Exhibit 10.1

 

Execution Version

 

PURCHASE AND SALE AGREEMENT

 

dated

 

October 12, 2016,

 

by and between

 

LANDMARK INFRASTRUCTURE OPERATING COMPANY LLC

 

as Buyer,

 

and

 

RECURRENT ENERGY LANDCO LLC

 

as Seller

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

1.

PURCHASE AND SALE

1

 

 

 

2.

PURCHASE PRICE

1

 

2.1

Deposit

2

 

2.2

Additional Deposit

2

 

 

 

 

3.

BUYER’S DUE DILIGENCE PERIOD

2

 

 

 

4.

BUYER’S ACKNOWLEDGEMENT; WAIVERS AND RELEASES

3

 

4.1

Natural Hazard Disclosures

3

 

4.2

AS-IS

4

 

4.3

Waivers

4

 

 

 

 

5.

CONDITIONS TO CLOSING

4

 

5.1

Buyer’s Closing Conditions

4

 

5.2

Failure of Buyer’s Closing Conditions

5

 

5.3

Seller’s Closing Conditions

6

 

5.4

Failure of Seller’s Closing Conditions

6

 

 

 

 

6.

TERMINATION BEFORE CLOSING

7

 

 

 

7.

EFFECT OF TERMINATION

7

 

 

 

8.

DEFAULT

7

 

8.1

Buyer Default

7

 

8.2

Liquidated Damages

7

 

8.3

Buyer’s Remedy Upon Seller’s Default

8

 

 

 

 

9.

CLOSING

8

 

9.1

Closing Date

8

 

9.2

Deliveries by Seller

8

 

9.3

Deliveries by Buyer

10

 

9.4

Prorations

10

 

9.5

Closing Costs

11

 

9.6

Estoppel Certificate

12

 

 

 

 

10.

SELLER’S REPRESENTATIONS AND WARRANTIES

12

 

10.1

Due Organization of Seller and the Land Holding Companies

12

 

10.2

Seller’s Authority; Validity of Agreements

12

 

10.3

Consents

13

 

10.4

Compliance with Laws and Permits

13

 

10.5

Equity Interests

13

 

10.6

Nature of Company’s Business

13

 

10.7

Properties

14

 

10.8

Litigation

14

 

i

--------------------------------------------------------------------------------

 

 

10.9

Condemnation and Expropriation

15

 

10.10

Employee Matters

15

 

10.11

Tax Matters

15

 

10.12

Environmental Matters

16

 

10.13

No Material Adverse Change

17

 

10.14

Insurance

17

 

10.15

Financial Information

17

 

10.16

Patriot Act Compliance

17

 

10.17

Seller’s Knowledge

17

 

10.18

Survival and Limitation of Liability

18

 

 

 

 

11.

BUYER’S REPRESENTATIONS AND WARRANTIES

18

 

11.1

Due Organization

18

 

11.2

Buyer’s Authority; Validity of Agreements

18

 

11.3

Patriot Act Compliance

19

 

11.4

Survival

19

 

 

 

 

12.

INDEMNIFICATION

19

 

12.1

Indemnification by Seller

19

 

12.2

Indemnification by Buyer

20

 

12.3

Damages Disallowed

20

 

 

 

 

13.

OTHER COVENANTS AND AGREEMENTS

20

 

13.1

Operations

20

 

13.2

Government Filings

21

 

13.3

Grant of Easements

21

 

13.4

Option to Repurchase Properties

22

 

13.5

Audit Cooperation by Seller

22

 

13.6

Tax Matters

22

 

13.7

Certificate of Compliance

26

 

 

 

 

14.

BROKERS

26

 

 

 

15.

MISCELLANEOUS PROVISIONS

26

 

15.1

Governing Law

26

 

15.2

Entire Agreement

26

 

15.3

Modification; Waiver

27

 

15.4

Notices

27

 

15.5

Expenses

27

 

15.6

Assignment

27

 

15.7

Severability

28

 

15.8

Successors and Assigns; Third Parties

28

 

15.9

Confidentiality

28

 

15.10

Public Statements

28

 

15.11

Drafts Not an Offer to Enter Into a Legally Binding Contract

29

 

15.12

Counterparts

29

 

15.13

Headings

29

 

ii

--------------------------------------------------------------------------------

 

 

15.14

Time of Essence

29

 

15.15

Further Assurances

29

 

15.16

Number and Gender

29

 

15.17

Construction

29

 

15.18

Exhibits

29

 

15.19

Attorneys’ Fees

29

 

15.20

Business Days

29

 

15.21

Waiver of Known Defaults

30

 

15.22

No Course of Dealing

30

 

15.23

Currency

30

 

15.24

No Registration of Agreement

30

 

iii

--------------------------------------------------------------------------------

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as
of October 12, 2016 (the “Execution Date”), by and between LANDMARK
INFRASTRUCTURE OPERATING COMPANY LLC, a Delaware limited liability company
(“Buyer”), and RECURRENT ENERGY LANDCO LLC, a Delaware limited liability company
(“Seller”).  Capitalized terms used herein without definition shall have the
meanings given to them in Exhibit A attached hereto.

 

R E C I T A L S

 

A.                                    Seller owns 100% of the outstanding equity
interests (the “Equity Interests”) in each of the entities (each a “Land Holding
Company” and collectively, the “Land Holding Companies”) as set forth on
Exhibit B attached hereto.

 

B.                                    Each Land Holding Company owns certain
real property interests and related rights at the site(s) as set forth opposite
such Land Holding Company’s name on Exhibit B attached hereto.  The real
property interests and related rights at each site is defined and described on
Exhibit C attached hereto (each a “Property” and collectively, the
“Properties”).

 

C.                                    Seller desires to sell, assign, transfer
and convey the Equity Interests in each and all of the Land Holding Companies to
Buyer, and Buyer desires to purchase, accept and assume such Equity Interests
from Seller, upon and subject to the terms and conditions set forth in this
Agreement.

 

A G R E E M E N T

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree as
follows:

 

1.             PURCHASE AND SALE.  Subject to all of the terms and conditions of
this Agreement, Seller agrees to sell, assign, transfer and convey to Buyer, and
Buyer agrees to purchase, accept and assume from Seller, the Equity Interests in
each and all of the Land Holding Companies, in each case free and clear from all
Liens, other than the restrictions on transfer that may be imposed by applicable
securities Laws and any Liens created by or through Buyer.

 

2.             PURCHASE PRICE.  The aggregate purchase price of the Equity
Interests in the Land Holding Companies shall be $72,740,000 (the “Purchase
Price”).  The allocation of the Purchase Price with respect to each Land Holding
Company is set forth opposite such Land Holding Company’s name on Exhibit E
attached hereto.  At Closing, Buyer shall pay to Seller the Purchase Price, net
of all prorations as provided in Section 9.4 hereof.  In addition, at Closing,
Buyer shall receive a credit of $250,000 (the “Initial Payment”) toward the
Purchase Price, which amount was previously deposited by Buyer with Seller
pursuant to that certain Term Sheet Purchase of Interests in Solar Project Real
Estate dated July 1, 2016.

 

--------------------------------------------------------------------------------

 

2.1              Deposit.  Buyer has delivered the Initial Payment to Stewart
Title of California, Inc., a California corporation (“Escrow Holder”), 5740
Fleet Street, #100, Carlsbad, CA 92008, Attn: Carla Burchard, Branch Operation
Manager/Commercial Escrow Officer.

 

2.2          Additional Deposit.  If Buyer delivers the Buyer’s Notice prior to
the end of the Due Diligence Period (as defined in Section 3 below), Buyer shall
deposit with Escrow Holder an additional amount of Five Hundred Thousand Dollars
($500,000) (the “Additional Deposit”) in cash or other immediately available
funds within two (2) business days following Buyer’s delivery of the Buyer’s
Notice.  The Initial Payment and the Additional Deposit (if and when the
Additional Deposit is deposited with Escrow Holder as provided herein) are
collectively referred to as the “Deposit.”  The Deposit shall be held by the
Escrow Holder in escrow and invested in an account satisfactory to Buyer, and
all interest thereon, less any fees, if any, shall be deemed a part of the
Deposit.

 

3.             BUYER’S DUE DILIGENCE PERIOD.  Buyer acknowledges that it
commenced its due diligence prior to the Execution Date and that its
accountants, PricewaterhouseCoopers, LLP, reviewed copies of certain tax
information pertaining to Seller and the Land Holding Companies, and Seller and
Buyer agree that Buyer shall have the right to continue its due diligence until
October 24, 2016 (such period being referred to herein as the “Due Diligence
Period”):  (a) to review documents containing information regarding each Land
Holding Company and Property, to include without limitation (i) the Charter
Documents, (ii) the Ground Leases, (iii) a current preliminary title report for
a standard coverage owner’s policy of title insurance for each Property (the
“PTR”) and copies of all documents referenced as exceptions therein
(collectively, the “Underlying Documents”), (iv) a survey of each Property (the
“Survey”) (the PTR, the Underlying Documents and the Survey shall be
collectively referred to herein as the “Title Documents”), (v) a Phase I
Environmental Site Assessment (“Phase I”) and, if applicable, a Phase II
Environmental Site Assessment (“Phase II”) for each Property, and (vi) such
other documents and materials, unaudited financial statements and other
financial documents pertaining to the Land Holding Companies and the Properties
delivered to or made available on a secured website accessible to Buyer (the
“Data Room”), the index for which is set forth on Schedule II attached hereto,
together with responses within diligence log exchanged from time to time between
parties, and (b) to otherwise conduct its Due Diligence of each Land Holding
Company and Property as Buyer has deemed or shall deem necessary or appropriate
(all such documents, agreements, reports, materials and information,
collectively, the “Diligence Documents”).  In connection with the Data Room: 
(1) Seller delivered to Buyer a notice of substantial completion of the Data
Room on August 15, 2016; (2) Buyer provided Seller with a written notice of
material due diligence items absent from the Data Room that Buyer believed to be
in Seller’s reasonable possession or control on August 17, 2016 (the “Diligence
Deficiency Notice”); (3) Seller delivered to Buyer Seller’s response to the
Diligence Deficiency Notice on August 22, 2016; and (4) Buyer delivered to
Seller a notice of substantial completion of the Data Room on August 23, 2016. 
Notwithstanding anything to the contrary as set forth herein, Seller shall be
under no obligation to create or commission any Diligence Documents.  Seller
shall have the right to redact documents or materials furnished or made
available to Buyer to delete pricing and other sensitive or proprietary
information, unrelated to the Equity Interests, obligations or liabilities of
the Land Holding Companies.  The date Seller and Buyer agree the Data Room is
substantially complete shall be referred to as the “Diligence Start Date”. 
Buyer acknowledges that Seller shall provide Buyer with copies of the existing
Title Documents, Phase I, and Phase II

 

2

--------------------------------------------------------------------------------

 

that are in Seller’s possession, and Buyer shall be responsible for the cost (or
shall reimburse Seller) of any updates to the Title Documents, Phase I, and
Phase II desired by Seller in accordance with Section 9.5 below at Closing or
upon the earlier termination of this Agreement.

