Blue Sphere Corp. 10-Q [blsp-10q_063015.htm] 

Exhibit 10.7

 

ORBIT ENERGY CHARLOTTE, LLC MEMBERSHIP

INTEREST PURCHASE AGREEMENT

 

among

 

ORBIT ENERGY, INC.,

ORBIT ENERGY CHARLOTTE, LLC,

BLUE SPHERE CORPORATION, INC.,

 

and

 

CONCORD ENERGY PARTNERS, LLC

 

dated as of

January 30, 2015

 

 

 

 

TABLE OF CONTENTS

ARTICLE I PURCHASE AND SALE 3 ARTICLE II REPRESENTATIONS AND WARRANTIES OF
SELLER 3 ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER 5 ARTICLE IV
COVENANTS 6 ARTICLE V CLOSING DELIVERIES AND CONDITIONS 9 ARTICLE VI
MISCELLANEOUS 10

 

 

 

 

ORBIT ENERGY CHARLOTTE, LLC MEMBERSHIP
INTEREST PURCHASE AGREEMENT

This Agreement, dated as of January 30, 2015 is entered into by and between
Orbit Energy, Inc., a North Carolina corporation (“Seller”), Concord Energy
Partners, LLC, a Delaware limited liability company (“Buyer”), Orbit Energy
Charlotte, LLC, a North Carolina limited liability company (“Project LLC”) and
Blue Sphere Corporation, a Nevada corporation (“Blue Sphere”).

WITNESSETH:

WHEREAS, Project LLC holds certain development and other rights necessary and
appropriate to develop, construct and operate a high solids anaerobic digestion
and energy generation facility for the production of biogas and electricity in
Charlotte, North Carolina (the “Project”);

WHEREAS, Seller and Blue Sphere are parties to that certain Amended and Restated
Orbit Energy Charlotte, LLC Purchase Agreement, (including Exhibit A thereto)
made and entered into as of November 19, 2014 (the “Prior Purchase Agreement”),
pursuant to which Blue Sphere purchased 100% of the limited liability company
interests of Project LLC, along with certain contractual, governmental and
permitting rights relating to the Project (collectively, in addition to the 100%
limited liability company interests of Project LLC, the “Interests”) from
Seller, and became the sole member of Project LLC, a copy of which agreement is
attached hereto and incorporated herein as Exhibit A. For the avoidance of
doubt, the terms “Interests” as used throughout this Agreement includes without
limitation, any and all Rights (as hereinafter defined) acquired by Project LLC
(or by Blue Sphere on behalf of Project LLC) during Blue Sphere’s period of
ownership;

WHEREAS, under the Prior Purchase Agreement, (i) Blue Sphere acknowledges and
agrees that it has an obligation to make certain payments to Seller, including,
without limitation, pursuant to Section 2, Section 3 and Section 4 of the Prior
Purchase Agreement, including a Seller Participation Fee, a Development Fee, an
extension fee, and a Management Fee (all as defined in the Prior Purchase
Agreement), and to perform certain other obligations under the Prior Purchase
Agreement (collectively, all of Blue Sphere’s obligations to perform under the
Prior Purchase Agreement as set forth therein and herein are referred to herein
as the “Blue Sphere Obligations”), and (ii) Seller has granted certain
technology rights to Blue Sphere and/or Project LLC for use in the Project;

WHEREAS, Blue Sphere, during the period in which it was the sole member of
Project LLC, on behalf of Project LLC, procured and coordinated certain
contractual and governmental and permitting rights necessary for the development
and construction of the Project (collectively, the “Rights”);

WHEREAS, Blue Sphere, Seller and York Renewable Energy Partners LLC, a Delaware
limited liability company (“York”), have been engaged in negotiations to effect
a transaction whereby Blue Sphere would contribute 100% of the Interests to
Buyer and York would make certain capital contributions to Buyer, such that Blue
Sphere and York would become the sole members of Buyer, and Buyer would become
the sole member of Project LLC (“Previous Transaction”);

 

1

 

 

WHEREAS, in contemplation of the Previous Transaction and payment by Blue Sphere
of the Development Fee to Seller as well as Blue Sphere’s performance of the
Blue Sphere Obligations, Seller executed and delivered a release to Buyer,
pursuant to which Seller released Buyer, York and Project LLC and their
respective assets, including the Project, from any liability for any of the Blue
Sphere Obligations under the Prior Purchase Agreement, including without
limitation, the Seller Participation Fee, the Development Fee, an extension fee
and the Management Fee, and granted to Project LLC a perpetual, royalty-free,
nonexclusive license to use certain technology in the Project (the “Release”, a
copy of which is attached hereto and incorporated herein as Exhibit B);

WHEREAS, the Previous Transaction has not been consummated;

WHEREAS, pursuant to Section 3.3 of the Prior Purchase Agreement, if payment in
full of the Development Fee (as defined in the Prior Purchase Agreement) is not
made by Blue Sphere on December 15, 2015, as extended to January 15, 2015, the
Interests automatically revert to Seller without further action, and effective
on the date hereof, with the consent of Blue Sphere, Seller and Buyer, such
reversion is deemed to have occurred and Seller is the sole legal and beneficial
the owner of the Interests;

WHEREAS, Blue Sphere, Seller and Buyer desire, in lieu of the Previous
Transaction to enter into the following transaction: (i) Seller shall sell and
Buyer shall purchase the Interests for the consideration described herein and
Buyer shall become the sole member of Project LLC; (ii) Blue Sphere, York and
Buyer shall enter into a certain Development and Indemnification Agreement
pursuant to which Blue Sphere shall make certain representations and warranties
regarding Project LLC, its assets and liabilities and the Project and undertake
certain covenants and indemnification obligations to Buyer relating thereto, and
contribute to Project LLC certain assets relating to the Project in exchange for
consideration stated therein; (iii) York, Buyer and Blue Sphere shall enter into
an amended and restated limited liability company agreement pursuant to which
York shall make certain capital contributions to Buyer as a member of Buyer
holding Series A units representing 75% of the limited liability company
interests of Buyer, and Blue Sphere shall become a member of Buyer holding
Series B units representing 25% of the limited liability company interests of
Buyer; and (iv) Seller shall confirm the Release and the grant to Project LLC of
the license described therein in light of the transactions contemplated by the
foregoing by its execution of this Agreement;

WHEREAS, subject to the terms and conditions hereof, Seller desires to sell all
of the Interests to Buyer, and Buyer wishes to purchase all of the Interests
from Seller; and

WHEREAS, Blue Sphere, Seller and Buyer desire to confirm certain of their
respective obligations under the Prior Purchase Agreement, including under the
Release;

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

 

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Article I
Purchase and Sale

Section 1.01

Purchase and Sale.

Subject to the terms and conditions set forth herein, at the Closing (as defined
herein), Seller shall sell to Buyer, and Buyer shall purchase from Seller, all
of Seller’s right, title and interest in and to the Interests free and clear of
any mortgage, pledge, lien, charge, security interest, claim or other
encumbrance (“Encumbrance”), and Seller abandons all economic and ownership
interest in the Interests in favor of Buyer, for the consideration specified in
Section 1.02, and effective with the Closing, Seller shall cease to be a member
of Project LLC, consents to the admission of Buyer as the sole member of Project
LLC, and Buyer shall be admitted as the sole member of Project LLC.

Section 1.02

Purchase Price.

Buyer shall pay to Seller $917,764 as the purchase price for the Interests (such
amount referred to herein as the “Closing Purchase Price”). Buyer shall pay the
Closing Purchase Price to Seller at the Closing (as defined herein) in cash, by
wire transfer of immediately available funds in accordance with the wire
transfer instructions provided by Seller to Buyer.

Section 1.03

Closing.

The closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place simultaneously with the execution of this Agreement on the date
of this Agreement (the “Closing Date”) at the offices of Sullivan & Worcester
LLP, One Post Office Square, Boston, Massachusetts 02109.

