typical Project Maintenance Contracts are as follows:
 
 
·
The contractor will provide all services required to operate and maintain the Project, including:
 
 
 
 
 
o Providing all personnel, equipment, and materials required for the efficient operation of the Project;
 
 
 
 
 
o Preparing all supporting documentation and information related to the use and operation of the Project;
 
 
 
 
 
o Inspecting transmission lines and substations at least twice annually and preparing a report suggesting services and maintenance to be performed on the Project;
 
 
 
 
 
o Preparing and implementing operation and maintenance instructions, guides, and procedures specific to the Project, including contingency plans as necessary;
 
 
 
 
 
o Performing routine inspections of the Project to ensure compliance with manufacturer's operation and maintenance standards;
 
 
 
 
 
o Determining, and to the extent possible, performing or managing any additional services as necessary to remedy any actual or potential problems with the Project;
 
 
 
 
 
o Registering the Project and all relevant equipment with the appropriate authorities; and
 
 
 
 
 
o Managing the supply of all equipment inventory and spare parts.
 
 
 
 
·
All services will be performed in accordance with their respective owner/operator manuals, applicable manufacturer and vendor warranties and specification, prudent operating practices and applicable laws.
 
 
 
 
·
The contractor will regularly communicate with the SPE concerning the Project, including:
 
 
 
 
 
o When any work is being done on the Project, holding monthly meetings;
 
 
 
 
 
o Providing monthly reports;
 
 
 
 
 
o Providing daily bulletins on the operation of the Project;
 
 
 
 
 
o Preparing monthly management; and
 
 
 
 
 
o Providing a report on any technical work performed on a Project.
 
 
 
 
·
The SPE will pay the third-party contractor a fixed monthly fee plus an additional amount for unexpected parts or services not part of the Scope of Work. The fixed monthly fee is subject to adjustment based on inflation.
 
 
 
 
·
The initial term of the contract is 60 months.
 
 
 
 
·
Disputes will be resolved in the courts of the Judicial District of Rio de State of Rio de Janeiro.
 
Page 26
 
Credit Management Agreements
 
The principal terms of typical Credit Management Agreements are as follows:
 
 
·
The Contractor will provide two types of credit management services:
 
 
 
 
 
o Marketing and acquisition services: whereby the Contractor is to identify, onboard and document Subscribers to the Consortium;
 
 
 
 
 
o Credit Management services: whereby the Contractor is to provide software and services necessary to create, verify, allocate and distribute energy credits followed by the invoicing and collection of revenue from Subscribers
 
 
 
 
·
The term is for 20 years, the same term as the Project Rental Contract.
 
 
 
 
·
Contractor must allocate at least 95% of all energy credits produced by the Project to Subscribers each month.
 
 
 
 
·
Contractor is to meet international safety and security standards around the use and possession of customer information.
 
 
 
 
·
Compensation for the services are divided into two categories to match the two types of services where marketing and acquisition services are paid a commission based on the contracted energy load and the credit management services are compensated as a fixed monthly fee.
 
 
 
 
·
Either Party may terminate the agreement with written notice to the other. Early termination for cause will result in a one-time early termination fee equal to six months of service payments to be paid by the Party who committed the defaulting act.
 
Material Legal Proceedings
 
Two of the Company's SPEs, namely Energea Pedra do Indaiá Ltda ("Pedra do Indaia") and Energea Iguatama Aluguel de Equipamentos e Manutenção Ltda ("Iguatama"), initiated legal action against Alexandria Indústria de Geradores S.A. ("Contractor") due to breaches of the terms and conditions stipulated in the Construction Contracts.
 
The Contractor's failure to fulfill its obligations under both Construction Contracts resulted in the accrual of Liquidated Damages owed to the SPEs of Pedra do Indaia and Iguatama. In an effort to remedy the default, a Confession of Debt was executed by the Contractor, encompassing both projects. This document imposed personal and corporate responsibility upon the Contractor to guarantee the owed amount to the SPEs. Regrettably, the Contractor failed to meet the payment obligations outlined in the Confession of Debt.
 
Subsequently, the Construction Contracts were terminated, and Energea Brasil Operações Ltda (a subsidiary of Energea Global LLC), the entity overseeing the SPEs, promptly initiated legal proceedings. They sought an injunction from the Courts of Rio de Janeiro to secure the payment, including the freezing of the Contractor's corporate bank accounts as a means to compel compliance.
 
The presiding Judge initially granted the injunction, compelling the Contractor to remit all Liquidated Damages, interest on overdue payments, and legal fees as specified in the Confession of Debt, within a three-day timeframe. Shortly thereafter, the proceedings were further complicated when the Contractor filed for bankruptcy protection and other secured creditors entered the process of collecting unpaid amounts. The lawsuit is still in process and may take several years to reach a final verdict.
 
Page 27
 
Factors Likely to Impact the Performance of the Company
 
The ability of the Company to conduct its business successfully depends on several critical factors including, but not limited to:
 
 
·
The Price of Electricity in Brazil: As of the date of this offering circular, we estimate that our Subscribers will typically save approximately 15% on their electricity bills when they subscribe to one of our Projects. The energy product we offer Subscribers is a fixed discount on their cost of energy. In other words, if a Subscriber joined with a fixed 15% discount, the amount of revenue we generate from that Subscriber will go up if energy prices go up (as determined by published tariff set by the interconnecting utility for conventional energy) and down if energy prices go down.
 
 
 
 
·
Government Policies: (see "Management Discussion: Comments on the Market") Given the environmental and economic benefits of solar power, the Company expects the friendly attitude of the Brazilian government to continue. As we have seen in other markets, however, environmentally friendly policies can change quickly. If the government in Brazil succumbed to pressure from incumbent energy producers, it could impose additional costs on the Projects.
 
 
 
 
·
Currency Fluctuations: The Brazilian national currency, the BRL, as of the date of this offering circular fluctuating near historic lows vis-à-vis the USD, making investments in Brazil relatively inexpensive. Although we believe the BRL will strengthen vis-à-vis the USD, making the profits from our Projects more valuable for U.S. investors, our financial projections assume conservatively that the BRL will continue to weaken versus the USD. Should the real weaken faster than our projections and after we invest in Projects, any profits from operational Projects would be less valuable for U.S. investors.
 
 
Description of Property
 
The only property owned by the Company are the Projects.
 
Projects Acquired
 
As of the date of this offering circular, the Company had acquired a total of 21 projects.
 
Project Name
Entity Name
Project Size (AC)
Acquisition
Date
Amount Invested*
Salinas
Project Salinas Geração S.A.
5.0 MW
04/15/19
$265,148.35
Itaguai III
Energea Itaguai III Aluguel de Equipamentos e Manutenção Ltda.
1.0 MW
03/06/20
35,706.72
Iguatama
Energea Iguatama Aluguel de Equipamentos e Manutencao Ltda.
2.3 MW
10/12/20
2,266,303.28
Pedrinopolis
Energea Pedrinopolis Ltda.
2.3 MW
05/21/21
117.67
Pedra do Indaiá
Energea Pedra do Indaiá Ltda.
2.3 MW
10/01/21
4,026,668.74
Divinopolis III
Energea Divinopolis Ltda.
2.3 MW
12/23/21
1,503,089.75
Araxa I
Energea Araxa I Ltda
2.5 MW
12/23/21
295,743.47
Araxa II
Energea Araxa II Ltda
2.5 MW
12/23/21
296,299.34
Divinópolis II
Energea Divinopolis II Ltda
2.5 MW
01/04/22
3,362,311.56
Corumbaíba
Energea Corumbaíba Ltda
2.5 MW
09/09/22
285,076.60
Diamantina II
Energea Diamantina II Ltda
2.5 MW
10/17/22
113,680.39
Formiga I
Energea Formiga I Ltda
2.5 MW
10/17/22
157,073.68
Formiga II
Energea Formiga II Ltda
1.5 MW
10/17/22
73,235.76
Naque
Energea Naque Ltda
1.5 MW
10/17/22
123,329.81
Micros I
Energea Micros I Ltda
1.1 MW
12/29/22
976,491.26
Itabapoana
Energea Itabapoana Ltda
2.5 MW
12/29/22
94,589.50
Aparecida do Taboado II
Energea Aparecida do Taboado II Ltda
2.5 MW
04/12/23
135,567.32
Frei Inocêncio
Energea Frei Inocêncio Ltda
2.5 MW
04/12/23
95,567.32
Nova Lacerda
Energea Nova Lacerda Ltda
2.5 MW
04/12/23
73,611.43
Monte Sião
Energea Portfolio Geração de Projetos MG II Ltda
2.5 MW
04/17/23
95,833.33
Aparecida do Taboado I
Energea Aparecida do Taboado I Ltda
2.5 MW
05/24/23
155,176.20
 
TOTAL
 
 
$14,430,621.48
* as of December 26, 2023
 
Page 28
 
Projects Sold
 
As of the date of this offering circular, the Company has sold 10 projects.
 
Project Name
Entity Name
Project Size (AC)
Date Sold
Sale Price Net of Taxes
Salinas
Project Salinas Geracao S.A.
5.0 MW
05/11/2021
$147,717.12
Pedrinopolis
Energea Pedrinopolis Ltda.
2.3 MW
05/11/2021
150,379.17
Itaguai III
Energea Itaguai III Aluguel de Equipamentos e Manutencao Ltda.
1.0 MW
05/19/2021
44,408.32
Aparecida do Taboado I
Energea Aparecida do Taboado I Ltda
2.5 MW
06/06/2023
136,029.13
Frei Inocêncio
Energea Frei Inocêncio Ltda
2.5 MW
06/06/2023
124,924.63
Monte Sião
Energea Portfolio Geração de Projetos MG II Ltda
2.5 MW
06/06/2023
126,224.19
Nova Lacerda
Energea Nova Lacerda Ltda
2.5 MW
06/06/2023
93,426.83
Formiga II
Energea Formiga II Ltda
1.5 MW
06/06/2023
100,343.76
Naque
Energea Naque Ltda
1.5 MW
06/06/2023
178,010.84
Itabapoana
Energea Itabapoana Ltda
2.5 MW
06/06/2023
133,060.59
TOTAL
 
$1,234,524.58
 
Projects Owned
 
As of the date of this offering circular, the Company holds 11 Projects. The table below lists the total amount the Company invested into each Project and the estimated Project cost. Please refer to the links in the column labeled "Form 1-U" for the Project Memo which gives in-depth information regarding each Project such as its location, the system size, contractors used to construct the Project, information about other stakeholders, information about the buyer of the energy and environmental commodities and the estimated economics of the Project. The Project Memos can also be found on the Platform.
 
Project Name
Entity Name
Project Size (AC)
Estimated Projected Cost
Amount Invested*
Form
1-U
Iguatama
Energea Iguatama Aluguel de Equipamentos e Manutencao Ltda.
2.3 MW
$2,266,303.28
$2,266,303.28
Pedra do Indaiá
Energea Pedra do Indaiá Ltda.
2.3 MW
4,060,647.00
4,026,668.74
Divinopolis III
Energea Divinopolis Ltda.
2.3 MW
2,769,085.00
1,503,089.75
Araxa I
Energea Araxa I Ltda
2.5 MW
3,586,096.00
295,743.47
Araxa II
Energea Araxa II Ltda
2.5 MW
3,599,613.00
296,299.34
Corumbaíba
Energea Corumbaíba Ltda
2.5 MW
3,380,687.00
285,076.60
Divinópolis II
Energea Divinopolis II Ltda
2.5 MW
3,419,573.00
3,362,311.56
Micros I
Energea Micros I Ltda
1.1 MW
1,048,742.00
976,491.26
Aparecida do Taboado II
Energea Aparecida do Taboado II Ltda
2.5 MW
3,284,388.00
135,567.32
TBD
Diamantina II
Energea Diamantina II Ltda
2.5 MW
3,238,712.00
113,680.39
TBD
Formiga I
Energea Formiga I Ltda
2.5 MW
3,297,611.00
157,073.68
TBD
 
TOTAL
 
$33,951,457.28
$13,418,305.39
 
* as of December 26, 2023
 
Page 29
 
Management Discussion and Analysis of Financial Condition and Result of Operation
 
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained in this offering circular. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in herein (see "Caution Regarding Forward-Looking Statements"). Unless otherwise indicated, the latest results discussed below are as of June 30, 2023.
 
Market Outlook and Recent Trends
 
According to Greener (Greener, 2023), an analyst of the Brazilian solar market, the number of installed solar systems in Brazil saw a remarkable surge in 2022, growing by 84.9% compared to 2021. This significant expansion required an investment of over R$64 billion (approximately $12.2B USD) including both Distributed Generation ("DG") and utility-scale solar projects. The addition of 7.1 GW of installed capacity marked a 73% increase compared to the previous year, when the installed capacity stood at 10.3 GW.
 
Despite a reduction in the use of bank financing for solar systems due to elevated interest rates, the solar market continued to flourish. Changes in the regulations governing DG, effective from January 2023, did have a marginal impact on the appeal of residential and commercial solar projects. Nevertheless, solar energy generation for local consumption remained an economically viable and advantageous option for end consumers.
 
According to Greener, the average price of a solar system experienced a noteworthy decrease of approximately 12% throughout 2022. This decline could be attributed to a drop in module costs and the abundance of equipment stocks among wholesalers, ultimately benefiting the Company. Those trends have continued throughout 2023 and prices for solar modules are at an all-time low.
 
Page 30
 
Brazilian Solar Energy Policies
 
Normative Resolution 482 (Resolução Normativa 482 or RN 482) is a key policy in Brazil governing distributed solar energy generation, specifically pertaining to net metering. However, please note that policies can change, and it is essential to check the most recent updates from Brazilian regulatory authorities for the latest information. Below is an overview of RN 482 and the difference between DG1 and DG2 as of the date of this Offering Circular:
 
Normative Resolution 482 (RN 482): This policy was enacted by ANEEL in 2012 and was aimed at promoting the development of distributed solar energy generation. The key provisions of RN 482 included:
 
 
·
Net Metering: RN 482 allowed consumers to install solar panels or other distributed generation systems and feed excess electricity back into the grid. This excess energy could be credited and used to offset the consumer's future electricity bills. This mechanism is known as net metering.
 
 
 
 
·
Consumer Categories: RN 482 classified consumers into two categories: DG1 and DG2.
 
 
o DG1: This category included residential and small commercial consumers with installed capacity of up to 75 kW (kilowatts). They were eligible for simplified net metering procedures and received credits for excess energy at the same rate they paid for energy consumption. The Company has acquired several DG1 Projects which we refer to as "micros".
 
 
o DG2: This category covered larger consumers, such as industrial or larger commercial users, with installed capacity above 75 kW and up to 5 MW (megawatts). DG2 consumers had more complex billing structures and received credits for excess energy at lower rates. The majority of the Projects owned by the Company are DG2 projects.
 
Difference Between DG1 and DG2:
 
The main difference between DG1 and DG2 under RN 482 was the size of the installed capacity and the billing structures:
 
 
·
Installed Capacity: DG1 consumers had a maximum installed capacity of up to 75 kW, while DG2 consumers had capacities exceeding 75 kW and up to 5 MW.
 
 
 
 
·
Billing: DG1 consumers enjoyed a more straightforward and favorable net metering arrangement with credits for excess energy at the retail electricity rate. DG2 consumers, on the other hand, faced more complex billing structures and received credits at a lower rate, which was typically lower than the retail rate.
 
Brazil's energy policies, including those related to solar power, may evolve or change. To obtain the most current and accurate information, it is advisable to consult ANEEL or other relevant regulatory sources for updates on Normative Resolution 482 and distributed solar energy regulations in Brazil.
 
Interconnection
 
One recurring trend we have experienced while constructing the Projects in Brazil has been delays in interconnecting to the utility-owned grid. Interconnecting our larger-format Projects requires a tremendous level of coordination between the utility company, contractors, construction management to run lines for miles, install significant electrical infrastructure and shut portions of the grid down for periods of time. To date, the Company has experienced abnormal delays in this process, extending, in some cases, for as long as six months. Fortunately, the long term financial impact of these delays has been immaterial and modeled projections have been adjusted to reflect this trend.
 
Page 31
 
Other than the trends described above and factors that will impact the Company's success discussed in the "Risks of Investing" section of this Offering Circular, the Company is not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material adverse effect on our revenues, income from continuing operations, profitability, liquidity, or capital resources.
 
That said, we believe that the solar market in Brazil for community solar projects remains one of the most attractive markets to develop solar projects anywhere in the world. Recent improvements to the laws that enable this type of project development have increased demand for these assets while the Company's experience in the market, and that of the Manager, continue to result in additional deal flow and promising prospects for long term cash flow.
 
Distributions
 
Provided we have sufficient available cash flow, we intend to authorize and declare distributions based on net income for the preceding month minus any amounts held back for reserves. Cash flow from Projects can be generated in three ways: (i) payments from Land Leases, Project Rental Contracts and Operations and Maintenance Contracts, (ii) proceeds from the sale or refinance of Projects and (iii) Liquidated Damages under Construction Agreements (see below).
 
While we are under no obligation to do so, we have in the past and expect in the future to declare and pay distributions monthly; however, our Manager may declare other periodic distributions as circumstances dictate.
 
Please note that in some cases, Investors have cancelled their purchase of Class A Investor Shares after distributions were made. In that case, the distribution allocated to that Investor is returned to the Company and the bookkeeping is updated to reflect the change in cash distributed. Thus, all figures below are subject to change.
 
Below is a table depicting the distributions made from the Company made since inception:
 
Distribution Date
Amount
Asset Management Fees*
Promoted Interest*
05/20/2021
132,819.41
547.79
4,415.82
06/24/2021
33,514.92
187.79
883.16
07/24/2021
33,077.97
139.73
883.16
08/26/2021
19,437.72
139.73
883.16
09/23/2021
19,437.63
139.73
883.16
10/27/2021
19,437.64
139.73
883.16
11/30/2021
19,437.64
139.73
883.16
12/24/2021
18,977.20
-
-
2021 Total
$296,140.13
$1,434,23
$9,714.78
01/26/2022
9,207.27
279.46
1,766.32
02/24/2022
7,903.96
139.73
883.16
03/29/2022
8,977.11
139.73
883.16
04/29/2022
7,068.65
-
-
05/31/2022
7,068.14
-
-
06/30/2022
24,999.75
-
-
07/29/2022
25,000.10
-
-
08/27/2022
23,284.07
927.05
789.12
09/27/2022
21,043.05
1,322.68
2,634.13
10/27/2022
21,070.42
1,225.71
2,703.95
11/29/2022
29,939.23
1,225.71
3,820.74
12/28/2022
24,778.17
2,092.89
3,118.85
2022 Total
$210,339.92
$7,352.96
$16,599.43
01/27/2023
22,479.53
1,291.53
1,225.71
02/24/2023
25,264.57
1,250.71
3,474.91
03/27/2023
30,931.40
1,250.71
2,755.98
04/28/2023
30,974.00
1,290.71
2,735.20
05/30/2023
32,817.29
1,290.71
2,891.48
06/26/2023
40,191.00
1,290.71
3,518.57
07/25/2023
90,787.22
1,290.71
7,921.97
08/28/2023
31,002.47
1,290.71
2,705.96
09/27/2023
79,008.47
1,290.71
6,707.23
10/27/2023
80,684.03
1,290.71
7,952.32
11/24/2023
77,243.03
1,290.71
6,466.16
12/26/2023
72,996.55
2,893.71
6,109.73
2023 Total
$614,375.07
$17,012.34
$54,465.22
TOTAL
$1,120,855.12
$25,799.53
$80,779.43
 
*Note: Energea reserves the right to reduce its Asset Management Fees and Promoted Interest payments for any reason or to protect the desired cash yield to Investors (see "Compensation of Directors and Executive Officers").
 
Page 32
 
Calculating Distributions
 
The Company intends to make distributions monthly, to the extent the Manager, in its discretion, determines that cash flow is available for distributions. Below are the activities of the Company that generate the cash flow which could be used to fund distributions:
 
Sources of Distributable Cash Flow
 
 
·
Sale of Energy under Project Rental Contracts and Operations and Maintenance Contracts
 
 
 
 
·
Net Proceeds from Capital Transactions
 
 
o Originates from the sale or refinancing of projects
 
 
o Net proceeds are the gross proceeds of the capital transaction minus associated expenses, including debt repayment
 
 
 
 
·
Liquidated Damages from Construction Agreements
 
 
o Penalties paid by EPC Contractors when projects are delivered behind schedule
 
 
o LDs are not booked as revenue but are considered distributable cash flow
 
When the Company makes distributable cash flow and the Manager determines to make a distribution, here is an overview of how these distributions are allocated and calculated:
 
Allocation of Distributions
 
 
·
Class A Investors:
 
 
o Receive a priority distribution of cash flow each month which results in a 7% IRR ("Preferred Return").
 
 
o Plus, 70% of any additional cash flow after the Preferred Return.
 
 
 
 
·
Manager:
 
 
o Receives 30% of any additional cash flow after Investors receive their Preferred Return ("Promoted Interest") (see "Compensation of Management and Executive Officers").
 
Page 33
 
Calculation of Preferred Return
 
The Manager discounts each month of Estimated NOI (see "Price of Class A Investor Shares") by the same discount rate until the cash flow results in an IRR of 7% ("Adjusted NOI"). The resulting Adjusted NOI is the monthly distribution that would need to be paid to Investors for them to receive their Preferred Return. Since all months of Estimated NOI are discounted evenly, the Adjusted NOI maintains the same seasonality curve as the Estimated NOI. If the actual NOI for any month is less than the Adjusted NOI, the Investors receive all the cash distributed that month and the shortfall is carried forward so that Investors catch up on their 7% Preferred Return prior to any Promoted Interest being paid.
 
Calculation of Promoted Interest
 
If the Manager determines that a distribution can be made with distributable cash flow, and the amount of distributable cash flow is greater than the Adjusted NOI for the month (and the Investors are therefore on track to receive their Preferred Return), the Manager will receive a Promoted Interest. Any distributable cash flow that is greater than the Adjusted NOI (plus any shortfall from previous months) shall be divided between the Manager and the Investors where the Manager will get 30% of the excess and Investors will get 70% of the excess.
 
Past Operating Results
 
Since the Company's inception in 2020, it has grown each year with the acquisition of new Projects, continued construction an interconnection works and the commencement of operations at completed Projects. In 2022, the Company turned its first Project on; Iguatama. In 2023, the Company added Micros I. In 2024, we expect to complete Pedra do Indaia, Divinopolis II and Divinopolis III.
 
During the construction phase, the Company has experienced challenges which have caused us to strategize alternatives for maintaining targeted cash yield. These challenges are mainly related to construction and interconnection delays. Many of our Projects are in remote parts of Brazil where finding sophisticated construction partners and responsive utility companies can be difficult. The Company's second large format asset, Pedra do Indaia, reached mechanical completion July, 2023 but is waiting on the interconnecting utility for authorization to energize as of the date of this Offering. To offset the impact on cash flows caused from the delays in interconnecting Pedra do Indaia, the Company added Micros I, sold certain Projects (see "Description of Property") and collected Liquidated Damages from contractors (see "Summary of Supporting Contracts" and "Material Legal Proceedings").
 
As a result of these maneuvers, the overall returns of the Company have held firmly within our targeted range of 14-16% after fees and delivered distributions on schedule every month of 2023. As the Company completes construction of the remaining Projects, we expect the portfolio to stabilize and to settle into a consistent rhythm of dividends to Investors.
 
In addition to the operations Projects and Projects under construction, the Company owns six other large format Projects. We expect to commence construction on two of them in 2024; Araxa I and Araxa II. We plan to sell two others; Aparecida do Taboado II and Corumbaiba, and we are working with the utility companies and potential contractors to determine if Diamantina II and Formiga I will be viable Projects to construct and interconnect in 2025.
 
For the fiscal year ended December 31, 2022, the Company invested a total of $6,815,454, gross of depreciation. During the period of January 1, 2022 to December 31, 2022 the Company generated $40,051 in revenue.
 
As of December 31, 2022, the Company has assets totaling $8,952,391 on its balance sheet, composed of cash on hand of $1,237,923, investments net of depreciation on the amount of $6,780,755, other current assets on the amount of $294,289 and non-current assets on the amount of $639,424. The Company's total Liabilities and members' equity was $8,952,391, Liabilities totaled $4,802,839 and $4,149,552 of equity owned by the Investors.
 
Page 34
Leverage
 
Per the Offering Circular, the Company might borrow money to invest in Projects, depending on the circumstances at the time. It states that if the Company needs to move quickly on a Project and has not yet raised enough capital through the Offering, it might make up the shortfall through borrowing. The Manager will make this decision on an as-needed basis.
 
On October 5, 2020, the Company entered into a third-party Credit Agreement ("Loan"), as an Additional Obligor, with Lattice Energea Global Revolver I, LLC ("Lender"), which is unaffiliated with the Manager. The Loan extends up to $5,000,000 of credit to the Company which can be used to construct Projects. After construction, the Loan converts into long-term project finance for a 10-year term. As of the date of this Offering Circular, the Company has used $4,553,001 from the line of credit to acquire and construct Projects.
 
On December 22, 2023, the parties amended the Loan to release the Manager and establish the sole borrower as Energea Portfolio 2 LLC. This included certain underlying projects as collateral: Iguatama, Pedra do Indaiá, Divinopolis II, Divinopolis III, and Micros.
 
Since the interest rate on the Loan is lower than the anticipated IRR of the Projects, we expect the Loan to lever returns to Investors while providing liquidity necessary to accelerate through construction to achieve distributions to Investors faster.
 
Liquidity and Capital Resources
 
We are dependent upon the net proceeds from the Offering to conduct our proposed investments. We will obtain the capital required to purchase new Projects and conduct our operations from the proceeds of the Offering and any future offerings we may conduct, from secured or unsecured financings from banks and other lenders, from short term advances from the Manager and from undistributed funds from our operations. As of June 30, 2023, the Company had $796,350.00 of cash on hand and equivalents, which will be used to pay for the remaining costs of constructing the Pedra do Indaia Project and to make progress on the construction of the Divinopolis II and Divinopolis III Projects. As we raise capital from this Offering, we expect to commence the Araxá I Project and the Araxá II Project in 2024. To the extent that capital raised from the Offering is insufficient to construct the Projects, we may borrow additional capital from the Lender to make up the difference.
 
Method of Accounting
 
The compensation described in this section was calculated using the accrual method in accordance with GAAP rules.
 
Page 35
 
Directors, Executive Officers & Significant Employees
 
Names, Positions, Etc.
 
The Company itself has no officers or employees. The individuals listed below are the Managing Partners, Executive Officers, and Significant Employees of Energea Global, the Manager of the Company.
 
Name
Position with Manager
 
Age
Term of Office
Approximate Hours Per Week If Not Full Time (1)
Executive Officers
 
 
 
 
Mike Silvestrini
Managing Partner
43
01/01/2017 - Pres
Full Time
Gray Reinhard
Managing Partner
39
01/01/2020 - Pres will
Full Time
 
 
 
 
Significant Employees
 
 
 
 
Isabella Mendonça
General Counsel
32
10/02/2020 - Pres
Full Time
Arthur Issa
Financial Analyst
29
05/23/2018 - Pres
Full Time
Tyler Hurlburt
Director of Investment Relations
45
11/03/2020 - Pres
Full Time
Marta Coehlo
Controller
51
12/07/2018 - Pres
Full Time
Dave Rutty
Director of Construction
34
06/13/2022 - Pres
Full Time
Kathy Koser
Director of Compliance
43
08/01/2021 - Pres
Full Time
 
(1) The above listed employees do not record specific hours to each Company managed by Energea Global. Rather, the employees focus their full-time and energy to each project, portfolio, or process as needed. The Manager cannot estimate number of hours per week spent managing this or any particular Company as the employees are salaried. The work required to manage the Company and other companies managed by Energea Global changes from time to time depending on the number and frequency of Projects resulting from the amount they raise in each Offering. As the companies grow, dedicated staff are brought in to exclusively manage a specific company. As of October 19, 2023, there are no staff members exclusively dedicated to the Company and it is managed by the Manager's executive team and certain significant employees.
 
Family Relationships
 
Marta Coelho, the Manager's Controller, is the sister-in-law of Mike Silvestrini, the Managing Partner. There are no other family relationships among the executive officers and significant employees of the Manager.
 
Ownership of Related Entities
 
Energea Global, the Manager of the Company, is majority owned by Mike Silvestrini, a resident of Chester, Connecticut.
 
Energea Brazil, our affiliated Development Company in Brazil, is owned by Energea Global.
 
Page 36
 
Business Experience
 
Mike Silvestrini
 
Mike is an accomplished professional with a strong commitment to renewable energy and environmental sustainability. He has played a key role in the development of over 500 solar projects across the United States, Brazil, and Africa, contributing to the global transition to clean energy.
 
Since 2017, Mike has been the Co-Founder & Managing Partner at Energea.
 
Since 2015, Mike has served as a Board Member of the Big Life Foundation, an organization dedicated to preserving over 1.6 million acres of wilderness in East Africa. Through community partnerships and conservation initiatives, Big Life protects the region's biodiversity and promotes sustainable practices.
 
From 2008 - 2017, Mike co-founded and served as the CEO of Greenskies Renewable Energy LLC, a leading provider of turnkey solar energy services. His expertise contributed to the development, financing, design, construction, and maintenance of solar projects across the United States. Notably, he was involved in solar installations on Target Corporation stores and distribution centers, as well as capped landfills throughout the northeast region of the U.S. 
 
Mike's track record in renewable energy, his involvement in hundreds of solar projects worldwide, and his dedication to environmental sustainability position him as a driving force in the global effort to combat climate change.
 
Gray Reinhard
 
Gray is an experienced software engineer specializing in business intelligence tools across multiple industries. Early in Gray's career, he worked primarily in E-Commerce where he built and supported sites for over 20 brands including several Fortune 500 companies. From there, Gray moved into renewable energy where he developed the project management software for the country's largest commercial solar installer, Greenskies. This custom platform managed everything from sales and financing to the construction, maintenance, and performance monitoring of over 400 solar projects owned by the company.
 
Prior to joining Energea in January 2020, Gray served as the CTO of Dwell Optimal Inc. which assists businesses providing employees with travel accommodations.
 
Gray studied at Princeton University.
 
Isabella Mendonça
 
Isabella is a corporate lawyer with experience in cross-border M&A transactions and the drafting and negotiation of highly complex contracts and corporate acts in different sectors, such as energy, oil & gas and infrastructure. Isabella has previously worked as an attorney for Deloitte and Mayer Brown in Brazil, where she was an associate in the Energy Group, working in regulatory, contractual and corporate matters related to renewable energy project development.
 
From 2016 until she joined Energea, Isabella was an associate in the corporate and securities practice at Mayer Brown in the Rio de Janeiro office.
 
Isabella studied law at Fundacão Getulio Vargas, in Brazil and has a master's degree (LLM) from the University of Chicago.
 
Page 37
 
Arthur Issa
 
Arthur Issa was one of the first employees at Energea, starting in May, 2018. Over the course of his career in Energea, has participated in the successful closing process of more than 100 MW worth of project installed capacity and their financial management, totaling an AUM of more than $100mm. Arthur is responsible for keeping track of all matters related to Corporate and Project Finance in Energea, through detailed financial modelling, reporting and cash flow management, maximizing efficiency in the company's decision-making process with reliable analytics Arthur has a B.S. in Production Engineering from University Candido Mendes in Rio de Janeiro, Brazil.
 
Tyler Hurlburt
 
From 2006 until he joined the Energea team, Tyler Hurlburt was a licensed Wealth Manager at Fortune 500 firms including Ameriprise, Prudential, Wells Fargo and TIAA. Tyler managed over $500M in client's assets in previous role at TIAA. He has over 20 years' experience within the financial service industry, as well as extensive experience in portfolio management, risk mitigation, tax, and estate planning. Tyler holds a MBA with honors from Saint Joseph's University.
 
Marta Coehlo
 
Since its inception in 2018, Marta Coelho has served as the Controller at Energea, bringing with her a wealth of experience and expertise in finance and accounting. As the Global Controller, Marta plays a crucial role in managing all financial aspects, including account management, taxation, and audits, for Energea's diverse range of operating entities and projects across Africa, Brazil, and the USA.
 
Dave Rutty
 
Dave is a highly experienced electrician with over 12 years of expertise in building and maintaining solar projects. At Energea, he plays a vital role in overseeing construction and maintenance processes across all markets. Dave's extensive experience brings a culture of expertise, meticulousness, and safety to our emerging markets.
 