 

If Buyer determines not to proceed with the purchase of the Land Holding
Companies for any reason or no reason, then Buyer may, before the end of the Due
Diligence Period, notify Seller in writing that Buyer has elected to terminate
this Agreement and not to proceed with the Closing, and thereafter, the Initial
Payment, less the sum of $100 (the “Non-Refundable Portion”) shall be returned
to Buyer by Seller within five (5) business days, and neither party shall have
any further rights or obligations hereunder except as provided in Section 14,
Section 15.9, and Section 15.10 of this Agreement.  If Buyer determines to
proceed with the purchase of the Land Holding Companies, then Buyer shall,
before the end of the Due Diligence Period, so notify Seller in writing
(“Buyer’s Notice”), in which case Buyer shall be deemed to have approved all of
the Diligence Documents, shall deposit the Additional Deposit with the Escrow
Holder, and the Deposit shall become nonrefundable except as otherwise provided
in Section 7 and Section 8.3.  If Buyer does not provide written notice of its
intent to proceed with the purchase of the Land Holding Companies to Seller
prior to the expiration of the Due Diligence Period, Buyer shall be deemed to
have elected to terminate this Agreement and not to proceed with the Closing,
and within five (5) business days after the end of the Due Diligence Period, the
Initial Payment, less the Non-Refundable Portion, shall be returned to Buyer,
and neither party shall have any further rights or obligations hereunder except
as provided in Section 14, Section 15.9, and Section 15.10 of this Agreement.

 

4.             BUYER’S ACKNOWLEDGEMENT; WAIVERS AND RELEASES.  Buyer
acknowledges, agrees and covenants as follows (subject, in any event, to
Seller’s representations and warranties in Section 10 hereof (as such
representations and warranties may be deemed modified or waived by Buyer
pursuant to this Agreement, “Seller’s Warranties”)):

 

4.1              Natural Hazard Disclosures.  As used herein, the term “Natural
Hazard Area” shall mean those areas identified as natural hazard areas or
natural hazards in the Natural Hazard Disclosure Act, California Government Code
Sections 8589.3, 8589.4 and 51183.5, and California Public Resources Code
Sections 2621.9, 2694 and 4136, and any successor statutes or laws (the “Act”). 
Buyer and Seller acknowledge that pursuant to the Act, Seller is required to
disclose if any of the Property lies within the following natural hazard areas
or zones:  (i) a special flood hazard area designated by the Federal Emergency
Management Agency; (ii) an area of potential flooding; (iii) a very high fire
hazard severity zone; (iv) a wild land area that may contain substantial forest
fire risks and hazards; (v) an earthquake fault or special studies zone; or
(vi) a seismic hazard zone.  Buyer acknowledges that Seller will employ the
services of the Title Companies and/or another third party selected by Seller
(“Natural Hazard Expert”) to examine the maps and other information specifically
made available to the public by government agencies and to post the results of
its examination in the Data Room prior to the Execution Date.  Subject to any
applicable provision(s) of the Act, the written report prepared by the Natural
Hazard Expert pursuant to the Act regarding the results of its examination,
fully and completely discharges Seller from its disclosure obligations with
respect to the Act, and, for the purposes of this Agreement, the provisions of
California Civil Code Section 1103.4 regarding the non-liability of Seller for
errors and/or omissions not within its personal knowledge shall be deemed to
apply, and the Natural Hazard Expert shall be deemed to be an expert dealing
with matters

 

3

--------------------------------------------------------------------------------

 

within the scope of its expertise with respect to the examination and written
report regarding the natural hazards referred to above.  Without limitation of
Seller’s express warranties hereunder, Buyer acknowledges and agrees that
nothing contained herein releases Buyer from its obligation to fully investigate
and satisfy itself with the condition of each Property prior to the date hereof,
including, without limitation, whether such Property is located in any Natural
Hazard Area.  Buyer is solely responsible for all disclosures to subsequent
prospective purchasers of each Property.

 

4.2              AS-IS.  Each Land Holding Company is being sold to Buyer in its
present “AS IS, WHERE IS” condition “WITH ALL FAULTS.”  THE PARTIES HEREBY
ACKNOWLEDGE AND AGREE AS FOLLOWS:  (A) BUYER IS A SOPHISTICATED BUYER WHO IS
FAMILIAR WITH LIMITED LIABILITY COMPANY INTERESTS SUCH AS THE EQUITY INTERESTS,
ENTITIES SUCH AS THE LAND HOLDING COMPANIES, AND REAL PROPERTY SUCH AS THE
PROPERTY; (B) EXCEPT AS MAY BE SPECIFICALLY SET FORTH IN THIS AGREEMENT, NEITHER
SELLER NOR ANY OF ITS AGENTS, REPRESENTATIVES, BROKERS, OFFICERS, DIRECTORS,
SHAREHOLDERS, OR EMPLOYEES HAS MADE OR WILL MAKE ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED,
WITH RESPECT TO ANY LAND HOLDING COMPANY OR PROPERTY; AND (C) EXCEPT AS MAY BE
SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE EQUITY INTERESTS ARE BEING SOLD TO
BUYER IN ITS PRESENT “AS IS, WHERE IS” CONDITION “WITH ALL FAULTS.”  SUBJECT TO
THE TERMS HEREOF, BUYER HAS BEEN OR WILL BE AFFORDED THE OPPORTUNITY TO MAKE ANY
AND ALL INSPECTIONS OF THE LAND HOLDING COMPANY, THE PROPERTY OWNED BY SUCH LAND
HOLDING COMPANY AND SUCH RELATED MATTERS AS BUYER MAY REASONABLY DESIRE AND,
ACCORDINGLY, BUYER WILL RELY SOLELY ON ITS OWN DUE DILIGENCE AND INVESTIGATIONS
IN PURCHASING THE EQUITY INTERESTS IN SUCH LAND HOLDING COMPANY.

 

4.3              Waivers.  Buyer acknowledges and agrees that the Diligence
Documents furnished or made available by Seller to Buyer are for informational
purposes only.  Subject to Section 3 hereof, Buyer shall independently confirm
to its satisfaction all information that it considers material to its purchase
of the Equity Interests in each Land Holding Company, and Buyer shall not rely
on any representation or warranty by Seller other than Seller’s Warranties set
forth in Section 10 herein or the correctness, accuracy or completeness of any
information contained in any Diligence Document or otherwise furnished or made
available to Buyer by Seller in determining the Purchase Price or the allocation
thereof.

 

5.             CONDITIONS TO CLOSING.

 

5.1              Buyer’s Closing Conditions.  The obligation of Buyer to
complete the transactions contemplated by this Agreement is subject to the
following conditions precedent (and conditions concurrent, with respect to
deliveries to be made by the parties at Closing) (the “Buyer’s Closing
Conditions”), which conditions may be waived, or the time for satisfaction
thereof extended, by Buyer only in a writing executed by Buyer:

 

4

--------------------------------------------------------------------------------

 

5.1.1       Seller’s Representations and Warranties.  All of the representations
and warranties of Seller set forth in this Agreement shall be true, correct and
complete in all material respects as of the Closing Date.

 

5.1.2       Due Diligence.  Buyer’s completion of its due diligence during the
Due Diligence Period as provided in Section 3 above.

 

5.1.3       Bankruptcy.  No action or proceeding shall have been commenced by or
against Seller under the federal bankruptcy code or any state or provincial Law
for the relief of debtors or for the enforcement of the rights of creditors, and
no attachment, execution, lien or levy shall have attached to or been issued
with respect to the Equity Interests or Seller’s or the respective Land Holding
Company’s interest in the Property or any portion thereof and not fully
satisfied and released as of the Closing Date.

 

5.1.4       Deliveries.  Seller shall have delivered to Escrow or Buyer, as the
case may be, such documents or instruments as are required to be delivered or
caused to be delivered by Seller pursuant to the terms of this Agreement.

 

5.1.5       Title Policies.  The applicable Title Company shall be committed to
issue to the applicable Land Holding Company the applicable Owner’s Title Policy
with respect to each Property, including an endorsement confirming that Buyer is
an additional insured party thereunder and a non-imputation endorsement.

 

5.1.6       Estoppel Certificates.  Seller shall have used commercially
reasonable efforts to deliver or cause to be delivered to Buyer an estoppel
certificate substantially in the form of Exhibit I attached hereto executed by
each tenant/lessee of each Ground Lease.

 

5.1.7       Board Approval.  Buyer shall have obtained approval of the board of
directors of Landmark LP (as defined herein) for the purchase and sale of the
Equity Interests for the transaction contemplated herein.

 

5.2              Failure of Buyer’s Closing Conditions.  If any of Buyer’s
Closing Conditions have not been fulfilled by the Closing Date in accordance
with this Agreement, Buyer may:

 

5.2.1       waive the Buyer’s Closing Condition and complete the transactions
contemplated by this Agreement in accordance with this Agreement, without
adjustment or abatement of the Purchase Price; or

 

5.2.2       at any time after delivery of Buyer’s notice, terminate this
Agreement by written notice to Seller within five (5) business days of becoming
aware that the Buyer’s Closing Condition has not been fulfilled (which is not
caused by a breach of any of the covenants or agreements contained in this
Agreement to be complied with by Seller or a breach of any representation or
warranty of Seller, which breach shall be governed by Section 6.3), in which
event this Agreement (except for any provisions which

 

5

--------------------------------------------------------------------------------

 

survive termination by their terms) shall automatically terminate, and Seller
shall pay for all of the cancellation charges of the Title Company(ies), if any.

 

5.3              Seller’s Closing Conditions.  The obligation of Seller to
complete the transactions contemplated by this Agreement is subject to the
following conditions precedent (and conditions concurrent, with respect to
deliveries to be made by the parties at Closing) (the “Seller’s Closing
Conditions”), which conditions may be waived, or the time for satisfaction
thereof extended, by Seller only in a writing executed by Seller:

 

5.3.1       Buyer’s Representations and Warranties.  All of the representations
and warranties of Buyer set forth in this Agreement shall be true, correct and
complete in all material respects as of the Closing Date.

 

5.3.2       Bankruptcy.  No action or proceeding shall have been commenced by or
against Buyer under the federal bankruptcy code or any state or provincial Law
for the relief of debtors or for the enforcement of the rights of creditors.

 

5.3.3       Assignment and Assumption.  As of Closing, Buyer shall have executed
and delivered to Escrow Buyer’s counterparts of the Assignment and Assumption as
set forth in Section 9.3.2.

 

5.3.4       Option Agreement for the Purchase and Sale of Real Property.  As of
Closing, Buyer shall have executed and delivered as the sole member of each Land
Holding Company to Escrow each Land Holding Company’s counterparts of (a) the
Repurchase Option, and (b) an original executed and acknowledged applicable
Memorandum of Repurchase Option for recording following the Closing in the
official records of Kern County, California, and Kings County, California.

 

5.3.5       Deliveries.  Buyer shall have delivered to Escrow or Seller, as the
case may be, such documents or instruments as are required to be delivered by
Buyer pursuant to the terms of this Agreement.

 

5.4              Failure of Seller’s Closing Conditions.  If any of the Seller’s
Closing Conditions have not been fulfilled by the Closing Date in accordance of
this Agreement, Seller may:

 

5.4.1       waive the Seller’s Closing Condition in accordance with this
Agreement, without adjustment of the Purchase Price; or

 

5.4.2       terminate this Agreement by written notice to Buyer within five
(5) business days of becoming aware that the Seller’s Closing Condition has not
been fulfilled (which is not caused by a breach of any of the covenants or
agreements contained in this Agreement to be complied with by Buyer or a breach
of any representation or warranty of Buyer, which breach shall be governed by
Section 6.4), in which event this Agreement (except for any provisions which
survive termination by their terms) shall automatically terminate and Buyer
shall pay for all of the cancellation charges of the Title Company(ies), if any.