Article II
Representations and Warranties of Seller

Seller represents and warrants to Buyer that the statements contained in this
Article II are true and correct as of the date hereof. For purposes of this
Article II, “Seller’s knowledge,” “knowledge of Seller” and any similar phrases
shall mean the actual knowledge of any director or officer of Seller, after due
inquiry.

Section 2.01

Organization and Authority of Seller; Enforceability.

Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of North Carolina. Seller has the corporate power
and authority to enter into this Agreement and the documents to be delivered
hereunder, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement and the documents to be
delivered hereunder have been duly executed and delivered by Seller, and
(assuming due authorization, execution and delivery by Buyer) this Agreement and
the documents to be delivered hereunder constitute legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms, except as may be limited by any bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors’ rights generally or by general
principles of equity.

 

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Section 2.02

No Conflicts; Consents.

The execution, delivery and performance by Seller of this Agreement and the
documents to be delivered hereunder, and the consummation of the transactions
contemplated hereby, do not and will not: (i) violate or conflict with the
articles of incorporation, by-laws or other organizational documents of Seller;
(ii) violate or conflict with any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Seller; (iii) conflict with, or
result in (with or without notice or lapse of time or both) any violation of, or
default under, or give rise to a right of termination, acceleration or
modification of any obligation or loss of any benefit under any contract or
other instrument to which Seller is a party; (iv) result in any violation,
conflict with or constitute a default under Project LLC’s Articles of
Organization; or (v) result in the creation or imposition of any Encumbrance on
the Interests.

Section 2.03

Legal Proceedings.

There is no claim, action, suit, proceeding or governmental investigation
(“Action”) of any nature pending or, to Seller’s knowledge, threatened against
or by Seller (i) relating to or affecting the Interests; or (ii) that challenges
or seeks to prevent, enjoin or otherwise delay the transactions contemplated by
this Agreement. No event has occurred or circumstances exist that may give rise
to, or serve as a basis for, any such Action.

Section 2.04

Ownership of Interests; Limited Liability Company Agreement.

(a)

Seller organized and was the sole member of Project LLC from March 16, 2010, the
date of its formation as a limited liability company under the laws of the State
of North Carolina, through November 19, 2014, the effective date of the Prior
Purchase Agreement.

(b)

From the date of formation of Project LLC through November 19, 2014 there was no
limited liability company agreement for Project LLC.

(c)

Pursuant to the Prior Purchase Agreement, Seller transferred and abandoned 100%
of the limited liability company interests of Project LLC, including all the
economic and ownership rights in Project LLC owned by Seller to Blue Sphere, and
consented to the admission of Blue Sphere as the sole member of Project LLC, and
Blue Sphere was admitted as the sole member, of Project LLC, effective November
19, 2014.

(d)

Effective on the date hereof, pursuant to Section 3.3 of the Prior Purchase
Agreement, ownership of the Interests reverted to Seller, and Seller became and
is the sole legal, beneficial, record and equitable owner of the Interests, free
and clear of all Encumbrances whatsoever and is the sole member of Project LLC.

(e)

The Interests were issued in compliance with applicable laws. The Interests were
not issued in violation of the organizational documents of Project LLC or any
other agreement, arrangement or commitment to which Seller or Project LLC was a
party during the periods when the Interests were owned by Seller and, to the
knowledge of Seller, are not subject to and were not issued or otherwise
transferred in violation of any preemptive or similar rights of any person or
entity.

 

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(f)

To the knowledge of Seller, the Interests are not subject to any restriction
with respect to their transferability (other than restrictions on transfer under
applicable federal and state securities laws); there are no outstanding or
authorized options, warrants, subscriptions, calls, puts, conversion or other
rights, contracts, agreements, commitments or understandings of any kind
respecting the Interests or obligating Seller to sell, purchase or return any of
the Interests and there are no other securities convertible into, exchangeable
for or evidencing the right to subscribe for any of the Interests.

Section 2.05

Brokers.

Except for Seller’s agreement with Excelsior Capital, which shall be the sole
obligation of Seller, no broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller.

Section 2.06

Non-foreign Status.

Seller is not a foreign person as such term is used in Treasury Regulation
Section 1.1445-2.

Article III
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that the statements contained in this
Article III are true and correct as of the date hereof. For purposes of this
Article III, “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases
shall mean the actual knowledge of any director or officer of Buyer, after due
inquiry.

Section 3.01

Organization and Authority of Buyer; Enforceability.

Buyer is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware. Buyer has full limited
liability company power and authority to enter into this Agreement and the
documents to be delivered hereunder, to carry out its obligations hereunder and
to consummate the transactions contemplated hereby. The execution, delivery and
performance by Buyer of this Agreement and the documents to be delivered
hereunder and the consummation of the transactions contemplated hereby have been
duly authorized by all requisite limited liability company action on the part of
Buyer. This Agreement and the documents to be delivered hereunder have been duly
executed and delivered by Buyer, and (assuming due authorization, execution and
delivery by Seller) this Agreement and the documents to be delivered hereunder
constitute legal, valid and binding obligations of Buyer enforceable against
Buyer in accordance with their respective terms, except as may be limited by any
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity.

 

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Section 3.02

No Conflicts; Consents.

The execution, delivery and performance by Buyer of this Agreement and the
documents to be delivered hereunder, and the consummation of the transactions
contemplated hereby, do not and will not: (i) violate or conflict with the
certificate of formation or limited liability company agreement of Buyer; or
(ii) violate or conflict with any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Buyer. No consent, approval, waiver
or authorization is required to be obtained by Buyer from any person or entity
(including any governmental authority) in connection with the execution,
delivery and performance by Buyer of this Agreement and the consummation of the
transactions contemplated hereby.

Section 3.03

Investment Purpose.

Buyer is acquiring the Interests solely for its own account for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution thereof. Buyer acknowledges that the Interests are not registered
under the Securities Act of 1933, as amended, or any state securities laws, and
that the Interests may not be transferred or sold except pursuant to the
registration provisions of the Securities Act of 1933, as amended, or pursuant
to an applicable exemption therefrom and subject to state securities laws and
regulations, as applicable.

Section 3.04

Brokers.

No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission from Seller in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Buyer.

Section 3.05

Legal Proceedings.

There is no Action pending or, to Buyer’s knowledge, threatened against or by
Buyer or any affiliate of Buyer that challenges or seeks to prevent, enjoin or
otherwise delay the transactions contemplated by this Agreement. No event has
occurred or circumstances exist that may give rise to, or serve as a basis for,
any such Action.

Article IV
COVENANTS

Section 4.01

Confidentiality.

From and after the Closing, Seller shall, and shall cause its affiliates to,
hold, and shall use its reasonable best efforts to cause its or their respective
representatives to hold, in confidence any and all information, whether written
or oral, concerning Project LLC or Buyer, except to the extent that Seller can
show that such information (i) is generally available to and known by the public
through no fault of Seller, any of its affiliates or their respective
representatives; or (ii) is lawfully acquired by Seller, any of its affiliates
or their respective representatives from and after the Closing from sources
which are not prohibited from disclosing such information by a legal,
contractual or fiduciary obligation. If Seller or any of its affiliates or their
respective representatives are compelled to disclose any information by judicial
or administrative process or by other requirements of law, Seller shall promptly
notify Buyer in writing and shall disclose only that portion of such information
which Seller is advised by its counsel in writing is legally required to be
disclosed, provided that Seller shall use reasonable best efforts to obtain an
appropriate protective order or other reasonable assurance that confidential
treatment will be accorded such information.

 

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Section 4.02

Public Announcements.

Unless otherwise required by applicable law (based upon the reasonable advice of
counsel), no party to this Agreement shall make any public announcements in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of the other
parties (which consent shall not be unreasonably withheld or delayed), and the
parties shall cooperate as to the timing and contents of any such announcement.

Section 4.03

Transfer Taxes.