From 2020 to 2022, Dave served as a Managing Partner at SRES, a solar contracting company based in the northeastern U.S. Prior to that, Dave was served as the Vice President of Operations and Maintenance at Greenskies Renewable Energy LLC.
 
Kathy Koser
 
Kathy is a pivotal manager at Energea, overseeing insurance, compliance, and human resources with exceptional skill. Kathy expertly evaluates insurance needs, formulates comprehensive policies, and collaborates with external providers to secure optimal coverage. Her deep understanding of compliance, particularly regarding Regulation A Tier II offerings, strengthens Energea's adherence to regulatory requirements. Additionally, Kathy's effective human resources management fosters a positive work environment, promoting productivity and employee satisfaction.
 
From 2018 to 2021, Kathy was an account associate and executive assistant for the sales team at RoomReady, an AV and technology services company.
 
Page 38
 
Legal Proceedings Involving Executives and Directors
 
Within the last five years, no Director, Executive Officer, or Significant Employee of the Company has been convicted of, or pleaded guilty or no contest to, any criminal matter, excluding traffic violations or other minor offenses.
 
Within the last five years, no Director, Executive Officer, or Significant Employee of the Company, no partnership of which an Executive Officer or Significant Employee was a general partner, and no corporation or other business association of which an Executive Officer or Significant Employee was an executive officer, has been a debtor in bankruptcy or any similar proceedings.
 
Other Solar Energy Funds
 
Energea Global, the Manager of the Company, is also the manager of two other funds formed to acquire and operate solar power projects:
 
 
·
Energea Portfolio 3 Africa LLC ("Portfolio 3"), which was formed to acquire and operate projects with located in Africa.
 
 
 
 
·
Energea Portfolio 4 USA LLC ("Portfolio 4"), which was formed to acquire and operate projects located in the United States.
 
Each company is conducting an offering under Regulation A. The current status of these offerings, as of the date of this offering circular, is below:
 
 
Energea Portfolio 3 Africa LLC
Energea Portfolio 4 USA LLC
Date of Initial Qualification
08/2/2021
07/01/2021
Maximum Offering Amount
$75,000,000
$75,000,000
Raised Through 12/26/23
$2,577,293.75
$2,911,945.62
Solar Projects Acquired
Eleven
Four
 
 
Compensation of Directors and Executive Officers
 
Overview
 
Our Manager is compensated as follows:
 
 
·
They receive fees and other compensation, including for services provided;
 
 
 
 
·
They may invest alongside Investors and, if so, will receive the same distributions as Investors;
 
 
 
 
·
They receive the Promoted Interest; and
 
 
 
 
·
They receive interest on loans to the Company.
 
The Company itself does not have any employees or payroll. The executive officers and employees of our Manager are compensated directly by the Manager from the fees and Promoted Interest paid to the Manager by the Company.
 
Page 39
 
Fees and Other Compensation
 
Type of Fee
Description
Reimbursement of Offering Expenses
The Company must reimburse the Manager for expenses the Manager incurs in connection with the Offering before the Offering Circular is qualified by the Securities and Exchange Commission.
 
As of the date of this offering circular, we estimate that those expenses will be approximately $60,000.
 
 
Asset Management Fees
The Manager will charge the Company a monthly asset management fee equal to 0.167% of the aggregate capital that has been invested into the Company.
 
 
Developer Fees
The Manager might originate and develop Projects that are acquired by the Company. If so, the Manager shall be entitled to compensation that is no greater than 5.0% of the Project's cost.
 
The amount of the developer fee will depend on the number of Projects the Manager develops for the Company and their cost. We cannot make a reasonable estimate at this time.
 
 
Interest on Loans
The Manager might lend to the Company to fund the acquisition or investment in Projects or for other purposes. Such a loan will bear interest at market rates.
 
The amount of interest will depend on the amount and term of any such loans.
 
 
O&M and Credit Management Services
Energea Brazil provides O&M and Credit Management services to the Projects owned by the Company. After an extensive search to identify third parties to provide these services, the Manager concluded that the nascent solar market in Brazil lacked cost-effective and experienced options for these tasks. Energea Brazil, on the other hand, agreed to provide these services at prices that were lower than those offered through the competitive search process and has extensive experience providing these services to hundreds of projects across the U.S. and in multiple global markets.
 
Co-Investment
 
The Manager and its affiliates might purchase Class A Investor Shares. If so, they will be entitled to the same distributions as other Investors. If such investment is made to facilitate the Company's acquisition of or investment in Projects before there are sufficient offering proceeds, the Manager will be entitled to redeem its Class A Investor Shares from additional offering proceeds as they are raised.
 
Page 40
 
Promoted Interest
 
As described in "Calculating Distributions", the Manager is entitled to receive certain distributions from the Company that we refer to as the Manager's "Promoted Interest." How much money the Manager ultimately receives as a Promoted Interest depends on several factors, including:
 
 
·
The total returns the Company is able to achieve;
 
 
 
 
·
When those returns are achieved;
 
 
 
 
·
When the Company distributes money to Investors; and
 
 
 
 
·
The amount of expenses the Company incurs.
 
Reporting Compensation to Investors
 
No less than once per year, the Company will provide Investors with a detailed statement showing:
 
 
·
The fees paid to the Manager and its affiliates; and
 
 
 
 
·
Any transactions between the Company and the Manager or its affiliates.
 
In each case, the detailed statement will describe the services performed and the amount of compensation paid.
 
Stages of Development
 
The stages of the Company's organization, development, and operation, and the compensation paid by the Company to the Manager and its affiliates during each stage, are as follows:
 
Stage of Company
Compensation
Organization of Company
· Reimbursement of Expenses
 
 
Acquisition of Projects
· Asset Management Fee
 
· Developer Fee
 
· Interest on Loans
 
 
Operation of Projects
· Asset Management Fee
 
· Promoted Interest
 
· O&M and Credit Management Service Fees
 
 
Sale of Projects
· Asset Management Fee
 
· Promoted Interest
 
Page 41
 
Security Ownership of Manager and Certain Securityholders
 
The individuals named below, as well as other employees of the Manager may own Class A Investor Shares that they purchased privately through the Platform in the same manner as any Investor.
 
The following table sets forth the approximate beneficial ownership of our Class A Investor Shares as of December 26, 2023, for each person or group that holds more than 10.0% of our Class A Investor Shares, and for each director and executive officer of our Manager and for the directors and executive officers of our Manager as a group.
 
Name of Beneficial Owner (1)(2)
Number of Shares Beneficially Owned
Amount and Nature of Beneficial Ownership Acquirable
Percent of All Shares
Energea Global LLC
374,333
N/A
2.6284%
Michael Silvestrini
159,273(3)
N/A
1.1183%
Christopher Sattler
113,386(3)
N/A
0.7961%
Gray Reinhard
322
N/A
0.0023%
All directors and executive officers of our Manager as a group (3 persons)
272,981
N/A
1.9167%
-
 
-
 
 
(1)
Under SEC rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to dispose of or to direct the disposition of such security. A person also is deemed to be a beneficial owner of any securities which that person has a right to acquire within 60 days. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which he or she has no economic or pecuniary interest.
 
 
 
 
(2)
Each listed beneficial owner, person or entity has an address in care of our principal executive offices at 52 Main Street, Chester, CT 06412.
 
 
 
 
(3)
Includes shares beneficially owned by Energea Global LLC, under the control of its Class A Shareholders. Notably, Michael Silvestrini and Chris Sattler, as the largest principal shareholders, hold 40.15% and 30.29% of the shares, respectively.
 
 
Interest of Management and Others in Certain TransactionS
 
The Company might enter into other transactions with related parties. If so, any compensation paid by the Company to the related party shall be (i) fair to the Company, and (ii) consistent with the compensation that would be paid to an unrelated party.
 
Page 42
 
By "related party" we mean:
 
 
·
The Manager or a subsidiary of the Manager (i.e. Energea Brazil);
 
 
 
 
·
Any director, executive officer, or significant employee of the Company or the Manager;
 
 
 
 
·
Any person who has been nominated as a director of the Company or the Manager;
 
 
 
 
·
Any person who owns more than 10% of the voting power of the Company or the Manager; and
 
 
 
 
·
An immediate family member of any of the foregoing.
 
 
As of the date of this offering circular, the Company (or its SPE subsidiaries) has (or intends to) enter into the following types of transactions with related parties:
 
 
·
Energea Brazil - Project Maintenance Contract: Energea Brazil provides operations and maintenance services to each of the SPEs. These services are detailed in the Project Maintenance Contract (see "Summary of Supporting Contracts").
 
Energea Brazil - Credit Management Agreement: Each Project produces energy credits. To convert those energy credits into revenue, the SPE must hire a service provider to onboard Subscribers and administrate the allocation of energy to each Subscriber on a monthly basis. These services are performed by Energea Brazil under the terms and conditions set forth in a Credit Management Agreement (see "Summary of Supporting Contracts").
 
 
 
 
·
Energea Global - Credit Advance: The Company has entered into several credit advances with the Manager to accelerate the availability of capital needed to make certain small payments. These amounts are recorded as do-to/do-from transactions and no interest is charged to the Company for these advances.
 
 
Contracts Currently Signed or Expected to be Signed with Related Parties
 
Project
Related Party
Contract
Date Signed
Iguatama
Energea Brazil
Project Maintenance Contract
August 22, 2023
 
Energea Brazil
Credit Management Agreement
Not Yet Signed
 
 
 
 
Pedra do Indaiá
Energea Brazil
Project Maintenance Contract
Not Yet Signed
 
Energea Brazil
Credit Management Agreement
Not Yet Signed
 
 
 
 
Divinopolis II
Energea Brazil
Project Maintenance Contract
Not Yet Signed
 
Energea Brazil
Credit Management Agreement
Not Yet Signed
 
 
 
 
Divinopolis III
Energea Brazil
Project Maintenance Contract
Not Yet Signed
 
Energea Brazil
Credit Management Agreement
Not Yet Signed
 
 
 
 
Micros I
Energea Brazil
Project Maintenance Contract
Not Yet Signed
 
Energea Brazil
Credit Management Agreement
Not Yet Signed
 
Page 43
 
Securities Being Offered: the Class A Investor Shares
 
Description of Securities
 
The Company is offering up to $50,000,000 of Class A Investor Shares, which represents the value of the Class A Investor Shares available to be offered as of the date of this offering circular out of the rolling 12-month maximum offering amount of $75.0 million. All of the rights and obligations associated with the Class A Investor Shares are set forth in:
 
 
·
 
 
 
 
·
 
Price of Class A Investor Shares
 
The fixed price of Class A Investor Shares was determined by calculating the Net Asset Value ("NAV") of the Company and dividing the NAV by the total number of outstanding shares. The NAV is calculated as the Net Present Value ("NPV") of the Estimated Net Operating Income ("Estimated NOI") of the Company.
 
The Estimated NOI calculation begins with an estimation of revenue. Since the Company currently does not have any Contracts for the Sale of Environmental Commodities and since we do not anticipate the sale of any Project, revenue comes from Solar Leases. We estimate monthly energy produced by each Project using predictive software called PVsyst. PVsyst is a vital tool in the solar industry for designing and simulating the performance of photovoltaic systems. Its comprehensive features enable precise predictions of solar power generation ("kWh"), considering a wide range of variables and site-specific conditions. To estimate monthly revenue for each Project, the energy rate described in the Solar Lease ("Energy Rate") is multiplied by kWh throughout the term of the Solar Lease.
 
We then deduct all of the expected operating expenses at the SPE and Company level (see "Our Operating Costs and Expenses") from the revenue. These expenses are fairly easy to estimate as they are either consistent and predictable (like a bank fee) or fixed by contract (like a Project Maintenance Contract). By subtracting the estimated operating costs and expenses from the estimated revenue, we establish a monthly Estimated NOI. We then use an XIRR calculation to compute the NPV of that Estimated NOI using the Project's IRR as the discount rate in the NPV equation. For example, if the Estimated NOI would result in a 12% IRR, we use 12% as the discount rate when calculating the NPV of the Estimated NOI.
 
Therefore, the NPV of the Estimated NOI using the IRR as the discount rate establishes the NPV of the Company. When we divided the NPV of the company by the number of outstanding Class A Investor Shares, we arrive at a price per share.
 
Voting Rights
 
Investors will have no right to vote or otherwise participate in the management of the Company. Instead, the Company will be managed by the Manager exclusively.
 
Page 44
 
Limited Liability Company Agreement
 
The Company is governed by a Limited Liability Company Agreement dated April 29, 2020 (the "LLC Agreement"). A copy of the LLC Agreement can be found here. The Class A Investor Shares being offered were created by the Manager under an Authorizing Resolution pursuant to section 3.1 of the LLC Agreement. A copy of the Authorizing Resolution can be found here.
 
The LLC Agreement was subsequently amended on December 3, 2020 (the "Amendment"). The Amendment allows the Manager to pledge its shares in the Company as collateral for a debt facility used by the Company to lever returns and provide liquidity necessary to complete the construction of Projects in a timely manner. The Amendment also allows the Lender to replace the Manager in the event the Company defaults under the terms of the Loan (see below).
 
The LLC Agreement establishes Energea Global LLC, a Delaware limited liability company, as the Manager.
 
Summary of LLC Agreement and Authorizing Resolution
 
The following summarizes some of the key provisions of the LLC Agreement and the Authorizing Resolution. This summary is qualified in its entirety by the LLC Agreement itself, a copy of which can be found here, and by the Authorizing Resolution itself, a copy of which can be found here.
 
Formation and Ownership
 
The Company was formed in Delaware on January 13, 2020, pursuant to the Delaware Limited Liability Company Act.
 
Under the LLC Agreement, ownership interests in the Company are referred to as "Shares," while the owners, are referred to as "Investor Members."
 
Shares and Ownership
 
The Manager adopted the Authorizing Resolution to create the Class A Investor Shares. Any Investor who buys Class A Investor Shares in the Offering will be an "Investor Member" under the LLC Agreement.
 
The interests in the Company are denominated by 501,000,000 "Shares". The Manager may further divide the 500,000,000 Investor Shares into one or more series, by adopting one or more authorizing resolutions.
 
The Class A Investor Shares will be owned by Investors and are the subject of this Offering. By adopting other authorizing resolutions, the Manager may create, offer, and sell other series of Investor Shares in the future, which could have rights superior to the rights of the Class A Investor Shares.
 
Management
 
The Manager has complete discretion over all aspects of the business conducted by the Company. For example, the Manager may (i) create classes of Investor Shares with such terms and conditions as the Manager may determine in its sole discretion; (ii) issue Shares to any person for such consideration as the Manager maybe determine in its sole discretion, and admit such persons to the Company as Investor Members; (iii) engage the services of third parties to perform services on behalf of the Company; (iv) enter into one or more joint ventures; (v) purchase, lease, sell, or otherwise dispose of real estate and other assets, in the ordinary course of business or otherwise; (vi) enter into leases and any other contracts of any kind; (vii) incur indebtedness on behalf of the Company, whether to banks or other lenders; (viii) determine the amount of the Company's Available Cash and the timing and amount of distributions to Members; (ix) determine the information to be provided to the Members; (x) grant mortgages, liens, and other encumbrances on the Company's assets; (xi) make all elections under the Code and the provisions of State and local tax laws; (xiii) file a petition in bankruptcy; (xiv) discontinue the business of the Company; and (xv) dissolve the Company.
 
Page 45
 
Investors who purchase Class A Investor Shares will not have any right to vote on any issue other than certain amendments to the LLC Agreement, or to remove the Manager.
 
The Manager can be removed for "cause" under a procedure set forth in section 5.6 of the LLC Agreement.
 
The term "cause" includes:
 
 
·
An uncured breach of the LLC Agreement by the Manager; or
 
 
 
 
·
The bankruptcy of the Manager; or
 
 
 
 
·
Certain misconduct on the part of the Manager, if the individual responsible for the misconduct is not terminated.
 
A vote to remove the Manager for cause must be approved by Investor Members owning at least seventy five percent (75%) of the outstanding Class A Investor Shares. Whether "cause" exists would then be decided in arbitration proceedings conducted under the rules of the American Arbitration Association, rather than in a court proceeding.
 
These provisions are binding on every person who acquires Class A Investor Shares, including those who acquire Class A Investor Shares from a third party, i.e., not from the Company.
 
Exculpation and Indemnification of Manager
 
The LLC Agreement protects the Manager and its employees and affiliates from lawsuits brought by Investors. For example, it provides that the Manager will not be liable to the Company for mistakes, errors in judgment, or other acts or omissions (failures to act) as long as the act or omission was not the result of the Manager's fraud or willful misconduct under the LLC Agreement. This limitation on the liability of the Manager and other parties is referred to as "exculpation."
 
The LLC Agreement also requires the Company to indemnify (reimburse) the Manager, its affiliates, and certain other parties from losses, liabilities, and expenses they incur in performing their duties. For example, if a third party sues the Manager on a matter related to the Company's business, the Company would be required to indemnify the Manager for any losses or expenses it incurs in connection with the lawsuit, including attorneys' fees. However, if it is judicially determined that such Manager is not entitled to be exculpated under the standard described in the preceding paragraph by the LLC Agreement, such Manager shall promptly reimburse the Company for any reimbursed or advanced expenses.
 
Notwithstanding the foregoing, no exculpation or indemnification is permitted to the extent such exculpation or indemnification would be inconsistent with the requirements of federal or state securities laws or other applicable law.
 
The detailed rules for exculpation and indemnification are set forth in section 6.2 of the LLC Agreement.
 
Page 46
 
Obligation to Contribute Capital
 
Once an Investor pays for his, her, or its Class A Investor Shares, he, she, or it will not be required to make any further contributions to the Company. However, if an Investor has wrongfully received a distribution, he, she, or it might have to pay it back.
 
Personal Liability
 
No Investor will be personally liable for any of the debts or obligations of the Company.
 
Distributions
 
The manner in which the Company will distribute its available cash is described in "Securities Being Offered - Calculating Distributions".
 
Transfers and First Right of Refusal
 
In general, Investors may freely transfer their Class A Investor Shares. However, if an Investor wants to sell Class A Investor Shares, the Investor may only offer the Class A Investor Shares to the Manager via the Platform. The Manager generally has a first right of refusal to purchase Class A Investor Shares pursuant to Article 8 of the LLC Agreement.
 
Death, Disability, Etc.
 
If an Investor who is a human being (as opposed to an Investor that is a legal entity) should die or become incapacitated, the Investor or his, her or its successors will continue to own the Investor's Class A Investor Shares.
 
Fees to Manager and Affiliates
 
The Company will pay certain management fees and other fees to the Manager, as summarized in "Compensation of Directors and Executive Officers".
 
Mandatory Redemptions
 
The Manager may require an Investor to sell his, her, or its Class A Investor Shares back to the Company:
 
 
·
If the Investor is an entity governed by the Employee Retirement Income Security Act of 1974, Code section 4975, or any similar Federal, State, or local law, and the Manager determines that all or any portion of the assets of the Company would, in the absence of the redemption, more likely than not be treated as "plan assets" or otherwise become subject to such laws.
 
 
 
 
·
If the Manager determines that the Investor has engaged in certain misconduct described in the LLC Agreement.
 
If an Investor's Class A Investor Shares are purchased by the Company as provided above, the price will be equal to 90% of the then-current value of such Class A Investor Shares as determined by the Company in accordance with the Financial Model.
 
The purchase price will be paid by wire transfer or other immediately available funds.
 
Page 47
 
"Drag-Along" Right
 
If the Manager wants to sell the business conducted by the Company, it may affect the transaction as a sale of the Project owned by the Company or as a sale of all the Shares in the Company. In the latter case, Investors will be required to sell their Class A Investor Shares as directed by the Manager, receiving the same amount they would have received had the transaction been structured as a sale of assets.
 
Electronic Delivery
 
All documents, including all tax-related documents, will be transmitted by the Company to Investors via email and/or through the Platform.
 
Amendment
 
The Manager may amend the LLC Agreement unilaterally (that is, without the consent of anyone else) for a variety of purposes, including to:
 
 
·
Cure ambiguities or inconsistencies in the LLC Agreement;
 
 
 
 
·
Add to its own obligations or responsibilities;
 
 
 
 
·
Conform to this Offering Circular;
 
 
 
 
·
Comply with any law;
 
 
 
 
·
Ensure that the Company isn't treated as an "investment company" within the meaning of the Investment Company Act of 1940;
 
 
 
 
·
Do anything else that could not reasonably be expected to have, an adverse effect on Investors
 
An amendment that has, or could reasonably be expected to have, an adverse effect on Investors, requires the consent of the Manager and Investors holding a majority of the Class A Investor Shares.
 
An amendment that would require an Investor to make additional capital contributions, delete or modify any amendments listed in Section 11.3 of the LLCA or impose personal liability on an Investor requires the consent of the Manager and each affected Investor.
 
Information Rights
 
Within a reasonable period after the end of each fiscal year of the Company, the Manager will provide Investors with (i) a statement showing in reasonable detail the computation of the amount distributed, and the manner in which it was distributed (ii) a balance sheet of the Company, (iii) a statement of income and expenses, and (iv) such additional information as may be required by law. The financial statements of the Company need not be audited by an independent certified public accounting firm unless the Manager so elects or the law so requires.
 
As a "tier 2" issuer under Regulation A, the Company will also be required to provide investors with additional information on an ongoing basis, including annual audited financial statements, annual reports filed on SEC Form 1-K, semiannual reports filed on SEC Form 1-SA, special financial reports filed on SEC Form 1-K, and current reports on SEC Form 1-U. If, however, our Class A Investor Shares are held "of record" by fewer than 300 persons, these reporting obligations could be terminated.
 
A Member's right to see additional information or inspect the books and records of the Company is limited by the LLC Agreement.
 
Page 48
Distributions in Liquidation
 
Distributions made in liquidation of the Company will be made in the manner described "Calculating Distributions", depending on whether the distributions consist of ordinary operating cash flow or net capital proceeds.
 
Preemptive Rights
 
The holders of the Class A Investor Shares will not have preemptive rights. That means that if the Company decides to issue securities in the future, the holders of the Class A Investor Shares will not have any special right to buy those securities. 
 
Liability to Make Additional Contributions
 
Once an Investor pays for his, her, or its Class A Investor Shares, the Investor will have no obligation to make further contributions to the Company. However, there could be circumstances where an Investor who has received distributions with respect to his, her, or its Class A Investor Shares is required to return part or all of the distribution.
 
Withholding
 
In some situations, the Manager might be required by law to withhold taxes and/or other amounts from distributions made to Investors. The amount we withhold will still be treated as part of the distribution. For example, if we distribute $100 to an Investor and are required to withhold $10 in taxes, for our purposes the Investor will be treated as having received a distribution of $100 even though only $90 was deposited in the Investor's bank account.
 
No Guarantee
 
The Company can only distribute as much money as the Company has available for distributions. There is no guarantee that the Company will have enough money, after paying expenses, to distribute enough to pay a positive return to Investors or even to return all their invested capital.
 
Limited Right of Redemption
 
There is a mandatory three-year investment hold period applied to all purchases of Class A Investor Shares. This period is integral to our operational strategy, enabling the effective management of cash flows dedicated to funding our Projects while simultaneously optimizing returns for all Investors. Upon the conclusion of this three -year term, Investors will have the option to list their shares for sale directly on the Platform. Subsequently, all newly acquired investments will be allocated to fulfill sell requests.
 
However, we acknowledge that life's unpredictability may necessitate deviations from established plans. Hence, we offer investors the option to divest their shares prior to the end of the three-year hold period, subject to a 5% penalty assessed on the fixed share price at the time of the redemption request. This provision underscores our commitment to providing flexibility and liquidity to investors confronting unforeseen circumstances while ensuring the overall stability of the Company.
 
Page 49
 
Upon receipt of a redemption request, via the Platform, the Manager shall use commercially reasonable efforts to arrange for the purchase, although there is no guaranty that the necessary funds will be available or that a buyer can be found. If the Manager is not able to purchase or arrange for the purchase of the Class A Investor Shares, the Investor may either rescind or maintain the request.
 
We note that any shares awarded after submitting your redemption request will not be included in the redemption request. Additionally, any promotional share bonuses earned from the Energea referral program after your request is submitted will also not be included in this redemption request. If you wish to redeem additional shares earned after submitting your request, you will need to submit another redemption request once the bonus share transaction has settled.
 
When you request to sell your shares, we will prioritize the sale of shares on a first-requested, first-sold basis. However, to safeguard the entire Energea investor community, we may pause the sale of investor shares and prioritize the sale of natural shares during periods where selling investor shares could potentially impact the overall performance of the portfolio. Such situations may arise when capital is required to complete a project, and selling shares would cause construction delays.
 
Under normal market conditions, we strive to facilitate regular share sales for investors. However, during periods of extreme economic uncertainty or sudden downturns, we reserve the right to temporarily suspend or limit the sale of shares in order to protect the interests of all Investors.
 
For additional context, below are the terms and conditions of the limited right of redemption currently being offered by the Company on the Platform:
 
Please be aware that any liquidity events will be reported to the Internal Revenue Service and may be subject to taxation. The Manager does not provide tax advice, so if an Investor has questions regarding the potential tax consequences of redeeming their shares, we recommend consulting a financial advisor or tax professional before proceeding.
 
In seeking to accommodate a request of redemption from an Investor, the Manager is not required to do any of the following:
 
 
·
Buy the Class A Investor Shares for its own account;
 
 
 
 
·
Contribute money to buy the Class A Investor Shares;
 
 
 
 
·
Borrow money or dispose of assets; or
 
 
 
 
·
Take any other action the Manager believes would be adverse to the interests of the Company, itself or its other Investors.
 
If an Investor's Class A Investor Shares are purchased pursuant to a redemption request, the price will be determined by the Financial Model.
 
If more than one Investor asks the Manager to purchase or arrange for the purchase of Class A Investor Shares, the Manager will consider the requests in the order received.
 
Page 50
 
Rights of Common Shares
 
Immediately following the Offering the Company will have two classes of securities outstanding: Class A Investor Shares and Common Shares. Investors will own all the Class A Investor Shares while the Manager will own all the Common Shares. The principal rights associated with the Common Shares are as follows:
 
 
·
Distributions: As the holder of the Common Shares, the Manager will be entitled to the distributions described above.
 
 
 
 
·
Voting Rights: The Common Shares will have no voting rights per se. However, the Manager, in its capacity as the manager of the Company, will control the Company.
 
 
 
 
·
Obligation to Contribute Capital: Holders of the Common Shares will have no obligation to contribute capital to the Company.
 
 
 
 
·
Redemptions: Holders of the Common Shares will have no right to have Common Shares.
 
How To Invest
 
To buy Class A Investor Shares, go to the Platform and follow the instructions. You will be asked for certain information about yourself, including:
 
 
·
Your name and address
 
 
 
 
·
Your email address
 
 
 
 
·
Your social security number (for tax reporting purposes)
 
 
 
 
·
Whether you are an "accredited investor"
 
 
 
 
·
If you not an accredited investor, your income and net worth
 
You will also be asked to sign an Investment Agreement, a copy of which is available here.
 
The minimum investment is $100. You will pay for your Class A Investor Shares using one of the options described on the Platform.
 
The information you submit, including your signed Investment Agreement, is called your "subscription." The Manager will review your subscription and decide whether to accept it. The Manager has the right to accept or reject subscriptions in our sole discretion, for any reason or for no reason.
 
When you invest, your money will be held in an escrow account with a third party until your subscription is reviewed and the Manager decides whether to accept it. When and if the Manager confirms that your subscription is complete and decided to accept your subscription, the Manager will release your money from the escrow account to the Company.
 
Once the Manager has accepted your subscription, you will be notified by email and the investment process will be complete. The Manager will also notify you by email if it does not accept your subscription, although it might not explain why.
 
You will not be issued a paper certificate representing your Class A Investor Shares.
 
Anyone can buy Class A Investor Shares. The Manager does not intend to limit investment to people with a certain income level or net worth, although there are limits on how much non-accredited investors may invest in this Offering.
 
Page 51
 
Limit On The Amount A Non-accredited Investor Can Invest
 
As long as an Investor is at least 18 years old, they can invest in this Offering. But if the Investor not an "accredited" investor, the amount they can invest is limited by law.
 
Under 17 CFR §230.501, a regulation issued by the Securities and Exchange Commission, the term "accredited investor" means:
 
 
·
A natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
 
 
 
 
·
A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;
 
 
 
 
·
A trust with assets in excess of $5 million, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person;
 
 
 
 
·
A business in which all the equity owners are accredited investors;
 
 
 
 
·
An employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
 
 
 
 
·
A bank, insurance company, registered investment company, business development company, or small business investment company;
 
 
 
 
·
A charitable organization, corporation, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets exceeding $5 million; and
 
 
 
 
·
A director, executive officer, or general partner of the company selling the securities, or any director, executive officer, or general partner of a general partner of that issuer.
 
If the Investor falls within any of those categories, then the Investor can invest any amount permitted on the Platform. If the Investor does not fall within any of those categories, then the most they can invest in this Offering is the great of:
 
 
·
10% of their annual income; or
 
 
 
 
·
10% of their net worth.
 
These limits are imposed by law, not by the Company.
 
The Company will determine whether an Investor is accredited when he, she, or it creates an account on the Platform.
 
Page 52
 
Additional Information
 
We have filed with the SEC an offering statement under the Securities Act on Form 1-A regarding this offering. This offering circular, which is part of the offering statement, does not contain all the information set forth in the offering statement and the exhibits related thereto filed with the SEC, reference to which is hereby made. Upon the qualification of the offering statement, we will be subject to the informational reporting requirements that are applicable to Tier 2 companies whose securities are qualified pursuant to Regulation A, and accordingly, we will file annual reports, semi-annual reports and other information with the SEC. The SEC maintains a website at www.sec.gov that contains reports, information statements and other information regarding issuers that file with the SEC.
 
The information incorporated by reference herein is an important part of the offering statement and this offering circular. The following documents previously filed with the SEC are incorporated by reference into the offering statement and this offering circular:
 
 
·
our Current Reports for 2023 on Form 1-U filed with the SEC on January 6, 2023, February 1, 2023, February 9, 2023, June 30, 2023
 
 
 
 
·
the Company's Annual Report for the fiscal year ended December 31, 2022 on Form 1-K
 
 
 
 
·
the Company's Semi-Annual Report for the semi-annual period ended June 30, 2023 on Form 1-SA
 
You may review these filings on our website and may also request a copy of these filings at no cost, by contacting us at:
 
ENERGEA PORTFOLIO 2 LLC
52 Main Street
Chester, CT 06412
www.energea.com
(860)-316-7466
 
So long as we remain subject to the periodic reporting requirements of Regulation A, within 120 days after the end of each fiscal year we will file on the SEC's EDGAR website an annual report on Form 1-K. The annual report will contain audited financial statements and certain other financial and narrative information that we are required to provide to investors.
 
We also maintain a website at www.energea.comwhere there may be additional information about our business, but the contents of that site are not incorporated by reference in or otherwise a part of this offering circular.
 
Page 53
 
Index to Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 54
 
Independent Auditors Report
 
To the Members of
Energea Portfolio 2 LLC
 
 
Opinion
We have audited the accompanying consolidated financial statements of Energea Portfolio 2 LLC (the "Company"), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, changes in members' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Energea Portfolio 2 LLC as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
 
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
 
Change in Accounting Principle
As described in Note 1 to the financial statements, the Company changed its method of accounting for leases in 2022 as required by the provisions of FASB Accounting Standards Update Number 2016-02. Our opinion is not modified with respect to that matter.
 
