Exhibit 10.35

 

 

 

 

PURCHASE AND SALE AGREEMENT

BY AND AMONG

MAGNOLIA SUN LLC
(the Purchaser),

 

PRINCIPAL SOLAR, INC.

 

VIS SOLIS, INC.

 

and

 

AstroSol, inc.

(the Sellers)

 

AND

 

PRINCIPAL SOLAR, INC.

(the Sellers' Representative)

August 18, 2015

 

 
 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

1

   

1.1

Definitions

1

     

ARTICLE II PURCHASE AND SALE OF THE INTERESTS

10

   

2.1

Sale of the Interests to the Purchaser

10

2.2

Purchase Price

10

2.3

Proration of Project Costs and Revenues

10

2.4

Confirmation of Proration

11

2.5

Option Payment

13

     

ARTICLE III CLOSING

13

   

3.1

Closing

13

3.2

Conditions Precedent to the Purchaser's Obligation to Close

13

3.3

Conditions Precedent to the Sellers' Obligation to Close

14

3.4

Deliveries and Actions Taken at the Closing

15

     

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS

17

   

4.1

Organization

17

4.2

Authority

17

4.3

Enforceability

17

4.4

No Conflicts; Consents and Approvals

17

4.5

Litigation

18

4.6

Interests

18

4.7

Brokers

18

4.8

Solvency

18

     

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANIES

19

   

5.1

Organization

19

5.2

Authority

19

5.3

No Conflicts; Consents and Approvals

19

5.4

Capitalization of the Companies

19

5.5

Financial Statements

20

5.6

Officers

20

5.7

Bank Accounts

20

5.8

Absence of Undisclosed Liabilities

20

5.9

Assets

21

5.10

Real Property

21

5.11

Contracts

22

5.12

Employees; Employee Benefit Plans

22

5.13

Intellectual Property

22

5.14

Permits; Compliance with Law

23

 

 
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5.15

Litigation

24

5.16

Taxes

24

5.17

Environmental Matters

25

5.18

Absence of Changes

26

5.19

Affiliate Transactions

27

5.20

Insurance

27

5.21

Brokers

28

5.22

Minutes; Books and Records

28

5.23

Solar Data and Project Attributes

28

5.24

Accuracy of Materials

28

     

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

28

   

6.1

Organization

28

6.2

Authority

28

6.3

Enforceability

29

6.4

No Conflicts; Consents and Approvals

29

6.5

Brokers

29

6.6

Litigation

29

     

ARTICLE VII COVENANTS

29

   

7.1

Access

29

7.2

Conduct of the Business

30

7.3

Books and Records

31

7.4

Bank Accounts and Email Addresses

31

7.5

Energy Regulatory Filings

31

7.6

Notification of Certain Matters

31

7.7

Further Assurances

32

7.8

Governmental Approvals

32

7.9

Tax Matters

33

7.10

Confidentiality

35

7.11

The Sellers' Representative

35

     

ARTICLE VIII INDEMNIFICATION

36

   

8.1

Indemnification

36

8.2

Claim Procedures

38

8.3

Survival of Claims

38

8.4

Exclusive Remedy

39

8.5

Third-Party Claims

39

     

ARTICLE IX TERMINATION

40

   

9.1

Causes of Termination

40

9.2

Effect of Termination

40

9.3

Specific Performance

40

     

ARTICLE X MISCELLANEOUS

40

 

 
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10.1

Entire Agreement

40

10.2

No Waiver; Modifications in Writing

41

10.3

Communications

41

10.4

Costs and Expenses

42

10.5

Counterparts

42

10.6

Binding Effect; Assignment

42

10.7

Governing Law and Jurisdiction; Waiver of Jury Trial

42

10.8

Severability of Provisions

43

10.9

Headings; Exhibits and Schedules

43

10.10

Terms Generally

43

10.11

Joint Effort

43

 

Exhibits

 

Exhibit A – Form of Assignment of Membership Interest

Exhibit B – Form of Non-Foreign Person Affidavit

 

 
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PURCHASE AND SALE AGREEMENT

 

This Purchase and Sale Agreement (this "Agreement") is made and entered into as
of August 18, 2015 (the "Execution Date"), by and among Magnolia Sun LLC, a
Delaware limited liability company (the "Purchaser"), Principal Solar, Inc., a
Delaware corporation ("Principal Solar"), Vis Solis, Inc., a Tennessee
corporation and successor to Vis Solis, LLC ("Vis Solis"), and AstroSol, Inc., a
Tennessee corporation ("AstroSol" and together with Principal Solar and Vis
Solis, each, a "Seller" and collectively, the "Sellers"), and Principal Solar,
in its capacity as the Sellers' Representative, as appointed pursuant to
Section 7.11 (the "Sellers' Representative"). Each of the Purchaser, the Sellers
and the Sellers' Representative are referred to herein as a "Party" and
collectively, as the "Parties."