Seller shall pay, and shall reimburse Buyer for, any sales, use or transfer
taxes, documentary charges, recording fees or similar taxes, charges, fees or
expenses, if any, that become due and payable as a result of the transactions
contemplated by this Agreement. 

Section 4.04

Seller Release; Continuing Obligations of Blue Sphere.

Each of Seller and Blue Sphere and their respective (as applicable) past and
present parent companies, subsidiaries, affiliates, divisions, predecessors,
successors, assignees, agents, partners, members, representatives, officers,
directors, managers, employees, consultants, licensees, sublicensees,
shareholders, insurers, assigns, and their attorneys, and all persons acting by,
through, under or in concert with them or any of them, other than Project LLC
(all collectively referred to as the “Releasors”), (i) do hereby release and
forever discharge Project LLC, Buyer, Entropy Investment Management, LLC, York
and each of their (as applicable) past and present parent companies,
subsidiaries, affiliates, divisions, predecessors, successors, assignees,
agents, partners, members, representatives, officers, directors, managers,
employees, consultants, licensees, sublicensees, shareholders, insurers,
assigns, past and present, and their attorneys, and all persons acting by,
through, under or in concert with them or any of them, other than any of the
Releasees which are also Releasors (all collectively referred to as the
“Releasees”), of and from any and all claims, causes of action, suits, debts,
liens, contracts, judgments, agreements, promises, infringements, liabilities,
claims, demands, damages, losses, costs, or expenses of any nature whatsoever,
known or unknown, fixed or contingent, which the Releasors or any of them now
has or may hereafter have against the Releasees, or any of them, including any
of the respective assets of the Releasees, including without limitation the
Project and the Interests, relating to or by reason of the Prior Purchase
Agreement and the failure of Blue Sphere to perform any obligations under the
Prior Purchase Agreement, or the failure of Project LLC or the Project to
perform any of its obligations or obligations imputed to it under the Prior
Purchase Agreement, including to pay the Development Fee, the Seller
Participation Fee, the extension fee, the Management Fee (each as defined in the
Prior Purchase Agreement), the obligation to enter into an operation agreement
with Seller, or the failure to disclose or deliver financial information about
the Project or Project LLC, and (ii) do hereby waive any rights to impose liens,
remedies or liabilities on or against any of the Releasees or their assets due
to or arising out of Blue Sphere’s failure to perform its obligations under the
Prior Purchase Agreement from the beginning of time to the date of this
Agreement. Blue Sphere hereby specifically acknowledges and agrees to its
continuing responsibility to pay and perform the Blue Sphere Obligations under
the Prior Purchase Agreement, which include, without limitation, the payment of
the Management Fee by Blue Sphere and the payment of the Seller Participation
Fee by Blue Sphere, as such terms are defined and described in the Prior
Purchase Agreement. The foregoing release shall not apply to the other
obligations of the parties hereto set forth in this Agreement. The Blue Sphere
Obligations shall be the sole responsibility and liability of Blue Sphere, and
any failure by Blue Sphere to pay or perform all of the Blue Sphere Obligations
hereunder shall have no effect on the right, title and interest in and to the
Interests or the Rights acquired by Buyer hereunder.

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Section 4.05

Technology License and Technology Incorporation.

Without limiting the scope of the release set forth in Section 4.04 above,
Seller hereby grants Project LLC an unconditional, perpetual, assignable,
royalty-free nonexclusive license to use the Technology (as defined in the Prior
Purchase Agreement) for HSAD Units (as defined in the Prior Purchase Agreement),
and Project LLC (or its successor) and Buyer agrees to incorporate the
Technology and HSAD Units as part of the Project, (as defined in the Prior
Purchase Agreement) subject to the following terms and conditions:

(a)

At such time as the Technology has been fully demonstrated to meet all technical
and operational parameters for use in the Project and all applicable thresholds,
requirements and criteria set forth in the Prior Purchase Agreement (including
as set forth in Exhibit A to the Prior Purchase Agreement and any other relevant
exhibits and annexes), and subject to subsection (c) hereof, Project LLC shall
incorporate the Technology and the requisite HSAD Units into the Project, up to
a total maximum capacity of 100 tons per day.

(b)

Blue Sphere acknowledges and agrees that it shall be responsible for all costs
of evaluating and incorporating the Technology and the HSAD Units, both direct
and indirect, including all payments to Seller and all increased costs, expenses
and any damages incurred in connection with the design, installation,
integration, operation and maintenance of the Technology incorporated into the
Project, which, for the purposes of clarity, shall include the payment of the
Management Fee (as defined in the Prior Purchase Agreement) to Seller.

(c)

Each of the following shall be conditions precedent to the requirement that
Project LLC incorporate the Technology and the HSAD Units into the Project and
to the continued operation of the Technology and HSAD Units as part of the
Project: (1) Seller shall provide Project LLC a Performance Guarantee, in form
and substance satisfactory to Project LLC, meeting the requirements for such
Performance Guarantee under the terms set forth in Section 2.4 of the Prior
Purchase Agreement; (2) the incorporation of the Technology shall have been
determined by Project LLC to (i) be capable of feasible integration within the
overall engineering design, construction and delivery agreement with Auspark LLC
and any other project contractors (collectively, the “EPC Agreements”) and will
not adversely impact the Project’s performance or void any warranties under the
EPC Agreements; and (ii) not reasonably be expected to result in any material
adverse impact on the Project or in Project LLC incurring any liabilities to any
third party. Upon such time as the HSAD Units are incorporated into the Project,
Blue Sphere, Project LLC and Buyer shall cooperate in good faith with Seller to
enter into an operation agreement the terms of which shall govern the technical
terms on which the HSAD Units will be incorporated into the Project, which shall
include, inter alia, agreement as to feedstock for the HSAD Units, auxiliary
resources to be devoted to the HSAD Units, and such other terms as the parties
may agree to in good faith in order to permit Seller to perform its obligations
hereunder.

 

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(d)

For the avoidance of doubt, in no event shall any of the Releasees have any
financial obligation to Seller in connection with the Technology, and the
nonexclusive license granted by Seller hereunder shall be freely assignable to
any third party in connection with a sale or transfer of any interest in the
Project or Project LLC, including any future debt or equity financing.

(e)

Seller hereby represents and warrants to Project LLC that Seller owns or holds a
valid license to any and all intellectual property relating to the Technology
and has full authority to grant the license granted hereunder and that Project
LLC’s use of the Technology and the license and/or any subsequent transfer
thereof will not infringe on the rights of any third parties or give rise to any
claims on the part of any third parties.

(f)

Seller agrees to indemnify and hold harmless Project LLC from any claims,
damages, losses, liabilities and/or costs (including for the avoidance of doubt,
reasonable counsel fees) (i) relating to or arising out of Project LLC’s use of
the HSAD Units, the Technology or the license granted hereunder or (ii) against
or in respect of Project LLC arising out of Seller’s conduct that occurred on or
prior to November 19, 2014. To the extent Seller lacks the funds to fulfill its
indemnity obligations hereunder, Seller pledges its rights, title and interest
in, to and under the Technology to Project LLC for Project LLC’s full and
unfettered use until such time as Project LLC has been made whole and recouped
any losses, costs or other out-of-pocket amounts.

Section 4.06

Further Assurances.

Following the Closing, each of the parties hereto shall, and shall cause their
respective affiliates to, execute and deliver such additional documents,
instruments, conveyances and assurances and take such further actions as may be
reasonably required to carry out the provisions hereof and give effect to the
transactions contemplated by this Agreement.

Article V
CLOSING DELIVERIES AND CONDITIONS

Section 5.01

Seller’s Deliveries.

At the Closing, to the extent applicable, Seller shall deliver to Buyer the
following:

(a)

The written resignation or resignations of Seller’s representatives, if any,
serving as managers, officers or any other position with or on behalf of Project
LLC, such resignations to be effective as of the date hereof.