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
 
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
 
 
Auditors' Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
 
Page 55
 
In performing an audit in accordance with generally accepted auditing standards, we:
       Exercise professional judgment and maintain professional skepticism throughout the audit.
       Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
       Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
       Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
       Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Text

Description automatically generated
Hartford, Connecticut
May 1, 2023
 
Page 56
 
Consolidated Balance Sheet
 
For the years ended December 31, 2022, and 2021
 
2022
2021
Assets
Current assets:
Cash and cash equivalents
$ 1,237,923
$ 1,073,640
Accounts receivable
174,061
-
Prepaid expenses and other current assets
55,577
142
Loan receivable, related party
64,651
54,939
Total current assets
1,532,212
1,128,721
Property and equipment, net
Property and equipment
2,457,753
-
Construction in progress
4,357,702
4,559,595
Total property and equipment
6,815,455
4,559,595
Less accumulated depreciation
34,700
-
Total property and equipment, net
6,780,755
4,559,595
Other noncurrent assets:
Operating lease right-of-use assets
629,475
-
Due from related party
9,949
-
Total other noncurrent assets
639,424
-
Total assets
$ 8,952,391
$ 5,688,316
Liabilities and members' equity
Current liabilities:
Accounts payable and accrued expenses
$ 80,038
$ 402,998
Operating lease liabilities, current portion
1,976
-
Due to related party
1,255
2,421
Total current liabilities
83,269
405,419
Non-current liabilities:
Operating lease liabilities, long-term portion
644,569
-
Line of credit note payable
4,075,001
3,675,000
Total current liabilities
4,719,570
3,675,000
Total liabilities
4,802,839
4,080,419
Members' equity
Total shares and accumulated deficit
4,412,778
1,758,868
Total accumulated other comprehensive loss
(263,226)
(150,971)
 
 
Total members' equity
4,149,552
1,607,897
Total liabilities and members' equity
$ 8,952,391
$ 5,688,316
 
Page 57
 
Consolidated Statements of Operations and Comprehensive Loss
 
For the years ended December 31, 2022, and 2021
 
2022
2021
Revenue
$ 40,051
$ -
Portfolio operating expenses:
Professional fees
45,366
19,389
Advertising and marketing
4,848
-
Software subscription
2,443
11,679
Taxes
4,951
44,132
Other general and administrative expenses
40,261
25,817
Total portfolio operating expenses
97,869
101,017
Projects operating expenses:
Professional fees
1,994
146
Travel
3,423
8,156
Taxes
87,036
-
Operation and Maintenance
3,143
-
Other general and administrative expenses
39,877
4,859
Total projects operating expenses
135,473
13,161
Loss from operations
(193,291)
(114,178)
Other income/(expense):
Realized foreign currency loss
(2,266)
-
Gain on sale of projects
-
56,172
Financing administrative fees
(4,000)
(22,567)
Depreciation
(34,700)
Interest income
10,413
1,845
Interest expense
(63,116)
-
Miscellaneous expense
(469)
-
Total other income/(expense)
(94,138)
35,450
Net loss
(287,429)
(78,728)
Other comprehensive loss
Unrealized foreign currency exchange loss
(112,255)
(137,511)
Comprehensive loss
$ (399,684)
$ (216,239)
 
Page 58
 
Consolidated Statements of Changes in Members Equity
 
For the years ended December 31, 2022, and 2021
 
Common Shares
 
Investor Shares
Accumulated Deficit
Accumulated Other Comprehensive Loss
Total Members' Equity
Shares
 
Amount
Shares
Amount
Members' equity, December 31, 2020
1,000,000
$ -
438,150
$ 392,763
$ (146,194)
$ (13,460)
$ 233,109
Issuance of investor shares
-
-
2,370,691
1,887,167
-
-
1,887,167
Non-dividend distributions
-
-
-
-
(296,140)
-
(296,140)
Net loss
-
-
-
-
(78,728)
-
(78,728)
Unrealized foreign currency translation loss
-
-
-
-
-
(137,511)
(137,511)
 
 
 
 
 
 
 
Members' equity, December 31, 2021
1,000,000
-
2,808,841
2,279,930
(521,062)
(150,971)
1,607,897
Issuance of investor shares, net of stock issuance costs of $138,384
-
-
4,091,954
3,150,840
-
-
3,150,840
Non-dividend distributions
-
-
-
-
(210,340)
-
(210,340)
Net loss
-
-
-
-
(287,429)
-
(287,429)
Cumulative translation adjustment
-
-
-
-
839
-
839
Unrealized foreign currency translation loss
-
-
-
-
-
(112,255)
(112,255)
Members' equity, December 31, 2022
1,000,000
$ -
6,900,795
$ 5,430,770
$ (1,017,992)
$ (263,226)
$ 4,149,552
 
Page 59
 
Consolidated Statements of Cash Flow
 
For the years ended December 31, 2022, and 2021
 
2022
2021
Cash flows from operating activities:
Net loss
$ (287,429)
$ (78,728)
Depreciation
34,700
-
Non-cash lease expense
14,465
Changes in assets and liabilities:
-
Accounts receivable
(178,118)
Prepaid expenses and other current assets
(55,463)
4,858
Loan receivable interest added to principal
(9,712)
(984)
Due from related party
6,655
-
Accounts payable and accrued expenses
(349,084)
305,972
Due to related party
(1,288)
(6,274)
Total cash flows from operating activities
(825,274)
224,844
Cash flows from investing activities:
Property and equipment
(2,312,202)
(4,029,798)
Loan receivable, related party
-
(54,001)
Total cash flows from investing activities
(2,312,202)
(4,083,799)
Cash flows from financing activities:
Advances on line of credit
400,000
2,256,725
Issuance of investor shares
3,150,840
1,887,167
Non-dividend distribution
(210,340)
(296,140)
Total cash flows from financing activities
3,340,500
3,847,752
Effect of exchange rate changes on cash
(38,741)
-
Increase in cash
164,283
(11,203)
Cash at the beginning of the period
1,073,640
1,084,843
Cash at the end of the period
$ 1,237,923
$ 1,073,640
Supplemental disclosure of non-cash activities:
Non-cash operating and investing activities:
Construction in progress in accounts payable
$ -
$ 345,644
Adoption of ASC No. 2016-02:
Operating lease right-of-use asset
$ 648,373
$ -
Operating lease liability
$ 648,373
$ -
 
Page 60
 
Notes to Financial Statements
 
The accompanying notes are an integral part of the consolidated financial statements.
 
December 31, 2022 and 2021
 
Note 1: Organization, Operations and Summary of Significant Accounting Policies
 
Business organization and operations
 
Energea Portfolio 2 LLC is a Delaware Limited Liability Corporation formed to develop, own and manage a portfolio of renewable energy projects in Brazil. The consolidated financial statements include the accounts of Energea Portfolio 2 LLC and its wholly-owned Brazilian single purpose entities ("SPEs"): Energea Iguatama Aluguel de Equipamentos e Manutençao Ltda; Energea Pedra do Indaia Ltda; Energea Araxá I Ltda; Energea Araxá II Ltda; and Energea Divinopolis Ltda. During 2022, Energea Divinopolis III Ltda, Energea Formiga I Ltda, Energea Formiga II Ltda, Energea Diamantina II Ltda, Energea Itabapoana Ltda, Energea Naque Ltda Energea Micros I Ltda, Energea Corumbaiba Ltda and Energea Portfolio Holding Ltda were added (collectively, the "Company"). All intercompany transactions have been eliminated in consolidation. The Company and its day-to-day operations are managed by Energea Global LLC ("Manager"). The Company works in close cooperation with stakeholders, project hosts, industry partners and capital providers to produce best-in-class results.
 
The Company's activities consist principally of organization and pursuit costs, raising capital, securing investors and project development activity. The Company's activities are subject to significant risks and uncertainties, including the inability to secure funding to develop its portfolio. The Company's operations are funded by the issuance of membership interests and debt at the Company level. There can be no assurance that any of these strategies will be achieved on terms attractive to the Company. During 2021, the Company initiated a Regulation A Offering for the purpose of raising capital to fund ongoing project development activities. As of December 31, 2022 and 2021, the Company has invested in its thirteen and two projects, respectively. The Company is offering to sell interests designated as Investor Shares to the public up to $75,000,000. The initial price of the Investor Shares was $1.00 per share. Through December 31, 2022, the Company had raised total gross offering proceeds of $5,430,770, net of stock issuance costs of $138,384, from settled subscriptions resulting from the sale of 6,900,795 Investor Shares.
 
Basis of presentation
 
The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("US GAAP").
 
Use of estimates
 
The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statement. Actual results could differ from those estimates.
 
Cash and cash equivalents
 
Cash and cash equivalents include cash on hand, deposits at commercial banks and short-term cash equivalents maturing within 90 days.
 
Page 61
 
Capitalization and investment in project assets
 
A project has four basic phases: (i) development, (ii) financing, (iii) engineering and construction and (iv) operations and maintenance. During the development phase, milestones are created to ensure that a project is financially viable. Project viability is obtained when it becomes probable that costs incurred will generate future economic benefits sufficient to recover those costs.
 
Examples of milestones required for a viable project include the following:
  • The identification, selection and acquisition of sufficient area required for a project;
  • The confirmation of a regional electricity market;
  • The confirmation of acceptable electricity resources;
  • The confirmation of the potential to interconnect to the electric transmission grid;
  • The determination of limited environmental sensitivity; and
  • The confirmation of local community receptivity and limited potential for organized opposition.
 
All project costs are expensed during the development phase. Once the milestones for development are achieved, a project is moved from the development phase into the engineering and construction phases. Costs incurred in these phases are capitalized as incurred, included within construction in progress ("CIP"), and not depreciated until placed into commercial service. Once a project is placed into commercial service, all accumulated costs are reclassified from CIP to property and equipment and become subject to depreciation or amortization over a specified estimated life.
 
Property and Equipment
 
Property and equipment costs of projects completed and is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 20 to 30 years. Additions, renewals, and betterments that significantly extend the life of the asset are capitalized. Expenditures for repairs and maintenance are charged to expense as incurred.
 
The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable. During the years ended December 31, 2022 and 2021, there was no impairment losses recognized for long-lived assets.
 
Revenue recognition
 
All of the SPE's have Project Rental Contracts. These agreements are with various Subscribers who will pay a monthly fee for the renewable energy upon completion of the projects. Projects are considered complete when they are tested, commissioned, interconnected to the grid and capable of producing electricity as designed. Revenue will be recognized as it is earned on a monthly basis. The agreements are in effect for twenty-five years from the completion date and are expected to have a combined gross revenue $168,863,666 from all projects when operational.
 
Comprehensive Loss
 
GAAP requires the reporting of "comprehensive loss" within general purpose financial statements. Comprehensive income/(loss) is comprised of two components, net income/(loss) and comprehensive income/(loss). For the years ended December 31, 2022 and 2021, the Company had foreign currency exchange losses relating to currency translation from Brazilian real to U.S. dollar reported as other comprehensive loss.
 
Page 62
 
Income taxes
 
Effective January 1, 2021, the Company has elected to be taxed as a C-Corporation for Federal, State and local income tax reporting purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized. As of December 31, 2022 and 2021, deferred taxes of approximately $159,712 and $76,444, respectively, have been fully reserved by a valuation allowance. Any income taxes currently due are not material to the consolidated financial statements for the year ended December 31, 2022 or 2021.
 
The Company also concluded that there are no uncertain tax positions that would require recognition in the consolidated financial statements. Interest on any income tax liability is reported as interest expense and penalties on any income tax liability are reported as income taxes. The Company's conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of tax laws, regulations and interpretations thereof, as well as other factors.
 
Leases
 
Adoption - ASU No. 2016-02, Leases (Topic 842) - The amendments in this update require lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases. The guidance was effective for the Company on January 1, 2022. The adoption requires either a modified retrospective transition where the lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented, or a cumulative effect adjustment as of the date of adoption. The Company adopted this new guidance on January 1, 2022 and as a result, the Company recorded a lease right-of-use asset and lease liability of $648,373 through a cumulative effect adjustment as of that date. In July 2018, the FASB issued ASU No. 2018-11, which provided a practical expedient package for lessees. The Company elected to use the expedient package and did not reassess whether any existing contracts contain leases; did not reassess the lease classification for existing leases; and did not reassess initial direct costs for any existing leases. As a result, all leases are considered operating leases.
 
The Company determines if an arrangement is a lease at inception. Lease right-of-use ("ROU") assets represent the Company's right to use an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. Lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately.
 
Foreign Currency Exchange Transactions
 
Purchases of products and services for the Brazilian subsidiaries are transacted in the local currency, Brazilian real (R$), and are recorded in U.S. dollar translated at historical exchange rates prevailing at the time of the transaction. Balances are translated into U.S. dollar using the exchange rates at the respective balance sheet date. Realized exchange gains and losses are included in foreign currency exchange loss on the accompanying consolidated statements of operations and comprehensive loss. Unrealized exchange gains and losses are included in other comprehensive loss on the accompanying consolidated statements of operations and comprehensive loss. Unrealized translation losses for the years ended December 31, 2022 and 2021 were $122,255 and $137,511, respectively. Realized translation losses for the year ended December 31, 2022 and 2021 were $2,266 and $-0-, respectively.
 
Page 63
 
Concentrations
 
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents in bank deposits at high credit quality financial institutions. The balances, at times, may exceed federally insured limits. Each bank account held in Brazil has a revolving line of credit associated with it intended to cover any shortfall in the cash accounts and carry interest at 13.99% per month. The lines have credit limits of $284 to $9,460. There were no draws on these lines of credit during the years ended December 31, 2022 or 2021.
 
Extended Transition Period
 
Under Section 107 of the Jumpstart Our Business Startups Act of 2012, the Company is permitted to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits the Company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B). By electing to extend the transition period for complying with new or revised accounting standards, these consolidated financial statements may not be comparable to companies that adopt accounting standard updates upon the public business entity effective dates.
 
Subsequent events
 
In connection with the preparation of the consolidated financial statements, the Company monitored and evaluated subsequent events for the year ended December 31, 2022, through May 1, 2023, the date on which the consolidated financial statements were available to be issued. There are no material subsequent events that require disclosure.
 
Note 2: Construction in Progress
 
The Company is in the process of developing and constructing renewable energy facilities in Brazil. All project costs are being capitalized and include hard costs, such as equipment and construction materials, and soft costs, such as engineering, architectural, legal, permits, developer fees and other costs. The balance of CIP at December 31, 2022 and 2021 was $4,357,702 and $4,559,595, respectively. The Company expects to incur an additional $17,781,510 of costs to complete the projects that have not yet completed or begun construction which include the projects owned by Energea Araxá I Ltda, Energea Araxá II Ltda, and Energea Divinopolis II Ltda, Energea Divinopolis III Ltda, Energea Corumbaiba, and Energea Micros I Ltda.
 
Note 3: Line of Credit
 
In October 2020, the Company, along with its majority member-manager, entered into a revolving credit agreement (the "Agreement") with a debt provider to provide funding for the construction projects in Brazil. The Agreement calls for a line of credit with total availability of $5,000,000 to be used solely to finance the purchase, development and construction of the two Brazilian projects. Interest is payable in quarterly installments at an annual rate of 15% through the date of maturity of September 30, 2023.
 
Page 64
 
The Company may elect to defer up to 50% of each quarterly interest installment, provided that such deferred interest will be treated as principal and repaid in accordance with the Agreement. The line of credit is secured by a pledge of the Manager's Class A Investor Shares and Common Shares in the Company as well as a fiduciary lien on the assets owned by Energea Iguatama Aluguel de Equipamentos e Manutençao Ltda and Energea Pedra do Indaia Ltda.
 
The Company may repay or prepay outstanding revolving notes with prior approval of the lender. In addition, the Company is required to repay outstanding principal with the proceeds of any sales of the projects within ten days following receipt of the sales proceeds, or in the event a project is canceled or unable to be completed.
 
If any projects have completed construction prior to the line of credit maturity date, the Company may elect to convert the revolving line of credit to a term loan, subject to certain limitations, provided the Company has met all financial covenants and other requirements, as defined. Term loans require quarterly repayments of principal plus interest at 13% per annum, in advance, over a term of ten years. The company intends to exercise this option so the line of credit is recorded as long-term on the accompanying consolidated balance sheets.
 
The Company's balance outstanding under the line of credit at December 31, 2022 and 2021 and 2020 was $4,075,001 and $3,675,000, respectively. Interest incurred during the construction phase is capitalized as CIP. Interest capitalized and paid during the year ended December 31, 2022 was $382,437. Interest capitalized and paid during the year ended December 31, 2021 was $333,763, of which $284,325 was paid and $49,438 was payable as of December 31, 2021 and included in accounts payable and accrued expenses on the accompanying 2021 balance sheet.
 
Note 4: Related Party Transactions
 
The Company has transactions between related companies from time to time. At December 31, 2022 and 2021, the Company had $1,255 and $2,421, respectively, payable to a company with common ownership At December 31, 2022 and 2021, the Company had $9,949 and $-0- respectively, receivable from related companies with common ownership, which are included due to/from related parties on the accompanying consolidated balance sheets.
 
As of December 31, 2022 and 2021, the Company entered into seven and two, respectively, construction management agreements with the Manager, one for each project, to pay developer fees for services of supervision of the construction of the projects. During the years ended December 31, 2022 and 2021, the Company paid total developer fees to the Manager of $60,000 and $572,512, respectively, which were capitalized to CIP.
 
During November 2021, the Company loaned an affiliate with common ownership $53,955. The loan matured in November 2022. An amended loan was signed in January 2023 with new maturity date in November 2023. The loan has an annual interest rate of 18%. As of December 31, 2022, the loan receivable balance consists of $53,955 of principal and $10,696 of accrued interest. As of December 31, 2021, the loan receivable balance consists of $53,955 of principal and $984 of accrued interest.
 
Note 5: Leases
 
The Company has a land lease for the Energea Iguatama Aluguel de Equipamentos e Manutençao Ltda property with an annual rent of approximately $11,919 expiring in January 2049. The monthly base rent increases each lease year by the General Market Price Index.
 
A second lease for the Energea Pedra do Indaiá Ltda with an annual rent of $8,073 and will expire in April 2047. The monthly base rent increases each lease year by the Brazilian Extended National Consumer Price Index.
 
Page 65
 
A third lease for the Divinopolis III Ltda property with an annual rent of $19,071 and will expire in June 2047. The monthly base rent increases each lease year by the Brazilian Extended National Consumer Price Index.
 
A fourth lease for the Energea Araxa I Ltda property with an annual rent of $18,163 and will expire in January 2047. The monthly base rent increases each lease year by the Brazilian Extended National Consumer Price Index.
 
A fifth lease for the Energea Araxa II Ltda property with an annual rent of $18,163 and will expire in January 2047. The monthly base rent increases each lease year by the Brazilian Extended National Consumer Price Index.
 
A sixth lease for the Energea Formiga I Ltda property with an annual rent of $34,056 and will expire in January 2047. The monthly base rent increases each lease year by the Brazilian Extended National Consumer Price Index.
 
Subsequent to December 31, 2022, the Company anticipates six additional leases with Energea Formiga II Ltda, Energea Diamantina II Ltda, Energea Itabapoana Ltda, Energea Naque Ltda Energea Divinopolis II Ltda, and Energea Corumbaiba Ltda will be effective in 2023. The leases have not been recorded as of December 31, 2022.
 
Total land lease costs for the year ended December 31, 2022 and December 31, 2021 were $ 69,848 and $11,282 respectively, which have been capitalized and included in CIP on the accompanying consolidated balance sheets.
 
The lease cost and other required information for the years ended December 31, 2022 are:
 
Operating lease cost
 
$ 69,848
Cash paid for amounts in the measurement of lease liabilities - operating cash flows from operating leases
 
 
$ 61,286
Weighted - average remaining lease term - operating leases
 
296
Weighted - average discount rate - operating leases
 
17.90%
 
Future minimum estimated lease payments based on the exchange rate at December 31, 2022 are as follows for the years ending December 31:
 
2023
 
$ 109,445
2024
 
109,518
2025
 
109,518
2026
 
109,518
2027
 
109,518
Thereafter
 
2,150,828
Total future undiscounted lease payments
 
2,698,345
Less interest
 
(2,051,800)
Lease liabilities
 
$ 646,545
 
Note 6: Commitments
 
The Company has two Engineering, Procurement and Construction ("EPC") contracts for two of the projects with a combined total expected cost of $4,981,899. As of December 31, 2021 $3,568,655 had been incurred. During 2022, the Company terminated the EPCs due to breach of contract by the contractor. No future balance is due.
 
As of December 31, 2022 and 2021, eight and five, respectively, of the SPE's entered into Operation and Maintenance Service Agreement ("O&M Agreements") with consortiums to perform continued maintenance on the projects. The agreements are in effect for twenty-five years from the initial rental date. The consortiums pay the SPEs a service fee based on a formula as defined in the agreement. The SPEs have subcontract agreements with a company related through common ownership to perform these services.
 
Page 66
 
Note 7: Members' Equity
 
Common Shares
 
The Company authorized 1,000,000 common shares, which as of December 31, 2022 and 2021, 1,000,000 are issued and outstanding. The shares represent membership interests in the Company.
 
Investor Shares
 
The Company authorized 19,000,000 investor shares, which as of December 31, 2022 and 2021, 6,900,795 and 2,808,841, respectively, are issued and outstanding. The shares represent membership interests in the Company.
 
Note 8: Income Taxes
 
The Company's loss before income taxes is comprised of the following for the years ended December 31, 2022 and 2021:
 
2022
2021
Federal
(2,710,486)
(78,728)
State
(747,884)
(78,728)
 
Income tax expense (benefit) is comprised of the following for the years ended December 31, 2022 and 2021:
 
2022
2021
Federal:
Current
$ -
$ -
Deferred
(60,361)
(56,327)
State:
Current
-
-
Deferred
(22,907)
(20,117)
Income tax expense(benefit)
(83,268)
(76,444)
Change in valuation allowance
83,268
76,444
Net Income tax expense (benefit)
$ -
$ -
 
A reconciliation of the United States Federal and Connecticut statutory rate to our effective income tax rate is shown in the table below for the years ended December 31, 2022 and 2021:
 
2022
2021
Statutory rate applied to pre-tax income - Federal
21.0%
21.0%
Statutory rate applied to pre-tax income - State
7.5%
7.5%
Valuation allowance
-28.50%
-28.50%
Effective tax rate
-
-
 
Page 67
 
Deferred income taxes reflect the net tax effects of net operating loss ("NOL") carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes. The Company's deferred tax assets relate mainly to NOL carryforwards which may be used to reduce tax liabilities in future years (subject to an 80% taxable income limitation). At December 31, 2022 and 2021, the Company had federal NOL carryforwards totaling $2,978,709 and $268,223, respectively. At December 31, 2022 and 2021, the Company had state NOL carryforwards totaling $1,016,107 and $268,223, respectively. The state NOL carryforwards are subject to a 50% taxable income limitation.
 
At December 31, 2022 and 2021, the Company had net deferred tax assets totaling $159,712 and $76,444, respectively, with an equal corresponding valuation allowance. The Company reduces the carrying amounts of deferred tax assets if, based on the evidence available, it is more-likely-than-not that such assets will not be realized.
 
In making the assessment under the more-likely-than-not standard, appropriate consideration must be given to all positive and negative evidence related to the realization of deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods by jurisdiction, unitary versus stand-alone state tax filings, loss carry forwards not expiring unutilized, and all tax planning alternatives that may be available. A valuation allowance has been recorded against the deferred tax assets as management cannot conclude that it is more-likely-than-not that these assets will be realized.
 
During the years ended December 31, 2022 and 2021, the Company did not have any unrecognized tax benefits related to uncertain tax positions.
 
On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act (also known as the "CARES Act"), a stimulus package intended to help mitigate the economic devastation caused by the coronavirus. The CARES Act includes changes to the tax treatment of business NOLs for corporations.
 
The 2017 Tax Cuts and Jobs Act tax reform legislation previously limited NOLs to 80% of taxable income in any one tax period. The CARES Act temporarily removes the 80% limit for taxable years beginning before 2021 to allow an NOL carryforward to fully offset a corporation's income. The Company is able to carryforward its federal NOLs indefinitely.
 
Page 68
 
Glossary of Certain Defined Terms
 
Authorizing Resolution
The authorization adopted by the Manager pursuant to the LLC Agreement that created the Class A Investor Shares.
Adjusted NOI
The net operating income of the Company after being adjusted so that the IRR of the CAFD is equal to the Preferred Return rate of 7%
Advisors Act
Investment Advisers Act of 1940.
ANEEL
The Brazilian Electricity Regulatory Agency.
Amendment
The amendment made to the LLC Agreement on April 29, 2020.
Blue Sky Laws
State-level laws governing investments.
BRL
The Brazilian currency called real.
CAFD
Cash available for distribution by the Company.
Class A Investor Shares
The limited liability company interests in the Company being offered to Investors in this Offering.
Code
The Internal Revenue Code of 1986, as amended (i.e., the Federal tax code).
Company
Energea Portfolio 2 LLC, a Delaware limited liability company, which is offering to sell Class A Investor Shares in this Offering.
Consortium
A group of residential and business Subscribers.
Construction Contract
The contract whereby the Company or an SPE will hire a third party to provide to provide engineering, procurement, and construction services for a Project.
Credit Management Agreement
A service contract for the sale and administration of energy credits produced by the Projects
Development Company
A company focused on acquiring and/or developing solar power projects.
DERMS
Distributed Energy Resource Management Systems
Energea Brazil
Energea Brasil Operações Ltda, a Brazilian entity that is an affiliate of the Manager.
Energea Global
Energea Global LLC, a Delaware limited liability company, which is owned by Michael Silvestrini and Chris Sattler and serves as the Manager.
Estimated NOI
The Net Operating Income estimated to be prodiced by the Company.
Exchange Act
The Securities Exchange Act of 1934.
FINRA
Financial Industry Regulatory Authority, Inc.
Financial Model
The financial model prepared by the Manager for each Project, projecting all the costs and distributions of the Project.
GILTI
General Intangible Low-Tax Income, a federal U.S. tax on profits made by companies outside the United States.
Investor
Anyone who purchases Class A Investor Shares in the Offering.
Investment Committee
A multi-disciplinary committee of experienced renewable energy executives of the Manager which decides which Projects the Company will invest in.
IPCA
The Brazilian consumer price index (Indice Nacional de Precos ao Consumidor Amplo).
IRR
Internal rate of return.
JOBS Act
The Jumpstart Our Business Startups Act of 2012.
Land Lease
The contract whereby the Company or and SPE will lease the land where a Project will be located.
Liquidated Damages
A penalty paid by a contractor to a SPE when the construction of a Project is delayed beyond the schedule in the Construction Contract.
LLC Agreement
The Company's Limited Liability Company Agreement dated June 5, 2020.
NOI
Net Operating Income.
Normatice Resolution 482
A Brazilian energy policy that allows for the rental of solar projects to consortiums (commonly reffered to as "community solar").
NPV
Net Present Value.
Manager
Energea Global LLC, a Delaware limited liability company.
Manager Shares
The limited liability company interests in the Company that will be owned by the Manager.
Offering
The offering of Class A Investor Shares to the public pursuant to this Offering Circular.
Offering Circular
The Offering Circular you are reading right now, which includes information about the Company and the Offering.
Operation and Maintenance Contract
The contract whereby our customer will hire the Company to operate and maintain the Project.
Platform
The website located at www.energea.com.
Preferred Return
An amount of distributed cash flow that goes to Investors before the Manager earns a Promoted Interest.
Prior Offering
The Company's previous Regulation A offering that was initially qualified by the SEC on August 13, 2020.
Project
A solar power project acquired or developed by the Company.
Project Maintenance Contract
When the SPE hires Energea Brazil to perform the actual O&M services.
Project Rental Contract
A contract pursuant to which the SPE that owns a Project will rent the Project to the customer.
Promoted Interest
The right of the Manager to receive distributions under the LLC Agreement, over and above its right to receive distributions in its capacity as an Investor.
Regulations
Regulations issued under the Code by the Internal Revenue Service.
Ratio
An monthly report presented to the utility company from each Project which outlines the allocation of energy credits (as a percentage of total generation) to Subscribers.
SEC
The U.S. Securities and Exchange Commission.
Securities Act
The Securities Act of 1933.
SPE
The entity we create to own and operate each Project, typically in the form of a Brazilian Limitada.
Subscriber
A small business or residential customer.
USD
The currency of the United States called dollars.
U.S. GAAP
United State Generally Accepted Accounting Principles.
Page 69
 
PART III - Exhibits
 
Index to Exhibits and Description of Exhibits
 
Exhibit No.
Description of Exhibit
2.1
2.2
Limited Liability Company Agreement of the Company dated April 29, 2020 (incorporated by reference to the copy thereof filed as Exhibit 1-A2B to the Company's Form 1-A filed July 2, 2020).
2.3
2.4
First Amendment of Limited Liability Company Agreement dated December 3, 2020 (incorporated by reference to the copy thereof filed as Exhibit 1-B to the Company's Form 1-K filed April 30, 2021)
4.1
4.2
4.3
4.4
4.5
4.6
6
9
11.1
Consent of Goodwin Procter (included in Exhibit 12)*
11.2
12
Legal opinion Goodwin Procter*
Page 70
 
Signatures
 
Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Chester, State of Connecticut, on December 26, 2023
 
Energea Portfolio 2 LLC
 
By: Energea Global LLC
 
By /s/ MICHAEL SILVESTRINI
Name: Michael Silvestrini
Title: Co-Founder and Managing Partner
 
This offering statement has been signed by the following person in the capacities and on the date indicated.
 
By /s/ MICHAEL SILVESTRINI
Name: Mike Silvestrini
Title: Co-Founder and Managing Partner of Energea Global LLC (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
 
Date: January 9, 2024
 
Page 71
EX1A-6 MAT CTRCT 6 ex6.htm
ASSUMPTION, RATIFICATION AND MODIFICATION AGREEMENT
 
This ASSUMPTION, RATIFICATION AND MODIFICATION AGREEMENT (this "Agreement") is dated as of December 22, 2023 by and among ENERGEA PORTFOLIO 2LLC, a Delaware limited liability company ("New Borrower"), ENERGEA GLOBAL LLC ("Prior Borrower"), ENERGEA GERAÇÃO DISTRIBUÍDA DE ENERGIA DO BRASIL S.A., a limited liability company headquartered in Rio de Janeiro ("Energea Brasil"), and LATTICE ENERGEA GLOBAL REVOLVER I LLC, a Delaware limited liability company ("Lender").
 
R E C I T A L S
 
WHEREAS, Lender, New Borrower, Energea Brasil and Prior Borrower have previously entered into certain loan agreements, guaranty agreements, instruments and documents, including certain of those set forth on Schedule A attached hereto (together with all other agreements, instruments and documents executed and delivered by Prior Borrower to Lender, each as amended, modified, extended, restated, replaced or supplemented from time to time, collectively referred to herein as the "Loan Documents"), pursuant to which, inter alia, Lender provided certain revolving and term loan credit facilities to Prior Borrower and/or its affiliates;
 
WHEREAS, Prior Borrower and New Borrower have requested that Lender permit Prior Borrower to assign to New Borrower, and New Borrower to assume from Prior Borrower (the "Assignment and Assumption") all of Prior Borrower's obligations and rights under the Loan Documents (collectively, the "Obligations");
 
WHEREAS, on the terms and conditions set forth in this Agreement, Lender has agreed to permit the Assignment and Assumption of the Obligations from Prior Borrower to New Borrower; and
 
WHEREAS, the New Borrower and Lender wish to modify certain provisions of the Loan Documents (including by Lender making a new loan to Prior Borrower), as set forth herein.
 
NOW THEREFORE, in consideration of the mutual covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lender, New Borrower, Energea Brasil and Prior Borrower hereby agree as follows:
 
Section 1. Assumption of Obligations. As of the Effective Date, New Borrower hereby assumes all of Prior Borrower's rights under the Loan Documents and the Obligations, and New Borrower further agrees to pay when due all Obligations of Prior Borrower and to abide by and be bound by all of the terms and conditions of the Loan Documents as "Borrower" thereunder, as though the Loan Documents to which Prior Borrower is a party had been made, executed and delivered by New Borrower as "Borrower" thereunder.
 
Section 2. Lender Consent to Assignment and Assumption. As of the Effective Date, Lender hereby consents to the Assignment and Assumption, and waives any and all restrictions and prohibitions with respect thereto. Lender's consent to the Assignment and Assumption provided for in this Agreement is not intended to be, and shall not be construed as, a waiver of any provisions of the Loan Documents other than with respect to the restriction or prohibition of the Assignment and Assumption.
 
Section 3. Cross Default. New Borrower hereby acknowledges and agrees that the failure of New Borrower to (a) make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any indebtedness owed to Lender or guarantee given in favor of Lender, or (b) observe or perform any other agreement or condition relating to any such indebtedness or guarantee, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such indebtedness or the beneficiary or beneficiaries of such guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), in each case, whether or not related to the Obligations or the Loan Documents, such failure shall automatically result in an event of default under all loan documents evidencing the obligations of New Borrower to Lender.
 