 

6

--------------------------------------------------------------------------------

 

6.             TERMINATION BEFORE CLOSING.  This Agreement may be terminated and
the transaction may be abandoned at any time prior to the Closing:

 

6.1          By mutual written agreement of Seller and Buyer.

 

6.2          By Buyer pursuant to Section 5.2.2 or by Seller pursuant to
Section 5.4.2.

 

6.3          By Buyer upon written notice to Seller if (a) Seller shall have
breached any of the covenants or agreements contained in this Agreement to be
complied with by Seller such that any closing condition set forth in Section 5.1
would not be satisfied, or (b) there exists a breach of any representation or
warranty of Seller contained in this Agreement such that the closing condition
set forth in Section 5.1.1 would not be satisfied prior to the Closing Date, in
each case, only if (i) Buyer shall have first given written notice to Seller
identifying such breach, and (ii) Seller has not cured or remedied such breach
within ten (10) business days of receipt of such notice; or

 

6.4          By Seller upon written notice to Buyer if (a) Buyer shall have
breached any of the covenants or agreements contained in this Agreement to be
complied with by Buyer such that any closing condition set forth in Section 5.3
would not be satisfied, or (b) there exists a breach of any representation or
warranty of Buyer contained in this Agreement such that the closing condition
set forth in Section 5.3.1 would not be satisfied prior to the Closing Date, in
each case, only if (i) Seller shall have first given written notice to Buyer
identifying such breach, and (ii) Buyer has not cured or remedied such breach
within ten (10) business days of receipt of such notice.

 

7.             EFFECT OF TERMINATION.  In the event of a termination of this
Agreement as provided in Section 6, this Agreement shall cease to have force and
effect, and there shall be no further liability or obligation on the part of
Seller or Buyer, except that (a) the applicable provisions of Section 5.2.2,
Section 5.4.2, Section 6, this Section 7, Section 8.1 (Buyer Default),
Section 8.2 (Liquidated Damages), Section 8.3 (Buyer’s Remedy Upon Seller’s
Default), Section 14 (Brokers), Section 15.9 (Confidentiality), and
Section 15.10 (Public Statements) shall continue to apply following any such
termination, (b) in the event of a termination by Buyer pursuant to Section 6.3,
Buyer’s sole and exclusive remedy shall be as set forth in Section 8.3, (c) in
the event of a termination by Seller pursuant to Section 6.4, Seller’s sole and
exclusive remedy shall be the receipt and retention of the Deposit as liquidated
damages as set forth in Section 8.1 and Section 8.2, and (d) nothing in this
Section 7 or elsewhere in the Agreement shall be deemed to release any party
from liability (or any limit thereof) for any fraud or willful breach of its
obligations under this Agreement in any material respect.

 

8.             DEFAULT.

 

8.1           Buyer Default.  Should Buyer default under any of the terms,
covenants or conditions of this Agreement prior to Closing, Seller shall have as
its sole and exclusive remedy the right to terminate this Agreement in
accordance with Section 6 and to retain the Deposit as liquidated damages.

 

8.2           Liquidated Damages.  IN THE EVENT THE TRANSACTION CONTEMPLATED
HEREBY IS NOT CONSUMMATED BECAUSE OF A DEFAULT

 

7

--------------------------------------------------------------------------------

 

UNDER THIS AGREEMENT ON THE PART OF BUYER, AS SELLER’S SOLE AND EXCLUSIVE REMEDY
BY REASON OF SUCH DEFAULT BY BUYER, THE AMOUNT OF THE DEPOSIT (COMPRISED OF THE
INITIAL PAYMENT AND, IF APPLICABLE, THE ADDITIONAL DEPOSIT, PLUS ANY INTEREST)
SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES, ALL OTHER CLAIMS
TO DAMAGES OR OTHER REMEDIES BEING HEREIN EXPRESSLY WAIVED BY SELLER.  THE
PARTIES ACKNOWLEDGE THAT, IN THE EVENT THE TRANSACTION CONTEMPLATED HEREBY IS
NOT CONSUMMATED BECAUSE OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER,
SELLER’S ACTUAL DAMAGES BY REASON OF SUCH DEFAULT BY BUYER WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE.  THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S DAMAGES
IN THE EVENT THE TRANSACTION CONTEMPLATED HEREBY IS NOT CONSUMMATED BECAUSE OF A
DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER.  NOTWITHSTANDING THE
FOREGOING, NOTHING IN THIS SECTION SHALL IN ANY WAY LIMIT ANY DAMAGES FOR WHICH
BUYER IS OR MAY BE LIABLE AS SET FORTH ELSEWHERE IN THIS AGREEMENT.

 

Seller:

 

 

Buyer:

 

 

8.3           Buyer’s Remedy Upon Seller’s Default.  Should Seller default under
any of the terms, covenants or conditions of this Agreement prior to Closing,
Buyer shall have as its sole and exclusive remedies, only the following: (a) the
right to terminate this Agreement in accordance with Section 6 and receive a
return of the Deposit; or (b) pursue a remedy of specific performance, provided
that any action for specific performance is commenced within ninety (90) days
after the occurrence of such default.

 

9.             CLOSING.

 

9.1              Closing Date.  Subject to the provisions of this Agreement,
closing of the transactions contemplated by this Agreement (“Closing”) shall
take place at the office of Seller or the offices of Escrow Holder on the
earlier of October 31, 2016 or five (5) business days following Seller’s receipt
of Buyer’s Notice or on such other date and time as Buyer and Seller may
mutually agree upon in writing (the “Closing Date”).  As with respect to this
transaction, time is of the essence, and such date and time shall not be
extended without the prior written approval of both Seller and Buyer.

 

9.2              Deliveries by Seller.  On or before the Closing Date, Seller,
at its sole cost and expense, shall deliver or cause to be delivered into the
escrow established by the applicable insuring Title Company (the “Escrow”) the
following documents and instruments, each dated as of the Closing Date, in
addition to all other items and payments required by this Agreement to be
delivered by Seller at Closing:

 

8

--------------------------------------------------------------------------------

 

9.2.1       Assignment and Assumption.  Two (2) executed originals of an
assignment and assumption agreement substantially in the form of Exhibit G
attached hereto (the “Assignment and Assumption”) executed by Seller;

 

9.2.2       Non-Foreign Affidavit.  A non-foreign affidavit with respect to the
transfer of the Equity Interests in the Land Holding Companies, substantially in
the form of Exhibit H attached hereto, executed by Seller (the “Non-Foreign
Affidavit”), and if required by the Title Company, a California Form 593 or
other form executed by Seller and to the effect that neither Buyer nor Title
Company is required to withhold any portion of the Purchase Price for payment of
Taxes under any applicable Law;

 

9.2.3       Option Agreement for the Purchase and Sale of Real Property. (a) Two
(2) executed originals of the Repurchase Option (as defined in Section 13.3
below), and (b) two (2) executed and acknowledged originals of the Memorandum of
Repurchase Option (as defined in Section 13.3 below) executed by Seller, for
recording following the Closing in the official records of Kern County,
California, and Kings County, California;

 

9.2.4       Agreement Regarding Easement Form.  Two (2) executed originals of
the Agreement Regarding Easement Form (as defined in Section 13.2 below);

 

9.2.5       Closing Statement.  A Closing Statement (as hereinafter defined)
executed by Seller;

 

9.2.6       Proof of Authority.  Certificates of good standing and certified
copies of certificate of formation of Seller, together with such proof of
Seller’s authority and authorization to enter into this Agreement and the
transaction contemplated hereby, and such proof of the power and authority of
the individual(s) executing or delivering any instruments, documents or
certificates on behalf of Seller to act for and bind Seller as may be reasonably
required by applicable Title Company(ies) or Buyer; and

 

9.2.7       Title Documents.  Such affidavits, indemnities and/or similar
certifications in customary form and executed by Seller as maybe required by the
Title Company to issue each Owner’s Title Policy at the Closing; provided,
however, that such documents and instruments shall be in a form reasonably
acceptable to Seller; and

 

9.2.8       Other.  Such other documents and instruments (or any keys, access
codes and/or combinations, if available), signed and properly acknowledged by
Seller, if appropriate, as may be reasonably required by Buyer and/or the Title
Company(ies) or otherwise in order to effectuate the provisions of this
Agreement and Closing; provided, however, that such documents and instruments
shall be in a form reasonably acceptable to Seller.

 

9.2.9       A Guaranty of Seller’s Post-Closing Obligations in the form of
Exhibit M attached hereto executed by Recurrent Energy, LLC, a Delaware limited
liability company.

 

9

--------------------------------------------------------------------------------

 

9.3              Deliveries by Buyer.  On or before the Closing Date, Buyer, at
its sole cost and expense, shall deliver or cause to be delivered into Escrow
the following funds, documents and instruments, each dated as of the Closing
Date, in addition to all other items and payments required by this Agreement to
be delivered by Buyer at Closing:

 

9.3.1       Purchase Price.  Cash in an amount equal to the Purchase Price (less
the Deposit) and all of the Buyer’s Closing Costs (and otherwise sufficient to
close the transaction contemplated herein);

 

9.3.2       Assignment and Assumption.  Two (2) executed originals of the
Assignment and Assumption, executed by Buyer;

 

9.3.3       Option Agreement for the Purchase and Sale of Real Property. (a) Two
(2) executed originals of the Repurchase Option executed by Buyer as the sole
member of each Land Holding Company, and (b) two (2) executed and acknowledged
originals of the Memorandum of Repurchase Option executed by Buyer as sole
member of each applicable Land Holding Company for recording following the
Closing in the official records of Kern County, California, and Kings County,
California.

 

9.3.4       Agreement Regarding Easement Form.  Two (2) executed originals of
the Agreement Regarding Easement Form;

 

9.3.5       Closing Statement.  A Closing Statement executed by Buyer;

 

9.3.6       Proof of Authority.  Certificates of good standing and certified
copy of the certificates of formation of Buyer, together with such proof of
Buyer’s authority and authorization to enter into this Agreement and the
transaction contemplated hereby, and such proof of the power and authority of
the individual(s) executing or delivering any instruments, documents or
certificates on behalf of Buyer to act for and bind Buyer as may be reasonably
required by the Title Company(ies) or Seller; and

 

9.3.7       Other.  Such other documents and instruments, signed and properly
acknowledged by Buyer, if appropriate, as may reasonably be required by Seller,
the Title Company(ies) or otherwise in order to effectuate the provisions of
this Agreement and Closing; provided, however, that such documents and
instruments shall be in a form reasonably acceptable to Buyer.