(b)

A certificate of the Secretary or Assistant Secretary (or equivalent officer) of
Seller certifying as to (i) the resolutions of the board of directors of Seller,
duly adopted and in effect, which authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby, and (ii)
the names and signatures of the officers of Seller authorized to sign this
Agreement and the documents to be delivered hereunder.

(c)

A certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Seller
is not a foreign person within the meaning of Section 1445 of the Internal
Revenue Code of 1986, as amended.

 

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Section 5.02

Buyer’s Deliveries.

At the Closing, Buyer shall deliver the Closing Purchase Price to Seller.

Section 5.03

Other Closing Conditions.

Each of Blue Sphere, York and Buyer shall have executed and delivered to the
other (i) the amended and restated limited liability company agreement of Buyer
together with all exhibits thereto in form satisfactory to Buyer dated the date
hereof (“Concord LLC Agreement”), and (ii) the Development and Indemnification
Agreement (“Development Agreement”) together with all exhibits and schedules
thereto and closing deliverables thereunder, in form satisfactory to Buyer and
the transactions contemplated under such agreements and documents shall have
been consummated.

Article VI
MISCELLANEOUS

Section 6.01

Expenses.

Except as otherwise specifically provided herein, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses.

Section 6.02

Notices.

All notices, requests, consents, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
given (i) when delivered by hand (with written confirmation of receipt); (ii)
when received by the addressee if sent by a nationally recognized overnight
courier (receipt requested); (iii) on the date sent by facsimile or e-mail of a
PDF document (with confirmation of transmission) if sent during normal business
hours of the recipient, and on the next Business Day if sent after normal
business hours of the recipient or (iv) on the third day after the date mailed,
by certified or registered mail, return receipt requested, postage prepaid. Such
communications must be sent to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 6.02):

If to Seller:

Orbit Energy, Inc.

900 Ridgefield Dr., Suite 145

Raleigh, NC 27609

Telephone: 919-882-3980

Fax: 919-954-0379

Email:

Attention: Chief Executive Officer

    If to Buyer or Project LLC:

c/o York Capital Management

767 Fifth Avenue, 17th Floor

New York, New York 10153

Telephone 212-710-6567

Fax 646-514-9321

Attention: Investment Counsel

Email: mmauro@yorkcapital.com

 

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If to Blue Sphere:

Blue Sphere Corporation

301 McCullough Drive, 4th Floor

Charlotte, NC 28262

Attn: Shlomi Palas

    with copies to:

Orit Marom-Albeck, Adv.

4 Berkowitz St. Level 8 (Museum Tower)

Tel-Aviv, Israel, 6423806

Telephone: +972-3-7778333

Fax: +972-3-7778444

e-mail: oritma@shibolet.com

 

Section 6.03

Headings.

The headings in this Agreement are for reference only and shall not affect the
interpretation of this Agreement.

Section 6.04

Severability.

If any term or provision of this Agreement is invalid, illegal or unenforceable
in any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other term or provision of this Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction.

Section 6.05

Entire Agreement.

This Agreement, together with the Concord LLC Agreement and the Development
Agreement and the exhibits and schedules thereto constitute the sole and entire
agreement of the parties to this Agreement with respect to the subject matter
contained herein (the “Documents”), and supersede all prior and contemporaneous
understandings and agreements, both written and oral, with respect to such
subject matter.

Section 6.06

Successors and Assigns.

This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. No party
may assign its rights or obligations hereunder without the prior written consent
of the other parties, which consent shall not be unreasonably withheld or
delayed. No assignment shall relieve the assigning party of any of its
obligations hereunder.

 

11

 

 

Section 6.07

Third Party Beneficiaries.

This Agreement is for the sole benefit of the parties hereto and their
respective successors and permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any other Person or entity any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, except that York shall be a third party beneficiary of
this Agreement.

Section 6.08

Amendment and Modification.

This Agreement may only be amended, modified or supplemented only by an
agreement in writing signed by each party hereto, provided however, if Sections
4.04 or 4.05 are not amended, a writing signed by Blue Sphere shall not be
required to effect such amendment, modification or supplement.

Section 6.09

Waiver.

No waiver by any party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and signed by the party so waiving. No waiver by
any party shall operate or be construed as a waiver in respect of any failure,
breach or default not expressly identified by such written waiver, whether of a
similar or different character, and whether occurring before or after that
waiver. No failure to exercise, or delay in exercising, any right, remedy, power
or privilege arising from this Agreement shall operate or be construed as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.

Section 6.10

Governing Law.

This Agreement shall be governed by and construed in accordance with the
internal laws of the State of North Carolina without giving effect to any choice
or conflict of law provision or rule (whether of the State of North Carolina or
any other jurisdiction).

 

12

 

 

Section 6.11

Arbitration.

Any controversy or claim by or between the parties related in any way to this
Agreement shall be settled by binding arbitration administered by the American
Arbitration Association (the “AAA”) in accordance with its Commercial
Arbitration Rules; provided that nothing herein shall require arbitration of any
claim or charge which, by law, cannot be the subject of a compulsory arbitration
agreement. Any arbitration proceeding brought under this Agreement shall be
conducted in Charlotte, North Carolina by a single arbitrator appointed by
agreement of the parties within thirty (30) days of receipt by respondent of the
demand for arbitration, or in default thereof by the AAA. Each of Buyer, Project
LLC, Seller and Blue Sphere, agree to be bound by this arbitration clause
provided that they have either (i) signed this contract or a contract that
incorporates this contract by reference or (ii) signed any other agreement to be
bound by this arbitration clause. Each such party agrees that it may be joined
as an additional party to an arbitration involving other parties under any such
agreement. The arbitrator(s) in the first-filed of such proceeding shall be the
arbitrator(s) for the consolidated proceeding. The arbitrator, in rendering an
award in any arbitration conducted pursuant to this provision, shall issue a
reasoned award stating the findings of fact and conclusions of law on which it
is based, and the arbitrator shall be required to follow the law of the state
designated by the parties herein. Any judgment or enforcement of any award,
including an award providing for interim or permanent injunctive relief,
rendered by the arbitrator may be entered, enforced or appealed from in any
court having jurisdiction thereof. Any arbitration proceedings, decision or
award rendered hereunder, and the validity, effect and interpretation of this
arbitration provision, shall be governed by the Federal Arbitration Act, 9
U.S.C.§ 1 et seq. In any arbitration proceedings under this Agreement, each
party shall pay all of its, his or her own legal fees, including counsel fees,
but AAA filing fees and arbitrator compensation shall be paid pursuant to the
AAA Commercial Arbitration Rules, unless otherwise provided by law for a
prevailing party. The parties agree that, notwithstanding the foregoing, prior
to the appointment of the arbitrator, nothing herein shall prevent any party
from seeking preliminary or temporary injunctive relief against any other party
in the federal or state courts of North Carolina. For the avoidance of doubt,
any actions for permanent relief or monetary damages shall be settled by
arbitration.

Section 6.12

Specific Performance.

The parties agree that irreparable damage would occur if any provision of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy to which they are entitled at law or in equity.
Each party hereto (i) agrees that it shall not oppose the granting of such
specific performance or relief and (ii) hereby irrevocably waives any
requirements for the security or posting of any bond in connection with such
relief.

Section 6.13

Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall be deemed to be one and the same
agreement. A signed copy of this Agreement delivered by facsimile, e-mail or
other means of electronic transmission shall be deemed to have the same legal
effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

 

13

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.