Section 4. Representations and Warranties; Ratification and Confirmation. New Borrower represents and warrants to Lender that as of the Effective Date: (a) there are no defenses, offsets, or counterclaims to the Loan Documents; and (b) all provisions of the Loan Documents are in full force and effect and no default or event of default has occurred which is continuing under the provisions of any Loan Document. New Borrower hereby acknowledges that it has reviewed the terms and provisions of this Agreement and the Loan Documents and hereby consents to and ratifies all provisions contained therein. New Borrower understands and intends that Lender will rely on these representations and warranties contained herein. New Borrower hereby authorizes Lender to file or record, as applicable, all UCC-1 or UCC-3 financing statements (and all foreign equivalents thereof) as deemed reasonably necessary to perfect Lender's security interests under the Loan Documents and that name the New Borrower as debtor, and Lender as secured party thereunder (the "Financing Statements").
 
Section 5. Conditions Precedent. This Agreement shall take effect as of the date (the "Effective Date") when the following are received by Lender, or otherwise satisfied in Lender's reasonable discretion:
 
(i)             this Agreement duly executed and delivered by each of the parties hereto;
 
(ii)           Allonges to the promissory notes to which Original Borrower is a party and owing to Lender, duly executed and delivered by New Borrower evidencing New Borrower's assumption of Prior Borrower's obligations to Lender under the Notes, in form and substance satisfactory to Lender (collectively, the "Allonges");
 
(iii)         a 2023 Term Loan Note, duly executed and delivered by Prior Borrower;

(iv)          a First Amendment to Warrant to Purchase Class B Membership Interests, in form and content satisfactory to Lender, duly executed and delivered by Prior Borrower;
 
(v)           a Pledge Agreement with respect to New Borrower's pledge of equity in Energea Iguatama Aluguel de Equipamentos e Manutenção Ltda., Energea Pedra do Indaiá Ltda., Energea Araxá I Ltda., Energea Divinópolis Ltda., Energea Divinópolis II Ltda., and Energea Micros I Ltda., duly executed and delivered by New Borrower;
 
(vi)          a Financing Statement naming New Borrower as Debtor and Lender as Secured Party, to be filed with the Secretary of State of the State of Delaware;
 
(vii)    a Deposit Account Control Agreement with respect to each of the DS Account and the VH Account (each as defined in the Credit Agreement as amended hereby), duly executed by New Borrower and the depository bank named therein;
 
(viii)  a Letter Agreement with each of BGTF I Transição Energética Fundo de Investimento em Participações Multiestratégia and VH GSEO UK Holdings Limited regarding distributions of proceeds by Energea BR S.A. and Victory Hill Distributed Energy Investments Limited;
 
(ix)     Confirmation of the payoff of the $200,000 loan made by Lender to Prior Borrower, it being acknowledged and agreed that such loan was referenced as "ENG-01" on the Revolving Loan Note but such loan was converted to a Term Loan under the Term Loan Note in 2022;
 
(x)           a certificate signed by the Manager of New Borrower certifying to (a) the Certificate of Formation and the limited liability company agreement of New Borrower,
(b) resolutions adopted by the Members of New Borrower authorizing the Assignment and Assumption and the execution and delivery of this Agreement, the Allonges and all other documents to which New Borrower is a party and referenced above, and the performance by New Borrower of its obligations hereunder and thereunder, and the general resolutions, in form and substance satisfactory to Lender and its counsel, authorizing the borrowings under the Loan Documents, and the performance of the other matters specified herein and therein, and (c) the incumbency of the Members and Manager of New Borrower;
 
(xi)          a certificate signed by the Manager of Prior Borrower certifying to (a) the resolutions adopted by the Members of Prior Borrower authorizing the Assignment and Assumption and the execution and delivery of this Agreement, and the performance by Prior Borrower of its obligations hereunder, including the borrower by Prior Borrower of the 2023 Term Loan, and (b) the incumbency of the Members and Manager of Prior Borrower; and
 
(xii)        payment of Lender's fees and expenses, including without limitation, those fees and expenses described in Section 11 below.
Section 6. Amendments to Credit Agreement. The parties hereto agree that, on the Effective Date, and immediately following the Assignment and Assumption, the Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same manner

as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double- underlined text) as set forth in on Exhibit A attached hereto. After giving effect to the amendments set forth in this Section on the Effective Date, the representations, warranties, certifications and, agreements contained in the Credit Agreement and the other Loan Documents are true, complete and accurate in all material respects as of the date hereof; provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date.
Section 7. Condition Subsequent. Within one-hundred twenty (120) days of the Effective Date, New Borrower shall cause the perfection of the Lender's security interests in the projects known as "Divinipolis III" and "Micros" in accordance with the terms of the Credit Agreement and in a manner satisfactory to the Lender. New Borrower agrees and acknowledges that its breach of this Section shall constitute an Event of Default under the Credit Agreement.
 
Section 8. Limitations on Waivers; Future Waivers. Any and all waivers contained in this Agreement are limited to the specific event referenced by such waiver only and shall not, nor shall they be construed as, a waiver of any other default or event of default under the Loan Documents, now existing or hereafter occurring, nor shall anything herein or Lender's actions hereunder be construed so as to imply that Lender has agreed, or is obligated, to grant any future waivers under the Loan Documents.
 
Section 9. No Modification. Except as otherwise set forth herein, this Agreement shall not modify the terms or provisions of Loan Documents, or otherwise constitute a substitution or novation of any of the Loan Documents, and all such documents and instruments shall remain unmodified and in full force and effect in accordance with their terms, and are hereby ratified by New Borrower.
 
Section 10. No Impairment of Lien. Nothing set forth herein shall affect the priority or extent of the lien of the Loan Documents, nor, except as expressly set forth herein, release or change the liability of any party who may now be or after the date of this Agreement, become liable primarily or secondarily, thereunder.
 
Section 11. Costs. Prior Borrower and New Borrower, jointly and severally, agree to pay all fees and reasonable costs, including the reasonable attorney's fees, incurred by Lender as a result of, or otherwise in connection with, this Agreement and the transactions contemplated hereby.
 
Section 12. Financial Information. Prior Borrower and New Borrower each represent and warrant to Lender that, all financial information provided to Lender in connection with Prior Borrower's and New Borrower's requests for the consent and waiver set forth herein were true and correct as of the date provided and remain materially true and correct as of the date of this Agreement.
 
Section 13. Further Assurances. Prior Borrower and New Borrower each hereby agrees to execute and deliver such other instruments, and to provide such further information and take

such other action, as Lender may reasonably request in connection with the assignment and assumption contemplated hereunder.
 
Section 14. Miscellaneous. (a) This Agreement shall be construed according to and governed by the laws of the State of New York without regard to its internal conflicts rules; (b) if any provision of this Agreement is adjudicated to be invalid, illegal or unenforceable, in whole or in part, it will be deemed omitted to that extent and all other provisions of this Agreement will remain in full force and effect; (c) the captions contained in the Agreement are for convenience of reference only and in no event define, describe or limit the scope of intent or any of the provisions or terms hereof; (d) this Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns; and (e) this Agreement may be executed in one or more counterparts.
 
 
[SIGNATURE PAGES FOLLOW]

-8-
 
EXHIBIT A
 
Amended Credit Agreement
 
[attached]

 
 
 
 
 
 
 
 
 
 
 
 
CREDIT AGREEMENT
 
 
dated as of October 5th, 2020
 
 
among
 
 
 
ENERGEA GLOBALPORTFOLIO 2 LLC,
as "Borrower"
 
ENERGEA PORTFOLIO 2 LLC AND ENERGEA GERAÇÃO DISTRIBUÍDA DE ENERGIA DO BRASIL S.A.,
as an "Additional ObligorsObligor"
 
 
and
 
 
LATTICE ENERGEA GLOBAL REVOLVER I LLC,
as "Lender "

Table of Contents
Article I DEFINITIONS AND ACCOUNTING TERMS 1
Section 1.1 Defined Terms_________________________________________________ 1
Section 1.2 Terms Generally______________________________________________ 15
Section 1.3 Computation of Time Periods. __ 1516
Section 1.4 Conflicting Terms_____________________________________________ 16
Article II AMOUNT AND TERMS OF THE CREDIT FACILITIES_____________________ 16
Section 2.1 The Credit Facilities___________________________________________ 16
Section 2.2 Payments Free of Taxes and Other Deductions______________________ 22
Section 2.3 Fees. __ 2324
Article III CONDITIONS PRECEDENT_________________________________________ 24
Section 3.1 Conditions Precedent to Effectiveness_____________________________ 24
Section 3.2 Conditions Precedent to Revolving Loans__________________________ 26
Section 3.3 Conditions Precedent to the Term Loans. __ 2829
Section 3.4 Limited Waiver of Conditions Precedent___________________________ 30
Article IV REPRESENTATIONS AND WARRANTIES 3031
Section 4.1 Formation, Good Standing, and Due Qualification. ____ 3031
Section 4.2 Corporate Power and Authority. ____ 3031
Section 4.3 Legally Enforceable Agreement__________________________________ 31
Section 4.4 Governmental Approvals_______________________________________ 31
Section 4.5 Indebtedness_________________________________________________ 31
Section 4.6 Other Agreements, No Default. ____ 3132
Section 4.7 Litigation. _____ 3132
Section 4.8 Ownership and Liens___________________________________________ 32
Section 4.9 Capital Structure______________________________________________ 32
Section 4.10 Permits. 3233
Section 4.11 Taxes_______________________________________________________ 33
Section 4.12 Debt and Liens Securing Same___________________________________ 33
Section 4.13 Federal Reserve Regulations_____________________________________ 33
Section 4.14 Fiscal Year. 3334
Section 4.15 No Broker's Fees. 3334
Section 4.16 Investment Company Act, Public Utility Holding Company Act. 3334
Section 4.17 Use of Proceeds. 3334

Section 4.18 Environmental Matters. ___ 3334
Section 4.19 Compliance with Laws. ___ 3435
Section 4.20 No Defaults or Material Adverse Effect. ___ 3435
Section 4.21 Labor Disputes and Acts of God. __ 3435
Section 4.22 ERISA Compliance. ___ 3435
Section 4.23 Insurance. ___ 3536
Section 4.24 Location of Real Property and Leased Premises. __ 3536
Section 4.25 Security Documents___________________________________________ 36
Section 4.26 Sanction Concerns____________________________________________ 36
Section 4.27 Sufficiency. ___ 3637
Section 4.28 Government Regulation. ___ 3637
Section 4.29 Approved Projects. ___ 3637
Section 4.30 No Other Bank Accounts. ___ 3637
Section 4.31 Solvency____________________________________________________ 37
Section 4.32 Financial Statements___________________________________________ 37
Section 4.33 Construction Costs. 3738
Section 4.34 Joint Ventures. 38
Article V AFFIRMATIVE COVENANTS 3738
Section 5.1 Maintenance of Existence. 3738
Section 5.2 Maintenance of Records. 3738
Section 5.3 Business and Properties. 3738
Section 5.4 Maintenance of Insurance. 3738
Section 5.5 Taxes. 3839
Section 5.6 Right of Inspection. 3839
Section 5.7 Reporting Requirements. 3839
Section 5.8 Litigation and Other Notices. 3940
Section 5.9 Supervision of Construction. 4142
Section 5.10 Energy Regulation. 4142
Section 5.11 Use of Proceeds 41; Use of Cash Flow. 42
Section 5.12 Additional Collateral. 4143
Section 5.13 Material Project Documents. 4143
Section 5.14 Construction Costs. 4243
Section 5.15 Account Controls. 4243
Section 5.16 Further Assurances. 4244

Article VI NEGATIVE COVENANTS 4244
Section 6.1 Liens. 4345
Section 6.2 Debt. 4345
Section 6.3 Guaranties. 4446
Section 6.4 Sale of Assets. 4446
Section 6.5 Developer Fee. 4447
Section 6.6 Restricted Payments. 4447
Section 6.7 Project Debt Service Coverage Ratio 45Financial Covenants. 47
Section 6.8 Burdensome Agreements. 4547
Section 6.9 No Accounts. 4547
Section 6.10 Change Name; Location or State of Incorporation. 4547
Section 6.11 Fiscal Year. 4547
Section 6.12 Management/Control and Accounting Methods. 4548
Section 6.13 Sale and Leaseback. 4548
Section 6.14 Sanctions. 4548
Section 6.15 Affiliate Contracts. 4548
Section 6.16 JV Agreements. 48
Article VII SECURITY 4648
Section 7.1 Security. 4648
Section 7.2 Release of Borrower 46[Reserved]. 48
Section 7.3 Bank Account. 4648
Section 7.4 Security Documents. 4649
Section 7.5 Collateral. 4649
Article VIII Error! Bookmark not defined.
Article VIII EVENTS OF DEFAULT 4649
Section 8.1 Events of Default. 4649
Article IX Error! Bookmark not defined. ADDITIONAL OBLIGORS 53
Section 9.1 Obligations. 5053
Section 9.2 Additional Obligors. 5053
Article X GENERAL PROVISIONS 5153
Section 10.1 Amendments. 5153
Section 10.2 Notices, Etc. 5154
Section 10.3 No Waiver; Remedies. 5254
Section 10.4 Successors and Assigns. 5254

Section 10.5 Transfer of Lender's Interests. 5255
Section 10.6 Right of Setoff. 5356
Section 10.7 Governing Law; Jurisdiction. 5356
Section 10.8 Entire Agreement, Severability of Provisions. 5456
Section 10.9 Waivers. 5457
Section 10.10 Survival of Agreement. 5558
Section 10.11 Construction. 5558
Section 10.12 Captions. 5558
Section 10.13 Counterparts. 5558
 
 
Exhibit A Project Approval Package
Exhibit B Lender Approval Form
Exhibit C Notice of Borrowing
Exhibit D Joinder Agreement
Exhibit E Reserved
Exhibit F Revolving Loan Note
Exhibit G Term Loan Note
Exhibit H Project Budget Modification
Schedule 1 List of Approved Projects
Schedule 2 Term Loan Amortization
Schedule 4.9 Capital Structure
Schedule 4.12 Debt and Liens Schedule 4.18 Environmental Matters
Schedule 4.22 Plans/Multiemployer Plans Schedule 4.23 Insurance
Schedule 4.24(a) Owned Real Property Schedule 4.24(b) Leased Real Property Schedule 6.15 Affiliate Contracts Schedule 7.1 Security Documents
Schedule 7.3 Account Restrictions
Schedule 9.1 Guaranty Terms

CREDIT AGREEMENT
 
THIS CREDIT AGREEMENT (this "Agreement") is entered into as of the 5th day of October, 2020 among ENERGEA GLOBALPORTFOLIO 2 LLC, a Delaware limited liability company with its principal place of business located at 9 Cedar Lane, Old Saybrook, CT 06475 ("Borrower"), ENERGEA PORTFOLIO 2 LLC, a Delaware limited liability company with its principal place of business located at 9 Cedar Lane, Old Saybrook, CT 06475, ENERGEA GERAÇÃO DISTRIBUÍDA DE ENERGIA DO BRASIL S.A., a limited liability company headquartered in the Municipality of Rio de Janeiro, State of Rio de Janeiro, at 81 Avenida Graça Aranha, and LATTICE ENERGEA GLOBAL REVOLVER I LLC, a Delaware limited liability company having a place of business at 431 E. 20th St., Apt. 14C, New York, NY 10010 ("Lender").
 
PREAMBLE
 
WHEREAS, subject to the terms and conditions set forth herein, Borrower has requested Lender to advance Revolving Loans in the maximum principal amount of $5,000,000 to finance in part the construction and/or acquisition of solar projects which qualify as Approved Projects (as defined below) owned by indirect subsidiaries of Borrower referred to herein as the Project SPEs;
 
WHEREAS, Borrower's direct subsidiaries, referred to herein as the Portfolio Companies, shall arrange for the remaining funding for the construction and/or acquisition of the Approved Projects via an equity offering from the Additional Investors;
 
WHEREAS, upon completion of construction and subject to the terms and conditions set forth herein, Borrower has requested Lender to advance the Term Loan based on the conversion of the outstanding Revolving Loan in the maximum principal amount of $5,000,000;
 
WHEREAS, Borrower, the Portfolio Companies, Energea Brasil and the Project SPEs shall grant the liens contemplated herein on the Collateral (as defined below) to secure Borrower's outstanding obligations hereunder and, if and to the extent provided herein, act as additional obligors with respect to Borrower's outstanding obligations hereunder; and
 
WHEREAS, Lender has agreed to extend the aforesaid loans subject to the terms and conditions set forth below;
 
THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties to this Agreement do each hereby agree as follows:
 
Article IARTICLE I DEFINITIONS AND ACCOUNTING TERMS
 
Section 1.1 Defined Terms. The following capitalized terms are used in this Agreement with the respective meanings set forth in this Section 1.1:

"Account Agreement" means, with respect to a General Obligor and each Approved Project, an agreement entered into by and between the Lender, the General Obligor and the respective Project SPE, wherein any bank accounts held by the General Obligor and the respective Project SPE shall be treated as Collateral and subject to a lien and in favor of the Lender in order to guaranty and secure the Borrower's obligations hereunder.
 
"Additional Investors" means third Person investors which contribute capital to one or more of the Portfolio Companies which is in turn contributed to the Project SPEs to fund one or more Approved Projects.
 
"Additional Obligor" means (i) each Term Loan Obligor, (ii) each General Obligor, and
(iii) each other affiliate of Borrower that may become an "Term Loan Obligor" or a "General Obligor from time to time pursuant to Section 9.2 via execution and delivery of a Joinder Agreement.
 
"Additional Project Document" means, with respect to each Project, any contract, agreement or other arrangement entered into by any Loan Party after the Drawdown Date of the first Revolving Loan relating to such Project that (a) constitutes a Primary Revenue Agreement,
(b) constitutes an Interconnection Agreement, (c) constitutes a Maintenance Services Agreement,
(d) replaces or substitutes for an existing Material Project Document or any further replacement or substitution thereof, (e) constitutes an Applicable Permit, or (f) involves the payment of receipt by the applicable Loan Party of more than $10,000 annually or an amount equal to five percent (5%) or more of the applicable Construction Budget or Operating Budget for such Approved Project, as applicable.
 
"Affiliate" means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with, the Person specified and shall include another Person who Controls ten percent (10%) or more (on a fully diluted basis) of the voting securities or other equity interest of the Person specified.
 
"Agreement" means this Credit Agreement, as amended, restated, supplemented, or otherwise modified and in effect from time to time.
 
"Applicable Permit" means, with respect to each Project, any Permit, including any zoning, environmental protection, pollution, sanitation, regulatory, safety, siting or building Permit that is material and necessary at any given time in light of the development, construction, ownership or operation of such Project to develop, construct, operate, maintain, repair, own or use such Project as contemplated by the Material Project Documents for such Project, to sell electricity, capacity, ancillary services or environmental credits or benefits therefrom, or to enter into any Material Project Document or to consummate any transaction contemplated thereby.
 
"Applicable Rate" means the rate of interest with respect to any Loan pursuant to Section 2.1(a) or 2.1(b), as applicable.
 
"Approved Project" means any Project owned by a Project SPE for which, pursuant to Section 2.1(a)(i), Borrower has provided Lender a Project Approval Package (in the form of

Exhibit A: Project Approval Package) and which Lender has approved (in the form of Exhibit B: Lender Approval Form), a list of which shall be maintained by Lender, and updated from time to time by Lender, in Schedule 1: List of Approved Projects. For the avoidance of doubt, Borrower shall not have the authority to revise Schedule 1: List of Approved Projects.
 
"Assignment Notifications" means, with respect to a General Obligor and each Approved Project, a notification to be sent by the General Obligor and the respective Project SPE to each counterparty to a Material Project Document informing such counterparty about the fiduciary assignment of certain credit rights held by the General Obligor and the Project SPEs against such counterparties to the Material Project Document, which shall be treated as Collateral and subject to a lien granted in favor of the Lender in order to guarantee and secure the Borrower's obligations hereunder.
 
"Availability Period" means, with respect to the Loans, the period from and including the Closing Date to the Revolving Loan Maturity Date.
 
"Borrower" has the meaning specified in the introductory paragraph hereto.
 
"Borrower Account" means the bank account of Borrower with Citizen's Bank with account number 2231933734 .
 
"Business Day" means any day other than a Saturday, Sunday, or other day on which banks in the State of Delaware are required or authorized by law to be closed.
 
"Closing Date" has the meaning specified in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral" means (i) all the "Collateral", "Collateral Accounts" and "Property" as
defined in any Security Document, (ii) all other property described as collateral in Schedule 7.1,
and (iii) all other property now or hereafter subject to the Liens granted in the Security Documents.
 
"Commitments" means the Revolving Loan Commitment and the Term Loan Commitment.
 
"Contaminant" means any pollutants, hazardous or toxic substances or wastes or contaminated materials which are subject to regulation under, or the Release of which or exposure to which is prohibited, limited or regulated under, any Environmental Law.
 
"Control" means the possession, directly or indirectly, of the legal power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise, and the terms "Controlling" and "Controlled" shall have the meanings correlative thereto.
 
"Construction Budget" means that term as defined in Section 3.2(d).

"Conversion Option" means that term as defined in Section 2.1(b)(ii).
 
"Current P2 Asset" means the projects of Borrower and its Subsidiaries, including Approved Projects, listed on Schedule 6.4.
 
"Debt" of any Person, means, without duplication: (a) all indebtedness or liability of such Person for borrowed money, or with respect to deposits or advances of any kind; (b) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments; (c) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person; (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services (including trade obligations and accrued obligations incurred in the ordinary course of business); (e) all indebtedness or liability of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; (f) all obligations of such Person under capital leases; (g) all obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements or other interest or exchange rate hedging arrangements; (h) current liabilities of such Person in respect of any Plan; (i) obligations of such Person under letters of credit, bankers acceptances or comparable arrangements; (j) all obligations of such Person under guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations of such Person to purchase, to provide funds for payment, to supply funds to invest in any Person, or otherwise to assure a creditor against loss; and (k) all other indebtedness of such Person that in accordance with GAAP is classified as liabilities upon the balance sheet of such Person or to which reference is made by footnotes thereto. The Debt of any Person (x) shall include the Debt of any partnership in which such Person is a general partner, and (y) in the case of any limited recourse liability, shall not exceed the amount of such recourse.
 
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
 
"Default" means an event or condition the occurrence or existence of which, with the lapse of time or the giving of a required notice, or both, would constitute an Event of Default.
 
"Default Rate" means the Applicable Rate plus one percent (1%)five percent (5%); provided in no event shall the Default Rate exceed the maximum lawful rate which may be contracted for, charged, taken, received or reserved by the Lender in accordance with applicable law.
 
"Designated Jurisdiction" means any country or territory to the extent that such country or territory is the subject of any Sanction.
 
"Dollar" and the sign "$" means lawful money of the United States of America.

"Drawdown Date" means the date (which must be a Business Day) on which any Loan is
made.
 
"DS Account" means a bank account maintained at Brookline Bank which is subject to an account control agreement in favor of Lender and which shall be funded at all times in accordance with Section 5.16(b).
 
"Energea Brasil" means Energea Geração Distribuída de Energia do Brasil S.A.
 
"Energea Global" means Energea Global LLC, a Delaware limited liability company with its principal place of business located at 9 Cedar Lane, Old Saybrook, CT 06475.
 
"Environment" means ambient air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, the workplace or as otherwise defined in any Environmental Law.
 
"Environmental Claim" means any accusation, allegation, notice of violation, claim, demand, order, directive, cost recovery action or other cause of action by, or on behalf of, the
U.S. Environmental Protection Agency, any other Governmental Authority or any other Person, for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), remedial action costs, tangible or intangible property damage, natural resource damages, nuisance, pollution, any adverse effect on the Environment caused by any Contaminant, or for fines, penalties or restrictions, resulting from or based upon (a) the existence, or the continuance of the existence, of a Release (including sudden or non-sudden, accidental or non-accidental Releases), (b) exposure to any Contaminant, (c) the presence, use, handling, transportation, storage, treatment, or disposal of any Contaminant, or (d) the violation or alleged violation of any Environmental Law.
 
"Environmental Law" means any and all applicable present and future treaties, laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the Environment, preservation or reclamation of natural resources, the management, use, treatment, storage, disposal, transportation, transfer, generation, processing, production, refining, control, handling, Release or threatened Release of any Contaminant or to health and safety matters; all laws, rules and regulations governing underground or above-ground storage tanks, conditioning transfer of property upon a form of negative declaration or other approval of a Governmental Authority of the environmental condition of a property or requiring the disclosure of conditions relating to Contaminants in connection with transfer of title to or interest in property; conditions or requirements imposed in connection with any Applicable Permits; government orders and demands and judicial orders pursuant to any of the foregoing; any and all other laws, rules and regulations of any Governmental Authority relating to the protection of human health or the Environment from Contaminants; and all amendments or regulations promulgated under any of the foregoing.

"EPC Contract" means, with respect to each Approved Project, the engineering, procurement and construction agreement for the Facility or any other agreement for the supply of equipment or construction services.
 
"EPC Contractor" means, with respect to each Approved Project, a third party contracted to act as the contractor for such Approved Project pursuant to any EPC Contract.
 
"Equity Interests" means, for any Person, any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interests in (however designated) equity of such Person, including any preferred equity interests, any limited or general partnership interest and any limited liability company membership interest.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, the regulations and published official interpretations thereunder and judicial interpretations thereof.
 
"ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
 
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization;
(d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 404 lA of ERISA, (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA, or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.
 
"Event of Default" means any of the events specified in Section 8.1.
 
"Facility" means a PV System or other renewable energy generation technology approved by Lender.
 
"Fiscal Year" means the fiscal year of Borrower ending on December 31 of each calendar year. For purposes of this Agreement, any particular Fiscal Year shall be designated by reference to the calendar year in which such Fiscal Year ends.

"General Obligor" means (i) Energea Brasil, and (ii) each other affiliate of Borrower that may become an "General Obligor" from time to time pursuant to Section 9.2 via execution and delivery of a Joinder Agreement.
 
"Governmental Authority" means any federal, state, provincial, municipal, foreign or other governmental department, agency, commission, board, bureau, court, tribunal, instrumentality, political subdivision, or other entity (including any zoning authority, FERC, the Federal Deposit Insurance Corporation, any state public utilities commission or other agency regulating public utilities or electric utilities, any applicable independent system operator, the Comptroller of the Currency or the Federal Reserve Board, any central bank or any comparable authority) or officer exercising executive, legislative, judicial, regulatory or administrative functions for or pertaining to any government or court, in each case whether associated with the United States, a state, district or territory thereof, or a foreign entity or government.
 
"Increase Option" means that term as defined in Section 2.1(a)(v). "Indemnitee" means that term as defined in Section 10.5(c).
"Initial Amount" means an amount equal to $2,500,000.
 
"Initial COD" means the date the first Approved Project completes construction and achieves commercial operations, substantial completion or its equivalent.
 
"Interconnection Agreement" means, with respect to each Approved Project, the agreement relating to interconnection of such Approved Project with the relevant electric utility, that does not materially diverge for the form approved by the appropriate Governmental Authorities of the state or country in which such Approved Project is located.
 
"Joinder Agreement" shall mean a joinder agreement in the form of Exhibit D.
 
"Key Project Participant" means each Offtaker, EPC Contractor, Maintenance Services Provider, and each Person providing the Project Warranties; provided, however, that any Person shall cease to be a Key Project Participant when all material obligations of such Person under all Material Project Documents to which it is a party have been indefeasibly performed and paid in full.
 
"Knowledge" means, with respect to Borrower, the actual knowledge after due inquiry of any officer, director or manager of the Loan Parties or any Person that may succeed the foregoing Persons in their respective capacities, provided that in each case such due inquiry shall not require any inquiry to be made of any Person that is not an Affiliate of Borrower.
 
"Laws" means, collectively, all Federal, state and local statutes, ordinances, by-laws, codes, rules, rulings, regulations, restrictions, orders, judgments, decrees, writs, judicial or administrative interpretations and injunctions (including without limitation, all applicable building, environmental, zoning and other land use statutes, ordinances, by-laws, codes, rules and regulations and all requirements under an Applicable Permit), whether now or hereafter enacted, promulgated or issued by any Governmental Authority affecting Borrower, any Approved Project

or the ownership, construction, development, maintenance, management, repair, use, possession or operation thereof.
 
"Lender" means Lattice Energea Global Revolver I, LLC, or any successors or assigns thereof.
 
"Lender's Bank Account" means account no. 613813309 held at JPMorgan Chase Bank,
N.A.
 
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, whether based on common law, statute, or contract, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset, and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
 
"Loans" collectively means the Revolving Loan and the Term Loans.
 
"Loan Amount" means the amount drawn from the Commitment according to any particular Loan.
 
"Loan Documents" means all now existing or hereafter arising instruments, loan agreements and any other agreements and documents governing, evidencing, guarantying, securing or otherwise relating to any or all of the Obligations, together with all amendments, modifications, renewals or extensions thereof, including without limitation, this Agreement, the Revolving Loan Note, the Term Loan Note, the Security Documents, a Joinder Agreement if and when required pursuant to Section 9.2, all other promissory notes, guaranties, mortgages, security documents, deeds to secure debt, deeds of trust, pledges, assignments, contracts, negative pledges, powers of attorney, landlord waivers, trust account agreements, and written matters, whenever executed and delivered to Lender, with respect to the transactions contemplated by this Agreement.
 
"Loan Parties" or "Loan Party" shall mean Borrower, the Portfolio Companies and the Project SPEs.
 
"Loan Statement" means the monthly bulletin Lender shall send to Borrower according to Section 2.1(a)(vi) and Section 2.2(b)(iv).
 
"Loss Proceeds" means all amounts and proceeds (including instruments) in respect of the proceeds of any casualty insurance policy maintained by any Loan Party received in respect of any single event or related series of events with respect to all or any portion of the Collateral and in respect of the proceeds of any condemnation of all or any portion of the Collateral.
 
"Make-Whole Premium" means an amount equal to (a) in the case of the prepayment of a Revolving Loan, the sum of the amount of interest that would have been payable on such Revolving Loan if such Loan was repaid on the Revolving Loan Maturity Date plus amount of interest that would have been payable on such Revolving Loan if such Loan was converted to a

Term Loan and repaid on the 5th anniversary of applicable conversion date, and (b) in the case of the prepayment of a Term Loan, the amount of interest that would have been payable on such Term Loan if such Loan was repaid on the 5th anniversary of applicable conversion date.
 
"Maintenance Services Agreement" means, with respect to each Approved Project, a maintenance services agreement that the Project SPE has or intends to execute with a Maintenance Services Provider defining the terms and conditions under which the Maintenance Service Provider has agreed to provide maintenance services for such Approved Project.
 
"Maintenance Services Provider" means the third party contracted by Borrower, in its capacity as Manager, under each Maintenance Services Agreement.
 
"Material Adverse Effect" means (a) a material adverse effect on the business, condition (financial or otherwise), operations or properties of Borrower, including, but not limited to, as a result of any change in the energy credit provided for under Section 48 of the Code or any other federal tax credit laws, (b) a material adverse change in the ability of any Key Project Participant to perform its respective material obligations under the Material Project Documents to which it is a party and the result of such inability could reasonably be expected to result in a Material Adverse Effect pursuant to the other clauses hereof, (c) material impairment of the validity or enforceability of this Agreement or any of the other Loan Documents, (d) material impairment of the ability of Lender to enforce any of the rights and remedies of Lender hereunder or under any other Loan Document, (e) material impairment of the ability of Borrower to perform its obligations under any Loan Document to which it is a party, and (f) material impairment of the value of the Collateral, taken as a whole.
 
"Material Project Documents" means, with respect to each Project, collectively, (a) the Primary Revenue Contract, (b) each EPC Contract, (c) each Project Warranty, and (d) each Additional Project Document, including, but not limited to, each Interconnection Agreement and each Maintenance Services Agreement, and Applicable Permits, site leases and easements or other real property rights in each case relating to such Project.
 
"Maximum Amount" means an amount equal to $5,000,000. "Note" means any Revolving Loan Note and any Term Loan Note.
"Notice of Borrowing" means that term as defined in Section 2.1(a)(iii).
 
"Obligations" means all loans, advances, interest, fees (including interest and fees accruing during the pendency of any proceeding under any Debtor Relief Laws naming Borrower as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding bankruptcy), Debt, liabilities, obligations, guaranties, indemnities, covenants and duties at any time owing by Borrower to Lender or any Affiliate of Lender, of every kind and description, whether or not evidenced by any note or other instrument, whether or not for the payment of money, whether direct or indirect, primary or secondary, absolute or contingent, due or to become due, now existing or hereafter arising, including, but not limited to, the Obligations arising under the each Note, cash management agreements, or any of the other Loan Documents, and all reasonable costs, expenses, fees and charges (including, but not limited to, reasonable

attorneys' fees) incurred in connection with any of the foregoing, or in any way involving or relating to the preservation, enforcement, protection or defense of, or realization under this Agreement, any Note, any cash management agreement or any other Loan Document, any related agreement, document or instrument, and the rights and remedies hereunder or thereunder, the Notes and/or any of the other Loan Documents.
 