 

9.4          Prorations.

 

9.4.1       Rentals, revenues, and other income, if any, from the applicable
Property, and ad valorem or real estate Taxes and assessments (collectively,
“Real Estate Taxes”), improvement bonds, utility costs, and other expenses
affecting such Property shall be prorated between Buyer and Seller as of the
Closing Date based on a 365-day year, if applicable.  Real Estate Taxes shall be
determined without regard to any increased assessment resulting from the
transactions contemplated by this Agreement or the development or construction
of the Properties after the Closing Date.  For purposes of

 

10

--------------------------------------------------------------------------------

 

calculating prorations, Buyer shall be deemed to be title holder of the
applicable Property, and therefore entitled to the income and responsible for
the expenses, from and after 12:01 a.m. Pacific Standard Time on the Closing
Date.  Delinquent rentals as of Closing Date, if any, shall not be prorated, but
any rental paid to Buyer after Closing shall be applied first to such delinquent
rentals, if any, and Buyer shall deliver the rentals so applied to Seller within
30 days after receiving the same.  After Closing, any delinquent rent shall
remain the property of Seller, but Buyer shall have no obligation to collect
such delinquent rent.  Notwithstanding the foregoing, any scheduled payments
that are not delinquent and that are received after Closing shall be applied to
the applicable period and prorated as of the Closing Date.  All non-delinquent
Real Estate Taxes  shall be prorated based on the actual current tax bill, but
if such tax bill has not yet been received by Seller by the Closing Date or if
supplemental Real Estate Taxes  are assessed after Closing for the period prior
to Closing, the parties shall make any necessary adjustment after Closing by
cash payment to the party entitled thereto so that Seller shall have borne all
Real Estate Taxes, including all supplemental Real Estate Taxes, allocable to
the period prior to Closing and Buyer shall bear all real property taxes,
including all supplemental taxes, allocable to the period from and after
Closing.  If any expenses attributable to the applicable Property and allocable
to the period prior to such Closing are discovered or billed after Closing, the
parties shall make any necessary adjustment after Closing by cash payment to the
party entitled thereto so that Seller shall have borne all expenses allocable to
the period prior to Closing and Buyer shall bear all expenses allocable to the
period from and after Closing.  Upon Closing, and except as provided in this
Section 9.4.1, Buyer assumes all expenses and Real Estate Taxes, including all
supplemental Real Estate Taxes, allocable to the period from and after Closing. 
For the avoidance of doubt, nothing in this Section alters or modifies any
obligation of any lessee under any of the Ground Leases to pay Real Estate Taxes
to the extent required thereunder.  The provisions of this Section 9.4.1 shall
survive Closing.

 

9.4.2                     The escrow officer handling the Escrow for each Title
Company (the “Escrow Agent”) shall deliver to each of the parties for their
review and approval a preliminary closing statement (the “Preliminary Closing
Statement”) setting forth:  (a) the proration amounts allocable to each of the
parties pursuant to Section 9.4 hereof; and (b) the Closing Costs allocable to
each of the parties pursuant to Section 9.5 hereof.  Based on each of the
party’s comments, if any, to the Preliminary Closing Statement, Escrow Agent
shall revise the Preliminary Closing Statement and delivered a final, fully
executed version of a closing statement to each of the parties as of Closing
(the “Closing Statement”).

 

9.5                                           Closing Costs.  Each party shall
pay its own costs and expenses arising in connection with the Closing
(including, without limitation, its own attorneys’, consultants’ and advisors’
fees, charges and disbursements), except the following costs (the “Closing
Costs”), which shall be allocated between the parties as follows:

 

9.5.1                     all documentary transfer, land transfer, stamp, sales
(including harmonized sales or goods and services) and other taxes related to
the transfer of the Equity Interests, if any, which shall be paid by Buyer;

 

11

--------------------------------------------------------------------------------

 

9.5.2                     Escrow Agent’s escrow fees and costs, which shall be
paid one-half (½) by Seller and one-half (½) by Buyer;

 

9.5.3                     the cost of the Surveys, the Phase I’s and Phase II’s
(if any), shall be paid by Buyer.  To the extent Seller incurs any costs
relating to the Surveys and the Phase I’s and Phase II’s (if any), Buyer shall
reimburse Seller for such costs at Closing; and

 

9.5.4                     the cost of the Owner’s Title Policies and the
endorsements thereto shall be paid by Buyer.

 

9.6                                           Estoppel Certificate.  Seller
shall use commercially reasonable efforts to deliver or cause to be delivered to
Buyer an estoppel certificate substantially in the form of Exhibit I attached
hereto executed by each tenant/lessee of the applicable Ground Lease (the
“Estoppel Certificate”).

 

10.                               SELLER’S REPRESENTATIONS AND WARRANTIES FOR
ITSELF AND THE LANDHOLDING COMPANIES.  Seller represents and warrants to and
agrees with Buyer, as of the Execution Date and as of the Closing Date, as
follows:

 

10.1                                    Due Organization of Seller and the Land
Holding Companies.  Seller is a Delaware limited liability company duly
organized and existing in good standing under the laws of the State of Delaware
and is qualified to do business in the State of California.  Each Land Holding
Company is duly organized, validly existing and in good standing under the laws
of the state of its organization.  Each Land Holding Company is qualified to do
business in all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary and where failure so to qualify would have
a material adverse effect on such Land Holding Company or its Property.  Each
Land Holding Company has all requisite power and authority to own the Property
owned by such Land Holding Company and to fulfill its obligations under the
Ground Lease to which it is a party.  Each Land Holding Company has at all times
complied in all material respects with the provisions of its Charter Documents
and the laws of the state in which such Land Holding Company was formed.

 

10.2                                    Seller’s Authority; Validity of
Agreements.  Seller has full right, power and authority to sell the Equity
Interests to Buyer as provided in this Agreement and to carry out its
obligations hereunder and under all other instruments, documents and agreement
to be executed and delivered by Seller hereunder (“Seller’s Transaction
Documents”).  The individual(s) executing this Agreement and Seller’s
Transaction Documents on behalf of Seller have the legal power, right and actual
authority to bind Seller to the terms hereof and thereof.  This Agreement and
Seller’s Transaction Documents shall be, duly authorized, executed and delivered
by Seller and shall be valid, binding and enforceable obligations of Seller
(except as enforcement may be limited by bankruptcy, insolvency or similar laws)
and, to Seller’s Knowledge (as hereinafter defined), do not, and as of the
Closing Date will not, violate any provisions of any Contract or judicial order
to which Seller is a party or to which Seller, the applicable Land Holding
Company or the applicable Property is subject.

 

12

--------------------------------------------------------------------------------

 

10.3                                    Consents.  Except as otherwise
specifically stated herein, no consent, approval, license, permit, order or
authorization (each, a “Consent”) of, or registration, declaration or filing
(each, a “Filing”) with, any Governmental Authority or any other Person which
has not been obtained or made by Seller or the Land Holding Companies is
required to be obtained or made by Seller or the Land Holding Companies in
connection with the execution and delivery of this Agreement and the other
agreements and instruments to be delivered hereunder by Seller or the Land
Holding Companies and the consummation by Seller and the Land Holding Companies
of the transactions contemplated hereby and thereby.

 

10.4                                    Compliance with Laws and Permits.  To
Seller’s Knowledge and except as otherwise specifically stated herein, (i) the
Land Holding Companies are in compliance in all material respects with all Laws,
(ii) the Land Holding Companies are not in violation of the terms of any
material permits, certificates, licenses, franchises, writs, variances,
exemptions, orders or other authorizations of any Governmental Authority
(collectively, “Permits”) used in the operation of their businesses, and
(iii) all such Permits are in full force and effect and are final and
non-appealable, and no claim to revoke, suspend, limit or modify any of such
Permits has been served upon Seller or the Land Holding Companies, nor to
Seller’s Knowledge is any such claim pending or threatened.

 

10.5                                    Equity Interests.  Seller is the record
and beneficial owner of, and holds good and valid title to, the Equity Interests
of each Land Holding Company free and clear of all Liens, other than the
restrictions on transfer that may be imposed by applicable securities Laws and
any Liens created by or through Buyer.  The Equity Interests in each Land
Holding Company constitute one hundred percent (100%) of the Ownership Interests
in such Land Holding Company.  All of the Equity Interests in each Land Holding
Company have been duly authorized and are validly issued in compliance with all
applicable federal and state securities laws and are fully paid and
non-assessable.  No Land Holding Company is subject to any Contracts, pledge or
hypothecation agreements or other arrangements with respect to voting rights or
transferability, and there are no outstanding options, warrants, rights
(including conversion or preemptive rights) or Contracts for the purchase or
acquisition of any portion of such Land Holding Company’s interests or
securities convertible or exchangeable for any portion of such Land Holding
Company, other than as provided in this Agreement or as may have been created by
or through Buyer.  Neither Seller nor any of the Land Holding Companies is
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any of its Ownership Interests.

 

10.6                                    Nature of Company’s Business.  To
Seller’s Knowledge, since their formation the Land Holding Companies have not
(i) engaged in any business other than its ownership of the Property, and
ownership and administration of their respective interests thereunder, or
(ii) owned any assets or entered into any Contracts, other than in connection
with their business described in clause (i) above.  No Land Holding Company owns
any securities or other debt or equity of any other Person.  To Seller’s
Knowledge, there are no Contracts in effect to which the Land Holding Company is
subject or bound except for those Contracts listed on Schedule III attached
hereto.

 

13

--------------------------------------------------------------------------------

 

10.7                                    Properties.

 

10.7.1                                            Each Land Holding Company owns
the Property set forth opposite such Land Holding Company’s name on Exhibit B
attached hereto (which Property is defined and described on Exhibit C attached
hereto).  To Seller’s Knowledge, each Property is free and clear of any Lien
except the Permitted Exceptions with respect to such Property.

 

10.7.2                                      Buyer and Seller hereby acknowledge
the following:

 

10.7.2.1                                        The Title Company insuring the
Properties for the Astoria Site, the Garland Site, and the Garland A Site have
disclosed to Seller that based on the Title Company’s review of the chain of
title for such Properties that certain parcels were created by deed and not by
an approved parcel map approved in compliance with the California Subdivision
Map Act.  Such parcels, which are identified on Schedule I attached hereto, were
created prior to the respective Land Holding Company’s acquisition of the
Property, and as of the Execution Date, Seller is in the process of obtaining
certificates of compliance from Kern County to verify that such parcels (the
“Certificate of Compliance Parcels”) constitute legal parcels under the
California Subdivision Map Act.

 

10.7.2.2                                  The applicable Title Company has
issued endorsements to each respective Land Holding Company’s existing Owner’s
Title Policy of Title Insurance insuring losses resulting from a violation of
the California Subdivision Map Act on the terms and conditions set forth in such
endorsements.  The applicable Title Company for each respective Certificate of
Compliance Parcel has informed Seller that the sale of the Equity Interests of
the Land Holding Companies to Buyer will not violate the California Subdivision
Map Act, and that such Title Company will continue to issue a Subdivision Map
Act endorsement to each respective Land Holding Company’s Owner’s Title Policy
at Closing.

 

10.7.2.3                                  In connection with the matters set
forth in Section 10.7.2, each of Seller and Buyer acknowledge, agree and
covenant as follows:  (a) Seller has not made (whether in this Agreement or in
any other written or oral statement) and will not make any representation or
warranty as to the Properties’ compliance with the California Subdivision Map
Act and Buyer will rely solely on the applicable Owner’s Title Policies issued
at Closing with respect to such matters; (b) the sale of the Equity Interests of
the Land Holding Companies to Buyer does not violate the California Subdivision
Map Act, and Buyer waives any right to rescind its purchase of the Equity
Interests of the Land Holding Companies under this Agreement on the basis of any
such alleged violation; and (c) Seller, at its cost and expense, will apply for
and pursue the issuance of certificates of compliance from Kern County for the
Certificate of Compliance Parcels (the issuance of which may occur
post-Closing).

 

10.8                                    Litigation.  To Seller’s Knowledge,
(a) there are no actions, suits, investigations or proceedings pending or
threatened in writing against Seller with respect to the ownership or operation
of any Land Holding Company or any of the Land Holding Companies, and (b) there
are no judgments, orders, awards or decrees currently in effect against Seller
or any

 

14

--------------------------------------------------------------------------------

 

Land Holding Company with respect to the ownership or operation of any Land
Holding Company.