 

RECITALS

 

WHEREAS, the Sellers jointly own all of the issued and outstanding equity
interests (the "Powerhouse One Interests") in Powerhouse One, LLC, a Tennessee
limited liability company ("Powerhouse One");

 

WHEREAS, Powerhouse One owns all of the issued and outstanding equity interests
(the "Project Company Interests," and together with the Powerhouse One
Interests, the "Interests") in the following companies: (a) Lincoln Farm I, LLC,
a Tennessee limited liability company; (b) Lincoln Farm II, LLC, a Tennessee
limited liability company; (c) Lincoln Farm III, LLC, a Tennessee limited
liability company; and (d) Lincoln Farm IV, LLC, a Tennessee limited liability
company (each, a "Project Company" and collectively, the "Project Companies,"
and together with Powerhouse One, each, a "Company" and collectively, the
"Companies"); and

 

WHEREAS, the Purchaser wishes to purchase from the Sellers, and the Sellers wish
to sell to the Purchaser, all of the Powerhouse One Interests, according to the
terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of these premises and the mutual and dependent
promises hereinafter set forth, the Parties agree as follows:

 

ARTICLE I
DEFINITIONS

 

1.1     Definitions. As used in this Agreement, the following terms have the
meanings specified below:

 

"AAA" has the meaning provided therefor in Section 2.5(a).

 

"Actual Net Working Capital" means the actual Net Working Capital as of the
Closing Date determined in connection with the preparation of the Proration
Statement.

 

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
specified Person. For the purposes of this definition, "control," when used with
respect to any Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

 

 
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"Agreed Accounting Firm" has the meaning provided therefor in Section 2.5(a).

 

"Agreement" has the meaning provided therefor in the preamble to this Agreement.

 

"Arbitrator" has the meaning provided therefor in Section 7.9(c)(iii).

 

"Assets" has the meaning provided therefor in Section 5.9.

 

"Base Purchase Price" means One Million, Seven Hundred Forty Thousand, One
Hundred Eighty-Nine and 17/100 Dollars.

 

"Benefit Plan" means employee benefit plans, as defined in Section 3(3) of
ERISA, and all other profit sharing, deferred compensation (including a list of
participants therein), bonus, stock option, stock purchase, stock bonus, phantom
stock, vacation pay, holiday pay, severance, dependent care assistance, excess
benefit, incentive compensation, salary continuation, medical, life or other
insurance, employment, severance, termination, golden parachute, consulting,
supplemental retirement plan or agreement, supplemental unemployment and other
employee benefit plans, programs, agreements or arrangements, including all
unwritten employee benefit plans, programs, agreements and arrangements, if any,
maintained or contributed to by a Person for the benefit of its employees (or
former employees) or independent contractors or their beneficiaries.

 

"Bridge Bank Indebtedness" means the aggregate amount of the Indebtedness
payable to Bridge Bank, National Association, solely under the Bridge Bank Loan
Agreement. The Parties agree that the Bridge Bank Indebtedness is equal to
$4,831,863.41.

 

"Bridge Bank Loan Agreement" means that certain Loan and Security Agreement,
dated as of June 10, 2013, by and among Bridge Bank, National Association, a
National Banking Association, Powerhouse One, LLC, Lincoln Farm I, LLC, Lincoln
Farm II, LLC, Lincoln Farm III, LLC and Lincoln Farm IV, LLC.

 

"Business" means the business of operating the Projects.

 

"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in New York are authorized or
obligated by Law or executive order to close.

 

"Claim Deadline" means 11:59 p.m. (CST) on the three (3)-year anniversary of the
Closing Date.

 

"Closing" has the meaning provided therefor in Section 3.1.

 

"Closing Date" has the meaning provided therefor in Section 3.1.

 

"Code" means the Internal Revenue Code of 1986, as amended.

 

 
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"Company" and "Companies" have the meaning provided therefor in the recitals to
this Agreement.

 

"Company Fundamental Representations" has the meaning provided therefor in
Section 8.3(a)(ii).

 

"Contract" means any agreement, contract, lease, consensual obligation,
promissory note, evidence of indebtedness, purchase order, letter of credit,
license, promise or undertaking of any nature (whether written or oral and
whether express or implied), including executed letters of intent, executed term
sheets, and similar evidences of an agreement in principle.

 

"Damages" means all damages (including direct and direct damages and incidental,
punitive and consequential damages), losses, deficiencies, judgments, diminution
in value, costs, claims, expenses, obligations, fines, expenditures,
liabilities, assessments, adjustments, settlement payments, penalties and
expenses including fees and expenses of counsel incurred in investigating,
defending or settling any claim or Proceeding.