"Obligor Actual Net Cash Flow" means, for any period, all revenues received by the Term Loan Obligors and their respective Subsidiaries during such period, less any amounts (without duplication) paid (and other amounts required to be paid that are not the subject of a good faith dispute) for operating and administrative expenses during such period by or on behalf of Term Loan Obligors, including taxes.
 
"Obligor Debt Service" means, for any period, the sum of all scheduled interest, scheduled principal, premiums (if any) and scheduled fees paid or payable during such period in respect of all Debt of the Term Loan Obligors and their respective Subsidiaries, including without limitation the Obligations and debt service for any Debt permitted pursuant to Section 6.2(d).
 
"Obligor Debt Service Coverage Ratio" means, as of any date following the Closing Date, for any trailing twelve (12) month period ending on such date, the ratio of (x) Obligor Actual Net Cash Flow to (y) all Obligor Debt Service paid (or scheduled to be paid) during such twelve (12) month period.
 
"OFAC" means the Office of Foreign Assets Control of the United States Department of the Treasury.
 
"Offtaker" means, with respect to each Approved Project, a third party contracted to act as the offtaker or purchaser of energy and related products for such Approved Project pursuant to any Primary Revenue Contract.
 
"Operating Budget" means that term as defined in Section 3.3(d). "Overrun Event" means that term as defined in Section 3.2(e).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
 
"Pension Act" means the Pension Protection Act of 2006.
 
"Pension Funding Rules" means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
 
"Pension Plan" means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to Borrower and any ERISA

Affiliate and is either covered by Title lV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
 
"Permit" means any and all franchises, licenses, permits, clearances, determinations, notifications, certifications, registrations, authorizations, exemptions, qualifications, rights of way, and other rights, privileges and approvals required to be obtained from a Governmental Authority under any Law (including any Environmental Law).
 
"Permit Event" means, with respect to each Approved Project, an Applicable Permit is either not obtained as and when required to construct or operate the Project or is canceled or revoked at any time.
 
"Permitted Accounts" means any deposit or securities account of a Project SPE which is subject to an Account Agreement as contemplated herein. For the avoidance of doubt, any deposit or securities account of a Project SPE that is not subject to an Account Agreement shall be deemed not to qualify as a Permitted Account.
 
"Permitted Liens" means that term as defined in Section 6.1(c).
 
"Permitted Revolver Prepayment" has the meaning given to such term in Section 2.1(a)(ix).
 
"Person" means any natural person, sole proprietorship, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, organization, joint venture, institution, Governmental Authority, or other entity of any nature whatsoever.
 
"Plan" means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of Borrower or any ERISA Affiliate or any such Plan to which Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.
 
"Pledged Entities" means the Portfolio Companies (excluding the Borrower and Equity Interests issued to the Additional Investors) and the Project SPEs.
 
"Portfolio 2" means Energea Portfolio 2 LLC.
 
"Portfolio Companies" means (a) Portfolio 2, a Delaware limited liability company formed in Delaware for the exclusive purpose of owning the Project SPEsBorrower and (b) each other affiliate of Borrower that may become a "Term Loan Obligor" from time to time pursuant to Section 9.2 via execution and delivery of a Joinder Agreement.
 
"Primary Revenue Agreement" means, with respect to each Approved Project, a solar power and services agreement or its equivalent executed by the Project SPE and Offtaker, and such Offtaker agrees to purchase electricity from such Project SPE.

"Project" means any power generation project which qualifies as an Approved Project pursuant to Section 2.1(a)(i).
 
"Project Actual Net Cash Flow" means, for any period, all Project Revenues received by the Project SPEs during such period, less any amounts (without duplication) paid (and other amounts required to be paid that are not the subject of a good faith dispute) during such period by or on behalf of the Project SPEs in accordance with the applicable Operating Budget(s) for each Approved Project, including taxes.
 
"Project Assets" means, as to each Approved Project, the Facility, the Material Project Documents and the Applicable Permits for such Project and all other assets owned by the Project SPE.
 
"Project Commitment" means an amount equal to the portion of the Revolving Loan Commitment that is approved for a specific Approved Project as reflected in the Lender Approval Form for such Approved Project.
 
"Project Debt Service" means, for any period, the sum of all scheduled interest, scheduled principal, premiums (if any) and scheduled fees paid or payable during such period in respect of all Debt of the Portfolio Companies and the Project SPEs, including without limitation the Obligations and debt service for any Debt permitted pursuant to Section 6.2(d).
 
"Project Debt Service Coverage Ratio" means, as determined on the last Business Day of the second full calendar quarter following the Initial COD and each calendar quarter thereafter, for any trailing twelve (12) month period ending on such date, the ratio of (x) Project Actual Net Cash Flow to (y) all Project Debt Service paid (or scheduled to be paid) during such twelve (12) month period.
 
"Project Revenues" means, for any period, all revenues, payments, and cash receipts arising from the business or operations of any Project SPE during such period.
 
"Project SPE" means each subsidiary of the Portfolio Companies which is constructing or owns and operates an Approved Project.
 
"Project Warranties" means the warranties from the EPC Contractor and each manufacturer with respect to panels, inverters, and racking systems.
 
"Property" means each real property owned, leased or occupied by Borrower.
 
"Prudent Industry Practices" means those practices, methods, equipment, specifications and standards of safety and performance, as the same may be changed from time to time, as are generally used in the start-up, commissioning, operation and maintenance of privately owned distributed generation facilities located in the same region as a given Approved Project of comparable size, which, at a particular time, in the exercise of reasonable judgment and in light of the facts known at the time the decision was made, are considered good, safe and prudent practice.

"PUHCA" means the Public Utility Holding Company Act of 2005 and all implementing rules of FERC.
 
"PV System" means a distributed generation photovoltaic solar generating system, including, but not limited to, the photovoltaic panels, racks, wiring and other electrical devices, conduit, weatherproof housings, hardware, inverter(s), remote monitoring system, connectors, disconnect, and overcurrent devices included in such photovoltaic system.
 
"REC" means any credits, credit certificates, green tags, allowances, offsets, entitlements or similar environmental or green energy attributes (such as those for greenhouse reduction or the generation of green power or renewable energy) created by a Governmental Authority or independent certification board or group generally recognized in the electric power generation industry, and generated by or associated with a Project or electricity produced therefrom, but excluding the energy credit provided for under Section 48 of the Code.
 
"REC Agreement" means, with respect to an Approved Project, any agreement relating to the sale of RECs from such Approved Project between the purchaser of RECs from such Approved Project and the applicable Project SPE.
 
"Related Parties" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person's Affiliates.
 
"Release" means any spilling, leaking, migrating, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Contaminant in, into, onto or through the Environment.
 
"Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.
 
"Responsible Officer" means, as to any Person, its president, chief executive officer, chief financial officer, treasurer or secretary (or assistant secretary), any of its vice presidents, or any managing general partner or managing member of such Person that is a natural person (or any of the preceding with regard to any managing general partner or managing member of such Person that is not a natural person).
 
"Restricted Payment" means, as to any Person, (a) any dividend or other distribution by such Person (whether in cash, securities or other property) with respect to any equity interest of such Person, (b) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of such equity interest or on account of any return of capital to any holder of any such Person's equity interests, (c) the acquisition for value by such Person of any equity interests issued by such Person or any other Person that Controls such Person, (d) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of equity interests Borrower or any Subsidiary, now or

hereafter outstanding, and (e) with respect to the foregoing clauses (a) through (d) of this definition, any transaction that has a substantially similar effect.
 
"Revolving Loan" means that term as defined in Section 2.1(a)(ii).
 
"Revolving Loan Commitment" means Lender's commitment to advance Revolving Loans to Borrower pursuant to Section 2.1(a) in an aggregate principal amount not to exceed at any time outstanding the Initial Amount; provided that such amount shall be increased to the Maximum Amount upon Lender's approval of the Increase Option in its sole discretion as provided in Section 2.1(a)(i).
"Revolving Loan Disbursement" means that term as defined in Section 2.1(a)(iii). "Revolving Loan Maturity Date" means the earlier of (i) September 30, 2023, and (ii) any
earlier date on which all monetary Obligations shall become due and payable in full hereunder,
whether by acceleration or otherwise.
 
"Revolving Loan Note" means the Revolving Loan Note of Borrower dated the date of this Agreement and payable to the order of Lender in substantially the form of Exhibit G, evidencing the Obligations arising from the Revolving Loans, and any and all substitutions and replacements thereof, all as the same may be amended and/or modified from time to time by Lender.
 
"Sale Proceeds" means all amounts and proceeds (including instruments) in respect of the proceeds of any sale of any Collateral by any Loan Party received in respect of any single transaction or related series of transactions with respect to all or any portion of the Collateral except sales of energy, capacity and related products by the Project SPEs in the ordinary course.
 
"Sanction(s)" means any sanction administered or enforced by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty's Treasury or any other Governmental Authority.
 
"Security Agreement" means each security agreement, security and pledge agreement or other agreement or instrument now or hereafter executed by a Loan Party or any other Person granting Lender a security interest in any Collateral to secure any of the Obligations, including as set forth in Schedule 7.1.
 
"Security Documents" means each Account Agreement, the account control agreements governing the VH Account and the DS Account, each Assignment Notification, the Security Agreements, and all other Loan Documents, contracts, assignments, instruments and the like now or hereafter securing (or given with the intent to secure) all or a portion of the Obligations, including as described in Schedule 7.1.
 
"Senior Debt" means the Loan and Security Agreement, dated January 10, 2019, by and between Borrower and the Senior Lender.
 
"Senior Lender" means Enhanced Capital Connecticut Fund V, LLC.

"Solvent" means, with respect to any Person, that as of the date of determination, (a) the sum of such Person's debt (including contingent liabilities) does not exceed the present fair saleable value of such Person's present assets; (b) such Person's capital is not unreasonably small in relation to its business as contemplated on such date of determination; (c) such Person has not incurred and does not intend to incur, or believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (d) such Person is "solvent" within the meaning given that term and similar terms under the Bankruptcy Code and applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition,
(i) the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5), (ii) "debt" means liability on a "claim," and (iii) "claim" means (A) any right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or
(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
 
"Subsidiary" means, with respect to any Person, a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Equity Interests having ordinary voting power for the election of directors or other governing body are at the time beneficially owned, or the management of which is otherwise Controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. In the case of Borrower, each Portfolio Company and each Project SPE shall constitute a Subsidiary.
 
"Term Loan" means that term as defined in Section 2.1(b)(i).
 
"Term Loan Commitment" means Lender's commitment to advance the Term Loan to Borrower pursuant to Section 2.1(b) in an aggregate principal amount not to exceed at any time outstanding $5,000,000; provided that the Term Loan Commitment shall be $0.00 unless and until Lender's decision to utilize the Conversion Option in its sole discretion as provided in Section 2.1(b)(ii).
 
"Term Loan Maturity Date" means the earlier of (a) the tenth (10th) anniversary of the date of the advancement of the Term Loan, and (b) the date on which all monetary Obligations shall become due and payable in full hereunder, whether by acceleration or otherwise.
 
"Term Loan Note" means the Term Loan Note of Borrower dated the date of this Agreement and payable to the order of Lender in substantially the form of Exhibit G, evidencing the Obligations arising from the Term Loans, and any and all substitutions and replacements thereof, all as the same may be amended and/or modified by Lender from time to time.
 
"Term Loan Obligor" means (i) Portfolio 2, and (iii) each other affiliate of Borrower that may become an "Term Loan Obligor" from time to time pursuant to Section 9.2 via execution and delivery of a Joinder Agreement.

"VH Account" means a bank account maintained at Brookline Bank which is subject to an account control agreement in favor of Lender and which shall be funded with all of Energea Global's (direct or indirect) proceeds from any sale of any projects owned (directly or indirectly) by Victory Hill Joint Venture.
 
"Victory Hill" means VH GSEO UK Holdings Limited, a limited liability company established under the laws of England and Wales.
 
"Victory Hill Joint Venture" means Victory Hill Distributed Energy Investments Limited, a limited liability company established under the laws of England and Wales.
 
"Victory Hill JV Agreements" means (i) that certain Subscription and Shareholders' Agreement dated May 21, 2021 by and among Energea Global, Victory Hill and Victory Hill Joint Venture, and (ii) all other documents and agreements entered into by Energea Global relating to or contemplated by the foregoing.
 
Section 1.2 Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including the Loan Documents) shall be construed as referring to such agreement, instrument or other document as from time to time amended, modified, extended, restated, replaced or supplemented from time to time (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, (iii) the words "hereto," "herein," "hereof' and "hereunder," and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory rules, regulations, orders and provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified, extended, restated, replaced or supplemented from time to time, (vi) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and (vii) all terms of an accounting or financial nature be construed, and all computations or classifications of assets and liabilities and of income and expenses shall be made or determined in accordance with, GAAP. Any and all references to "Borrower" regardless of whether preceded by the term a, any, each of, all, and/or, or any other similar term shall be deemed to refer, as the context requires, to each and every (and/or any one or all) parties constituting Borrower, individually and/or in the aggregate.

Section 1.3 Computation of Time Periods. In this Agreement, in the computation of
periods of time from a specified date to a later specified date, the word "from" shall mean "from and including" and the words "to" and "until" each mean "to but excluding".
 
Section 1.4 Conflicting Terms. It being the express intention and agreement of
Borrower and Lender that the provisions of this Agreement shall control and govern the Obligations, in the event and to the extent that any term or provision of this Agreement conflicts with a similar term or provision contained in another Loan Document, the term or provision of this Agreement shall govern and control.
 
Article IIARTICLE II AMOUNT AND TERMS OF THE CREDIT
FACILITIES
 
Section 2.1 The Credit Facilities.
 
(a)                        The Revolving Loans.
 
(i)                          Approval of Projects. In order to draw any Revolving Loan
in connection with any Project, Borrower shall have (i) submitted to Lender a Project Approval Package with respect to such Project in the form of Exhibit A: Project Approval Package at least ten (10) Business Days prior to the requested Drawdown Date, and (ii) received an approval from Lender for such Project in the form of Exhibit B: Lender Approval Form indicating that such Project qualifies as an Approved Project. Lender shall maintain a list of Approved Projects in the form of Schedule 1: List of Approved Projects. Each document attached to the Project Approval Package shall be in form and substance acceptable to Lender. Lender shall be entitled to request change to the Project Approval Package in which case Borrower may elect to adopt such changes and re-submit the Project Approval Package for approval by Lender in accordance with the foregoing.
 
(ii)                       Revolving Loan Commitment. Subject to the terms and
conditions contained in this Agreement, including the satisfaction of the conditions precedent set forth in Section 3.2 and the approval of Lender as set forth in Section 2.1(a)(i), Lender agrees to make revolving loans (each, a "Revolving Loan") to Borrower, from time to time, on any Business Day during the Availability Period, which, in the aggregate, shall not exceed the Revolving Loan Commitment (as adjusted as contemplated herein). The Borrower may request Revolving Loans under Section 2.1(a)(iii). The Revolving Loans shall be denominated in Dollars.
 
(iii)                    Procedure for Revolving Loans.
 
(1)                      Borrower shall be entitled to draw (x) one
Revolving Loan for corporate purpose in the amount of $200,000, and (y) for each Project which qualifies as an Approved Project in accordance with Section 2.1(a)(i), up to three Revolving Loans in the maximum aggregate amount of the applicable Project Commitment subject to the satisfaction of the conditions precedent set forth in Section 3.2 ((x) and (y) collectively, the

"Revolving Loan Disbursements"). All Revolving Loan Disbursements shall be an amount no less than $200,000.
 
(2)                      Requests for Revolving Loans may be made only
once per Business Day, and shall be made on written notice, given by Borrower to Lender at least five (5) Business Days prior to the proposed Drawdown Date. Borrower shall make no more than three (3) requests for Revolving Loans as to any Approved Project. Each such notice (which notice shall be irrevocable and binding on Borrower) of a proposed borrowing shall be substantially in the form of Exhibit C: Form Notice of Borrowing (each, a "Notice of Borrowing"), specifying the proposed Drawdown Date and the amount to be borrowed. Subject to the fulfillment of the applicable conditions precedent set forth in Section 3.2, Lender will, on the Drawdown Date, make the requested Revolving Loan in immediately available funds by crediting the amount thereof to the Borrower Account.
 
(iv)                     Interest Rate. Subject to the provisions of Section 2.1(d)
hereof, during the period from the date advanced through and including the date of payment in full, each Revolving Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to fifteen percent (15%).
 
(v)                       Increase of Commitment. Prior to the Revolving Loan
Maturity Date, in response to a request from Borrower, Lender may agree, in its sole discretion, to increase the Revolving Loan Commitment from the Initial Amount up to the Maximum Amount ("Increase Option") in the form of Exhibit B: Lender Approval Form.
 
(vi)                     Revolving Loan Note. The Revolving Loans shall be
evidenced by, and repaid with interest in accordance with, the Revolving Loan Note. Borrower hereby authorizes Lender to record on the Revolving Loan Note or in its internal computerized records (i) the amount of each Revolving Loan made hereunder, and (ii) the amount of any principal or interest received by Lender on account of the Revolving Loans; provided, however, that the failure of Lender to make any such recordation or any error therein shall not in any manner limit or otherwise affect the obligations of Borrower under this Agreement or the Revolving Loan Note, including without limitation, Borrower's obligation to repay Revolving Loans in accordance with their terms. Upon request by Borrower, Lender will issue a Loan Statement to Borrower reflecting all outstanding principal and interest no more frequently than once per month.
 
(vii)                  Use of Proceeds. The proceeds of each Revolving Loan
shall be used solely to finance Borrower's purchase, development and construction of the Approved Project identified in the Notice of Borrowing for such Revolving Loan; provided, that an amount equal to $200,000 from the first draw on the Revolving Loans may be used by Borrower as working capital for general corporate purposes.
 
(viii)               Payment of Interest. Principal and interest payments on the
Revolving Loans shall be made according to the below:
 
(1)                      Interest on each Revolving Loan shall be payable
quarterly in advance beginning on the first Business Day of the quarter beginning with the first full

calendar quarter following the advancement of the Revolving Loan and each and every quarter thereafter, without notice or demand, so long as any such Revolving Loan remains outstanding. Notwithstanding the foregoing, at Borrower's option upon notice to Lender, up to fifty percent (50%) of the interest accrued on all Revolving Loans as of each calendar quarter can be deferred until the Revolving Loan Maturity Date, provided that such deferred interest shall be treated as the principal amount of a Revolving Loan from the date of deferment and interest shall accrue on such deferred amount in accordance with the terms hereof applicable to Revolving Loans.
 
(2)                      In addition, interest accrued on each Revolving
Loan shall be payable, without duplication: (i) on the Revolving Loan Maturity Date unless such Loan is converted and made part of the Term Loan; and (ii) on the date of any payment or prepayment, in whole or in part, of principal outstanding on any Revolving Loan, on the principal amount so paid or prepaid. Interest accrued on any Loans or other monetary Obligations after the date such amount is due and payable (whether on the applicable maturity date, upon acceleration or otherwise) shall be payable upon demand.
 
(ix)                     Repayments and Prepayments of Revolver Loans.
 
(1)                      Borrower may prepay or repay outstanding
Revolving Loans with respect to any Approved Project if and only if Borrower has first received a prior Lender Approval Form approving a new Project Approval Package in accordance with clauses (iv)(1) and (iv)(2) above in respect of a replacement Project with a Project Commitment in an amount equal to the proposed prepayment or repayment amount and concurrently submits the first Notice of Borrowing with respect to such replacement Project (a "Permitted Revolver Prepayment"). A Permitted Revolver Prepayment may be made on any Business Day during the Availability Period. All such voluntary prepayments or repayments shall require at least three (3) Business Days' prior written notice to Lender. Any prepayment or repayment of Revolving Loans other than a Permitted Revolver Prepayment prior to the Revolving Loan Maturity Date shall be subject to the concurrent payment of the Make-Whole Premium. Following a Permitted Revolver Prepayment, Borrower may reborrow Revolving Loans with respect to the replacement Approved Project subject to the requirements and conditions set forth herein.
 
(2)                      Borrower shall prepay the Revolving Loans with any
Sales Proceeds no later than the date ten (10) Business Days following receipt. Such a prepayment shall not qualify as a Permitted Revolver Prepayment so shall be subject to the concurrent payment of the Make-Whole Premium.
 
(3)                      Borrower shall prepay the Revolving Loans with any
Loss Proceeds no later than the date ten (10) Business Days following receipt; provided that Borrower may request and Lender may approve, in its sole discretion, the application of some or all of such Loss Proceeds to replacing the damaged or condemned Collateral. Such a prepayment shall qualify as a Permitted Revolver Prepayment.
 
(4)                      If any Permit Event occurs and is continuing,
Borrower shall prepay outstanding Revolving Loans with respect to the applicable Approved

Project within ten (10) Business Days of the occurrence of such event. Such a prepayment shall qualify as a Permitted Revolver Prepayment.
 
(5)                      For the avoidance of doubt, any prepayment or
repayment of any Revolving Loans upon the occurrence of an Event of Default and the exercise of remedies by Lender shall not qualify as a Permitted Revolver Prepayment so shall be subject to the concurrent payment of the Make-Whole Premium.
 
(b)                       The Term Loans.
 
(i)                          Term Loan Commitment. Subject to the terms and
conditions contained in this Agreement, including the satisfaction of the conditions precedent set forth in Section 3.3 and the approval of Lender as set forth in Section 2.1(b)(ii) or (iii) below, as applicable, Lender agrees to make term loans (the "Term Loans") to Borrower on any Business Day during the Availability Period, which, in the aggregate, shall not exceed the Term Loan Commitment. Term Loans shall be denominated in Dollars.
 
(ii)                       Conversion Option. With respect to any Approved Project
approved by Lender under Section 2.1(a)(i) which has completed construction, prior to the Revolving Loan Maturity Date, Borrower may elect to convert the Revolving Loans in respect of such Approved Project into Term Loans ("Conversion Option") provided it meets the Project Debt Service Coverage Ratio and other requirements for Approved Projects. Such Conversion Option shall be executed, and the corresponding Term Loan drawn, in accordance with the procedures set forth in Section 2.1(b)(iv) below.
 
(iii)                    Approval of Projects. In order to draw a Term Loan which
is not subject to the Conversion Option, Borrower shall have (i) submitted to Lender a Project Approval Package with respect to such Project in the form of Exhibit A: Project Approval Package at least twenty (20) Business Days prior to the requested Drawdown Date, and (ii) received an approval from Lender for such Project in the form of Exhibit B: Lender Approval Form indicating that such Project qualifies as an Approved Project. Lender shall maintain a list of Approved Projects in the form of Schedule 1: List of Approved Projects. Each document attached to the Project Approval Package shall be in form and substance acceptable to Lender. Lender shall be entitled to request change to the Project Approval Package in which case Borrower may elect to adopt such changes and re-submit the Project Approval Package for approval by Lender in accordance with the foregoing.
 
(iv)                     Procedures for Term Loans:
 
(1)                      With respect to any Term Loan made available to
Borrower pursuant to Section 2.1(b)(ii), subject to fulfillment of the applicable conditions set forth in Section 3.3, Lender will, on the applicable Drawdown Date, make the requested Term Loan by crediting the amount thereof against the principal amount of the outstanding Revolving Loans for such Approved Project. In the event the applicable conditions precedent in Section 3.3 have not been satisfied, Lender may elect, in its sole discretion, to waive any or all such conditions precedent and advance a Term Loan. Lender shall provide Borrower with notice of any approved Conversion Option at least three (3) Business Days in advance. Borrower may request that

Lender convert one or more Revolving Loans by notice delivered at least three (3) Business Days in advance of the proposed conversion date but such determination shall be made by Lender in its sole discretion.
 
(2)                      With respect to any Term Loan drawn under Section
2.1(b)(ii), for each Project which qualifies as an Approved Project in accordance therewith, Borrower shall be entitled to draw a Term Loan in the maximum aggregate amount of the applicable Project Commitment subject to the satisfaction of the conditions precedent set forth in Section 3.3. Requests for such Term Loans may be made only once per Business Day, and shall be made on written notice, given by Borrower to Lender at least five (5) Business Days prior to the proposed Drawdown Date. Each such notice (which notice shall be irrevocable and binding on Borrower) of a proposed borrowing shall be substantially in the form of Exhibit C: Form Notice of Borrowing, specifying the proposed Drawdown Date and the amount to be borrowed. Subject to the fulfillment of the applicable conditions precedent set forth in Section 3.3, Lender will, on the Drawdown Date, make the requested Term Loans in immediately available funds by crediting the amount thereof to the Borrower Account.
 
(v)                       Interest Rate. Subject to the provisions of Section 2.1(d),
during the period from the date advanced through and including the date of payment in full, each Term Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to thirteen percent (13%).
 
(vi)                     Term Loan Note. The Term Loans shall be evidenced by,
and repaid with interest in accordance with, the Term Loan Note. Borrower hereby authorizes Lender to record on the Term Loan Note or in its internal computerized records (i) the amount of each Term Loan made hereunder, and (ii) the amount of any principal or interest received by Lender on account of the Term Loans; provided, however, that the failure of Lender to make any such recordation or any error therein shall not in any manner limit or otherwise affect the obligations of Borrower under this Agreement or the Term Loan Note, including without limitation, Borrower's obligation to repay Term Loans in accordance with their terms. Upon request by Borrower, Lender will issue a Loan Statement to Borrower reflecting all outstanding principal and interest.
 
(vii)                  Use of Proceeds.
 
(1)                      The proceeds of any Term Loan under Section
2.1(b)(ii) shall be used to repay the Revolving Loans.
 
(2)                      The proceeds of any Term Loan under Section
2.1(b)(iii) shall be used to finance Borrower's purchase of or repayment of any construction loans associated with the Approved Project identified in the Notice of Borrowing for such Term Loan.
 
(viii)               Repayment. Principal and interest payments on the Term
Loan shall be made according to the below:
 
(1)                      Interest on the Term Loan shall be payable quarterly
in advance beginning on the first Business Day of the quarter beginning with the first full calendar

quarter following the advancement of the Term Loan and each and every quarter thereafter, without notice or demand, so long as such Loan remains outstanding.
 
(2)                      In addition, interest accrued on the Term Loan shall
be payable, without duplication: (i) on the Term Loan Maturity Date and (ii) on the date of any payment or prepayment, in whole or in part, of principal outstanding on the Term Loan, on the principal amount so paid or prepaid. Interest accrued on any Loans or other monetary Obligations after the date such amount is due and payable (whether on the applicable maturity date, upon acceleration or otherwise) shall be payable upon demand.
 
(3)                      The principal amount of each Term Loan shall be
payable quarterly in advance beginning on the first Business Day of the quarter beginning with the first full calendar quarter following the advancement of the Term Loan and each and every quarter thereafter, without notice or demand, so long as such Loans remain outstanding in accordance with amortization schedule set forth in Schedule 2.
 

 
forth below:

(ix) 

Prepayment. Borrower may prepay the Term Loan as set

 
(1)                      Borrower may make a voluntary prepayment, in
whole or in part, of the then-outstanding principal amount of the Term Loans; provided, that such voluntary prepayments shall require the contemporaneous payment to Lender as to each Term Loan of (A) the Make-Whole Premium if such prepayment occurs on or before the 5th anniversary of the applicable date of conversion of such Loan, and (B) a fee in the amount of one percent (1%) of the amount prepaid if such prepayment occurs after the 5th anniversary of the applicable date of conversion of such Loan. All such voluntary prepayments shall require at least three (3) Business Days' prior written notice to Lender.
 
(2)                      Upon receipt, Borrower shall prepay the Term
Loans with any Sale Proceeds no later than the date ten (10) Business Days following receipt. Such prepayment shall be subject to the prepayment clause 2.1 (b) (ix) 2 above.
 
(3)                      Upon receipt, Borrower shall prepay the Term
Loans with any Loss Proceeds no later than the date ten (10) Business Days following receipt; provided that Borrower may request and Lender may approve, in its sole discretion, the application of some or all of such Loss Proceeds to replacing the damaged or condemned Collateral.
 
(4)                      For the avoidance of doubt, any prepayment or
repayment of any Term Loans upon the occurrence of an Event of Default and the exercise of remedies by Lender shall be subject to the concurrent payment of the Make-Whole Premium or one percent (1%) of the amount prepaid, as applicable, in accordance with the above.
 

(c) Payments for all Loans.

Method of Payment, Payment Date Adjustments, Application of

(i)                          Method of Payment. Borrower shall make each payment
due under this Agreement, any Note and the other Loan Documents to Lender at Lender's Bank Account, when due, in Dollars in immediately available funds, without setoff, defense or counterclaim and free and clear of, and without any deduction or withholding for, any taxes as contemplated in Section 2.2.
 
(ii)                       Payment Date Adjustments. Whenever any payment of
principal or interest on any Loan shall be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest and fees thereon shall be payable for such extended time.
 
(iii)                    Application of Payments. All payments by or on behalf of
Borrower under this Agreement, any Note or any of the other Loan Documents shall be applied first to the payment of all fees, expenses and other amounts due to Lender (excluding principal and interest), then to accrued interest, and then to the balance on account of outstanding principal; provided, however, that after the occurrence of an Event of Default, payments will be applied to the Obligations in such manner and order of priority as Lender determines in its sole discretion.
 
(d)                       Computation of Interest and Fees, Interest Rate Changes. All
computations of interest for Loans shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).
 
(e)                        Late Payment. If Borrower shall default in the payment of any
principal of or interest on any Term Loan or any related interests or fees, by acceleration or otherwise, until such defaulted amount shall have been paid in full, to the extent permitted by law, the Term Loans shall bear interest at the Default Rate.
 
Section 2.2 Payments Free of Taxes and Other Deductions.
 
(a)                       Any and all payments by Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any and all current and future taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature, and all liabilities with respect thereto, excluding, in the case of Lender, taxes that are imposed on its overall net income by the United States and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state under the Laws of which Lender is organized or of its applicable lending office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or any of the other Loan Documents being hereinafter referred to as "Taxes"). If Borrower is be required by Law to deduct any Taxes from or in respect of any sum payable hereunder or under any of the other Loan Documents,
(a)      the sum payable by Borrower shall be increased as may be necessary so that after Borrower has made all of the required deductions (including deductions applicable to additional sums payable under this Section 2.2) Lender receives an amount equal to the sum

it would have received had no such deductions been made; (b) Borrower shall make all such deductions; and (c) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Law. In addition, Borrower shall pay any present or future stamp, documentary, excise, property, or similar taxes, charges or levies that arise from any payment made hereunder or under any other Loan Document or from the execution, delivery, or registration of, performance under, or as otherwise with respect to, this Agreement or any of the other Loan Documents (hereunder referred to as "Other Taxes"). Borrower will deliver promptly to Lender certificates or other valid vouchers for all Taxes, Other Taxes or other charges deducted from or paid with respect to payments made Borrower hereunder or under such other Loan Documents.
 
(b)                      Borrower will indemnify Lender for the full amount of Taxes and
Other Taxes, and for the full amount of taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.2, imposed on or paid by Lender and any liability (including penalties, interest and expenses (including reasonable attorneys' fees and expenses)) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted by the relevant Governmental Authority. Payment to Lender under this indemnification shall be made within thirty (30) days of written demand from Lender.
 
(c)                       Notwithstanding anything contained herein to the contrary, Lender
represents and warrants that as of the date of this Agreement it is not subject to withholding requirements under the Foreign Account Tax Compliance Act or Section 871(m) of the Code. If at any time Lender is not established or existing as a domestic entity of the United States of America or any political subdivision thereof (or any State thereof) and exempt from withholdings as aforesaid, Lender shall promptly furnish to Borrower any completed and executed forms required under the Code which are required to be filed or confirm or otherwise provide sufficient evidence that Lender is exempt from withholding or deduction from any payment required to be made by Borrower hereunder, under the Notes or any other Loan Documents.
 