 

10.9                                    Condemnation and Expropriation.  Neither
Seller nor any Land Holding Company has received written notice of any currently
pending proceedings to condemn or expropriate all or any portion of any Property
by eminent domain or expropriation proceedings or otherwise.

 

10.10                             Employee Matters.

 

10.10.1       Since their formation, the Land Holding Companies have not and do
not currently employ any employees.

 

10.10.2       No Company Plan exists and none have existed with respect to any
Land Holding Company since its formation.  No Land Holding Company has
sponsored, maintained or contributed to or been required to maintain or
contribute to any benefit plan that is subject to Section 302 or 303 or Title IV
of ERISA or Section 412 or 430 of the Internal Revenue Code of 1986, as amended,
or is otherwise a defined benefit plan.  No Benefit Plan provides health,
medical or other welfare benefits after retirement or other termination of
employment to any person as a result of such person’s providing services or
being compensated by any Land Holding Company.

 

10.11                             Tax Matters.

 

10.11.1       Tax Returns.  Each Land Holding Company has filed or will file all
Tax Returns that are required to be filed on or before the applicable Closing
Date (giving regard to valid extensions) and all such Tax Returns are correct
and complete in all material respects.

 

10.11.2       Taxes Paid or Accrued.  All Taxes (whether or not shown on any Tax
Return) due on or before the Closing Date by a Land Holding Company have been or
will be timely paid in full on or before such Closing Date, and all Taxes that
are required to be withheld or collected by such Land Holding Company have been
duly withheld and collected and, to the extent required, have been timely paid
to the appropriate Governmental Authority or properly deposited as required by
applicable Law.

 

10.11.3       Assessments and Audits.  No Taxing Authority has, in writing,
asserted or threatened to assert any deficiency or assessment, or proposed any
adjustment, for any Taxes against any Land Holding Company that has not been
fully resolved, and to Seller’s Knowledge there are no pending or threatened
audits, investigations, disputes, claims or other actions for or relating to any
liability for Taxes of any Land Holding Company.

 

10.11.4       Tax Sharing Agreements.  No Land Holding Company is a party to any
Tax sharing, Tax indemnification or similar agreement currently in force (other
than commercial agreements or contracts entered into in the ordinary course of
business the primary purpose of which does not relate to Taxes).

 

15

--------------------------------------------------------------------------------

 

10.11.5       Tax Classification.  Each Land Holding Company has been since its
formation and is currently treated as a disregarded entity for U.S. federal,
state of California or local income tax purposes, and no election has been filed
with respect to such entity so as to cause it to be treated as an association
taxable as a corporation for U.S. federal income tax purposes.  Further each
Land Holding Company was never a corporation that was a member of a consolidated
group for Tax purposes at any time and each Land Holding Company is not a
successor, and never was a successor, to any member of a consolidated group for
Tax purposes.

 

10.11.6       Tax Liens. There are no Liens for Taxes (other than for current
Taxes not yet due and payable).

 

10.11.7       Statute of Limitations. There are no agreements or waivers
currently in effect with respect to a Land Holding Company that provide for an
extension of any statute of limitations, any time with respect to the filing of
any Tax Return or any time with respect to any Tax assessment, collection or
deficiency.

 

10.11.8       Nexus. No claim has ever been made by a Governmental Authority in
a jurisdiction in which no Tax Return is filed by a Land Holding Company that
there may be liability in that jurisdiction in respect of Taxes that would be
covered by or the subject of such entity’s Tax Return.

 

10.12                             Environmental Matters.

 

10.12.1       The Land Holding Companies are now, and to Seller’s Knowledge have
always been in compliance with all applicable Environmental Laws and
Environmental Permits.

 

10.12.2       There are no suits, claims or proceedings pending or threatened
against the Land Holding Companies alleging any violation of, or liability
under, any Environmental Law, Environmental Permits or any indemnity obligations
to which the Land Holding Companies or its assets are subject relating to any
Environmental Law or Environmental Permits.

 

10.12.3       The Land Holding Companies are not subject to any decree, order or
judgment requiring the investigation or cleanup of any Hazardous Substance under
any Environmental Law or Environmental Permits at the Properties.

 

10.12.4       Except to the extent disclosed to Buyer in the Data Room or in
Diligence Documents otherwise made available by Seller to Buyer, there is not
now and, to the Seller’s Knowledge of the Land Holding Companies, without
undertaking any independent investigation, there has not been any Hazardous
Substance (x) used, generated, treated, stored, transported, disposed of,
released, handled on any owned, leased or easement property associated with the
business of the Land Holding Companies (including, without limitation, the
Properties or any portion thereof) except in full compliance with Environmental
Law and Environmental Permits, or (y) otherwise existing on, under, about, or
emanating from or to, the Properties except in full compliance with all
applicable Environmental Laws and Environmental Permits.

 

16

--------------------------------------------------------------------------------

 

10.12.5       The Land Holding Companies do not hold any Environmental Permits
in connection with the operation of their businesses.

 

10.13                             No Material Adverse Change.  As of the Closing
Date only, between the expiration of the Due Diligence Period and the Closing
Date, there has been no material adverse change in the condition of the Land
Holding Companies, the Equity Interests and the Properties.

 

10.14                             Insurance .  The Land Holding Companies are
the beneficiaries of the insurance policies described on Schedule 10.14 attached
hereto (each an “Insurance Policy” and together the “Insurance Policies”).  The
Insurance Policies are in full force and effect and all premiums due on such
Insurance Policies have been paid.  No written notice of cancellation,
non-renewal, disallowance or reduction in coverage or claim or termination, nor
any written notice of breach or default under any Insurance Policy, has been
received by Seller or the Land Holding Companies and no such action has been
threatened.

 

10.15                             Financial Information.  Seller has provided to
Buyer true, correct and complete copies of unaudited financial statements
(including income statements and balance sheets) for:  (a) RE Astoria LandCo LLC
for the past three (3) fiscal years, (b) RE Mustang LandCo LLC for the past two
(2) fiscal years, and (c) RE Garland LandCo LLC and RE Garland A LandCo LLC for
the past fiscal year (collectively, the “Historical Financial Statements”), and
for each of the Land Holding Companies financial statements (including income
statements and balance sheets) for the six months ended June, 2016
(collectively, the “Most Recent Financial Statements,” and together with the
Historical Financial Statements, the “Financial Statements”).  The Financial
Statements (A) have been prepared from and in accordance with the books and
records of Seller and the Land Holding Companies in all material respects,
(B) have been prepared in accordance with U.S. generally accepted accounting
principles applied on a consistent basis during the periods involved and
(iii) fairly present, in all material respects, as of the dates and for the
periods referred to therein the financial position of each of the Land Holding
Companies and there has been no material change in the financial condition of
any Land Holding Company since the date of the Most Recent Financial
Statements.  The books of account and other financial records relating to the
Land Holding Companies have been kept accurately in the ordinary course of
business, consistent with Law in all material respects.

 

10.16                             Patriot Act Compliance.  Neither Seller nor
any person, group, entity or nation that Seller is acting, directly or
indirectly for, or on behalf of, is named by any Executive Order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism)
or the United States Treasury Department is a terrorist, “Specially Designated
National and Blocked Person,” or is otherwise a banned or blocked person, group,
entity, or nation pursuant to any law that is enforced or administered by the
Office of Foreign Assets Control, and Seller is not engaging in the transaction
contemplated herein, directly or indirectly, on behalf of, or instigating or
facilitating the transaction contemplated hereby, directly or indirectly, on
behalf of, any such person, group, entity or nation.

 

10.17                             Seller’s Knowledge.  As used herein, the term
“Seller’s Knowledge” shall mean the actual knowledge, without any investigation
or inquiry, of Amanda Hamilton, Seth Israel and Brandon Wantland, who are the
persons within Seller’s organization most likely

 

17

--------------------------------------------------------------------------------

 

to have knowledge of the matters set forth herein, provided that in no event
shall the individual named in this Section 10.17 have any personal liability as
a result of being designated a knowledge party hereunder.  Notwithstanding
anything to the contrary as set forth herein, the term Seller’s Knowledge shall
include that the knowledge of one of the foregoing persons shall be imputed to
all of the foregoing persons.

 

10.18                             Survival and Limitation of Liability.  All of
the representations, warranties and agreements of Seller set forth in this
Agreement shall be true upon the Execution Date, shall be deemed to be repeated
at and as of the Closing Date (except as otherwise set forth in writing to
Buyer) and shall survive the Closing for a period of one (1) year, except (i) as
expressly set forth in Section 13.6.7 and (ii) for the representations and
warranties of Seller set forth in Sections 10.1, 10.2 and 10.5 (herein, the
“Fundamental Representations”), which Fundamental Representations and warranties
shall survive for the applicable statute of limitations period.  Buyer
acknowledges and agrees that Seller shall not be liable for the payment of any
losses or damages (collectively, “Buyer Losses”) suffered by Buyer as a result
of any representation or warranty made by Seller under this Agreement being
untrue, incomplete or incorrect in any material fashion, until the aggregate
amount of all such Buyer Losses (as determined by a court of competent
jurisdiction in a final and non-appealable order) is equal to or greater than
$100,000, whereupon Seller shall be liable for all Buyer Losses in excess of
$100,000 and up to a maximum liability amount equal to ten percent (10%) of the
allocated Purchase Price for each Land Holding Company as set forth on Exhibit E
as set forth herein (the “Cap”); provided, however, that the above $100,000
deductible and the “Cap” shall not apply to any Buyer Losses suffered by Buyer
as a result of any of the Fundamental Representations made by Seller under this
Agreement being untrue, incomplete or incorrect, and provided further, that in
no event shall Seller’s aggregate liability under Sections 12.1 and 13.6 of this
Agreement exceed the Purchase Price.  For the avoidance of doubt, Buyer hereby
expressly acknowledges and agrees that Seller shall have no obligation or
liability for any Buyer Losses in an amount in excess of the applicable Cap. 
Notwithstanding the foregoing, to the extent that Buyer has actual knowledge
that any such representation or warranty made by Seller hereunder is materially
untrue, incomplete or incorrect as of the Closing Date, but nonetheless proceeds
with the Closing, Buyer shall be deemed to have waived any claim against Seller
for any Buyer Losses with respect to such materially untrue, incomplete or
incorrect representation or warranty.  Notwithstanding anything to the contrary
as set forth hereof, the Seller’s limitation on liability (including the
“deductible” and the Cap) as set forth in this Section 10.18 shall not apply to
terms and conditions as set forth in Section 12.1(iii) and
Section 12.1(iv) hereof; provided, however, that in no event shall Seller’s
aggregate liability under Sections 12.1 and 13.6 of this Agreement exceed the
Purchase Price.

 

11.                               BUYER’S REPRESENTATIONS AND WARRANTIES.  Buyer
represents and warrants to Seller, as of the Execution Date and as of the
Closing Date, as follows:

 

11.1                                    Due Organization.  Buyer is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware.

 

11.2                                    Buyer’s Authority; Validity of
Agreements.  Buyer has full right, power and authority to purchase and acquire
the Equity Interests from Seller as provided in this Agreement and to carry out
its obligations hereunder and under all other instruments, documents

 

18

--------------------------------------------------------------------------------

 

and agreement to be executed and delivered by Buyer hereunder (“Buyer’s
Transaction Documents”).  The individual(s) executing this Agreement and Buyer’s
Transaction Documents on behalf of Buyer have the legal power, right and actual
authority to bind Buyer to the terms hereof and thereof.  This Agreement and
Buyer’s Transaction Documents shall be, duly authorized, executed and delivered
by Buyer and shall be valid, binding and enforceable obligations of Buyer
(except as enforcement may be limited by bankruptcy, insolvency or similar laws)
and do not, and as of the Closing Date will not, violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer is
subject.