  Orbit Energy, Inc.           By:       Name:   Title:           Orbit Energy
Charlotte, LLC           By:       Name:   Title:

 

 

[LLC Member Interest Purchase Agreement – Signature Page]

 

 

  Concord Energy Partners, LLC          

By:

York Renewable Energy Partners LLC,
its Sole Member

          By:       Name: Richard P.  Swanson   Title:   General Counsel

 

 

 

 

[LLC Member Interest Purchase Agreement – Signature Page]

 

 

  Blue Sphere Corporation           By:       Name: Shlomi Palas   Title:   CEO

 

 

 

[LLC Member Interest Purchase Agreement – Signature Page]

 

 

Exhibit A – Prior Purchase Agreement

 

 

 

 

 

 

AMENDED AND RESTATED ORBIT ENERGY CHARLOTTE, LLC PURCHASE AGREEMENT

This amended and restated Orbit Energy Charlotte, LLC Purchase Agreement (this
“Agreement”) is made and entered into as of November 19, 2014 (the “Effective
Date”) by and between Bluesphere Corporation, a Nevada corporation
(“Purchaser”), and Orbit Energy, Inc., a North Carolina corporation (“Seller”).

RECITALS

A.

Seller has established Orbit Energy Charlotte, LLC (the “LLC”) to implement an
anaerobic digestion and energy generation project in Concord, North Carolina or
at an alternate site in North Carolina (the “Project”).

B.

In accordance with the terms of this Agreement, Seller desires to sell and
transfer 100% of its right, title and interest in, to and under the LLC to
Purchaser and Purchaser desires to purchase and accept 100% of the right, title
and interest in, to and under the LLC for the purpose of implementing the
Project.

Now. therefore, the parties hereby agree as follows.

1.

RECITALS. The foregoing recitals are incorporated by reference as if fully set
forth herein.

2.

SALE AND PURCHASE OF THE LLC.

2.1

Terms of Sale and Purchase. Subject to the terms and conditions of this
Agreement, Seller hereby sells, assigns, conveys and transfers to Purchaser, and
Purchaser hereby purchases, accepts and receives from Seller, 100% of its right,
title and interest (for the avoidance of doubt, both economic and ownership) in,
to and under the LLC in exchange for Purchaser’s payment to Seller of (i) a
development fee of $900,000 as well as reimbursement of an amount equal to an
additional $17,764 in immediately available funds pursuant to wiring
instructions to be provided separately (the “Development Fee”) to be paid in
accordance with Section 3.1 below and (ii) an amount equal to thirty percent
(30%) of the Project” s distributable cash flow after the Purchaser and the
party(ies) making an equity investment in the Project fully recoup their
respective investment in the Project (such investment(s) to be calculated solely
as amounts expended in and for the construction of the Project) and the Project
achieves a thirty (30%) percent internal rate of return (the “IRR”), which, for
the avoidance of doubt, will take into account and be computed on the basis of
any and all benefits from tax credits, depreciation and other incentives of any
nature (such payment to the Seller, the “Seller Participation Payment”). The
Seller Participation Payment shall be paid by Purchaser to Seller on a quarterly
basis commencing the first quarter in which the Project achieves the IRR. Within
45 days of the end of the fiscal year of each of the LLC, Seller will be
provided the audited financials of the LLC, including the cash distributions to
the members of each of the foregoing. Purchaser hereby guarantees the Seller
Participation Payment.

 

 

 

 

2.2

Seller, as the sole member of the LLC, hereby (i) admits Purchaser as a member
of the LLC and (ii) abandons 100% of its ownership and economic interest in the
LLC with such abandonment to take effect immediately and without any further
action after Purchaser becomes an ownership member of the LLC. In this
connection, Seller will take any and all actions necessary or helpful to record
and/or reflect ownership of the LLC in Purchaser’s name with all applicable
governmental authorities and non-governmental third-parties as soon as
practicable and, going forward, as and when requested by Purchaser.

2.3

[intentionally omitted].

2.4

HSAD License. Purchaser shall incorporate high solid anaerobic digester units
designed by Seller (the “HSAD Units”) in the planning, implementation, design,
and operation of the Project. Seller shall provide Purchaser with (i) the
detailed design and engineering of such HSAD Units as is required for all
applicable permitting and fabrication purposes and (ii) a performance guarantee
in respect of the HSAD Units from a third party which shall guarantee to
Purchaser that the rate of gas production from the HSAD Units shall be equal to
or greater than that from other digesters used in the Project for a period of
three years from the date on which the HSAD Units are used for power production
in the Project, and, if there is a shortfall in production relative to that of
other digesters in the Project. Seller or the third party providing the
performance guarantee shall pay an amount equal to the difference to Purchaser.
Purchaser will use its reasonable efforts to procure acceptance by the
party(ies) financing the inclusion of the HSAD Units in the Project of a
performance guarantee directly from Seller permitting Purchaser to withhold in
escrow payments otherwise due to Seller in escrow in amount up to $100,000,
against which Purchaser, at its option, could offset amounts owed to it due to
breaches of the performance guarantee (the “Orbit PG”). Any outstanding escrow
amount held by Purchaser would be released to Seller upon the earlier to occur
of: (i) thirty-six (36) consecutive months without a breach of the performance
guarantee or (ii) the termination of the Operation Agreement. If Purchaser is
unable to procure acceptance of the Orbit PG, Seller shall be required to obtain
a market-standard performance guarantee in form and substance reasonably
acceptable to Purchaser. Seller agrees to cover the cost of such market-standard
performance guarantee up to an amount equal to what a market-standard
performance guarantee for a bankable high solid anaerobic digester technology
costs. Purchaser will cover any cost to be incurred in excess thereof. The HSAD
Units shall be used by the LLC and the Project in and for the production of
power, and shall be an integral part of the Project. That certain letter
agreement between Seller and Purchaser dated as of April 4, 2013 is attached
hereto as Exhibit A and its terms are hereby incorporated by reference. Neither
Purchaser nor any third party shall be permitted to operate or access the HSAD
Units except pursuant to the terms of an operation agreement (the “Operation
Agreement”) to be negotiated in good faith between Seller and Purchaser prior to
March 1, 2015, which shall provide, inter alia, for the respective obligations
of the Purchaser to maintain and operate the HSAD Units (including the ancillary
equipment supporting the HSAD Units) and for Seller to manage the HSAD Units.
Seller shall fully cooperate in good faith to provide Purchaser such budgets.
specifications, site plans and other information that Purchaser may reasonably
request from time to time in order to accomplish the foregoing; provided that,
Purchaser shall be solely responsible for the cost of the implementation,
construction and operation of the Units. Seller hereby grants Purchaser an
unconditional and irrevocable, non-exclusive license to use Seller’s high solids
anaerobic digestion (HSAD) technology consisting of a proprietary process that
uses an anaerobic digester design developed by the U.S. Department of Energy and
subsequently modified by Seller in combination with the proprietary bacteria to
be supplied by Seller (the “Technology”) at the Project site for so long as the
Project is in operation (the “License”). Purchaser may freely sell or transfer
the License in the event of a sale or transfer of its rights in the Project to
another party.

 

 

 

3.

DEVELOPMENT FEE PAYMENT EXTENSION AND RETURN OF THE LLC TO SELLER.

3.1

Development Fee Payment. Subject to Section 3.2 below, Purchaser shall pay the
Development Fee to Seller in immediately available funds in accordance with
separately provided instructions by no later than December 15, 2014 (the
“Payment Date”).

3.2

Extension. Notwithstanding anything else to the contrary herein, Purchaser shall
have the option to extend the Payment Date until January 15, 2015 upon the
payment of $75,000 to Seller in immediately available funds on December 15, 2014
wired to the account of Seller pursuant to separately provided instructions.

3.3

Return of LLC to Seller. If payment in full of the Development Fee is not made
by Purchaser on the Payment Date as set forth above, all right, title and
interest in the LLC (including all permits, deposits, interconnection studies
and agreements held by or related to the LLC) shall automatically revert to
Seller without any further action by either party and without cost or transfer
of liability to Seller. In the event of such a reversion: (i) Purchaser shall
cooperate in good faith with Seller to provide such documentation and to take
such actions as Seller may reasonably request to evidence and effect such
reversion to Seller, including, but not limited to, abandoning its economic and
ownership interest in the LLC; and (ii) Purchaser shall indemnify and hold
harmless Seller from any claims, damages, losses, liabilities and/or costs
(including, for the avoidance of doubt, reasonable counsel fees) against or in
respect of the LLC due to or arising out of Purchaser’s conduct that occurred
during the period of time that Purchaser was a member of the LLC.