(d)                      Obligations Absolute. The Obligations under this Agreement, the
Notes and the other Loan Documents shall (a) be absolute, unconditional and irrevocable,
(b)     be paid strictly in accordance with the terms of this Agreement and such other Loan Document under all circumstances, and (c) not be affected, modified, released, discharged or impaired, in whole or in part under any circumstances, irrespective of, and Borrower hereby irrevocably waives, to the maximum extent permitted by law, any defenses it may now or hereafter have in any way relating to, any or all of the following:
 
(i)                          any lack of validity or enforceability of all or any portion of
this Agreement, any of the other Loan Documents or any other agreement or any instrument relating hereto;
 
(ii)                       the failure to give notice to Borrower (except as otherwise
specifically provided herein) of the occurrence of a Default or an Event of Default;

(iii)                    any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations;
 
(iv)                     the existence of any claim, setoff, defense or other right that
Borrower may have (other than prior payment in full in cash);
 
(v)                        any modification, amendment, rescission, or waiver of, or
consent to departure from, any of the Loan Documents or all or any of the Obligations (except to the extent any such Loan Document or Obligation is so modified or amended);
 
(vi)                     any exchange, release or non-perfection of any collateral
security, or any release of any party primarily or secondarily liable on any of the Obligations, or any amendment or waiver of or consent to departure from any guarantee of all or any of the Obligations; or
 
(vii)                  the dissolution or full or partial discharge of Borrower in
bankruptcy or similar proceeding or otherwise.
 

Section 2.3 the Loans are:

Fees. The only fees that will be charged by Lender or paid by Borrower for

 
(a)                       With respect to the Revolving Loan Commitment, Borrower shall
pay to Lender an origination fee in an amount of $50,000 (the "Loan Fee") due and payable on the Closing Date. The Loan Fee shall be deemed fully earned on the date paid and is nonrefundable for any reason whatsoever.
 
(b)                      For each Revolving Loan, Borrower shall pay an administration fee
equal to 1% of the applicable Loan Amount (the "Administrative Fee") due and payable on the applicable Drawdown Date. The Administrative Fee shall be deemed fully earned on the date paid and is nonrefundable for any reason whatsoever.
 
(c)                        Section 2.4 Acknowledgement. The Loan Parties have participated
jointly in the negotiation and drafting of this Agreement and the other Loan Documents. The Borrower expressly acknowledges that it has had the opportunity to retain and consult with counsel of its choice admitted under the laws of the State of New York and that it has elected not to retain such counsel in connection with the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement and the other Loan Documents 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 provisions of this Agreement or any other Loan Document, the relative bargaining power of the parties or the Borrower's failure to retain counsel admitted under the laws of the State of New York.
 
Article IIIARTICLE III CONDITIONS PRECEDENT

Section 3.1 Conditions Precedent to Effectiveness. The Revolving Loan Commitment
and the Term Loan Commitment shall not be effective until, and Lender shall not be required to fund any Loan until, the date that each of the following conditions has been satisfied as determined by Lender in its sole discretion (unless waived by Lender in its sole discretion) ("Closing Date"):
 
(a)                       This Agreement, the Revolving Loan Note, the Term Loan Note
and each Security Document contemplated in Schedule 7.1 as of the Closing Date and each other Loan Document to which any Loan is a party shall be executed by the Loan Parties and delivered to Lender.
 
(b)                      Lender shall have received each of the following, in form and
substance satisfactory to Lender and its counsel:
 
(i)                          a certificate, dated as of the date of this Agreement, of a
Responsible Officer of each Loan Party certifying (A) that attached copies of such certificate of formation and limited liability company agreement are true and complete, and in full force and effect, without amendment except as shown, (B) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents by such each Loan Party is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this Agreement and the other Loan Documents, and (C) to the title, name and signature of each Person authorized to sign such Loan Documents;
 
(ii)                       a certificate executed by a duly authorized knowledgeable
Responsible Officer of Borrower certifying that (A) no Default or Event of Default exists; (B) the representations and warranties set forth in Article IV are true and correct in all material respects (or, to the extent any such representation or warranty is subject to a materiality qualifier or Material Adverse Effect standard, such representation or warranty is true and correct in all respects); and (C) each Loan Party has complied with all agreements and conditions to be satisfied by it under the Loan Documents as of the Closing Date;
 
(iii)                    Certificates of Good Standing or Legal Existence, as the
case may be, issued by the Secretary of State of the states of organization and qualification of each Loan Party, evidencing that each Loan Party is a limited liability company legally existing in the state of its organization and in each state where it is qualified to do business or its equivalent for any Loan Party organized outside the United State, in form and substance acceptable to Lender;
 
(iv)                     Each document (including any UCC financing statement)
required by the Security Documents or under law or reasonably requested by Lender to be filed, registered or recorded in order to create in favor of Lender a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (subject only to Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the Lien of Lender in such Collateral) shall be in proper form for filing, registration or recordation;

(v)                       Lender shall have received the original executed limited
liability company membership interest certificates representing one hundred percent (100%) of the limited liability company membership interests in the Pledged Entities pledged pursuant to Security Documents, together with an undated transfer power for each such membership interest certificate executed in blank;
 
(vi)                     Lender shall have received evidence that all filing,
recordation, subscription and inscription fees and all recording and other similar fees, and all recording, stamp and other Taxes and other expenses related to such filings, registrations and recordings necessary for and related to the transactions contemplated by this Agreement and the other Loan Document to be consummated on the Closing Date (to the extent the obligation to make such payment then exists) are to be paid in full by or on behalf of Borrower on the Closing Date;
 
(vii)                  Lender shall have received (A) results of searches of UCC
filings in the jurisdiction of incorporation or formation, as applicable, of each Loan Party and each jurisdiction where a filing would need to be made in order to perfect the security interest of Lender in the Collateral and (B) results of tax lien, judgment and bankruptcy searches for each Loan Party in such jurisdictions and, in each case, such results shall reveal no Liens other than Permitted Liens or shall otherwise be satisfactory to Lender in its sole discretion (or the equivalent searches in each case if the jurisdiction of incorporation or formation is outside the U.S.).
 
(viii)               copies of all instruments and agreements governing,
evidencing and/or securing any and all Senior Debt and a written consent by the Senior Lender to the execution and performance by the Loan Parties of the Loan Documents executed by the Senior Lender and otherwise in form and substance acceptable to Lender;
 
(c)                       All expenses incurred by Lender prior to the Closing Date shall
have been paid by Borrower.
 
(d)                      No Material Adverse Effect has occurred and is continuing, and no
event or circumstance exists that could reasonably be expected to result in a Material Adverse Effect.
 
(e)                       Borrower shall have paid the Loan Fee.
 
(f)                        Lender shall have completed its customary business, financial and
legal due diligence of Borrower and the Approved Projects and the transactions contemplated hereunder and the results of such due diligence shall be satisfactory to Lender in all respects.
 
(g)                      Lender shall have received a legal opinion from a local counsel
acceptable to Lender, in form and substance acceptable to Lender.
 
(h)                       Lender shall have received the most recent unaudited annual
financial statements (or audited if available) of the Loan Parties, all in reasonable detail and

accompanied by an unqualified report thereon by a certified public accountant reasonably acceptable to Lender which shall state that such financial statements present fairly the financial condition as of the end of such Fiscal Year and the results of operations and changes in financial position for such Fiscal Year of Borrower in accordance with GAAP.
 
Section 3.2 Conditions Precedent to Revolving Loans. Following the Closing Date, any
obligation of Lender to make any Revolving Loan shall be subject to the satisfaction of each of the following conditions precedent as determined by Lender in its sole discretion (unless waived by Lender in its sole discretion):
 
(a)                       (i) in connection with the first Revolving Loan Disbursement
contemplated in Section 2.1(a)(iii) for any Approved Project, Lender shall have received evidence that the applicable Approved Project is ready to commence construction and issue a notice to proceed or its equivalent pursuant to the applicable EPC Contract for such Approved Project in form and substance acceptable to Lender, and (ii) in connection with the last Revolving Loan Disbursement contemplated in Section 2.1(a)(iii) for any Approved Project, Lender shall have received evidence that the applicable Approved Project is ready to complete construction and issue or approve a notice of final completion or its equivalent pursuant to the applicable EPC Contract for such Approved Project in form and substance acceptable to Lender.
 
(b)                      The following statements shall be true and each of (x) the delivery
by Borrower of the applicable Notice of Borrowing and (y) the acceptance by Borrower of the proceeds of such Revolving Loan shall constitute a representation and warranty by Borrower that, on the date of such notice and on the date of such borrowing, as the case may be, each such statement is true:
 
(i)                          Neither Lender nor Borrower shall have terminated the
Revolving Loan Commitment, nor shall a Default or an Event of Default exist or have occurred, or would exist or occur as a result of such Loan;
 
(ii)                       No Material Adverse Effect shall have occurred and be
continuing and no event or circumstance exists that could reasonably be expected to result in a Material Adverse Effect; and
 
(iii)                    The representations and warranties of the Loan Parties in
the Loan Documents shall be true and correct in all material respects (or, to the extent any such representations or warranties are subject to a materiality qualifier or Material Adverse Effect standard, such representations or warranties are true and correct in all respects) on the date of, and upon giving effect to, such Loan (except for representations and warranties that expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (or, to the extent any such representations or warranties are subject to a materiality qualifier or Material Adverse Effect standard, such representations or warranties are true and correct in all respects) as of such earlier date).
 
(c)                       All conditions required to be satisfied in accordance with Section
2.1(a) shall have been satisfied, including, but not limited to, (i) Lender's receipt of the

applicable Notice of Borrowing, (ii) confirmation (in the form of a Lender Approval Form) that the Project in connection with which such Notice of Borrowing is submitted qualifies as an Approved Project pursuant to Section 2.1(a)(viii), (iii) Lender has, in its sole discretion, approved the Increase Option to the extent required to advance any Loans, and (iv) execution and delivery of such further documents, instruments, agreements and assurances as required in accordance with Section 2.1(a).
 
(d)                      Lender shall have received the construction budget and schedule for
each Approved Project in form and substance acceptable to Lender (including the budgeted amount of any developer fee payable to Borrower or any Affiliate of Borrower) ("Construction Budget").
 
(e)                       For each final Revolving Loan Disbursement for an Approved
Project advancing the remainder of the applicable Project Commitment, Lender shall have received evidence that (i) the Additional Investors and/or Borrower have made the equity contribution in the amount of at least the remainder of the expected acquisition, development or construction costs set forth in the applicable Construction Budget not paid previously plus any cost overruns which may have been incurred or are reasonably expected to be incurred, and (ii) such contribution is either on deposit in the Borrower Account as of the Closing Date or has been used to pay acquisition, development or construction costs for an Approved Project in accordance with the applicable Construction Budget, reasonable evidence of which has been provided to Lender; provided that, upon a written request by Borrower, Lender may elect, in its sole discretion, to waive the foregoing requirement and size the final Revolving Loan Disbursement for an Approved Project in an amount equal to the remainder of the expected acquisition, development or construction costs set forth in the applicable Construction Budget not paid previously plus any cost overruns which may have been incurred or are reasonably expected to be incurred (such resizing referred to as an "Overrun Event");
 
(f)                             (i) each additional Security Document contemplated in Schedule
7.1 shall be executed by the applicable Loan Parties and delivered to Lender, (ii) Lender shall be granted or continue to have a perfected security interest in all right, title, and interest of the Loan Parties, in and to the Collateral free of all other Liens thereon other than Permitted Liens and (iii) all authorizations, consents, approvals, licenses, leases, rulings, permits, certifications, exemptions, submissions to or filings for registration by or with any Governmental Authority that are necessary in order to establish, protect, preserve and perfect Lender's Lien on the Collateral shall have been duly made or taken and remain in full force and effect, including those set forth in Schedule 7.1.
 
(g)                      All amounts required to be paid to or deposited with Lender
hereunder or under any other Loan Document, and all taxes, fees payable hereunder, other fees and other costs payable in connection with the execution, delivery, recordation and filing of the documents and instruments required to be filed as a condition precedent pursuant to Section 3.1 and this Section 3.2, as applicable, shall have been paid in full (or shall be paid concurrently with the advance of the applicable Loan).

(h)                      Lender shall have received a certificate duly executed and delivered
by the principal financial officer or other authorized officer of Borrower with responsibility for financial matters, certifying that Borrower and each other Loan Party, is and, immediately after giving effect to the consummation of the transactions contemplated by the Loan Documents will be, Solvent, in form and substance satisfactory to Lender.
 
(i)                         There shall be no actions, suits, or legal or arbitration proceedings
pending to which a Loan Party is a party (and, to the knowledge of Borrower, there shall be no actions, suits or legal or arbitration proceedings threatened against a Loan Party), in any such case at law or in equity before any governmental person or arbitral body against or affecting a Loan Party, which actions, suits, or legal or arbitration proceedings in any such case could reasonably be expected to have a Material Adverse Effect on the ability of each Loan Party to perform its obligations under the Loan Documents and related documents or to consummate the transactions contemplated thereby.
 
(j)                         Borrower shall have paid the Administrative Fee.
 
Section 3.3 Conditions Precedent to the Term Loans. Following the Closing Date, any
obligation of Lender to make any Term Loan shall be subject to the satisfaction of each of the following conditions precedent as determined by Lender in its sole discretion (unless waived by Lender in its sole discretion):
 
(a)                       (i) Lender shall have received evidence that the applicable
Approved Project has completed construction and has issued or approved a notice of final completion or its equivalent pursuant to the applicable EPC Contract for such Approved Project in form and substance acceptable to Lender;
 
(b)                      The following statements shall be true and each of (x) the delivery
by Borrower of the applicable Notice of Borrowing and (y) the acceptance by Borrower of the proceeds of such Term Loan shall constitute a representation and warranty by Borrower that, on the date of such notice and on the date of such borrowing, as the case may be, each such statement is true:
 
(i)                          Neither Lender nor Borrower shall have terminated the
Term Loan Commitment, nor shall a Default or an Event of Default exist or have occurred, or would exist or occur as a result of such Loan;
 
(ii)                       No Material Adverse Effect shall have occurred and be
continuing and no event or circumstance exists that could reasonably be expected to result in a Material Adverse Effect; and
 
(iii)                    The representations and warranties of the Loan Parties in
the Loan Documents shall be true and correct in all material respects (or, to the extent any such representations or warranties are subject to a materiality qualifier or Material Adverse Effect standard, such representations or warranties are true and correct in all respects) on the date of, and upon giving effect to, such Loan (except for representations and warranties that expressly relate to an earlier date, in which case such representations and warranties shall be true and

correct in all material respects (or, to the extent any such representations or warranties are subject to a materiality qualifier or Material Adverse Effect standard, such representations or warranties are true and correct in all respects) as of such earlier date).
 
(c)                       All conditions required to be satisfied in accordance with Section
2.1(b) shall have been satisfied, including, but not limited to, (i) Lender's receipt of the applicable Notice of Borrowing, (ii) confirmation (in the form of a Lender Approval Form) that the Project in connection with which such Notice of Borrowing is submitted qualifies as an Approved Project pursuant to Section 2.1(b)(iii), and (iii) execution and delivery of such further documents, instruments, agreements and assurances as required in accordance with Section 2.1(b).
 
(d)                      Lender shall have received an operating budget for the Loan Parties
and for such Approved Project in form and substance acceptable to Lender ("Operating Budget").
 
(e)                            (i) Each additional Security Document contemplated in Schedule
7.1 shall be executed by the applicable Loan Parties and delivered to Lender, (ii) Lender shall be granted or continue to have a perfected security interest in all right, title, and interest of the Loan Parties, in and to the Collateral free of all other Liens thereon other than Permitted Liens and (iii) all authorizations, consents, approvals, licenses, leases, rulings, permits, certifications, exemptions, submissions to or filings for registration by or with any Governmental Authority that are necessary in order to establish, protect, preserve and perfect Lender's Lien on the Collateral shall have been duly made or taken and remain in full force and effect, including those contemplated in Schedule 7.1.
 
(f)                        All amounts required to be paid to or deposited with Lender
hereunder or under any other Loan Document, and all taxes, fees payable hereunder, other fees and other costs payable in connection with the execution, delivery, recordation and filing of the documents and instruments required to be filed as a condition precedent pursuant to Section 3.1 and this Section 3.2, as applicable, shall have been paid in full (or shall be paid concurrently with the advance of the applicable Loan).
 
(g)                      Lender shall have received a certificate duly executed and delivered
by the principal financial officer or other authorized officer of Borrower with responsibility for financial matters, certifying that Borrower and each other Loan Party, is and, immediately after giving effect to the consummation of the transactions contemplated by the Loan Documents will be, Solvent, in form and substance satisfactory to Lender.
 
(h)                      There shall be no actions, suits, or legal or arbitration proceedings
pending to which a Loan Party is a party (and, to the knowledge of Borrower, there shall be no actions, suits or legal or arbitration proceedings threatened against a Loan Party), in any such case at law or in equity before any governmental person or arbitral body against or affecting a Loan Party, which actions, suits, or legal or arbitration proceedings in any such case could reasonably be expected to have a Material Adverse Effect on the ability of each

Loan Party to perform its obligations under the Loan Documents and related documents or to consummate the transactions contemplated thereby.
 
(i)                         After giving effect to the making of any Term Loan to be made on
such Drawdown Date, the Project Debt Service Coverage Ratio is equal to, or greater than 1.20:1.00.
 
Section 3.4 Limited Waiver of Conditions Precedent. If Lender funds any Loan or
grants any other accommodation when any conditions precedent are not satisfied (regardless of whether the lack of satisfaction was known or unknown at the time), it shall not operate as a waiver of (a) the right of Lender to insist upon satisfaction of all conditions precedent with respect to any subsequent funding, issuance, creation or grant; or (b) any Default or Event of Default due to such failure of conditions or otherwise.
 
Article IVARTICLE IV REPRESENTATIONS AND WARRANTIES
 
In order to induce Lender to enter into this Agreement and the other Loan Documents and to advance Loans hereunder, Borrower makes the following representations and warranties to Lender, which shall be deemed made by Borrower as of the date of this Agreement and as of each Drawdown Date (except to the extent such representation or warranty relates to a specified date, in which case such representation or warranty shall be true and correct as of such date), and shall survive the execution and delivery hereof and each performance hereunder. Any knowledge acquired by Lender shall not diminish Lender's rights to rely upon such representations and warranties.
 
Section 4.1 Formation, Good Standing, and Due Qualification. Borrower (a) is a
limited liability company duly organized and validly existing under the laws of the jurisdiction of its formation; (b) has all requisite power and authority necessary to own its properties and assets and to carry on the business in which it is now engaged or proposed to be engaged; and (c) is duly qualified and in good standing as a foreign corporation, foreign limited liability or foreign partnership, as applicable, under the laws of each other jurisdiction in which such qualification is required, except where the failure to so qualify could not reasonably be expected to result in a Material Adverse Effect.
 
Section 4.2 Corporate Power and Authority. The execution, delivery and performance
by each Loan Party of the Loan Documents and Material Project Documents to which it is a party, and the borrowings, guaranties and undertakings contemplated hereunder and thereunder, are within the company powers and authority of the applicable Loan Party and have been duly authorized by all necessary action, and do not and will not (a) violate the certificate of incorporation, articles or organization or operating agreement of the applicable Loan Party, or any Law, or (b) be in conflict with, result in a breach of or constitute a default under any indenture or loan or credit agreement or any other material agreement, lease, or instrument to which the applicable Loan Party is a party or by which the applicable Loan Party may be bound or affected, including, but not limited to, the Senior Debt, and (c) result in the creation or imposition of any

Lien (except in favor of Lender) upon or with respect to any property or assets now owned or hereafter acquired by the applicable Loan Party, except as contemplated by this Agreement.
 
Section 4.3 Legally Enforceable Agreement. This Agreement is, and each of the other
Loan Documents and the Material Project Documents to which a Loan Party is a party when executed and delivered will be, legal, valid, and binding obligations of the applicable Loan Party that is a party thereto, enforceable in accordance with its terms, except to the extent that enforcement thereof may be limited by the effect of general principles of equity and bankruptcy and similar laws affecting the rights and remedies of creditors generally.
 
Section 4.4 Governmental Approvals. No action, consent or approval of, registration
or filing with or any other action by any Governmental Authority is required in connection with the transactions contemplated by this Agreement and the other Loan Documents, except for such as have been made or obtained and are in full force and effect.
 
Section 4.5 Indebtedness.
 
(a)                       Upon consummation of the transactions contemplated herein, the
Loan Parties will not have any outstanding Debt other than the Obligations, trade debt incurred in the ordinary course of its business, the Senior Debt in the case of Borrower, and any debt arising pursuant to the Material Project Documents to which it is a party.
 
(b)                      Neither this Agreement, the other Loan Documents nor any written
information, exhibit, report, document, or certificate furnished to Lender by or on behalf of any Loan Party in connection with this Agreement, including any and all Project Approval Packages and annexes thereto delivered by Borrower pursuant to Section 2.1(a)(i), contained or contains any material misstatement of fact or omitted or omits to state a material fact necessary to make the statements contained herein or therein not misleading. There is no fact known by Borrower that materially adversely affects or that, insofar as Borrower can now reasonably foresee, may materially adversely affect, the condition, financial or otherwise, operations, properties, or prospects of any Loan Party, or the ability of any Loan Party to carry out its obligations under any of the Loan Documents to which it is a party.
 
Section 4.6 Other Agreements, No Default. No Loan Party is in default in any manner
under any provision of any indenture or other agreement or instrument evidencing Debt, or any material term of any other material agreement or instrument to which it is a party or by which it or any of its properties or assets are or may be bound, including, but not limited to, any Material Project Document, or is in violation of any Law, where such default or violation could reasonably be expected to result in a Material Adverse Effect. To Borrower's Knowledge, no Key Project Participant is in default under any material term of any such Material Project Document, in each case, which could reasonably be expected to result in a Material Adverse Effect. Each Loan Party enjoys peaceful and undisturbed possession under all leases to which it is a party.
 
Section 4.7 Litigation. There is no pending or, to the Knowledge of Borrower,
threatened action, suit or proceeding before any court, Governmental Authority, board of arbitration, or arbitrator against any Loan Party for which any of its properties or assets are or

may otherwise become involved, which is not otherwise fully covered by insurance and may, in any one case or in the aggregate, reasonably be expected to have a Material Adverse Effect, nor is there any basis therefor. No Loan Party has received any summons, citation, directive, letter, or other communication from any Governmental Authority concerning any intentional or unintentional violation or alleged violation of any Environmental Laws.
 
Section 4.8 Ownership and Liens. Each Loan Party has good and marketable title to, or
valid leasehold interests in, all of its properties and assets, including all of the assets and properties (tangible or intangible) constituting any part of such Approved Projects, and none of its properties or assets is subject to any security interest or other Lien, except Permitted Liens and Liens in favor of Lender.
 
Section 4.9 Capital Structure. Schedule 4.9 shows, for Borrower, and each Subsidiary
of Borrower, its name and the name of each Subsidiary, if any, of such Person, its and each Subsidiary's jurisdiction of organization, its and each Subsidiary's authorized and issued Equity Interests, the holders of its Equity Interests, and all agreements binding on such holders with respect to their Equity Interests. Each of Borrower and the Portfolio Companies has good title to its Equity Interests in its respective Subsidiaries, if any, subject only to Liens in favor of Lender, Senior Debt and other Permitted Liens, and all such Equity Interests are duly issued, fully paid and non-assessable. There are no outstanding options to purchase, warrants, subscription rights, agreements to issue or sell, convertible interests, phantom rights or powers of attorney relating to any Equity Interests of any Loan Party except as shown on Schedule 4.9.
 

Section 4.10 Approved Project:

Permits. As of the Drawdown Date of each Revolving Loan for any

 
(a)                       each Applicable Permit relating to such Approved Project that is
necessary to be obtained as of such date is either (x) in full force and effect and, if an appeal period is specified by Law, the appeal period has expired and no judicial, administrative or other proceedings are pending or, to Borrower's Knowledge, threatened that may allow material modification or revocation; or (y) of a type that is routinely granted on application, that is ministerial in nature,
 
(b)                      Borrower has no reason to believe that any material Permit
described in clause (y) above will not be obtained without substantial difficulty, expense or delay before it becomes an Applicable Permit.
 
(c)                       No Loan Party is in material violation of any such Applicable
Permit and no such Applicable Permit is subject to any material restriction, condition, limitation or suspension, and no such Applicable Permit contains any terms or conditions that provide for material curtailment or other material operational restrictions with respect to such Approved Project.
 
(d)                      The Loan Parties possesses all material franchise, patents,
copyrights, trademarks and trade names, or rights thereto necessary to perform its duties as of such date under the Material Project Documents relating to such Approved Project to

which it is a party, and such Loan Parties are not in material violation of any valid rights of other parties with respect to any of the foregoing.
 
Section 4.11 Taxes. Each Loan Party has filed all tax returns (federal, state, local and
foreign) required to be filed and has paid all taxes, assessments, and governmental charges and levies (including penalties and interest) shown thereon to be due, including interest and penalties, except taxes that are being contested in good faith by appropriate proceedings and for which the applicable Loan Party shall have set aside on its books adequate reserves in accordance with GAAP.
 
Section 4.12 Debt and Liens Securing Same. Set forth on Schedule 4.12 hereto is a
complete and correct list of all Debt of Borrower and each Loan Party other than the Obligations and trade debt incurred in the ordinary course of its business. The maximum principal or face amounts of the obligations set forth, which are outstanding, and which can be outstanding, are correctly stated, and all Liens of any nature given or agreed to be given as security therefore are correctly described or indicated in Schedule 4.12.
 
Section 4.13 Federal Reserve Regulations. No Loan Party is engaged principally, or as
one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock. No part of the proceeds of any Loan have been or will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board of Governors of the Federal Reserve System of the United States of America (the "Board"), including without limitation, Regulation T, Regulation U or Regulation X. Borrower will not take, or permit any agent acting on its behalf to take, any action which might cause any transaction or obligation, or right created by this Agreement, or any document or instrument delivered pursuant hereto, to violate any Regulation of the Board.
 
Section 4.14 Fiscal Year. The Fiscal Year of each Loan Party for financial accounting
purposes ends on December 31 of each calendar year.
 
Section 4.15 No Broker's Fees. No Loan Party is obligated to pay any brokerage
commissions, finder's fees or appraisal fees (other than reimbursing Lender for such fees incurred by Lender) in connection with the transactions contemplated by this Agreement.
 
Section 4.16 Investment Company Act, Public Utility Holding Company Act. No Loan
Party is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company", as such terms are defined in the PUHCA, nor is any Loan Party subject to regulation as a "public utility" under the FPA, as amended, nor is it an "investment company", or an "affiliated company" or a "principal underwriter" of an "investment company", as such terms are defined in the Investment Company Act of 1940.
 
Section 4.17 Use of Proceeds. Borrower will use the proceeds of the Loans only for the
purposes and subject to the limitations specified herein.
 
Section 4.18 Environmental Matters. Except as disclosed on Schedule 4.18 hereto:

(a)                       No Loan Party is in violation of any Environmental Law with
respect to the Projects which violation could reasonably be expected to constitute a Material Adverse Effect.
 
(b)                      No Loan Party has used, released, discharged, generated,
manufactured, produced, stored or disposed of Contaminants in, on, under or about any Project, or transported, arranged or permitted the disposal thereto or therefrom, of any Contaminant that would subject any Loan Party or Lender to a material liability under any Environmental Law or that could reasonably be expected to constitute a Material Adverse Effect.
 
(c)                       There are no aboveground or, to Borrower's Knowledge,
underground tanks, whether operative or temporarily or permanently closed, located on any Project, the presence of which could reasonably be expected to constitute a Material Adverse Effect.
 
(d)                      To Borrower's Knowledge, there is no condition at any Project that
could reasonably form the basis of any liability of a Loan Party or Lender under any Environmental Law that could reasonably be expected to constitute a Material Adverse Effect.
 
(e)                       There is no Environmental Claim pending or, to Borrower's
Knowledge, threatened with respect to any Project or Loan Party with respect to any Project.
 
(f)                        Borrower has received or caused to be prepared any environmental
report or site assessment with respect to any Project or Project site, except any such report or assessment a true, correct and complete copy of which has been delivered to Lender.
 
Section 4.19 Compliance with Laws. No Loan Party is in material default or material
violation of, nor, to Borrower's Knowledge, will the continued construction or operation of any Project be in material default or material violation of, any Law or any Applicable Permit.
 
Section 4.20 No Defaults or Material Adverse Effect. No Default or Event of Default
has occurred and is continuing, and there has not occurred any event or circumstance that has resulted or could reasonably be expected to result in a Material Adverse Effect.
 
Section 4.21 Labor Disputes and Acts of God. As of the date hereof, there are no
strikes, lockouts or slowdowns against Borrower pending or, to Borrower's Knowledge, threatened. To Borrower's Knowledge, the hours worked by and payments made to employees of Borrower have not been in material violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters. The business and Projects and other assets of Borrower have not been affected by any fire, explosion, accident, drought, storm, hail, earthquake, embargo, act of God, or other casualty (whether or not covered by insurance) which could, in any one case or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.22 ERISA Compliance.
 

(a) Multiemployer Plan.

Except as disclosed on Schedule 4.22, No Loan Party has a Plan or

 
(b)                       Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable Law. Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service. To Borrower's Knowledge, nothing has occurred that would prevent or cause the loss of such tax- qualified status.
 
(c)                        There are no pending or, to Borrower's Knowledge, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could be reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.
 
(d)                       (i) No ERISA Event has occurred, and neither Borrower nor any
ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) Borrower and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher and neither Borrower nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date; (iv) neither Borrower nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid; (v) neither Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA; and (vi) no Pension Plan has been terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.
 
Section 4.23 Insurance. Schedule 4.23 sets forth a true, complete and correct
description of all insurance maintained by the Loan Parties as of the date hereof. As of such date, such insurance is in full force and effect and all premiums have been duly paid. Each Loan Party has insurance in such amounts and covering such risks and liabilities as are in accordance with normal industry practice.

Section 4.24 Location of Real Property and Leased Premises.
 
(a)                       Schedule 4.24 (a) lists completely and correctly as of the date
hereof all real property owned by the Loan Parties and the addresses thereof.
 
(b)                      Schedule 4.24 (b) lists completely and correctly as of the date
hereof all real property leased by the Loan Parties and the addresses thereof. The Loan Parties have valid leases in all of the real property that it leases as set forth on Schedule 4.24(b). Except for its rights to use and access the applicable Projects set forth in the applicable Material Project Documents to which the Loan Parties are a party, no Project SPE is a licensee of, or easement holder with respect to, any real property rights.
 
Section 4.25 Security Documents. The Security Documents are and will continue to be
effective to create in favor of Lender legal, valid and enforceable Liens against the Collateral described therein and so long as financing statements in appropriate form is filed in the offices specified on Schedule 7.1, the Security Agreements shall continue to constitute fully perfected Liens against all of the Loan Parties' respective rights, title and interests in the Collateral described therein, in each case prior and superior in right to any other Person other than holders of Permitted Liens.
 
Section 4.26 Sanction Concerns. Neither Borrower, nor any Subsidiary, nor any
director, officer, employee, agent, affiliate or representative thereof, is a Person that is, or is owned or controlled by any Person that is (i) currently the subject or target of any Sanctions or
(ii) located, organized or resident in a Designated Jurisdiction. No Loan, nor the proceeds from any Loan has been used, to Borrower's Knowledge, directly or indirectly, to lend, contribute, provide or has been otherwise made available to fund any activity or business in any Designated Jurisdiction or to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the subject of any Sanctions, or in any other manner that will result in any violation by any Person (including Lender) of Sanctions.
 
Section 4.27 Sufficiency. The Material Project Documents are or will be sufficient in all
material respects to enable (x) each Project to be located and constructed on the corresponding approved Project sites and (y) each Project to be operated and maintained on the corresponding approved Project sites, in each case in accordance in all material respects with applicable Law, each Applicable Permit and the Construction Budget or Operating Budget, as applicable.
 
Section 4.28 Government Regulation. As of the Drawdown Date of each Revolving
Loan for a particular Project, the Loan Parties are not and will not, solely as a result of (i) entering into any Material Project Document or any transaction contemplated hereby or thereby, or (ii) the construction, ownership, leasing, use or operation of any Project, or the generation, transmission, distribution or sale of electric energy therefrom, be subject to, or not exempt from, regulation as a "public utility" under the FPA. Upon the initial generation of electricity from any Project, the applicable Project SPE will not be considered to be an "electric utility company" and a "public- utility company" under PUHCA and will not be subject to regulation as an "electric company", "distribution company" or similar entity under applicable Law of the State in which such Project is located or to the jurisdiction of which such Project is subject.