 

11.3                                    Patriot Act Compliance.  Neither Buyer
nor any person, group, entity or nation that Buyer is acting, directly or
indirectly for, or on behalf of, is named by any Executive Order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism)
or the United States Treasury Department as a terrorist, “Specially Designated
National and Blocked Person,” or is otherwise a banned or blocked person, group,
entity, or nation pursuant to any law that is enforced or administered by the
Office of Foreign Assets Control, and Buyer is not engaging in the transaction
contemplated herein, directly or indirectly, on behalf of, or instigating or
facilitating the transaction contemplated hereby, directly or indirectly, on
behalf of, any such person, group, entity or nation.  Buyer is not engaging in
the transaction contemplated hereby, directly or indirectly, in violation of any
laws relating to drug trafficking, money laundering or predicate crimes to money
laundering.  None of the funds of Buyer have been or will be derived from any
unlawful activity with the result that the investment of direct or indirect
equity owners in Buyer is prohibited by law or that the transaction contemplated
hereby or this Agreement is or will be in violation of law.  Buyer has and will
continue to implement procedures, and has consistently and will continue to
consistently apply those procedures, to ensure the foregoing representations and
warranties remain true and correct at all times prior to any Closing.
Notwithstanding anything contained in the foregoing, the foregoing
representations, warranties and covenants shall not apply to, include or cover
any person, group, entity, nation or other governmental authority which is an
owner of any direct or indirect ownership interest in Buyer or any entity
affiliated with Buyer if such ownership interest exists by means of the
ownership of stock or other securities which are publicly traded on a U.S.
national stock exchange.

 

11.4                                    Survival.  All of the representations,
warranties and agreements of Buyer set forth in this Agreement shall be true
upon the Execution Date, shall be deemed to be repeated at and as of the Closing
Date (except as otherwise set forth in writing to Seller) and shall survive the
Closing for a period of one (1) year.

 

12.                               INDEMNIFICATION.

 

12.1                                    Indemnification by Seller.  Subject to
the limitations set forth in Section 10.18, subsequent to the Closing Date,
Seller shall indemnify, hold harmless and defend Buyer and its affiliates
(including, after Closing, each Land Holding Company) and their respective
officers, directors, managers and employees against any damages that any of the
foregoing suffers as a result of (i) any breach or inaccuracy of Seller’s
Warranties (other than the representations and warranties in Section 10.11,
which shall instead be covered by the provisions of Section 13.6.6) as set forth
in Section 10, (ii) any breach of any covenant or agreement of

 

19

--------------------------------------------------------------------------------

 

Seller contained in this Agreement or in any certificate delivered pursuant to
this Agreement, (iii) any Real Estate Taxes incurred by any Land Holding Company
attributable to any full or partial Tax period ending prior to the Closing Date
for which Seller is responsible under Section 9.4.1 or Section 13.6.2, and
(iv) any damages arising in connection with the disposal of Hazardous Substance
by Seller or any Land Holding Company on any of the Properties in violation of
Law prior to the Closing Date.  Notwithstanding anything to the contrary which
may be contained in this Agreement, the indemnity set forth in this Section 12.1
shall become effective only as of the Closing Date.

 

12.2                                    Indemnification by Buyer.  Subsequent to
the Closing Date, Buyer shall indemnify, hold harmless and defend the Seller,
its affiliates, and their respective officers, directors, managers and employees
against any damages that any of the foregoing suffers as a result of (i) any
breach or inaccuracy of the representations and warranties by Buyer set forth in
Section 11, (ii) any breach of any covenant or agreement of Buyer contained in
this Agreement or in any certificate delivered pursuant to this Agreement, and
(iii) any Taxes of any Land Holding Company for taxable periods (or portions
thereof) beginning after the Closing Date.  Notwithstanding anything to the
contrary which may be contained in this Agreement, the indemnity set forth in
this Section 12.2 shall become effective only as of the Closing Date.

 

12.3                                    Damages Disallowed.  Notwithstanding any
provision in this Agreement to the contrary, in no event shall either party or
its affiliates be liable hereunder at any time for consequential, indirect,
special or punitive damages or losses of the other party, whether in contract,
tort (including negligence), strict liability or otherwise.

 

13.                               OTHER COVENANTS AND AGREEMENTS.

 

13.1                                    Operations.  From the Execution Date
until the Closing or earlier termination of this Agreement, Seller shall and
shall cause each Land Holding Company to manage, operate, maintain and insure
the Property in a manner substantially consistent with the manner in which
Seller and each Land Holding Company has managed, operated, maintained and
insured the Property prior to the Execution Date;

 

13.1.1              not encumber the Property with any monetary lien (other than
mechanics liens incurred in the ordinary course of business);

 

13.1.2              not dispose of or permit the disposition of any Property;

 

13.1.3              pay and perform in a timely manner all of its obligations as
and when due;

 

13.1.4              not enter into or assume or permit to be entered into or
assumed any Contract related to any Land Holding Company or the Property;
provided, however, notwithstanding the foregoing, (a) each Land Holding Company
shall have the right to grant Future Easements/Licenses (as defined below)
pursuant to the Ground Lease Easement/License Provisions (as defined below), and
(b) RE Mustang LandCo LLC shall have the right, subject to the written approval
of the tenant under the Ground Lease with respect to the Mustang Site, to enter
into a non-binding letter of intent with First Solar Development, LLC, or its
affiliate (“First Solar”), which will provide First Solar with an

 

20

--------------------------------------------------------------------------------

 

option for non-exclusive easements for access, transmission, and temporary
construction upon, across and over a portion of the Mustang Site for purposes of
interconnection to the existing Pacific Gas and Electric Company switching
station located on the Mustang Site (the “First Solar LOI”); provided further
,that Seller shall promptly provide Buyer with (i) any drafts of the First Solar
LOI as and when submitted by Seller to First Solar and/or received by Seller
from First Solar, and (ii) the fully-executed First Solar LOI if executed.

 

13.1.5              with respect to any Land Holding Company or the assets
thereof, make any new, change in or revocation of any Tax election; settle or
compromise any claim, notice, audit report or assessment in respect of Taxes;
change any annual Tax accounting period, adopt or change any method of Tax
accounting; enter into any Tax allocation agreement, Tax sharing agreement, Tax
indemnity agreement or closing agreement relating to any Tax; surrender any
right to claim a Tax refund; or consent to any extension or waiver of the
statute of limitations period applicable to any Tax claim or assessment.

 

13.2                                    Government Filings.  Following the
Closing, Buyer shall file, or cause to be filed, with the California Board of
Equalization a Form BOE-100-B in connection with the change of ownership and/or
control of the Land Holding Companies resulting from the transactions
contemplated herein as required under the applicable Laws.

 

13.3                                    Grant of Easements.

 

13.3.1              The parties acknowledge and agree that, pursuant to
Section 3 of each Ground Lease with respect to a Property (such provisions of
each such Ground Lease the “Ground Lease Easement/License Provisions”), from and
after Closing each “Owner” under a Ground Lease may, or may hereinafter be
required to, grant (a) to third parties (including local public utilities or
service providers) non-exclusive easements over, across and upon portions of its
Property for purposes of ingress and egress, roads, constructing a substation,
overhead and underground utility lines, communication lines and other related
facilities and utilities for interconnection, transmission and/or
telecommunications purposes and/or (b) such other easements and/or licenses for
access, utilities, transmission and/or telecom to other parties (including the
tenant under a Ground Lease and to owners of projects that are owned by
affiliates of such tenant and located within the near vicinity of such Property,
utilities and certain others), in each case as more particularly described and
provided for in, and subject to the terms of, the Ground Lease Easement/License
Provisions (the “Future Easements/Licenses”).

 

13.3.2              Following the Closing, and for so long as Buyer is the owner
of the Equity Interests in an “Owner” under a Ground Lease, Buyer shall cause
such “Owner” to comply with its obligations under the Ground Lease
Easement/License Provisions, without any additional compensation to such
“Owner”, but subject to such “Owner’s” right to reimbursement for certain
expenses as expressly provided for therein.

 

13.3.3              In addition, following the Closing, and for so long as Buyer
is the owner of the Equity Interests of RE Mustang LandCo LLC, Buyer shall cause
RE Mustang LandCo LLC to grant such easements (or an option therefor) to First
Solar as are

 

21

--------------------------------------------------------------------------------

 

provided for in the First Solar LOI, subject (i) to the approval of the form and
substance of such easements (or option therefor) by Buyer and RE Mustang LandCo
LLC, which approval shall not be unreasonably withheld, and by the tenant under
the Ground Lease with respect to the Mustang Site and (ii) Seller’s agreement to
subordinate its Repurchase Option (as defined below) to such easements (or
option therefor) with respect to such Property.

 

13.3.4              In connection with the Closing, Seller and Buyer as sole
member of each Land Holding Company shall execute an agreement in the form of
Exhibit J attached hereto (the “Agreement Regarding Easement Form”) in which
each Land Holding Company and Seller (with each tenant under a Ground Lease as a
third party beneficiary) agrees that:  (i) the Easement for Access and
Transmission and Utility Facilities substantially in the form of Exhibit J (the
“Lessee Easement Form”) is reasonable and acceptable for the purposes set forth
therein; and (ii) for purposes of easements granted to public utilities or
service providers, the standard forms utilized by such companies are reasonable
and acceptable.

 

13.4                                    Option to Repurchase Properties. 
Concurrently with the Closing, Seller and Buyer as sole member of each Land
Holding Company shall execute (a) an Option Agreement for the Purchase and Sale
of Real Property substantially in the form of Exhibit K attached hereto (the
“Repurchase Option”), and (b) an applicable Memorandum of Option Agreement for
the Purchase and Sale of Real Property substantially in the form of Exhibit G to
Exhibit K attached hereto (the “Memorandum of Repurchase Option”) for recording
following the Closing in the official records of Kern County, California, and
Kings County, California.  Pursuant to, and as more particularly set forth in
and subject to the terms of, the Repurchase Option, each Land Holding Company
shall grant to Seller a one-time exclusive right, but not the obligation, to
purchase any or all of the Properties (but not a portion of any Property) at the
Repurchase Price for such Property as set forth on Exhibit E attached hereto. 
Pursuant to, and as more particularly set forth in and subject to the terms of,
the Repurchase Option, the Repurchase Option may only be exercised during a
period commencing on the date that is two (2) years prior to the Repurchase Date
for such Property as set forth on Exhibit E attached hereto and ending on the
date that is one (1) year prior to the Repurchase Date.

 

13.5                                    Audit Cooperation by Seller .  For the
period of time commencing on the Execution Date and continuing through the first
(1st) anniversary of the Closing Date, Seller shall, from time to time, upon
reasonable advance notice from Buyer, shall reasonably cooperate with Buyer’s
accountants as provided in Exhibit L attached hereto.