 

"Effective Time" means July 1, 2015 at 9:00 a.m. EST.

 

"Encumbrance" means any lease, license, pledge, option, right of first offer,
right of first refusal, easement, deed of trust, right of way, encroachment,
conditional sales agreement, security interest, mortgage, zoning Law or
ordinance, encumbrance, lien, charge or restriction of any kind, including any
restriction on the use, voting, transfer or other attribute of ownership,
whether voluntarily incurred or arising by operation of Law, or any agreement to
grant or create any of the foregoing.

 

"Environmental Law" means all applicable Laws relating to pollution, protection
or preservation of the environment, natural resources or human health and
safety, including any applicable provisions of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. ("CERCLA"),
the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Clean
Water Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C.
§ 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq., and
the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., together with all rules
and regulations thereunder, and all analogous state or local statutes and
regulations.

 

"Environmental Liability" means any indebtedness, liability, obligation, claim
(whether pending or threatened), loss, damage, fine, penalty, cost, expense,
deficiency or responsibility, whether known or unknown, contingent or otherwise,
arising under any Environmental Law, whether based on negligence, strict
liability or otherwise, including any costs and liabilities for investigation,
removal, remediation, restoration, abatement, monitoring, personal injury,
property damage, natural resource damages, court costs, and reasonable
attorneys' fees.

 

"Environmental Permits" has the meaning provided therefor in Section 5.17(a)(i).

 

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
together with all rules and regulations thereunder.

 

 
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"Estimated Net Working Capital" means the estimated Net Working Capital as of
the Closing Date as agreed to by the Purchaser and the Sellers on the Closing
Date.

 

"Execution Date" has the meaning provided therefor in the preamble to this
Agreement.

 

"Excluded Project Costs" means (a) any and all costs and expenses arising in
connection with the Indebtedness under the Bridge Bank Loan Agreement but
excluding any prepayment fees payable pursuant to Section 2.3(d) of the Bridge
Bank Loan Agreement, and (b) any costs and expenses arising under the O&M
Agreements. The Parties acknowledge and agree that the Sellers shall remain
responsible for the payment of all Excluded Project Costs.

 

"Final Settlement Date" has the meaning provided therefor in Section 2.4(a).

 

"Financial Statements" has the meaning provided therefor in Section 5.5(a).

 

"GAAP" or "generally accepted accounting principles" means generally accepted
accounting principles in the United States, applied on a consistent basis.

 

"Governmental Authority" means any department, commission, board, bureau, court,
agency or any other instrumentality of any federal, state, provincial, county,
city or municipal government or similar political subdivision, whether foreign
or domestic.

 

"Hazardous Materials" means any substance, waste, contaminant or material that
is listed, defined, designated, classified or regulated as hazardous,
radioactive or toxic, or as a pollutant or contaminant, under or pursuant to any
Environmental Law including petroleum and petroleum-derived products, asbestos,
polychlorinated biphenyls and radioactive materials.

 

"Indebtedness" means, without duplication, all obligations of any Company to any
Person (a) for money borrowed; (b) evidenced by bonds, debentures, notes or
other similar instruments (including any seller notes issued in connection with
any acquisition undertaken by a Company); (c) under any letter of credit,
banker's acceptance, payment, performance or surety bond or related
reimbursement agreement, in each case only to the extent drawn; (d) issued or
assumed as the deferred purchase price of property or services (including
earn-outs or other contingent payments), for conditional sales or under any
title retention agreement; (e) under any non-competition, severance or similar
arrangement; (f) under any deferred compensation arrangement or phantom equity
arrangement; (g) relating to any lease that is required to be classified as a
capital lease in accordance with GAAP, in the amount thereof accounted for as a
liability in accordance with GAAP; (h) under any interest rate protection
agreement (valued on a market quotation basis); (i) to guarantee or be liable
for obligations of any other Person of the types described in clauses (a)-(i);
(j) under any off-balance sheet financing arrangement (excluding all operating
leases); (k) for underfunded employee pension benefit plans and for any
unsatisfied obligation for "withdrawal liability" to a "multiemployer plan" as
such terms are defined under ERISA; (l) that are characterized as long-term
liabilities under GAAP; and (m) for any accrued interest, prepayment premiums,
penalties, unpaid fees, expenses or other monetary obligations related to any of
the foregoing; provided, however, that Indebtedness shall not include any debt
financing incurred by a Company in connection with the consummation of the
Transactions.

 

"Indemnified Party" means a Purchaser Indemnified Party or a Seller Indemnified
Party.