Section 4.29 Approved Projects. Schedule 1 lists completely and correctly as of the date
hereof all of the Projects which may be presented by Borrower for approval pursuant to Section 2.1(a)(i) and specifying (including any estimates thereof as applicable) (a) the location thereof and the Offtaker therefrom, (b) the expected capacity thereof, (c) the suppliers of the modules, inverters and other major items of equipment with respect thereto, (d) with respect to the Primary Revenue Agreement that is then in effect or that is expected to be entered into with respect to such system, listing the price thereunder (and if renewable energy credits or other items are sold thereunder, the price therefor) and the term thereof.
 
Section 4.30 No Other Bank Accounts. The Loan Parties have no other deposit or
securities account other than the Borrower Account and the Permitted Accounts in accordance with and subject to the Account Agreement.
 
Section 4.31 Solvency. Borrower and each other Loan Party, is and, immediately after
giving effect to the consummation of the transactions contemplated by the Loan Documents will be, Solvent.
 
Section 4.32 Financial Statements. The most recent financial statements (including the
notes thereto) delivered in respect of the Loan Parties pursuant to this Agreement fairly present in all material respects the financial condition of the Loan Parties as of the date thereof and have been prepared in accordance with GAAP applied on a consistent basis, subject to the audit and normal year-end adjustments and the absence of footnotes and associated disclosures. Such financial statements and notes thereto disclose all direct or contingent material liabilities of the Loan Parties as of the dates thereof.
 
Section 4.33 Construction Costs. As of the Drawdown Date of each final Revolving
Loan Disbursement for an Approved Project advancing the remainder of the applicable Project Commitment, Borrower or its Subsidiaries have received sufficient funds to pay any and all construction costs in accordance with the Construction Budget and any cost overruns which may have been incurred or are reasonably expected to be incurred, in each case, including any amounts payable pursuant to an EPC Contract, including the proceeds of any Loan.
 
Section 4.34 Joint Ventures. Borrower represents and warrants that (a) no default
exists by any party to the Victory Hill JV Agreements and Borrower is not aware of any fact, circumstance or occurrence which is reasonably likely to give rise to a default by any party to the Victory Hill JV Agreements; and (b) Energea Global owns 15% of Victory Hill Joint Venture (on a fully diluted basis), free and clear of any liens, claims, encumbrances, rights of repurchase, options, or similar rights.
 
Article VARTICLE V AFFIRMATIVE COVENANTS

Borrower covenants and agrees that so long as this Agreement shall remain in effect and until the Commitments shall have been terminated and all of the Obligations shall have been paid and performed in full, unless Lender shall have otherwise consented in writing, Borrower shall, and shall cause each Borrower Subsidiary to:
 
Section 5.1 Maintenance of Existence. Preserve and maintain its existence in its current
form of organization in the jurisdiction of organization and qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification is required, except where the failure to remain so qualified would not have a Material Adverse Effect.
 
Section 5.2 Maintenance of Records. Keep proper books of record and account, in
which complete entries will be made substantially in accordance with GAAP consistently applied, reflecting all of their financial transactions.
 
Section 5.3 Business and Properties. (a) Do or cause to be done all things necessary to
obtain, preserve, renew, extend, comply with and keep in full force and effect the rights, licenses, Permits (including all Applicable Permits), franchises, authorizations, patents, copyrights, trademarks and trade names material to the conduct of its business, and to own, insure, operate and maintain the Projects in the manner contemplated by the Material Project Documents; (b) maintain and operate such business in substantially the manner in which it is presently conducted and operated; (c) comply in all material respects with all Laws; and (d) at all times maintain, keep and preserve all of its properties necessary or useful in the proper conduct of its businesses in good working order and condition, ordinary wear and tear excepted.
 
Section 5.4 Maintenance of Insurance. (a) Keep its tangible personal property assets
insured against fire, theft and other hazards (so-called "All Risk" coverage) in amounts and with companies satisfactory to Lender to the same extent in covering such risks as is customary in the same or a similar business, but in no event in an amount less than the lesser of (i) the total Obligations or (ii) the amount necessary to avoid any co-insurance penalty, which policies shall name Lender as loss payee as its interests may appear, (b) maintain public liability coverage against claims for personal injuries, death or property damage in an amount deemed reasonable by Lender, which policy shall name Lender as an additional insured, and (c) maintain all worker's compensation, employment or similar insurance as may be required by applicable law. Such All Risk property insurance coverage shall provide for a minimum of thirty (30) days' written cancellation notice to Lender, except if such cancellation notice is as a result of non- payment of premium, in which case ten (10) days written cancellation shall be provided. Borrower agrees to deliver or cause to be delivered copies of all of the aforesaid insurance policies to Lender. In the event of any loss or damage to a material portion of Borrower, Borrower shall give immediate written notice to Lender and to its insurers of such loss or damage and shall properly file its proofs of loss with said insurers. Borrower shall cause Lender to be endorsed as a loss payee with a long form Lender's Loss Payable clause, in form and substance acceptable to Lender, on all such insurance. In the event of failure to provide and maintain insurance as herein provided, Lender may, at its option, provide such insurance and the amount thereof shall constitute Obligations. Borrower hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an interest, to make proofs of loss and claims for insurance and to receive payments of the insurance and execute and endorse all documents, checks and drafts in connection with payment of the

insurance. Any proceeds of insurance received by Lender shall be applied to the Obligations in such manner and order of priority as Lender shall determine in its sole discretion.
 
Section 5.5 Taxes. Pay and discharge before the same shall become delinquent all
taxes, assessments, and governmental charges or levies (including interest and penalties) imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default; provided, however, that such payment or discharge shall not be required with respect to any tax, assessment, charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings diligently conducted and with respect to which the applicable Loan Party shall have set aside on its books adequate reserves in accordance with GAAP and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and enforcement of a Lien.
 
Section 5.6 Right of Inspection. Permit Lender or any agent or representative of
Lender, upon (a) reasonable notice and during normal business hours and as often as reasonably requested in the case of all examinations, visits and inspections other than field examinations, and
(b) upon reasonable prior written notice (not to be given more frequently than two (2) times per calendar year) in the case of field examinations, to examine and make copies of and abstracts from the records, including, without limitation, computer records and books of account of, and visit and inspect the properties of Borrower and any Subsidiary, and to discuss the affairs, finances, and accounts of Borrower or such Subsidiary with any of its Responsible Officers and directors and its independent accountants (who, by this reference, are authorized by Borrower to discuss such matters with Lender or any agent or representative of Lender). After the occurrence and during the continuance of an Event of Default, Lender may undertake any of the foregoing rights of examination and inspection at any time and at any frequency.
 
Section 5.7 Reporting Requirements.
 
(a)                       Furnish or cause to be furnished to Lender:
 
(i)                          As soon as available and in any event within one hundred
twenty (120) days after the end of each Fiscal Year, the most recent unaudited annual financial statements (or audited if available) of the Loan Parties, all in reasonable detail and accompanied by an unqualified report thereon by a certified public accountant reasonably acceptable to Lender which shall state that such financial statements present fairly the financial condition as of the end of such Fiscal Year and the results of operations and changes in financial position for such Fiscal Year of Borrower in accordance with GAAP.
 
(ii)                       On the last calendar day of each month, (A) a construction
progress report as to each Approved Project, (B) a reconciliation of the costs incurred in connection with the construction of each Approved Project in construction as compared to the applicable Construction Budget, (C) a reconciliation of the costs incurred in connection with the operation of each Approved Project in operations as compared to the applicable Operating Budget, and (D) copies of bank statements reflecting all funds deposited into or withdrawn from the Borrower Account, and (E) copies of bank statements reflecting end of month combined operating cash balances for the Borrower and its Subsidiaries.

(iii)                    On the last calendar day of each quarter, a certificate from
Borrower signed by a Responsible Officer, in his or her representative, and not individual, capacity, certifying that (A) no Default or Event of Default exists, and (B) Borrower is in compliance with all required financial covenants under this Agreement, including pursuant to Section 6.7 (such certifications to include a calculation of such compliance and the supporting information therefor).
 
(iv)                     Such other information respecting the condition or
operations, financial or otherwise, of Borrower or any Subsidiary as Lender may from time to time reasonably request.
 
(b)                      Borrower shall make personnel available to conduct a meeting with
Lender once per calendar month during the first six (6) months following the execution of this Agreement and quarterly thereafter to discuss (i) the monthly and quarterly reports delivered pursuant to Section 5.7(a)(iii) and (iv) and, (ii) cash flow usage for the prior quarter and projected cash flow usage for the upcoming quarter, and (iii) other matters regarding Borrower or any Subsidiary as Lender may from time to time reasonably request.
 
Section 5.8 Litigation and Other Notices. Promptly, upon receiving written notice, or
obtaining knowledge thereof (and in any case no later than five (5) Business Days after receiving written notice, or obtaining knowledge thereof), give written notice to Lender of:
 
(a)                       any litigation, action or proceeding pending or, to the knowledge of
Borrower, threatened, against any Loan Party (i) involving claims in excess of $100,000 against, (ii) seeking any material injunctive, declaratory or other equitable relief that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect, or (iii) instituted for the purpose of revoking, terminating, suspending, withdrawing, modifying or withholding any Applicable Permit or Material Project Document;
 
(b)                      any dispute or disputes which may exist between it and any
Governmental Authority and which involve (i) claims against it or a Project, (ii) injunctive or declaratory relief, or (iii) revocation, modification, suspension or the like of any Applicable Permit or imposition of additional material conditions with respect thereto;
 
(c)                       any Default or Event of Default, and together with such notice or
as soon thereafter as possible, a description of the action or actions that Borrower has taken or proposes to take with respect to such Default or Event of Default;
 
(d)                      any casualty, damage or loss, whether or not insured, through fire,
theft, other hazard or casualty, if such casualty, damage or loss affects it or any Project;
 
(e)                       any matter which has or could reasonably be expected to have a
Material Adverse Effect;

(f)                        initiation of any condemnation or eminent domain proceedings
involving a Project, a Project site or any material portion thereof;
 
(g)                      (i) any notice of default or termination given or received under any
Material Project Document; (ii) any occurrence at, on or arising from an Approved Project that has resulted in or could reasonably be expected to result in material noncompliance with or a material liability under any Environmental Law, (iii) Release of Contaminants on or from an Approved Project that has resulted in or could reasonably be expected to result in personal injury or material property damage or have a Material Adverse Effect, or (iv) pending or threatened material Environmental Claim against any Loan Party or arising in connection with occupying or conducting operations on or at an Approved Project;
 
(h)                      any termination, revocation, suspension or material modification of
any Applicable Permit, or any action or proceeding related to any notice of violation issued by a Governmental Authority to any Loan Party;
 
(i)                         any claim of force majeure under any Material Project Document
and, to the extent reasonably requested by Lender and reasonably available to Borrower, copies of related invoices, statements, supporting documentation, schedules, data or affidavits delivered under the relevant Material Project Document;
 
(j)                         its intention to undertake any action or any action by Borrower or
any Loan Party that would constitute a Reportable Event;
 
(k)                      a copy of any amendment, modification, supplement or a waiver
with respect to any Material Project Document to Lender promptly upon Borrower receiving a copy thereof, but in no event later than thirty (30) days after it has received a fully executed copy thereof;
 
(l)                         (i) any cancellation or material change in the terms, coverages or
amounts of any insurance described in Section 5.4; and
 
(m)                  (l) any materialmen's, mechanics', workers', repairmen's,
employees' or other like Lien or application therefor in an amount in excess of $50,000 individually or $100,000 in the aggregate, in each case having been recorded against (i) a Borrower, or (ii) an Approved Project relating to work performed by or at the direction of Borrower, in each case together with a notice of such recordation describing the reasons for such Lien in reasonable detail and attaching all relevant documentation available to Borrower regarding such Lien.
 
Section 5.9 Supervision of Construction. Borrower shall supervise, manage and direct
the completion of the construction of all Approved Projects, including the procurement of all materials necessary to install, test, complete all Approved Projects, by the EPC Contractor in all respects consistent with the applicable EPC Agreement and all applicable manufacturer and design specifications relating to the relevant Project, Prudent Industry Practices, Laws and Applicable Permits. Borrower shall timely pay, or cause to be paid, all amounts owed to the EPC Contractor, and shall ensure that EPC Contractor timely pays all amounts owed by it to its subcontractors and

vendors, in connection with the performance of all obligations of the EPC Contractor under the applicable EPC Agreement when such amounts are due and payable.
 
Section 5.10 Energy Regulation. Cause each Project SPE to comply with all applicable
energy regulatory laws, including without limitation the Brazilian legislation, the regulation determined by the competent authorities and, if applicable, the Resolution No. 482, issued on April 17th, 2012 by the National Agency of Electrical Energy - ANEEL (Agência Nacional de Energia Elétrica - ANEEL), if applicable.
 
Section 5.11 Use of Proceeds; Use of Cash Flow.
 
(a)                      Section 5.11 Use of Proceeds. Use the proceeds of the Loans only
for the purposes and subject to the limitations specified herein.
 
(b)                     On a monthly basis, use cash proceeds solely as follows, and in
the following order of priority:
 
(i)                         First, to fund the DS Account in accordance with
Section 5.15(b);
 
(ii)                      Second, to make payments to Lender of principal,
interest, and other charges and fees as they come due hereunder;
 
(iii)                  Third, to fund reserves to pay for the Operating
Budgets for Approved Projects;
 
(iv)                   Fourth, to use for construction costs in accordance with
the Construction Budgets for Approved Projects; and
 
(v)                      Fifth, to make distributions or dividends to the holders
of Class A Investor Shares of the Borrower pursuant to the Borrower's Offering Circular dated June 30, 2020, as supplemented or amended from time to time.
 
Section 5.12 Additional Collateral. With respect to any personal property acquired after
the Closing Date by any Loan Party that is intended to be subject to the Lien created by any Security Document, including, but not limited to, all rights, title and interest of any Loan Party in, to and under any after-acquired Maintenance Services Agreement, Interconnection Agreement or REC Agreement, but is not so subject, promptly (and in any event within 30 days after the acquisition thereof) (a) execute and deliver to Lender such amendments or supplements to the relevant Security Documents, or such other documents as Lender shall reasonably deem necessary to grant to Lender, for its benefit and for the benefit of its Affiliates, as applicable, a Lien on such property subject to no Liens other than Permitted Liens, and (b) take all actions necessary to cause such Lien to be duly perfected to the extent required by such Security Agreement in accordance with all applicable Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by Lender. Borrower shall otherwise take such actions and execute and deliver to Lender such documents as Lender shall reasonably require to

confirm the validity, perfection and priority of the Lien of the Security Agreements against such after-acquired property or cause the applicable Loan Party to take such action or execute and deliver such documents.
 
Section 5.13 Material Project Documents. Borrower shall and shall cause each Loan
Party to (a) perform and observe all of its material covenants and obligations contained in each of the Material Project Documents to which it is a party (subject to any applicable exceptions set forth in the Material Project Documents), (b) take all reasonable and necessary action to prevent the termination or cancellation of any Material Project Documents to which it is a party (except for the expiration of any Material Project Document in accordance with its terms and not as a result of a breach or default thereunder), and (c) enforce against the relevant Key Project Participant each material covenant or material obligation of such Material Project Document to which it is a party in accordance with its terms, including enforcing such Loan Party's rights and remedies under the Material Project Documents to maximize the amount of liquidated damages available to such Loan Party under the Material Project Documents.
 
Section 5.14 Construction Costs. Commencing as of the Drawdown Date of the final
Revolving Loan Disbursement for any Approved Project advancing the remainder of the applicable Project Commitment, Borrower or its Subsidiaries have received equity contributions from the Additional Investors and/or Borrower which are sufficient to pay any and all remaining construction costs in accordance with the Construction Budget and any cost overruns which may have been incurred or are reasonably expected to be incurred, including, in each case, any amounts payable pursuant to an EPC Contract, with respect to each such Approved Project; provided that, upon a written request by Borrower, Lender may elect, in its sole discretion, to waive the foregoing requirement and size the final Revolving Loan Disbursement for an Approved Project in an amount equal to the remainder of the expected acquisition, development or construction costs set forth in the applicable Construction Budget not paid previously plus any cost overruns which may have been incurred or are reasonably expected to be incurred.
 
Section 5.15 Account Controls.
 
(a)                      Any and all proceeds of Revolving Loans and any and all Project
Revenues shall be deposited into the Borrower Account and applied solely to the payment of permitted costs in accordance with Schedule 7.3, including compliance with the applicable Construction Budget and Operating Budget except for any variance approved by the Lender in accordance with Schedule 7.3 based on the submission by Borrower of a certificate in the form of Exhibit H.
 
(b)                     Until (i) the Borrower provides Lender with evidence (in form
and substance satisfactory to Lender) that the Obligor Debt Service Coverage Ratio exceeds 1.5:1.0 on a trailing twelve months basis and (ii) the Project known as "Araxa I" shall become an Approved Project (the satisfaction of clauses (i) and (ii) being referred to as the "Step-Down Condition"), the Borrower shall cause the DS Account to have a minimum balance at all times of at least $810,000. Following the occurrence of the Step-Down Condition, the Borrower shall cause the DS Account to have a minimum balance at all times of at least $405,000; provided, however, that once the Borrower provides Lender with evidence (in form and substance satisfactory to

Lender) that (i) the "Divinopolis II" project, on its own (i.e., Project Actual Net Cash Flow and Project Debt Service only take into account the "Divinopolis II" project), has produced a Project Debt Service Coverage Ratio of at least 1.2:1.0 for a calendar quarter, and (ii) the "Divinopolis II" project interconnection has been completed, the Borrower's obligation to maintain the DS Account shall be released and the Lender shall execute a release and termination of the DS Account account control agreement.
 
(c)                       All proceeds received by Energea Global of or from the Victory
Hill Joint Venture (exclusive of proceeds in respect of management fees, service fees, administrative fees and similar fees) shall be deposited into the VH Account, subject to the terms of the account control agreement with Lender governing such account.
 
Section 5.16 Further Assurances. Promptly upon request by Lender, Borrower shall or
shall cause any Loan Party to (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as Lender may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) perfect and maintain the validity, effectiveness and priority of any of the Security Documents and any of the Liens intended to be created thereunder (other than Permitted Liens that are accorded priority pursuant to applicable Law) and (iii) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto Lender the rights granted or now or hereafter intended to be granted to Lender under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Key Project Participant is or is to be a party (provided, that in case an action is required of a Key Project Participant, that is not Borrower, to comply with this Section 5.16, Borrower shall use commercially reasonable efforts to comply with this Section 5.16).
 
Article VIARTICLE VI NEGATIVE COVENANTS
 
Borrower covenants and agrees that so long as this Agreement shall remain in effect and until the Commitments shall have been terminated and all of the Obligations shall have been paid and performed in full, unless Lender shall have otherwise consented in writing, neither Borrower nor any Subsidiary shall, directly or indirectly:
 
Section 6.1 Liens. Create, incur, assume, or suffer to exist any Lien upon or with
respect to any of its properties or assets (including without limitation, securities and other investment property), now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except:
 
(a)                       Liens created under the Loan Documents in favor of Lender;
 
(b)                      Liens created in connection with the Senior Debt; and
 
(c)                       the following types of Liens (excluding any such Lien imposed
pursuant to Section 401(a)(29) or Section 412(n) of the Code or by ERISA or any such

Lien relating to or imposed in connection with any Environmental Claim), in each case as to which no enforcement, collection, execution, levy or foreclosure shall have been commenced (collectively, the "Permitted Liens"):
 
(i)                          Liens for taxes or assessments or other government charges
or levies not yet due and payable or which are being contested in compliance with Section 5.5 and with respect to which Borrower has established reserves in accordance with GAAP;
 
(ii)                       pledges or deposits to secure obligations in the ordinary
course of business under workers' compensation laws, unemployment insurance or other similar social security legislation (other than in respect of employee benefit plans subject to ERISA);
 
(iii)                    Liens imposed by law, such as carriers', mechanics',
materialmen's, storage and repairmen's Liens and other similar Liens arising in the ordinary course of business and securing obligations (other than Debt) (A) that are not delinquent, or (B) the amount, applicability or validity of which is being contested in good faith and by appropriate proceedings diligently conducted and with respect to which Borrower has established reserves in accordance with GAAP;
 

 
liability to insurance carriers;

(iv)

deposits made in the ordinary course of business to secure

 
(v)                        easements, rights-of-way, zoning restrictions and other
encumbrances and survey exceptions, minor defects or irregularities in title and other similar restrictions on title to, or the use of, real property that do not, either individually or in the aggregate (A) materially detract from the value of such real property, or (B) materially and adversely affect the use of such real property for its intended purposes or the conduct of the business of Borrower in the ordinary course and, in any case, that were not incurred in connection with and do not secure Debt or other extensions of credit.
 

Section 6.2 Debt, except:

Debt. Create, incur, assume, or suffer to exist any recourse or nonrecourse

 
(a)                       Debt pursuant to the Loan Documents;
 

 
Closing Date;

(b)

The Senior Debt as in the principal amount outstanding on the

 
(c)                       Debt resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
 
(d)                      Debt for borrowed money incurred by a Project SPE with the prior
written consent of Lender;
 
(e)                       accounts payable to trade creditors for goods or services and
current operating liabilities (other than for borrowed money), in each case incurred in the ordinary course of business.

Section 6.3 Guaranties. Except for the Loan Documents, assume, guaranty, endorse, or
otherwise be or become directly or contingently responsible or liable (including, but not limited to, an agreement to purchase any obligation, stock, assets, goods, or services, or to supply or advance any funds, assets, goods, or services, or to maintain or cause such Person to maintain a minimum working capital or net worth, or otherwise to assure the creditors of any Person against loss) for obligations of any Person, except for guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business.
 
Section 6.4 Sale of Assets.
 
(a)                       As to each Project SPE, sell, lease, assign, transfer, or otherwise
dispose of any of its now owned or hereafter acquired assets except sales of energy, capacity and related products by the Project SPEs in the ordinary course.
 
(b)                      Sell, lease, assign, transfer or otherwise dispose of any
Approved Project set forth on Schedule 6.4.
 
(c)                       Sell, lease, assign, transfer, or otherwise dispose of any Current
P2 Asset (excluding any Approved Project), until such time as the Borrower provides Lender with evidence that the Obligor Debt Service Coverage Ratio exceeds 2.2:1.0, in form and substance satisfactory to Lender; provided however that prior to any such sale, lease, assignment, transfer or other disposal of any Current P2 Asset (excluding any Approved Project), the Borrower has provided Lender with a pro forma compliance certificate evidencing continued compliance of the remaining Current P2 Assets of the Obligor Debt Service Coverage Ratio in excess of 2.2:1.0, in form and substance satisfactory to Lender.
 
(d)                      (b) As to each of Borrower and the Portfolio Companies, sell,
lease, assign, transfer, or otherwise dispose of or grant any interest in, option on or warrant or other similar interest in, any of its now owned or hereafter acquired Equity Interests in any Loan Party, including without limitation any Project SPE that owns an Approved Project.that has been pledged as Collateral to Lender from time to time. For the avoidance of doubt, this Section 6.4(d) will not, in any way limit the sale, lease, assignment, transfer or other disposal of or grant of any interest in, option on or warrant or other similar interest in any Equity Interests of the Borrower or any Portfolio Company other than those pledged Equity Interests referenced above.
 
(e)                       (c) As to each Loan Party, sell, lease, assign, transfer, or otherwise
dispose of any of its now owned or hereafter acquired assets which constitute Collateral except sales of energy, capacity and related products by the Project SPEs in the ordinary course.
 
(f)                        (d) As to each of Borrower and the Portfolio Companies, following
an Overrun Event, sell, lease, assign, transfer, or otherwise dispose of any of its now owned or hereafter acquired assets.

Section 6.5 Developer Fee. Pay any developer fee to Borrower or any Affiliate of
Borrower for any Approved Project unless such payment of a developer fee is in accordance with the applicable Operating Budget for such Approved Project; provided that any such developer fee shall be reduced in the amount of any cost overrun incurred with respect to such Approved Project.
 
Section 6.6 Restricted Payments. Declare or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except that any Loan Party may declare and make dividend payments or other distributions payable solely in common equity interests of such Person beginning after the Initial COD so long as no Default or Event of Default has occurred and is continuing prior to or immediately following such dividend or distribution or otherwise results from such dividend or distribution (or would exist as a result thereof), including pursuant to the financial covenant in Section 6.7, if applicable.
 
Section 6.7 Financial Covenants.
 
(a)                      Section 6.7 Project Debt Service Coverage Ratio. Allow the
Project Debt Service Coverage Ratio to be less than 1.20:1.00 as of the last Business Day of any calendar quarter beginning with the second full calendar quarter following the Initial COD.
 
(b)                     Minimum Operating Cash Balance. Allow the Borrower's and
its Subsidiaries' combined operating cash balance to be less than $270,000 as of the end of any calendar month.
 
Section 6.8 Burdensome Agreements. Enter into any agreement or other contractual
commitment (other than existing agreements or contractual commitments entered into by Borrower prior to the date hereof, this Agreement or any other Loan Document) that (a) limits the ability of Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that nothing herein shall prohibit any negative pledge or any prohibition on transfer incurred or provided in favor of any holder of Debt permitted under Section 6.2(b) solely to the extent any such negative pledge or prohibition on transfer relates to the property financed by or the subject of such Debt; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.
 
Section 6.9 No Accounts. Open or maintain any deposit or securities account other
than the Borrower Account, the DS Account, and the Permitted Accounts in accordance with and subject to the Account Agreement.
 
Section 6.10 Change Name; Location or State of Incorporation. (a) Change its legal
name or conduct its business under any trade name other than as hereinabove set forth unless Borrower gives thirty (30) days prior written notice to Lender; (b) conduct business, locate assets or maintain an office at any location unless Borrower gives thirty (30) days prior written notice to Lender; and (c) change its legal structure or State of incorporation or formation from its current legal structure or State of formation unless Borrower gives thirty (30) days prior written notice to Lender.

Section 6.11 Fiscal Year. Change its Fiscal Year.
 
Section 6.12 Management/Control and Accounting Methods. (a) Suffer any change in its
Control which Lender deems, in its sole discretion, to be a material change, (b) make a material adverse change in the nature of its business or a material change in its method of accounting; or
(c)    suffer the death, removal, termination or resignation of any of its Responsible Officers, unless within 90 days thereafter the Company engages a replacement for such Responsible Officer.
 
Section 6.13 Sale and Leaseback. Sell, transfer, or otherwise dispose of any real or
personal property to any Person and thereafter directly or indirectly lease back the same or similar property.
 
Section 6.14 Sanctions. Directly or indirectly, use any Loan or the proceeds of any
Loan, or lend, contribute or otherwise make available such Loan or the proceeds of any Loan to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person of Sanctions.
 
Section 6.15 Affiliate Contracts. Except as set forth in Schedule 6.15, be a party to any
transactions or arrangements (including any transactions relating to the buying or selling of any Property or any products of the Projects or involving the receipt of money as payment for goods or services) with any Affiliate of any Loan Party or make payments to any Affiliate thereunder.
 
Section 6.16 JV Agreements.
 
(a)                      Take, or permit Energea Global to take, any action or omission
that constitutes, or with the lapse of time will constitute, a breach, default or event of default under the Victory Hill JV Agreements, or permit any breach, default or event of default by any other party to such agreements.
 
(b)                     Permit, or permit Energea Global to permit, the distribution of
Energea Global's share of the proceeds of any sale or divestment of any project or asset owned (directly or indirectly) by Victory Hill Joint Venture unless the proceeds of such sale or divestment are deposited into and maintained in the VH Account.
 
Article VIIARTICLE VII SECURITY
 
Section 7.1 Security. As set forth in Schedule 7.1, as of the Closing Date and each
Drawdown Date for any Revolving Loan or any Term Loan, Borrower shall, or shall cause the applicable Loan Party to, execute or file and deliver to Lender each Security Document not previously delivered as of such date. The Obligations are and shall continue to be secured by and pursuant to the Security Documents.
 
Section 7.2 Release of Borrower[Reserved].
 
(a) If no Revolving Loans are outstanding, Lender shall release Borrower from its obligations under the Loan Documents upon Lender's receipt of (i) evidence that the

Obligor Debt Service Coverage Ratio exceeds 2.2:1.0, in form and substance satisfactory to Lender, and (ii) written notice from Borrower requesting such release. Following such release, each and every Additional Obligor at the time of such release shall thereafter be deemed to be the "Borrower" for all purposes hereunder and shall be directly liable, on a joint and several basis, for all of the Obligations in accordance with the terms of this Agreement.
 
Section 7.3 Bank Account. Subject to Section 5.11(b) and Section 6.16(b), no Loan
Party shall deposit or withdraw any funds in or from the Borrower Account or any Permitted Account except in accordance with Schedule 7.3. No Loan Party shall apply the proceeds of any Loan or any Project Revenue to the payment of any costs other than permitted costs in accordance with Schedule 7.3.
 
Section 7.4 Security Documents. Borrower shall, and shall cause each other Loan
Party, to comply with the Security Documents to which each is a party.
 
Section 7.5 Collateral. The collateral for the Obligations shall include all Project Assets
for any Approved Project, and the Equity Interests of the Portfolio Companies and Project SPEs, in each case, as further described in and in accordance with the applicable Security Documents. Collateral for the Obligations shall also include (a) the VH Account, until such time as the Borrower provides Lender with evidence that the Obligor Debt Service Coverage Ratio exceeds 2.2:1.0, in form and substance satisfactory to Lender, and (b) the DS Account, in accordance with Section 5.15(b).
 
Article VIIIARTICLE VIII EVENTS OF DEFAULT
 
Section 8.1 Events of Default.
 
(a)                       The following events (whether voluntary or involuntary or effected
by operation of law or otherwise) shall be an "Event of Default":
 
(i)                          Borrower shall fail to pay the principal of, premium, if any,
or interest on any Loan, on the date that such amount is due and payable, whether at the due date thereof or at a date fixed for repayment or prepayment thereof or by acceleration thereof or otherwise.
 
(ii)                       Borrower shall fail to pay any amount of any fee, or any
other Obligation, in each case within fifteenthirty (1530) calendar days after the date that such amount is due and payable, whether at the due date thereof or at a date fixed for repayment or prepayment thereof or by acceleration thereof or otherwise.
 
(iii)                    Any representation or warranty made or deemed made by or
on behalf of Borrower in or in connection with any Loan Document or the borrowings hereunder or thereunder, or any representation, warranty statement or information contained in any certificate, document, opinion, report, financial statement or other instrument furnished at any

time on behalf of Borrower in connection with or pursuant to any Loan Document, shall prove to have been false or misleading in any material respect when so made, deemed made or furnished.
 
(iv)                     Default in the due observance or performance by Borrower
or any Subsidiary of any covenant contained in Section 5.1 (Maintenance of Existence), Section
5.3 (Business and Properties), Section 5.4 (Maintenance of Insurance), Section 5.11 (Use of Proceeds; Use of Cash Flow), Section 5.14 (Construction Costs), Section 5.15 (a) (Account Controls), Section 5.16 (Further Assurances), Article VI, (excluding Section 6.7(b)), Article VII (and the related Schedules) or Article IX (and the related Schedule).
 
(v)                       Default in the due observance or performance by Borrower
or any Subsidiary of any other covenant or agreement contained in this Agreement or any covenant or agreement contained in any other Loan Document (other than those specified elsewhere in this Section 8.1) and, in each case, such default shall continue unremedied for a period of fifteenthirty (1530) calendar days after the date such default occurred.
 
(vi)                     Borrower shall (A) fail to pay any principal or interest,
regardless of the amount, due in respect of Debt in the principal amount in excess of $250,000, when due and payable or within any grace period for the payment thereof, or (B) fail to perform or observe any other term, covenant, condition or agreement under any agreement or instrument evidencing, governing or relating to any such Debt (which is not waived by the holder or holders of such Debt) if the effect of any failure referred to in this clause (B) is to cause, or to permit the holder or holders of such Debt or a trustee on its or their behalf (with or without the giving of notice, or the lapse of time) to cause, such Debt to become due prior to its stated maturity or to permit the acceleration after the giving of notice or passage of time, or both, of the maturity.
 
(vii)                  Any Loan Party institutes or consents to the institution of
any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of the applicable Loan Party and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to the applicable Loan Party or to all or any material part of its property is instituted without the consent of Borrower and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or
 
(viii)               One or more judgments or orders (including, without
limitation, writs or warrants of attachment, garnishment, execution, distraint or similar process) for the payment of money in excess of $250,000 shall be rendered against Borrower or any Subsidiary and shall remain unsatisfied and either (A) enforcement proceedings shall have been commenced by any creditor upon any such judgment or order, or (B) there shall be any period of at least ten (10) consecutive days during which a stay of enforcement of any such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.
 