4.

PROJECT MANAGEMENT.

4.1

Seller hereby agrees to manage the implementation and operation of the HSAD
Units subject to any agreements entered into or to be entered into in respect of
the Project by Purchaser and the supervision and control of Purchaser. With
respect to the HSAD Units, Seller shall cooperate with Purchaser and provide
relevant information pertaining to the LLC’s obligations regarding (i) reporting
to all applicable authorities, (ii) permit compliance and renewal, (iii)
presence at the site and operation, service and maintenance of the anaerobic
digester plant, in each case, as required or helpful, (iv) ongoing
identification of feedstock sources, compost off-takers and other third-parties
for use in the Project and (v) such other actions as may be required or
desirable in the reasonable discretion of either Seller or Purchaser. Seller
shall provide such management services as a reasonably prudent operator and the
LLC shall pay Seller an annual fee of U.S. $187,500 therefor, which shall be
payable in monthly installments of 1/12 thereof (the “Management Fee”). The
first such payment shall be payable on the sooner of: (i) the first day of the
month occurring after the Project is operational; or (ii) November 19, 2015,
and, subject to Sections 4.2 and 4.3, shall thereafter be paid on the first day
of each month for so long as the Project is operational.

 

 

 

 

4.2

Seller hereby agrees to forego receipt of the full Management Fee in the second
and third year from the date hereof if the transfer of Orbit Energy Rhode
Island, LLC from Seller to Purchaser pursuant to that Amended and Restated Orbit
Energy Rhode Island Purchase Agreement of even date herewith (“OERI Amended and
Restated Purchase Agreement”) does not take place due solely to (i) Seller’s
failure to obtain consent to change of control in respect of the power purchase
agreement dated May 26, 2011, as amended, from the Narragansett Electric Company
d/b/a National Grid; provided that, National Grid’s rejection of Seller’s
proposed transferee and/or Purchaser’s EPC contractor shall not be considered a
failure of Seller to obtain consent or (ii) failure by the owner of the site to
be used by OERI in its project to provide information required to provide a
lease guarantee from the Purchaser. For the purposes of clarity, if the
foregoing transfer or execution does not take place due to reasons other than
the Seller’s failure to obtain such consent (unless such failure is due to
National Grid rejecting Seller’s proposed transferee or Purchaser’s EPC
contractor or failure by the OERI site owner to provide information required to
provide a lease guarantee as set forth above, then the Management Fee shall be
payable in full.

4.3

Notwithstanding anything else to the contrary herein, Seller hereby agrees that
in the event that if the HSAD Units are not used in the Project due to Seller’s
fault or fail to perform and the terms of the performance guaranty are not
complied with by Seller or any third party guarantor, Purchaser’s obligation to
pay the Management Fee shall be limited to four years from the date of first
payment of the Management Fee (if the HSAD Units are not used at all) or four
years after the date on which the HSAD Units no longer perform in accordance
with their specifications and the terms of the performance guaranty are not
complied with by Seller.

5.

REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to
Purchaser as follows.

5.1

No Broker-Dealer. Except for the involvement of Excelsior Capital, Seller has
not effected this transfer of the LLC by or through any intermediaries.

5.2

Title to the LLC. Seller has valid marketable title to the LLC, free and clear
of any pledge, lien, security interest, encumbrance, claim or equitable interest
(“Encumbrances”). Upon the sale and transfer of the LLC, and payment therefor,
in accordance with the provisions of this Agreement, Purchaser will acquire
valid marketable title to the LLC, free and clear of any pledge, lien. security
interest, encumbrance, claim or equitable interest.

5.3

Consents. All consents, approvals, authorizations and orders required for the
execution and delivery of this Agreement and the transfer of the LLC under this
Agreement have been obtained and are in full force and effect.

5.4

Authority. Seller has full legal right, power and authority to enter into and
perform its obligations under this Agreement and to transfer the LLC under this
Agreement, and Seller is not obligated to transfer the LLC to any other person
or entity. Seller has been duly organized and is validly existing in good
standing under the laws of the jurisdiction of its organization as the type of
entity that it purports to be and all corporate or other entity actions
necessary to authorize the transactions contemplated by this Agreement have been
duly taken. The person(s) executing and delivering this Agreement on behalf of
Seller are duly authorized to do so.

 

 

 

5.5

Intellectual Property. Seller owns or holds a valid license to any and all
intellectual property relating to the Technology and has full authority to grant
the License. Purchaser’s use of the Technology and License and/or any subsequent
transfer thereof will not infringe on the rights of any third parties or give
rise to any claims on the part of any third-parties.

6.

COMPLIANCE WITH LAWS AND REGULATIONS. The sale and transfer of the LLC and the
implementation and management of the Project will be subject to and conditioned
upon compliance by Purchaser with all applicable state and federal laws and
regulations at the time of such sale, transfer, implementation and/or
management.

7.

GENERAL PROVISIONS.

7.1

Successors and Assigns; Assignment. Except as otherwise provided in this
Agreement, this Agreement, and the rights and obligations of the parties
hereunder, will be binding upon and inure to the benefit of their respective
successors, assigns. heirs, executors, administrators and legal representatives.
Each party hereto may assign its rights in, to and under this Agreement with the
consent of the other party with such consent not to be unreasonably withheld or
delayed.

7.2

Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of North Carolina without giving effect to its body
of laws pertaining to conflict of laws.

7.3

Notices. Any and all notices required or permitted to be given to a party
pursuant to the provisions of this Agreement will be in writing and will be
effective and deemed to provide such party sufficient notice under this
Agreement on the earliest of the following: (a) at the time of personal
delivery, if delivery is in person; (b) one (1) business day after deposit with
an express overnight courier for United States deliveries, or two (2) business
days after such deposit for deliveries outside of the United States; or (c)
three (3) business days after deposit in the United States mail by certified
mail (return receipt requested) for United States deliveries. All notices for
delivery outside the United States will be sent by express courier. All notices
not delivered personally will be sent with postage and/or other charges prepaid
and properly addressed to the party to be notified at the address set forth
below the signature lines of this Agreement or at such other address as such
other party may designate by one of the indicated means of notice herein to the
other party hereto. A “business day” shall be a day, other than Saturday or
Sunday, when the banks in the city of New York are open for business.

7.4

Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

7.5

Titles and Headings. The titles, captions and headings of this Agreement are
included for ease of reference only and will be disregarded in interpreting or
construing this Agreement. Unless otherwise specifically stated, all references
herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this
Agreement.

 

 

 

 

7.6

Entire Agreement. This Agreement and the documents referred to herein constitute
the entire agreement and understanding of the parties with respect to the
subject matter of this Agreement and supersede all prior understandings and
agreements, whether oral or written, between or among the parties hereto with
respect to the specific subject matter hereof.

7.7

Severability. If any provision of this Agreement is determined by any court or
arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in
any respect, such provision will be enforced to the maximum extent possible
given the intent of the parties hereto. If such clause or provision cannot be so
enforced, such provision shall be stricken from this Agreement and the remainder
of this Agreement shall be enforced as if such invalid, illegal or unenforceable
clause or provision had (to the extent not enforceable) never been contained in
this Agreement. Notwithstanding the forgoing. if the value of this Agreement
based upon the substantial benefit of the bargain for any party is materially
impaired, which determination as made by the presiding court or arbitrator of
competent jurisdiction shall be binding, then both parties agree to substitute
such provision(s) through good faith negotiations.

