Capital Contributions; Preferential Distribution. (A) On the Effective Date, pursuant to the Subscription Agreement, MEC shall convey, assign and transfer to the Company as its initial capital contribution (the “Initial MEC Contribution”) free and clear of all Liens, all of its right, title and interest in and to (a) all of its fifty percent (50%) limited liability company interest in Solar Construction Lending, LLC, a Maryland limited liability company (“SCL”); (b) all of its fifty percent (50%) limited liability company interest in Solar Permanent Lending, LLC, a Maryland limited liability company (“SPL”); and (c) the specific Investments set forth in the Subscription Agreement (collectively the “Transferred Assets”), effective as of the Effective Date, and the Company hereby accepts the assignment of the Transferred Assets. The assignment by MEC of the Transferred Assets includes all rights of MEC with respect to the Transferred Assets, including, without limitation (i) those rights arising under the operating agreement of each of SCL and SPL and (ii) all rights of MEC to receive return of capital contributions or distributions of profit made with respect to the Transferred Assets on or after the Effective Date, whether or not such profit distributions relate to profit that was realized by SCL or SPL prior to the Transfer Date.
(B) Subject to the terms of the Subscription Agreement, the Company has assumed thereunder all of the obligations, commitments, liabilities and duties of MEC with respect to the Transferred Assets. The Effective Date will be the effective date for purposes of maintaining the capital accounts of the Company, and for federal, state and local income tax purposes.
(C) On the Effective Date, RDH shall make a Capital Contribution to the Company in cash in amount equal to $5,000,000 (the “Initial RDH Contribution”). RDH shall make Capital Contributions to the Company in cash in accordance with the terms hereof in an amount, together with the Capital Contribution made on the Effective Date, not to exceed the lesser of (i) eighty-five percent (85%) of the aggregate Approved Investments of the Company (taking into account the Initial MEC Contribution), and (ii) an amount that would result in an implied unlevered project level IRR (calculated by substituting the Project Cost in the Investment Model with RDH’s implied Capital Contribution associated with the loan applied against projected pre-tax unlevered cash flows assuming (a) the project monetizes 90% of the eligible ITC value as a cash...