 

13.6                                    Tax Matters.

 

13.6.1              Cooperation. Buyer and Seller agree to furnish or cause to
be furnished to the other, upon request, as promptly as practicable, such
information and assistance relating to the Land Holding Companies and the assets
thereof, including, without limitation, access to books and records, as is
reasonably necessary for the filing of all Tax Returns by Buyer or Seller, the
making of any election relating to Taxes, the preparation for any audit by any
Taxing Authority and the prosecution or defense of any claim, suit or proceeding
relating to any Tax.  Each of Buyer and Seller shall retain all

 

22

--------------------------------------------------------------------------------

 

books and records with respect to Taxes pertaining to the Land Holding Companies
for a period of at least seven (7) years following the Closing Date.  Buyer and
Seller shall cooperate fully with each other in the conduct of any audit,
litigation or other proceeding relating to Taxes involving the Land Holding
Companies or the Tax Allocation.

 

13.6.2              Tax Returns. Seller shall prepare and timely file, or shall
cause to be prepared and timely filed, all Tax Returns in respect of the Land
Holding Companies and assets thereof that are required to be filed (taking into
account any extension) on or before the Closing Date, and shall pay, or cause to
be paid, all Taxes (other than Real Estate Taxes which shall be prorated as
provided above) in respect of the Land Holding Companies and assets thereof that
are due on or before the Closing Date.  Such Tax Returns shall be prepared by
treating items on such Tax Returns in a manner consistent with past practices,
except as required by Law. At least ten (10) days prior to filing any such Tax
Return, the Seller shall submit a copy of such Tax Return to Buyer for Buyer’s
review and approval, which approval shall not be unreasonably withheld. Buyer
shall prepare and timely file, or shall cause to be prepared and timely filed,
all Tax Returns in respect of the Land Holding Companies and assets thereof that
relate to taxable periods ending on or before the Closing Date but that are
required to be filed after the Closing Date, and Seller shall timely pay, or
cause to be timely paid, all Taxes other than Real Estate Taxes which shall be
prorated as provided above) due with respect to such Tax Returns.  Buyer shall
deliver at least ten (10) days prior to the due date (taking into account any
extension) for the filing of such Tax Returns to Seller for Seller’s review a
draft of such Tax Returns.  Buyer shall make any reasonable revisions requested
by Seller that Seller submits to Buyer no less than five (5) business days prior
to the due date of such Tax Returns.  Buyer shall prepare and timely file, or
cause to be prepared and timely filed, any Tax Return (a “Straddle Period Tax
Return”) required to be filed by any Land Holding Company for a period that
includes (but does not end on) the Closing Date (a “Straddle Period”).  Buyer
shall deliver at least ten (10) days prior to the due date for the filing of
such Straddle Period Tax Return to Seller for Seller’s review a draft of such
Tax Return.  Buyer shall make any reasonable revisions requested by Seller that
Seller submits to Buyer no less than five (5) business days prior to the due
date of such Straddle Period Tax Return.  With respect to Taxes other than Real
Estate Taxes (which shall be prorated as provided in Section 9.4.1) of the Land
Holding Companies relating to a Straddle Period, Seller shall pay to Buyer the
amount of such Taxes allocable to the portion of the Straddle Period that is
deemed to end on the close of business on the Closing Date.  The portion of any
Tax other than Real Estate Taxes (which shall be prorated as provided in
Section 9.4.1) that is allocable to the taxable period that is deemed to end on
the Closing Date will be determined as though the taxable year of the Land
Holding Companies terminated at the close of business on the Closing Date based
on an interim closing of the books of the Land Holding Companies.  Seller shall
make such payment at least two (2) business days before payment of Taxes
(including estimated Taxes, but excluding Real Estate Taxes, which shall be
prorated as provided above) is due.  Any Tax refund (including interest thereon)
with respect to the Land Holding Companies attributable to any period ending
prior to the Closing Date or that portion of a

 

23

--------------------------------------------------------------------------------

 

Straddle Taxable Period ending on the Closing Date shall be the property of
Seller.  If, after the Closing, Buyer or a Land Holding Company receives a
refund or utilizes a credit of any Tax of a Land Holding Company attributable to
a period ending prior to the Closing Date or that portion of a Straddle Taxable
Period ending on the Closing Date, Buyer shall pay to Seller within ten
(10) business days after such receipt or utilization an amount equal to such
refund received or credit utilized, together with any interest received or
credited thereon net of any costs associated therewith.  Buyer shall, and shall
cause the Land Holding Companies to, use commercially reasonable efforts to
obtain a refund or credit of any Tax of the Land Holding Companies attributable
to a period ending prior to the Closing Date or that portion of a Straddle
Taxable Period ending on the Closing Date or to mitigate, reduce or eliminate
any such Tax that could be imposed for a period ending prior to the Closing Date
or that portion of a Straddle Taxable Period ending on the Closing Date
(including with respect to the transactions contemplated hereby).

 

13.6.3              Tax Audits and Contests. Seller shall control any Tax audit
or contest with respect to a Tax period ending on or before the Closing Date and
Buyer shall control any other Tax audit or contest.  Neither Buyer nor Seller
shall settle any Tax audit or contest in a way that would adversely affect the
other Party without the other Party’s written consent, which the other Party
shall not unreasonably withhold.  Seller shall promptly notify Buyer in writing
upon receipt by Seller of notice of any pending or threatened Tax audits or
assessments relating to the income, properties or operations of Seller that
reasonably may be expected to relate to or give rise to a Lien on any Land
Holding Company’s assets.  Each of Buyer and Seller shall promptly notify the
other in writing upon receipt of notice of any pending or threatened Tax audit
or assessment challenging the Tax Allocation.

 

13.6.4              Allocation. The Purchase Price, and any other amounts
properly taken into account under the Code, shall be allocated among the assets
of the Land Holding Companies in accordance with Section 1060 of the Code and
the Treasury regulations promulgated thereunder (and any similar provision of
state, local or foreign law, as appropriate) (the “Tax Allocation”).  The Tax
Allocation shall be delivered by Buyer to Seller within thirty (30) days after
the Closing Date and shall be consistent with the Purchase Price allocation set
forth in Exhibit E.  If the Purchase Price is adjusted pursuant to the
Agreement, the Tax Allocation shall be adjusted in a manner consistent with the
procedures set forth in this Section 13.6.4.  Seller and Buyer agree that they
will (a) report the federal, state and other income Tax consequences of the
transactions contemplated hereby in a manner consistent with the Tax Allocation
on all Tax Returns (including Form 8594), and (b) not take any position
inconsistent therewith upon examination of any income Tax Return, in any refund
claim, in any litigation, investigation or otherwise, unless required by
applicable Law or with the consent of the other party, provided, however, that
nothing contained herein shall prevent Buyer or Seller from settling any
proposed deficiency or adjustment by any Governmental Authority based upon or
arising out of the Tax Allocation, and neither Buyer nor Seller shall be
required to litigate before any court any proposed deficiency or adjustment by
any Governmental Authority challenging such Tax Allocation.

 

13.6.5              Tax Indemnity.  Subject to the limitations set forth in
Section 13.6.6, Seller agrees to indemnify, save and hold harmless the Buyer and
the Land Holding Companies (after Closing) from and against any and all losses
or damages incurred in connection with, arising out of, resulting from or
incident to (i) any Taxes

 

24

--------------------------------------------------------------------------------

 

(other than Real Estate Taxes which shall be prorated as provided above) of the
Land Holding Companies allocable to any Pre-Closing Tax Period; (ii) Taxes of
Seller (including, without limitation, capital gains Taxes arising as a result
of the transactions contemplated by this Agreement) or any of their affiliates
(excluding the Land Holding Companies) for any Tax period, other than Taxes
described in Section 9.5.1; (iii) Taxes attributable to any breach or inaccuracy
of any representation in of Seller relating to Tax matters set forth in this
Agreement or any failure to comply with any covenant or agreement of the Seller
(including any obligation to take or cause the Land Holding Companies to take,
or refrain from taking, any action under this Agreement); (iv) Taxes for which
any Land Holding Company (or any predecessor thereof) is held liable under
Treasury regulations Section 1.1502-6 (or any similar provision of state, local
or foreign Law) by reason of such entity being included in any consolidated,
affiliated, combined or unitary group at any time before or on the Closing Date;
and (v) Taxes of any Person imposed on Buyer or any Land Holding Company as a
transferee or successor or otherwise by operation of Law, with respect to which
any Land Holding Company has an obligation to indemnify such Person pursuant to
a transaction consummated on or prior to the Closing.  Payment in full of any
amount due from the Seller under this Section 13.6.5 shall be made to the Buyer
in immediately available funds at least two (2) business days before the date
payment of the Taxes to which such payment relates is due, or, if no Tax is
payable, within fifteen (15) days after written demand is made for such payment.

 

13.6.6              Survival and Limitation of Tax Indemnity.  All of the
representations, warranties and agreements of Seller pertaining to Taxes as set
forth in Section 10.11 and Section 13.6 of this Agreement shall be true upon the
Execution Date, shall be deemed to be repeated at and as of the Closing Date
(except as otherwise set forth in writing to Buyer) and shall survive the
Closing as provided in Section 13.6.7.  Buyer acknowledges and agrees that
Seller shall not be liable for the payment of any losses or damages
(collectively, “Buyer Tax Losses”) suffered by Buyer in connection with any of
the provisions of Section 10.11 or Section 13.6 of this Agreement until the
aggregate amount of all such Buyer Tax Losses is equal to or greater than
$100,000, whereupon Seller shall be liable for all Buyer Tax Losses in excess of
$100,000 and up to a maximum liability amount equal to ten percent (10%) of the
total Purchase Price herein (the “Tax Cap”).  Buyer shall provide Seller with
reasonable supporting documents, including the determination from the applicable
taxing authority, detailing the calculation and amount of the Buyer Tax Losses. 
For the avoidance of doubt, Buyer hereby expressly acknowledges and agrees that
Seller shall have no obligation or liability for any Buyer Tax Losses in an
amount in excess of the Tax Cap.  Notwithstanding the foregoing, to the extent
that Buyer has actual knowledge that any such representation or warranty made by
Seller hereunder is materially untrue, incomplete or incorrect as of the Closing
Date, but nonetheless proceeds with the Closing, Buyer shall be deemed to have
waived any claim against Seller for any Buyer Tax Losses with respect to such
materially untrue, incomplete or incorrect representation or warranty.

 

13.6.7              Survival Period. Notwithstanding any other provision of this
Agreement, the representations, warranties and agreements contained in
Section 10.11 and this Section 13.6 shall survive the Closing and shall continue
in full force and effect until

 

25

--------------------------------------------------------------------------------

 

ninety (90) days after the expiration of the applicable statute of limitations
(including any applicable extensions).

 

13.6.8              Withholding. Buyer shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to Seller or
any other Person such amounts as Buyer is required to deduct and withhold under
the Code, or any Tax Law, with respect to the making of such payment.  To the
extent that amounts are so withheld, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the Person in respect of
whom such deduction and withholding was made.

 

13.6.9              Tax Treatment of Indemnity Payments. Any payments made
pursuant to Section 12.1 shall constitute an adjustment of the Purchase Price
for Tax purposes and shall be treated as such by Buyer and Seller on their Tax
Returns to the extent permitted by Law.

 

13.7                                                            Certificate of
Compliance.  Notwithstanding anything to the contrary as set forth herein, and
subject to the terms set forth in Section 10.7.2.3(c) hereof, Seller shall use
commercially reasonable efforts to continue to pursue at its sole cost and
expense, final approval of any and all pending certificates of compliance
related to the Properties.