7.8

Amendment and Waivers. This Agreement may be amended only by a written agreement
executed by each of the parties hereto. No amendment of or waiver of, or
modification of any obligation under this Agreement will be enforceable unless
set forth in a writing signed by the party against which enforcement is sought.
Any amendment effected in accordance with this section will be binding upon all
parties hereto and each of their respective successors and assigns. No delay or
failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. No
waiver granted under this Agreement as to any one provision herein shall
constitute a subsequent waiver of such provision or of any other provision
herein, nor shall it constitute the waiver of any performance other than the
actual performance specifically waived.

7.9

Confidentiality. Each of Seller and Purchaser agrees that it will keep
confidential and will not disclose or use for any purpose any information about
the terms or existence of this Agreement and the transactions contemplated
hereby and any confidential information obtained from the Company in connection
herewith, unless any such information (a) is known or becomes known to the
public in general (other than as a result of a breach of this Agreement by the
disclosing party), or (b) is or has been made known or disclosed to the
disclosing party by a third party without a breach of any confidentiality
obligations by such third party; provided, however, that either Seller or
Purchaser may disclose such information (i) to its attorneys, accountants,
consultants, financiers and other professionals to the extent necessary to
obtain their services in connection with the transfer and ownership of the LLC
or the implementation of the Project; (ii) to any affiliate in the ordinary
course of business, provided that such affiliate agrees to maintain the
confidentiality of such information in accordance herewith; or (iii) as may be
required by law, including without limitation Purchaser’s disclosure obligations
under applicable U.S. securities laws, provided that the disclosing party
promptly notifies the other parties hereto in advance of such disclosure and
agrees to cooperate to take reasonable steps to minimize the extent of any such
required disclosure. Any public statements regarding the LLC or the Project
shall be mutually agreed to in writing in advance by the parties hereto, and
shall in no event occur sooner than three (3) days after the payment in full of
the Development Fee. All public statements shall identify the Seller and
Purchaser as joint developers of the Project. Notwithstanding anything else to
the foregoing herein, the Purchaser’s 8-K reporting this agreement, which shall
be released three days after the payment of the development fee, shall contain a
copy hereof as an exhibit to such 8-K.

 

 

 

7.10

Counterparts; Facsimile Signatures. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same agreement.
This Agreement may be executed and delivered by facsimile or other means of
electronic delivery and upon such delivery the signature will be deemed to have
the same effect as if the original signature had been delivered to the other
party.

7.11

Expenses. Each party hereto shall pay its own expenses in connection with this
Agreement.

7.12

Specific Performance. Unless this Agreement has been terminated, each party to
this Agreement acknowledges and agrees that any breach by it of this Agreement
shall cause any (or either) of the other parties irreparable harm which may not
be adequately compensable by money damages. Accordingly, except in the case of
termination, in the event of a breach or threatened breach by a party of any
provision of this Agreement, each party shall be entitled to seek the remedies
of specific performance, injunction or other preliminary or equitable relief,
without having to prove irreparable harm or actual damages. The foregoing right
shall be in addition to such other rights or remedies as may be available to any
party for such breach or threatened breach, including but not limited to the
recovery of money damages.

7.13

Indemnification/Pledge. Seller hereby agrees to indemnify and hold harmless
Purchaser from any claims, damages, losses, liabilities and/or costs (including,
for the avoidance of doubt, reasonable counsel fees) (i) relating to or arising
out of Purchaser’s use of the HSAD Units, Technology or License or (ii) against
or in respect of the LLC due to or arising out of Seller’s conduct that occurred
on or prior to the date hereof. To the extent that Seller lacks the funds to
fulfill its indemnity obligations hereunder, Seller hereby pledges its rights,
title and interest in, to and under the Technology to Purchaser for Purchaser’s
full and unfettered use until such time as Purchaser has been made whole and
recouped any losses, costs or other out-of-pocket amounts.

7.14

Costs of Enforcement. If any party to this Agreement seeks to enforce its rights
under this Agreement by legal proceedings against any other party to this
Agreement, the non-prevailing party or parties named in such legal proceedings
shall pay all costs and expenses incurred by the prevailing party or parties,
including, without limitation, all reasonable attorneys’ fees.

IN WITNESS WHEREOF, Seller and Purchaser have each executed this Agreement as of
the Effective Date.

 

 

 

 

 

 

SELLER:

_____________________________

 

By:

_____________________________

 

Address:

_____________________________

_____________________________

PURCHASER:

_____________________________

 

By:

_____________________________

 

Address:

_____________________________

_____________________________

 

 

 

 

 

 

[ex10-7_img001.jpg]

 

 

 

 

 

Exhibit B – Release

 

 

 

 

 

RELEASE

THIS RELEASE (the “Release”) is made and entered into as of the 22nd day of
January, 2015 by and among Orbit Energy, Inc., a North Carolina corporation
(“Seller”), Blue Sphere Corporation, a Nevada corporation (“Blue Sphere”), and
Orbit Energy Charlotte, LLC, a North Carolina limited liability company
(“Orbit”) with reference to the following facts:

A.

WHEREAS, Seller and Blue Sphere are parties to a certain Amended and Restated
Orbit Energy Charlotte, LLC Purchase Agreement, (including Exhibit A thereto)
made and entered into as of November 19, 2014 (the “Purchase Agreement”),
pursuant to which Blue Sphere purchased 100% of the limited liability interests
of Orbit (the “Interests”) from Seller, a copy of which agreement is attached
hereto as Exhibit A.

B.

WHEREAS, pursuant to the Purchase Agreement, (i) Blue Sphere and/or Orbit has,
or may have, an obligation to (1) make certain payments to Seller, including
without limitation, pursuant to Section 2, Section 3 and Section 4 of the
Purchase Agreement, including a Seller Participation Fee, a Development Fee, an
extension fee, and a Management Fee (all as defined in the Purchase Agreement),
and (2) perform certain other obligations under the Purchase Agreement to or in
connection with Seller, and (ii) Seller has granted certain rights to Blue
Sphere and/or Orbit relating to the Project;

C.

WHEREAS, Blue Sphere, Concord Energy Partners LLC, a Delaware limited liability
company (“Holdco”) and York Renewable Energy Partners LLC (“York”) intend to
consummate a transaction whereby Blue Sphere will contribute 100% of the
Interests to Holdco and York will make certain capital contributions to Holdco,
such that Blue Sphere and York will become the sole members of Holdco, and
Holdco will become the sole member of Orbit (the “Transaction”) pursuant to the
terms of a certain Contribution Agreement by and among Holdco, York and Blue
Sphere, a certain Contribution Agreement by and between Holdco and Blue Sphere
and a certain Amended and Restated Limited Liability Agreement of Holdco (the
“Transaction Documents”);

D.

WHEREAS, a condition of the Transaction is that Blue Sphere have good title to
the Interests, free and clear of all encumbrances of any kind or nature, and
that Orbit have no liability or obligation to Seller under the Purchase
Agreement nor that any of Orbit’s assets nor any assets relating to the Project
(as defined below) be subject to any liability or obligation under the Purchase
Agreement, other than as expressly stated herein;

E.

WHEREAS, a further condition of the Transaction is that all of the development
rights, permits, technology rights and contractual rights necessary for the
construction and operation of a high solids anaerobic digestion and energy
generation facility for the production of biogas and electricity in Charlotte,
North Carolina (the “Project”) be owned by Orbit and not by Blue Sphere or any
affiliate of Blue Sphere;

 

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F.

WHEREAS, other than as expressly stated herein, Orbit wishes (i) to be released
from any and all and all obligations to Seller with respect to the Purchase
Agreement, including without limitation, the payment of such Development Fee,
extension fee, Seller Participation Fee and Management Fee, the disclosure or
delivery of financial or other information relating to Orbit or the Project to
Seller, and the obligation of Orbit or the Project to use any technology of
Seller; (ii) that all of the assets relating to the Project be released from all
obligations under the Purchase Agreement by Seller and Blue Sphere, and (iii)
that all liens, remedies or liabilities of Seller, whenever arising, arising out
of such obligations or the failure of Blue Sphere or Orbit to perform any of
such obligations be released by Seller and Blue Sphere with respect to Orbit,
and each of Seller and Blue Sphere agrees to such releases;

THEREFORE, for valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto mutually agree as follows:

1.