(ix)                     (A) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of

Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the $250,000, or (B) Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the $250,000; or
 
(x)                        Any Loan Party repudiates, revokes or attempts to revoke
or denies or contests the validity or enforceability of any of the Loan Documents or Obligations, or the perfection or priority of any Lien granted to Lender; any Loan Document ceases to be in full force or effect for any reason (other than a waiver or release by Lender); or any Security Document shall at any time after its execution and delivery and for any reason cease to create a valid and perfected first priority (except as otherwise expressly provided in this Agreement or such Security Document) Lien in and to the property purported to be subject to such Security Document.
 
(xi)                     Any Loan Party is criminally indicted or convicted for (A) a
felony committed in the conduct of Borrower'sits business, or (B) any state or federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War Materials Act) that could lead to forfeiture of any material Property of Borrower or any Collateral.
 
(xii)                  There shall have occurred a Material Adverse Effect or a
material adverse change in the financial standing of any customer counterparty of Borrower or any Borrower Subsidiary.
 
(xiii)               There shall have occurred a default or event of default (after
the expiration of any applicable grace or cure periods) under or within the meaning of (A) any other instruments or agreements between Lender and Borrower, or (B) the Victory Hill JV Agreements (but only during such time as the Lender is entitled to maintain its lien on the VH Account in accordance with Section 7.5), or (C) any of the Material Project Documents or the Senior Debt.
 
(xiv)               If, at any time, the Loan Parties fail to obtain or maintain
binding commitments in sufficient amounts to fund any and all construction costs for each Approved Project as and when due and payable pursuant to any EPC Contract or any similar agreement, including any cost overruns incurred or reasonably expected to be incurred and, in each case, such failure shall continue unremedied for a period of thirty (30) calendar days after the date such failure occurred.
 
(b)                      Upon and after the occurrence of any Event of Default, Lender may
take any or all of the following actions:
 

(i) Commitments shall be terminated;

declare the Commitments to be terminated, whereupon such

(ii)                       declare all the outstanding Obligations to be forthwith due
and payable, whereupon the Commitments shall be terminated, and all Obligations shall become and be forthwith due and payable, with notice to Borrower;
 
(iii)                    upon no less than 48 hours' prior written notice to
Borrower and without interruption to Borrower's operations, enter onto the property where any Collateral is located and take possession thereof with or without judicial process;
 
(iv)                     exercise all the rights and remedies of Lender on default
under the UCC (whether or not the UCC applies to the affected Collateral) to collect, enforce or satisfy any Obligations then owing, whether by acceleration or otherwise; and
 
(v)                        exercise any and all rights and remedies available to it under
the Loan Documents, at law or in equity.
 
For the avoidance of doubt, Lender may sell the Collateral and may do so without giving any warranties as to the Collateral. Lender may specifically disclaim or modify any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Lender shall have no obligation to marshal any of the Collateral. In addition to the foregoing, upon the occurrence and during the continuation of an Event of Default, Lender shall have the right, without notice to Borrower, to transfer all or any portion of the Equity Interests pledged as Collateral to its name or the name of its nominee or agent. In the event of a transfer pursuant to the immediately preceding sentence, Lender shall within a reasonable period of time thereafter give Borrower written notice of such transfer; provided, however, that (x) failure to give such notice shall have no effect on the rights of Lender hereunder and (y) Lender shall not be required to deliver any such notice if Borrower is the subject of an Event of Bankruptcy or the delivery of such notice is otherwise prohibited by Applicable Laws. Borrower hereby agrees that it shall at its expense and promptly upon request of Lender forthwith, assemble all or part of the Collateral (if and to the extent in the possession or any Loan Party) as directed by Lender and make it available to Lender at a place to be designated by Lender that is reasonably convenient to the Parties.
 
 
(c)                       Borrower and each Additional Obligor hereby irrevocably
constitutes and appoints Lender, acting for and on behalf of itself and each successor or permitted assign of Lender as its true and lawful attorney-in-fact, with full power and authority in the place and stead of Borrower each Additional Obligor and in the name of Borrower, each Additional Obligor or in its own name, at Borrower's sole reasonable cost and expense, subject to the terms of this Agreement and Applicable Laws, to enforce all rights, interests and remedies of Borrower or an Additional Obligor with respect to the Collateral upon the occurrence and during the continuation of an Event of Default, for the purpose of carrying out the provisions of this Agreement, including without limitation, generally to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Collateral as fully and completely as though Lender were the absolute owner thereof for all purposes, and do, at Lender's option and Borrower's reasonable expense, at any time, or from time to time, all acts and things that Lender reasonably deems necessary to protect, preserve or realize upon the Collateral and Lender's Lien thereon and to effect the

intent of this Agreement, all as fully and effectively as Borrower or an Additional Obligor might do.
 
(d)                      From and after any Event of Default and the exercise of remedies
by Lender, all payments made under this Agreement or the other Loan Documents and all other amounts received by Lender under this Agreement or the other Loan Documents (including proceeds from any disposition of Collateral) shall be applied as follows:
 
(i)                          first, to any fees or costs or expenses payable to Lender
hereunder or under the other Loan Documents;
 
(ii)                       second, on a pro rata basis, to any accrued but unpaid
interest and outstanding principal then due and owing and remaining unpaid;
 
(iii)                    third, to such other Obligations as remain outstanding; and
 

 
thereto.

(iv) 

fourth, to Borrower or any other person legally entitled

 
(e)                       The occurrence of an Event of Default under this Agreement shall
constitute an event of default under or within the meaning of any other Loan Documents, and vice versa, and shall entitle Lender to initiate and pursue, in Lender's sole discretion exercised on one or more occasions, and all any rights and remedies available to Lender hereunder and/or under any of the other Loan Documents, with notice to Borrower, any requirement for which is hereby expressly waived by Borrower, anything contained herein or in any Loan Document to the contrary notwithstanding.
 
Article IXARTICLE IX ADDITIONAL OBLIGORS
 
Section 9.1 Obligations.
 
(a)                       Each General Loan Obligor shall be jointly and severally liable, as a
primary obligor and not merely as a surety, and hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, all Obligations, in each case, as defined in and in accordance with the terms set forth in Schedule 9.1(a).
 
(b)                      Each Term Loan Obligor shall be jointly and severally liable, as a
primary obligor and not merely as a surety, and hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, all Guaranteed Obligations, in each case, as defined in and in accordance with the terms set forth in Schedule 9.1(b).
 
Section 9.2 Additional Obligors.

(a)                       If any Approved Project is owned by a Project SPE which, in turn,
is owned by a holding company other than Portfolio 2the Borrower formed for the exclusive purpose of owning the applicable Project SPE, then such holding company shall become a Term Loan Obligor hereunder. Borrower shall present an executed Joinder Agreement executed by such Additional Obligor with the Project Approval Package approved by Lender for such Project pursuant to Section 2.1(a)(i).
 
(b)                      Lender and Borrower may agree from time to time that an
additional Affiliate of Borrower will become a General Obligor. Borrower shall present an executed Joinder Agreement executed by such Additional Obligor as and when required by Lender.
 
Article XARTICLE X GENERAL PROVISIONS
 
Section 10.1 Amendments. No amendment, modification, terminally, or waiver of any
provision of any Loan Document, or consent to any departure by Borrower from any terms of any Loan Document, shall in any event be effective unless the same shall be in writing and signed by Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice or demand on Borrower in any case shall entitle Borrower or any other Person to any other or further notice or demand in similar or other circumstances unless such notice is expressly required pursuant to the terms hereof, any Loan Document or by applicable Law.
 
Section 10.2 Notices, Etc. All notices, demands, requests, and other communications
given under this Agreement shall only be effective if they are (a) in writing, (b) sent by hand delivery, by facsimile transmission, by reputable express delivery service, or by certified or registered mail, postage prepaid, and (c) (i) when delivered to the addressee by hand, (ii) when received by the addressee as evidenced by a return receipt signed by the addressee or its agent, and (iii) in the case of facsimile transmissions, when transmitted, answer back received:
 
(i)                          If to Lender, to it at:
 
Lattice Energea Global Revolver I LLC
431 E. 20th St.127 Garfield Place, Apt. 14C2 New YorkBrooklyn, NY 1001011215 nparikh@latticeimpact.com
Telephone No.: (847) 971-0931
 
(ii)                       If to any Borrower or any Loan Party, to it at:
 
Energea Global LLC 9 Cedar Lane
Old Saybrook, CT 06475 mike@energea.com
Telephone No.: (860) 316-7466

(iii)                    or to such other address (and/or facsimile transmission number) as Borrower or Lender, as the case may be, shall have specified in the latest unrevoked notice sent to the other in accordance with this Section 0.210.2.
 
Section 10.3 No Waiver; Remedies. No failure on the part of Lender to exercise, and no
delay in exercising, any right, power, or remedy under any of the Loan Documents shall operate as a waiver of such right, power, or remedy, nor shall any single or partial exercise of any right, power, or remedy under any of the Loan Documents, or any abandonment or discontinuance of steps to enforce such a right, power or remedy, preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The rights, powers and remedies provided in the Loan Documents are cumulative and not exclusive of any rights, powers or remedies that Lender would otherwise have, whether under the Loan Documents, at law, in equity, or otherwise.
 
Section 10.4 Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that BorrowerLender may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of LenderBorrower (and any other attempted assignment or transfer by Borrower without such consent shall be null and void).
 
Section 10.5 Transfer of Lender's Interests.
 
(a)                       Assignments. Borrower hereby agrees that Lender, at its own cost
and expense, shall have the right, subject to written consent from Borrower, to assign all or a portion of its rights and obligations hereunder to one or more investors or other financial institutions.
 
(b)                      Participations. Borrower hereby agrees that Lender, in its sole
discretion, shall have the unrestricted right at any time and from time to time, and without the consent of or notice of Borrower, to grant participating interests in its obligation to lend hereunder and/or all or any part of the Obligations to one or more banks or other financial institutions (each, a "Participant"). In the event of any such grant by Lender of a participating interest to a Participant, Lender shall remain responsible for the performance of its obligations hereunder and Borrower shall continue to deal solely and directly with Lender in connection with Lender's rights and obligations hereunder. Lender may furnish any information concerning Borrower in its possession from time to time to Participants and prospective Participants, provided that Lender shall require any such Participants and prospective Participants to agree in writing to maintain the confidentiality of such information, except as required by applicable laws or Governmental Authorities, and provide notice to Borrower of such action.
 
(c)                       Indemnification. Borrower shall jointly and severally indemnify
Lender and each Related Party of Lender (each such Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of

any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by Borrower arising out of, in connection with, or as a result of: (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Contaminants on or from any property owned or operated by Borrower or Project SPE or any Subsidiary and related in any way to any activity of Borrower or Project SPE or such Subsidiary, or any liability resulting from any Environmental Claim related in any way to any activity of Borrower or Project SPE or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Borrower, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of any Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.
 
Section 10.6 Right of Setoff. Borrower hereby grants to Lender a continuing lien,
security interest and right of setoff as security for all of the Obligations and other liabilities of Borrower to Lender or any Affiliate of Lender, whether now existing or hereafter arising, upon and against all its deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Lender or any entity under the control of Lender's parent company, if any, and its successors and assigns or in transit to any of them. At any time and from time to time after the occurrence and during the continuance of an Event of Default, without demand or notice (any such demand or notice being expressly waived by Borrower), Lender may setoff the same or any part thereof and apply the same to any Obligation or other liability of Borrower to Lender, even though unmatured, irrespective of whether or not Lender shall have made any demand under this Agreement or any other Loan Document and regardless of the adequacy of any other collateral securing such Obligations and liabilities. The rights of Lender under this Section 10.6 are in addition to other rights and remedies (including, without limitation, other rights of setoff) which Lender may have.
 
Section 10.7 Governing Law; Jurisdiction.
 
(a)                       This Agreement and the other Loan Documents shall be construed
in accordance with and governed by the laws of the State of New York (excluding the laws applicable to conflicts or choice of law). It is the express intention of Lender and Borrower that the laws of the State of New York (but not its conflict of laws rules) apply to the entirety of the transactions evidenced by the Loan Documents.
 
(b)                      Borrower hereby irrevocably submits, for itself and its property, to
the nonexclusive jurisdiction of any Delaware State or United States Federal court sitting in the State of Delaware, and any appellate court from any thereof, in any action or proceeding

arising out of or relating to this Agreement or the other Loan Documents, or for recognition or enforcement of any judgment, and Borrower hereby irrevocably and unconditionally agrees that all claims in respect to such action or proceeding may be heard and determined in such Delaware State or Federal court. Borrower and Lender agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
 
(c)                       Nothing in this Section 10.7 shall affect the right of Lender to serve
legal process in any other manner permitted by law or affect any right that Lender may otherwise have to bring an action or proceeding relating to this Agreement or the other Loan Documents against Borrower or its properties in the courts of any jurisdiction.
 
Section 10.8 Entire Agreement, Severability of Provisions.
 
(a)                       This Agreement and the other Loan Documents are intended by the
parties as the final, complete and exclusive statement of the transactions evidenced by this Agreement and the other Loan Documents. All prior or contemporaneous promises, agreements and understandings, whether oral or written, are deemed to be superseded by this Agreement and the other Loan Documents, and no party is relying on any promise, agreement or understanding not set forth in this Agreement and/or the other Loan Documents. This Agreement and the other Loan Documents may not be amended or modified except by a written instrument describing such amendment or modification executed by Borrower and Lender. Nothing in this Agreement or in the other Loan Documents, express or implied, is intended to confer upon any party other than the parties hereto and thereto, any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents.
 
(b)                      If any one or more terms or provisions contained in this Agreement
or in any of the other Loan Documents or the application thereof to any circumstance shall, in any jurisdiction and to any extent, be held invalid, illegal or unenforceable, such terms or provisions shall be ineffective as to such jurisdiction only to the extent of such invalidity, illegality or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions hereof or thereof or the application of such term or provision to circumstances other than those as to which it is held invalid, illegal or unenforceable. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
 
Section 10.9 Waivers.
 
(a)                       Jury Waiver. BORROWER AND LENDER MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF

CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF LENDER RELATING TO THE ADMINISTRATION OF ANY OF THE LOANS OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
 
(b)                      Waiver of Consequential Damages, Etc. TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND LENDER AGREE NOT TO ASSERT, AND HEREBY WAIVE, ANY CLAIM AGAINST ONE ANOTHER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY LOAN OR THE USE OF THE PROCEEDS THEREOF. NO INDEMNITEE SHALL BE LIABLE FOR AN DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
 
Section 10.10 Survival of Agreement. All covenants, agreements, representations and
warranties made by Borrower in this Agreement and in the certificates or other instruments prepared or delivered by it or on its behalf in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by Lender and shall survive the making by Lender of the Loans and delivery of this Agreement and the other Loan Documents, regardless of any investigation made by Lender or on its behalf, and shall continue in full force and effect as long as any Obligation is outstanding and so long as the Commitments have not been terminated. The provisions of Sections [ ]Article I, and Article X hereof shall survive and remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of the Obligations, the expiration of the Revolving Loan Commitment, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of Lender.
 
Section 10.11 Construction. Each covenant contained in Articles V, VI and VII of this
Agreement shall be construed (absent an express contrary provision therein) as being independent of each other covenant contained herein, and compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.
 
Section 10.12 Captions. Article and Section titles in the Loan Documents are included for
convenience only and do not define, limit, or describe the scope of the provisions thereof.

Section 10.13 Counterparts. This Agreement may be executed and delivered in any
number of counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute but one and the same agreement. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
 
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK THE NEXT PAGE IS THE SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
 
ENERGEA GLOBAL LLC
 
By: Name: Michael Silvestrini
Title: Manager
 
 
 
By: Name: Chris Sattler
Title: Manager
 
ENERGEA PORTFOLIO 2 LLC
 
By: Name: Michael Silvestrini
Title: Manager
 
By: Name: Chris Sattler
Title: Manager
 
 
ENERGEA GERAÇÃO DISTRIBUÍDA DE ENERGIA DO BRASIL S.A.
 
By: Name: Michael Silvestrini
Title: Manager
 
By: Name: Chris Sattler
Title: Manager

LATTICE ENERGEA GLOBAL REVOLVER I LLC
 
By: Name: Neal Parikh
Title: Partner
 
 
By: Name: Krishnan Raghunathan
Title: Partner

Schedule 4.12 Debt and Liens
 
 
 
 
 
N/A

Schedule 4.18 Environmental Matters
 
 
 
 
 
 
 
N/A

Schedule 4.22 Plans/Multiemployer Plans
 
 
 
 
 
 
 
N/A

Schedule 4.23 Insurance
 
 
 
 


Schedule 4.24(a) Owned Real Property
 
 
 
 
 
 
 
a.  Energea Portfolio 2 LLC: N/A
 
b.  Energea Geração Distribuída de Energia do Brasil S.A.: N/A
 
c. Energea Iguatama Aluguel de Equipamentos e Manutenção Ltda.: N/A
 
d.  Energea Pedra do Indaiá Ltda.: N/A
 
e. Energea Araxá I Ltda.: N/A
 
f. Energea Divinópolis Ltda.: N/A
 
g.  Energea Divinópolis II Ltda.: N/A
 
h.  Energea Micros I Ltda.: N/A

Schedule 4.24(b) Leased Real Property
 
 
 
Loan Party
Leased Real Property
Address
Energea Portfolio 2 LLC
N/A
N/A
Energea Geração Distribuída de Energia do Brasil S.A.
N/A
N/A
Energea Iguatama Aluguel de Equipamentos e Manutenção Ltda.
Surface Rights Agreement dated August 26, 2020, with Hamilton Aparecido Garcia
Property located in Iguatama/MG, registered under No. R-2-592.
Energea Pedra do Indaiá Ltda.
Surface Rights Deed, dated September 16, 2022, with Agropecuária Tapera Ltda.
Property located in Pedra do Indaiá/MG, called "Fazenda Tapera", registered under No. 13.574.
Energea Araxá I Ltda.
Lease Agreement dated February 18, 2022, with Jordelino José Carneiro Neto and Palmira Barcelos Carneiro.
Property located in Araxá/MG, called "Fazenda Córrego do Sal", registered under No. 46.242.
Energea Divinópolis Ltda.
Lease Agreement dated May 4, 2022, with Jerônimo Rodrigues dos Santos.
Property Located at Divinopolis/MG, called "Fazenda do Brejinho", registered under No. 25.533.
Energea Divinópolis II Ltda.
Lease Agreement dated March 10, 2022, with Beraldo Ferreira and Nilda Maria Gomes Ferreira.
Property Located in Divinopolis/MG, called "Córrego Sugo", registered under No. 25.462.
Energea Micros I Ltda. Beto
Lease Agreement dated December 20, 2022 with Espólio de Paulo Roberto Pacca de Souza Brito.
Property located in Vassouras/RJ, called "Bacia Vieira de Macedo", registered under No. 8.796.
Energea Micros I Ltda. Granja Bambu
Lease Agreement with Espólio Sebastião Hudson e Espólio de Thereza Almerinda da Conceição
Property located in Vassouras/RJ, called "Monte Razo", registered under No. 1.381.

Loan Party
Leased Real Property
Address
Energea Micros I Ltda. Granja Escola
Lease Agreement with Espólio Sebastião Hudson e Espólio de Thereza Almerinda da Conceição
Property located in Vassouras/RJ, registered under No. 602.
Energea Micros I Ltda. Granja Platô
Lease Agreement with Sebastião Hudson Filho
Property located in Paty dos Alferes/RJ, called "Imóvel Jacó e Guarda Mor", registered under No. 4.009.
Energea Micros I Ltda.
 
Jurema I
Lease Agreement with Luiz Carlos Fernandes Ribeiro and Marinete Fernandes Ribeiro
Property located in Paty dos Alferes/RJ, registered under No. 294
Energea Micros I Ltda. Jurema II
Lease Agreement with Luiz Carlos Fernandes Ribeiro and Marinete Fernandes Ribeiro
Property located in Vassouras, called "Granja n
 
Número 35", registered under No. 10.995.
Energea Micros I Ltda. Karol II
Lease Agreement with Karolayne Maciel Conde
Property located in Petropolis/RJ, called "Viuva Bastos", registered under No. 204
Energea Micros I Ltda. Karol III
Lease Agreement with Karolayne Maciel Conde
Property located in Petropolis/RJ, called "Viuva Bastos", registered under No. 204
Energea Micros I Ltda. Reinaldo I
Lease Agreement with Reinaldo da Silva Machado
Property located in Paty dos Alferes/RJ, called "Fazenda São Luiz Boa Vista", registered under No. 3.950.
Energea Micros I Ltda. Rosane I
Lease Agreement with Rosane da Costa Maciel
Property Located in Paty dos Alferes/RJ, called "Viuva Bastos", registered under No. 5.590.
Energea Micros I Ltda. Rosane III
Lease Agreement with Rosane da Costa Maciel and Orlanda da Costa Maciel
Property Located in Paty dos Alferes/RJ, called "Viuva Bastos", registered under No. 5.591.

Loan Party
Leased Real Property
Address
Energea Micros I Ltda. Sapucaia I
Lease Agreement with Carlos Alberto dos Santos Junior and Sebastião Lopes de Carvalho
Property located in Sapucaia/RJ, called "Sitio Nossa Senhora da Paz", registered under No. 2.332.

Schedule 6.4
 
Approved Projects as of December 2023
 
 
No. Project
 
1. Iguatama, Brazil
Reference #
 
BRZ-IGU
Approval Date 10/9/2020
Approved Amount (US$)
$1,775,000.00
2.25 MW ac
2. Pedra do Indaiá, Brazil
 
BRZ-PED
 
9/3/2021
 
$1,900,000.00
2.50 MW ac
3. Divinópolis, Brazil
 
BRZ-DIV
 
10/14/2022
 
$1,360,000.00
2.50 MW ac
4. Divinópolis III
 
BRZ-DIV-III
 
12/19/2023
 
$0
5. Araxa I
BRZ-ARX
12/19/2023
$0
6.
BRZ-MIC-
12/19/2023
$0
Micros I - Beto
7.
BTO
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Granja Bambu
8.
GBB
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Granja Escola
9.
GES
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Granja Platô
10.
GPT
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Jurema I
11.
JM1
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Jurema II
12.
JM2
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Karol II
13.
KR2
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Karol III
14.
KR3
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Reinaldo I
15.
RND
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Rosane I
16.
RS1
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Rosane III
17.
RS3
BRZ-MIC-
 
12/19/2023
 
$0
Micros I - Sapucaia I
SPC
 
 
 
 
 
Current P2 Assets as of December 2023

Project Name
Status
kWdc kWac Budget $ CFADS
Balance $
 
Iguatama
 
Pedra do Indaiá Divinópolis II Divinópolis III Araxá I
Araxá II Micros I - Beto
Micros I - Granja
Bambu
Micros I - Granja Escola
Micros I - Granja Platô Micros I - Jurema I
Micros I - Jurema II Micros I - Karol II Micros I - Karol III Micros I - Reinaldo I Micros I - Rosane I Micros I - Rosane III Micros I - Sapucaia I
Corumbaíba Diamantina Formiga I
Aparecida do Taboado
II
 
Operational
Under Construction
Under Construction
Under Construction
Contracted Backlog
Contracted Backlog
Operational
 
Operational
 
Operational
Operational Under Construction Under Construction
Operational Operational Operational Operational Operational Operational
2,547,52
2,706 2,250 7 48,281
4,188,31
3,000 2,500 7 56,908
3,463,05
2,971 2,500 0 59,427
3,165,78
3,125 2,500 9 60,232
3,642,65
3,125 2,500 3 58,980
3,669,09
3,125 2,500 4 59,070
100 75 82,702 14,682
 
100 75 82,614
 
100 75 82,590
100 75 69,508
100 75 82,795
100 75 82,903
100 75 83,362
100 75 82,580
100 75 82,804
100 75 82,614
100 75 82,773
100 75 82,749
3,141,76
3,125 2,500 8
3,480,92
3,125 2,500 3
3,529,67
3,125 2,500 2
3,458,94
3,125 2,500 8
 
 
 
942,927
2,387,142
3,354,525
3,380,410
 
 
 
 
 
 
 
 
2,900,886
3,366,666
3,405,081
3,363,380

Schedule 6.15 - Affiliate Contracts
 
 
 
a.  Energea Portfolio 2 LLC: N/A
 
b.  Energea Geração Distribuída de Energia do Brasil S.A.: N/A
 
c. Energea Iguatama Aluguel de Equipamentos e Manutenção Ltda.:
 
       Equipment Rental Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea;
       O&M Service Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea.
d.  Energea Pedra do Indaiá Ltda.:
 
       Equipment Rental Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea;
       O&M Service Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea.
e. Energea Araxá I Ltda.:
 
       Equipment Rental Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea;
       O&M Service Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea.
f. Energea Divinópolis Ltda.:
 
       Equipment Rental Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea;
       O&M Service Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea.
g.  Energea Divinópolis II Ltda.:
 
       Equipment Rental Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea;
       O&M Service Agreement with Consorcio de Geração Compartilhada de Energia Eletrica Energea.
h.  Energea Micros I Ltda.: N/A

Schedule 7.1 Security Documents
 
 
A.             Security Documents.
 
(i)             As of (x) the Closing Date in accordance with Section 3.1(a), (y) each Drawdown
Date for any Revolving Loan in accordance with Section 3.2(f), and (z) each Drawdown Date for any Term Loan in accordance with Section 3.3(e) of the Credit Agreement, Borrower shall, or shall cause the applicable Loan Party to, execute and deliver to Lender each Security Document required hereunder not previously delivered as of such date.
 
 
(ii)            "Security Documents" means (i) the Security Agreements as defined in part B
below, (ii) the filings contemplated in part C below, (iii) each additional Loan Document necessary to grant Lender a perfected security interest in all right, title, and interest of the Loan Parties, in and to the Collateral free of all other Liens thereon other than Permitted Liens, and (iv) all authorizations, consents, approvals, licenses, leases, rulings, permits, certifications, exemptions, submissions to or filings for registration by or with any Governmental Authority that are necessary in order to establish, protect, preserve and perfect Lender's Lien on the Collateral.
 
 
B.             Security Agreements.
 
(i)             "Security Agreements" means, from time to time, the agreements required as
indicated in the tables set forth below in clause (ii).
 
(ii)            Each of Borrower and the Loan Parties shall be obligated to deliver fully executed
copies of the following to Lender on the dates set forth below (as of each date, to the extent not executed and delivered to Lender previously). References below to Approved Projects refers to all Approved Projects as of the applicable date as that list may be revised from time to time.
 
Date Required
Agreement
Granting Loan Party
Relevant Collateral
Second Amendment Closing Date
Pledge Agreement
Borrower
All outstanding membership interests in [ ] owned by Borrower
Closing Date
Fiduciary Lien over Shares
Michael Paul Silvestrini, Chris Sattler and Antonio Carlos Nether Ferreira Pires
All outstanding equity interests in Energea Geração Distribuída de Energia do Brasil S.A. ("Energea Brasil")
Closing Date
Fiduciary Assignment of Credit Rights and Accounts Administration (one for each applicable Project SPE)
Energea Brasil and each Project SPE which owns an Approved Project
All receivables from Project Agreements, Insurance and balance/ investments on escrow account
Closing Date
Fiduciary Lien over Shares/Quotas (one for each applicable Project SPE)
Shareholders of each applicable Project SPE
All outstanding equity interests in any Project SPE that owns an Approved Project

Date Required
Agreement
Granting Loan Party
Relevant Collateral
Closing Date
Fiduciary Lien over Assets (one for each applicable Project SPE)
Each Project SPE which owns an Approved Project
All equipment owned by each applicable Project SPE
Drawdown Date for Revolving Loan or Term Loan
Account Agreement for each Permitted Account
Each Project SPE which owns an Approved Project
All security of deposit accounts of each applicable Project SPE
Drawdown Date for Revolving Loan or Term Loan
Any agreement set forth above not provided previously
As set forth above, as applicable
As set forth above, as applicable
 
 
C.             Filings and Instruments. Each of Borrower and the Loan Parties shall be obligated to make the following filings and deliver to Lender fully-executed copies of the following on the dates set forth below (as of each date, to the extent not executed and delivered to Lender previously). References below to Approved Projects refers to all Approved Projects as of the applicable date as that list may be revised from time to time.
 
 
Date Required
Filing/Instrument
Granting Loan Party
Relevant Collateral
Second Amendment Closing Date
UCC-1 Filing
Borrower
All outstanding membership interest in Energea Iguatama Aluguel de Equipamentos e Manutenção Ltda., Energea Pedra do Indaiá Ltda., Energea Araxá I Ltda., Energea Divinópolis Ltda., Energea Divinópolis II Ltda., Energea Micros I Ltda. owned by Borrower.
Second Amendment Closing Date
Undated, executed transfer instrument and certificate of membership interest
Borrower
All outstanding membership interest in Energea Iguatama Aluguel de Equipamentos e Manutenção Ltda., Energea Pedra do Indaiá Ltda., Energea Araxá I Ltda., Energea Divinópolis Ltda., Energea Divinópolis II Ltda., Energea Micros I Ltda. owned by Borrower
Drawdown Date for Revolving Loan or Term Loan
Assignment Notifications as to each Material Project Document for each Approved Project
Energea Brasil and each Project SPE which owns an Approved Project
Energea Brasil and each Project SPE which owns an Approved Project
5 Business Days from the execution date of the Fiduciary Lien over Shares
Annotation of the Fiduciary Lien on Energea Brasil's registered Share Register
Michael Paul Silvestrini, Chris Sattler and Antonio Carlos Nether Ferreira Pires
All outstanding equity interests in Energea Brasil
10 days from the
Register before the
Michael Paul
All outstanding equity

Date Required
Filing/Instrument
Granting Loan Party
Relevant Collateral
execution date of the Fiduciary Lien over Shares
competent Registry of Titles and Deeds
Silvestrini, Chris Sattler and Antonio Carlos Nether Ferreira Pires
interests in Energea Brasil
5 Business Days from the execution date of the
Registered amendment to the Articles of Association of the
Shareholders of each applicable Project SPE
All outstanding equity interests in any Project SPE that owns an
Fiduciary Lien over Shares/Quotas
Project SPE
 
Approved Project
10 days from the execution date of the Fiduciary Lien over Shares/Quotas
Register before the competent Registry of Titles and Deeds
Shareholders of each applicable Project SPE
All outstanding membership interest in any Project SPE that owns an Approved Project
10 days from the execution date of the Fiduciary Assignment of Credit Rights and Accounts Administration
Register before the competent Registry of Titles and Deeds
Energea Brasil and each Project SPE which owns an Approved Project
All receivables from Project Agreements, Insurance and balance/ investments on escrow account
10 days from the execution date of the Fiduciary Lien over Assets
Register before the competent Registry of Titles and Deeds
Each Project SPE which owns an Approved Project
All equipment owned by the Project SPE that will be used in the construction of the Approved Project
Drawdown Date for Revolving Loan or Term Loan relating to an Approved Project owned indirectly by Portfolio 1
UCC-1 Filing
Borrower
All outstanding membership interest in Portfolio 1 owned by Borrower
Drawdown Date for Revolving Loan or Term Loan relating to an Approved Project owned indirectly by Portfolio 1
Undated, executed transfer instrument and certificate of membership interest
Borrower
All outstanding membership interest in Portfolio 1 owned by Borrower
Drawdown Date for Revolving Loan or Term Loan
Any filing, notice or instrument set forth above not provided previously
As set forth above, as applicable
As set forth above, as applicable

Schedule A
 
Loan Documents
 
1.     Credit Agreement dated October 5, 2020 among Prior Borrower, New Borrower, Energea Brasil, and Lender, as amended by 1st Amendment to Credit Agreement dated December 9, 2020
2.     Revolving Loan Note dated October 5, 2020 made by Prior Borrower in favor of Lender
3.     Term Loan Note dated October 5, 2020 made by Prior Borrower in favor of Lender
4.     Amended and Restated Pledge Agreement dated October 5, 2020 among Prior Borrower and Lender*
5.     Warrant to Purchase Class B Membership Interests dated October 5, 2020 issued by Prior Borrower to Lender**
 
 
 
*To be terminated.
 
**Agreement and related obligations retained by Prior Borrower and not being assumed by New Borrower.