 

14.                               BROKERS.  Buyer and Seller each hereby
represent, warrant to and agree with each other that it has not had, and shall
not have, any dealings with any third party to whom the payment of any broker’s
fee, finder’s fee, commission or other similar compensation (“Commission”) shall
or may become due or payable in connection with the transaction contemplated
hereby.  Seller shall indemnify, defend, protect and hold Buyer harmless from
and against any and all claims incurred by Buyer by reason of any breach or
inaccuracy of the representation, warranty and agreement of Seller contained in
this Section 14.  Buyer shall indemnify, defend, protect and hold Seller
harmless from and against any and all claims incurred by Seller by reason of any
breach or inaccuracy of the representation, warranty and agreement of Buyer
contained in this Section 14.  The provisions of this Section 14 shall survive
the Closing or earlier termination of this Agreement.

 

15.                               MISCELLANEOUS PROVISIONS.

 

15.1                                    Governing Law.  This Agreement and the
legal relations between the parties hereto shall be governed by and construed
and enforced in accordance with the Laws of the State of California, without
regard to its principles of conflicts of law.

 

15.2                                    Entire Agreement.  This Agreement,
including the exhibits attached hereto, and the Transaction Documents
constitutes the entire agreement between Buyer and Seller pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
letters of intent, negotiations and discussions, whether oral or written, of the
parties, and there are no warranties, representations or other agreements,
express or implied, made to either party by the other party in connection with
the subject matter hereof except as specifically set forth herein or in the
documents delivered pursuant hereto or in connection herewith.

 

26

--------------------------------------------------------------------------------

 

15.3                                    Modification; Waiver.  No supplement,
modification, waiver or termination of this Agreement shall be binding unless
executed in writing by the party to be bound thereby.  No waiver of any
provision of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.

 

15.4                                    Notices.  All notices, consents,
requests, reports, demands or other communications hereunder (collectively,
“Notices”) shall be in writing and may be given personally, by registered or
certified mail, by facsimile or by Federal Express (or other reputable overnight
delivery service) as follows:

 

To
Buyer:                                                                                        
Landmark Infrastructure Operating Company LLC
c/o Landmark Dividend LLC
2141 Rosecrans Avenue, Suite 2100
El Segundo, CA 90245
Attention:  Legal Department
Telephone:  (424) 543-2061
Facsimile:    (424) 543-2061

 

To
Seller:                                                                                            
Recurrent Energy LandCo LLC
c/o Recurrent Energy, LLC

300 California Street, 7th Floor

San Francisco, CA 94104
Attention: Office of the General Counsel
Telephone:  (415) 675-1500
Facsimile:   (415) 675-1501

 

or to such other address or such other person as the addressee party shall have
last designated by notice to the other party.  All Notices shall be deemed to
have been given when received.  All Notices given by facsimile shall be followed
by the delivery of a hard copy of such Notice, provided that such Notice shall
be deemed to have been given when received by facsimile.

 

15.5                                    Expenses.  Subject to the provision for
payment of the Closing Costs in accordance with the terms of Section 9.5 hereof
and any other provision of this Agreement, whether or not the transaction
contemplated by this Agreement shall be consummated, all fees and expenses
incurred by any party hereto in connection with this Agreement shall be borne by
such party.

 

15.6                                    Assignment.  Neither all nor any portion
of either party’s interest under this Agreement may be sold, assigned,
encumbered, conveyed, or otherwise transferred, whether directly or indirectly,
voluntarily or involuntarily, or by operation of law or otherwise (including,
without limitation, by a transfer of interests in such party) (collectively, a
“Transfer”), without the prior written consent of the other party hereto, which
consent may be granted or denied in its sole and absolute discretion; provided,
however, Buyer shall have the unconditional right, but with written notice to
Seller, to assign its interest in this Agreement to Landmark Infrastructure
Partners LP, a Delaware limited partnership (“Landmark LP”), or a subsidiary of
Landmark LP.  Any attempted Transfer in violation of this paragraph and without
the required consent shall be

 

27

--------------------------------------------------------------------------------

 

null and void.  No Transfer, whether with or without consent, shall operate to
release the party making a Transfer or alter such party’s primary liability to
perform its obligations under this Agreement.

 

15.7                                    Severability.  Any provision or part of
this Agreement which is invalid or unenforceable in any situation in any
jurisdiction shall, as to such situation and such jurisdiction, be ineffective
only to the extent of such invalidity and shall not affect the enforceability of
the remaining provisions hereof or the validity or enforceability of any such
provision in any other situation or in any other jurisdiction.

 

15.8                                    Successors and Assigns; Third Parties. 
Subject to and without waiver of the provisions of Section 15.6 hereof, all of
the rights, duties, benefits, liabilities and obligations of the parties shall
inure to the benefit of, and be binding upon, their respective successors and
assigns.  Except as specifically set forth or referred to herein, nothing herein
expressed or implied is intended or shall be construed to confer upon or give to
any person or entity, other than the parties hereto and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement.

 

15.9                                    Confidentiality.  Buyer acknowledges
that all information provided to it in connection with this Agreement and the
consummation of the transactions contemplated hereby, is subject to the terms of
that certain Mutual Nondisclosure Agreement between Recurrent Energy, LLC, and
Landmark Dividend LLC, dated June 4, 2016 (the “Confidentiality Agreement”), the
terms of which are incorporated herein by reference.  In addition to the
foregoing, each party agrees to maintain in confidence, and not to disclose to
any third party without the other party’s prior consent, the terms and
provisions of this Agreement; provided, however, that each party, its agents and
representatives may disclose such information (i) to such party’s accountants,
attorneys, lenders, partners, consultants and other advisors in connection with
the transactions contemplated by this Agreement (collectively “Representatives”)
to the extent that such Representatives reasonably need to know (in Seller’s or
Buyer’s reasonable discretion) such information in order to assist, and perform
services on behalf of, Seller or Buyer, but the disclosing party shall remain
responsible for its Representatives’ compliance with the confidentiality
provisions of this Agreement; (ii) to the extent required by any applicable
statute, law, regulation, governmental authority or court order or as
appropriate to meet disclosure obligations of such party under applicable
securities laws or stock exchange rules; and (iii) in connection with any
litigation that may arise between the parties in connection with the
transactions contemplated by this Agreement.

 

15.10                             Public Statements.  Each of the parties hereto
shall not (and shall cause its affiliates not to) issue any press release or any
similar public statement regarding the transactions contemplated by this
Agreement unless both parties consent to such public statement (such consent
from either party shall not be unreasonably withheld, conditioned or delayed)
and have approved the contents of any such public statement; provided, however,
that Seller acknowledges that Buyer intends to and shall be entitled to disclose
and file a copy of this Agreement with the Securities and Exchange Commission
(the “SEC”) (but not the exhibits or schedules hereto, unless otherwise required
under applicable securities laws or stock exchange rules or requested by the
SEC) on Form 8-K or Form 10-K pursuant to the Securities Act of 1933, as
amended, and the regulations thereunder; provided further, however, that
following the Closing, Buyer shall also be entitled to disclose and file a copy
of the Repurchase Option in the form executed by the parties at Closing with the
SEC on Form 8-K or Form 10-K.

 

28

--------------------------------------------------------------------------------

 

15.11                             Drafts Not an Offer to Enter Into a Legally
Binding Contract.  The parties hereto agree that the submission of a draft of
this Agreement by one party to another is not intended by either party to be an
offer to enter into a legally binding contract.  The parties shall be legally
bound with respect to the purchase and sale of the Equity Interests in the Land
Holding Companies pursuant to the terms of this Agreement only if and when the
parties have been able to negotiate all of the terms and provisions of this
Agreement in a manner acceptable to each of the parties in their respective sole
discretion, including, without limitation, all of the Exhibits and Schedules
hereto, and both Seller and Buyer have fully executed and delivered to each
other a counterpart of this Agreement, including, without limitation, all
Exhibits and Schedules hereto.

 

15.12                             Counterparts.  This Agreement may be executed
in as many counterparts as may be deemed necessary and convenient, and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same instrument.

 

15.13                             Headings.  The Section headings of this
Agreement are for convenience of reference only and shall not be deemed to
modify, explain, restrict, alter or affect the meaning or interpretation of any
provision hereof.

 

15.14                             Time of Essence.  Time shall be of the essence
with respect to all matters contemplated by this Agreement.

 

15.15                             Further Assurances.  In addition to the
actions recited herein and contemplated to be performed, executed, and/or
delivered by Seller and Buyer, Seller and Buyer agree to perform, execute and/or
deliver or cause to be performed, executed and/or delivered at Closing or after
Closing any and all such further acts, instruments, deeds and assurances as may
be reasonably required to consummate the transaction contemplated hereby.

 

15.16                             Number and Gender.  Whenever the singular
number is used, and when required by the context, the same includes the plural,
and the masculine gender includes the feminine and neuter genders.

 

15.17                             Construction.  This Agreement shall not be
construed more strictly against one party hereto than against any other party
hereto merely by virtue of the fact that it may have been prepared by counsel
for one of the parties.

 

15.18                             Exhibits.  All exhibits attached hereto are
hereby incorporated by reference as though set out in full herein.

 

15.19                             Attorneys’ Fees.  In the event that either
party hereto brings an action or proceeding against the other party to enforce
or interpret any of the covenants, conditions, terms or provisions of this
Agreement, the prevailing party in such action or proceeding shall be entitled
to recover all costs and expenses of such action or proceeding, including,
without limitation, attorneys’ fees, charges, disbursements and the fees and
costs of expert witnesses.

 

15.20                             Business Days.  As used herein, the term
“business day” shall mean a day that is not a Saturday, Sunday or legal holiday
in the State of California.  In the event that the

 

29

--------------------------------------------------------------------------------

 

date for the performance of any covenant or obligation under this Agreement
shall fall on a Saturday, Sunday or legal holiday, the date for performance
thereof shall be extended to the next business day.

 

15.21                             Waiver of Known Defaults.  Notwithstanding
anything to the contrary contained herein, in the event that either party hereto
has actual knowledge of the default of the other party (a “Known Default”), but
nonetheless elects to consummate the transaction contemplated hereby and
proceeds to Closing, then the rights and remedies of the non-defaulting party
shall be waived with respect to any such Known Default upon the Closing and the
defaulting party shall have no liability with respect thereto.

 

15.22                             No Course of Dealing. Seller has entered into
this Agreement on the express understanding with Buyer that in entering into
this Agreement Seller is not establishing any course of dealing with Buyer and,
for the avoidance of doubt, except as expressly set forth herein, no action
shall be deemed to create a binding future obligation of Seller or course of
dealing pursuant to this Agreement.

 

15.23                             Currency.  All reference to currency in this
Agreement shall be deemed to be reference to United States dollars.

 

15.24                             No Registration of Agreement.  The Buyer shall
not register this Agreement or any notice of this Agreement on title to any
Property.

 

[Remainder of Page Left Blank Intentionally]

 

30

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

 

BUYER:

 

 

 

LANDMARK INFRASTRUCTURE OPERATING
COMPANY LLC, a Delaware limited liability company

 

 

 

 

By:

/s/ George Doyle

 

 

Name: George Doyle

 

 

Title:Authorized Signatory

 

[Additional Signature Page Follows]

 

--------------------------------------------------------------------------------

 

 

SELLER:

 

 

 

RECURRENT ENERGY LANDCO LLC,

 

a Delaware limited liability company

 

 

 

 

By:

/s/ Helen Kang Shin

 

 

Name: Helen Kang Shin

 

 

Title: Vice President

 

--------------------------------------------------------------------------------