Seller Release. Effective upon the consummation of the Transaction, each of
Seller and Blue Sphere and their respective (as applicable) past and present
parent companies, subsidiaries, affiliates, divisions, predecessors, successors,
assignees, agents, partners, members, representatives, officers, directors,
managers, employees, consultants, licensees, sublicensees, shareholders,
insurers, assigns, and their attorneys, and all persons acting by, through,
under or in concert with them or any of them, other than Orbit (all collectively
referred to as the “Releasors”), (i) do hereby release and forever discharge
Orbit, Holdco, Entropy Investment Management, LLC, York and each of their (as
applicable) past and present parent companies, subsidiaries, affiliates,
divisions, predecessors, successors, assignees, agents, partners, members,
representatives, officers, directors, managers, employees, consultants,
licensees, sublicensees, shareholders, insurers, assigns, past and present, and
their attorneys, and all persons acting by, through, under or in concert with
them or any of them, other than any of the Releasees which are also Releasors
(all collectively referred to as the “Releasees”), of and from any and all
claims, causes of action, suits, debts, liens, contracts, judgments, agreements,
promises, infringements, liabilities, claims, demands, damages, losses, costs,
or expenses of any nature whatsoever, known or unknown, fixed or contingent,
which the Releasors or any of them now has or may hereafter have against the
Releasees, or any of them, including any of the respective assets of the
Releasees, including without limitation the Project and the Interests, relating
to or by reason of the Purchase Agreement and the failure of Blue Sphere to
perform any obligations under the Purchase Agreement, or the failure of Orbit or
the Project to perform any of its obligations or obligations imputed to it under
the Purchase Agreement, including to pay the Development Fee, the Seller
Participation Fee, the extension fee, the Management Fee (each as defined in the
Purchase Agreement), the obligation to enter into an operations agreement with
Seller, or the failure to disclose or deliver financial information about the
Project or Orbit, and (ii) do hereby waive any rights to impose liens, remedies
or liabilities on or against any of the Releasees or their assets due to or
arising out of Blue Sphere’s failure to perform its obligations under the
Purchase Agreement, including without limitation, any reversion of the Interests
to Seller pursuant to Section 3.3 of the Purchase Agreement, from the beginning
of time to the date of this Agreement. The foregoing shall not apply to the
obligations of the parties hereto set forth in this Release.

2.

Orbit Technology License and Incorporation. Without limiting the scope of the
release set forth in Section 1 above, Seller hereby grants Orbit an
unconditional, perpetual, assignable, royalty-free nonexclusive license to the
Technology (as defined in the Purchase Agreement) for HSAD Units (as defined in
the Purchase Agreement), and Orbit (or its successor) agrees to incorporate the
Technology and HSAD Units as part of the Project, (as defined in the Purchase
Agreement) subject to the following terms and conditions:

 

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a)

At such time as the Technology has been fully demonstrated to meet all technical
and operational parameters for use in the Project and all applicable thresholds,
requirements and criteria set forth in the Purchase Agreement (including as set
forth in Exhibit A to the Purchase Agreement and any other relevant exhibits and
annexes), and subject to subsection (c) hereof, Orbit shall incorporate the
Technology and the requisite HSAD Units into the Project, up to a total maximum
capacity of 100 tons per day.

b)

Blue Sphere acknowledges and agrees that it shall be responsible for all costs
of evaluating and incorporating the Technology and the HSAD Units, both direct
and indirect, including all payments to Seller and all increased costs, expenses
and any damages incurred in connection with the design, installation,
integration, operation and maintenance of the Technology incorporated into the
Project, including as more fully set forth in the Transaction Documents, which,
for the purposes of clarity, shall include the payment of the Management Fee (as
defined in the Purchase Agreement) to Seller.

c)

Each of the following shall be conditions precedent to the requirement that
Orbit incorporate the Technology and the HSAD Units into the Project and to the
continued operation of the Technology and HSAD Units as part of the Project: (1)
Seller shall provide Orbit a Performance Guarantee, in form and substance
satisfactory to Orbit, meeting the requirements for such Performance Guarantee
under the terms set forth in Section 2.4 of the Purchase Agreement; (2) the
incorporation of the Technology shall have been determined by Orbit to (i) be
capable of feasible integration within the overall engineering design,
construction and delivery agreement with Auspark LLC and any other project
contractors (collectively, the “EPC Agreements”) and will not adversely impact
the Project’s performance or void any warranties under the EPC Agreements; and
(ii) not reasonably be expected to result in any material adverse impact on the
Project or in Orbit incurring any liabilities to any third party.

d)

For the avoidance of doubt, in no event shall any of the Releasees have any
financial obligation to Seller in connection with the Technology, and the
nonexclusive license granted by Seller hereunder shall be freely assignable to
any third party in connection with a sale or transfer of any interest in the
Project or Orbit, including any future debt or equity financing.

e)

Seller hereby represents and warrants to Orbit that Seller owns or holds a valid
license to any and all intellectual property relating to the Technology and has
full authority to grant the license granted hereunder and that Orbit’s use of
the Technology and the license and/or any subsequent transfer thereof will not
infringe on the rights of any third parties or give rise to any claims on the
part of any third parties.

f)

Seller agrees to indemnify and hold harmless Orbit from any claims, damages,
losses, liabilities and/or costs (including for the avoidance of doubt,
reasonable counsel fees) (i) relating to or arising out of Orbit’s use of the
HSAD Units, the Technology or the license granted hereunder or (ii) against or
in respect of Orbit arising out of Seller’s conduct that occurred on or prior to
November 19, 2014. To the extent Seller lacks the funds to fulfill its indemnity
obligations hereunder, Seller pledges its rights, title and interest in, to and
under the Technology to Orbit for Orbit’s full and unfettered use until such
time as Orbit has been made whole and recouped any losses, costs or other
out-of-pocket amounts.

 

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3.

Indemnification by Blue Sphere. Blue Sphere shall indemnify, defend and hold
harmless the Releasees against all actions, costs, damages, disbursements,
expenses, liabilities, losses, deficiencies, obligations, penalties or
settlements of any kind or nature, including but not limited to, interest or
other carrying costs, penalties, reasonable legal, accounting and other
professional fees and expenses incurred in the investigation, collection,
prosecution and defense of claims and amounts paid in settlement (“Losses”),
that may be imposed on or otherwise incurred or suffered by any of the Releasees
as a result of the Purchase Agreement, or as a result of incorporation of the
Technology or the HSAD Units into the Project under Section 2 above, except if
such Losses are directly resulting from a breach by such Releasee of any of its
obligation under the Transaction Documents.

4.

Third Party Beneficiaries. Each of Holdco, York and Entropy Investment
Management, LLC shall be third party beneficiaries under this Release.

5.

Governing Law. This Release shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without reference to
conflict of laws principles.

6.

Counterparts. This Release may be executed in several counterparts and all such
executed counterparts shall constitute one agreement, which shall be binding on
the parties notwithstanding that all parties are not signatories to the same
counterpart or counterparts.

7.

Further Assurances. The parties hereby agree to execute, acknowledge and deliver
such other statements, certificates, affidavits, instruments, and other
documents as may be reasonably requested by the other party in order to confirm,
perfect, evidence or otherwise effectuate the assignment and assumption effected
hereby.

IN WITNESS WHEREOF, the parties have executed this Release for delivery as of
the date first written above.

ORBIT ENERGY, INC.:

 

 

By:________________________________

Print Name: Anwar Shareef

Title: CEO

ORBIT ENERGY CHARLOTTE, LLC:

 

 

By:________________________________

Print Name: Shlomi Palas

Title: CEO

 

 

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