 

 
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"Indemnifying Notice" has the meaning provided therefor in Section 8.2.

 

"Indemnifying Party" has the meaning provided therefor in Section 8.2.

 

"Insurance Policies" has the meaning provided therefor in Section 5.20(a).

 

"Intellectual Property" shall mean all intellectual property and proprietary
rights throughout the world, including all patents (and applications therefor,
as well as all patent disclosures), trademarks and other indicia of source (and
registrations and applications for registration therefor), copyrights (and
registrations and applications for registration therefor), trade secrets and
confidential information (including customer and supplier lists and marketing
information), and computer software (including object code and source code
thereof and data and databases related thereto).

 

"Interests" has the meaning provided therefor in the recitals to this Agreement.

 

"Knowledge of the Purchaser" and variations thereof means, except as explicitly
provided to the contrary in this Agreement, the actual knowledge of Charles
Wheeler without any obligation to make inquiries.

 

"Knowledge of the Sellers" and variations thereof means, except as explicitly
provided to the contrary in this Agreement, the actual knowledge of the Sellers
and their respective officers, without any obligation to make inquiries.

 

"Law" means any federal, state, local or similar constitution, statute, law,
ordinance, rule, regulation, order, writ, injunction, directive, judgment or
decree of any Governmental Authority.

 

"Licenses" has the meaning provided therefor in Section 5.13(b).

 

"Material Contract" means any of the following Contracts entered into by any
Company or that binds or affects any Company or any Project:

 

 

(a)

any power purchase agreement or energy sales agreement;

 

 

(b)

any agreement for the purchase, exchange or sale of renewable energy credits or
green attributes;

 

 

(c)

any interconnection or transmission-related agreement;

 

 

(d)

any engineering, procurement and construction agreement, panel or inverter
supply agreement, operation and maintenance agreement, warranty agreement for
equipment of the Project;

 

 

(e)

any exclusivity or non-competition agreement;

 

 

(f)

any loan agreement, note, mortgage, indenture, security agreement and other
contracts, agreements and instruments relating to Indebtedness or guarantees of
the obligations of any other Person or the mortgaging, pledging or otherwise
placing Encumbrances on any asset or group of assets of any Company or any
Project;

 

 
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(g)

any contract or agreement pursuant to which any Company is a lessor or a lessee
of any personal property or the lessor or lessee of any real property;

 

 

(h)

any contract or agreement with any Governmental Authority;

 

 

(i)

any contract or agreement that contains earn-out, deferred or contingent payment
obligations on the part of any Seller or any Company;

 

 

(j)

any contract or agreement that grants any right of first refusal or first offer
or similar right or otherwise relating to the acquisition or disposition by the
Sellers or any Company or their respective predecessors of any assets (whether
by acquisition or disposition of equity interests, assets or otherwise), and
pursuant to which the Sellers or any Company has any remaining obligation or
potential liability;

 

 

(k)

any contract or agreement involving a remaining commitment by the Sellers or a
Company as to which the expected annual cost of performing such contract by such
Company, or the annual revenue expected to be received under such contract by
such Company exceeds, or any contract to sell or otherwise dispose of any
capital assets having a fair market value in excess of, Five Thousand Dollars
($5,000);

 

 

(l)

any noncompetition or similar contracts running in favor of any Seller or any
Company;

 

 

(m)

any payment, performance or surety bond or surety agreement;

 

 

(n)

any settlement, conciliation or similar agreement with any Governmental
Authority or any other Person;

 

 

(o)

any contract or agreement with any officer or manager of the Sellers or any
Company, or any Affiliate of any of the foregoing, or in the case of any
individual, any immediate family member of any of the foregoing;

 

 

(p)

any Contract that provides for non-monetary obligations on the part of such
Company, the non-performance of which obligations would reasonably be expected
to have a material adverse effect on a Company; and

 

 

(q)

any Contract to which a Company is a party, or by the terms of which a Company
is bound, that is material to such Project or Company.

 

"Material Property Contracts" has the meaning provided therefor in
Section 5.10(a).

 

"Net Working Capital" means the net working capital of the Companies calculated
in each instance in the same manner and using the same assumptions and
methodologies set forth in Schedule 1.1.

 

"Notice" has the meaning provided therefor in Section 10.3.

 

 
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"Option Payment" means the aggregate amount of all monies owed to Vis Solis and
AstroSol, pursuant to that certain that certain LLC Membership Minority Interest
Option Agreement between Vis Solis [sic], AstroSol, Inc. and Principal Solar,
Inc., dated May 31, 2013 and Agreement Among Powerhouse One, LLC Members
Regarding Subsidiary Guaranty of Powerhouse One, LLC, dated February 19, 2015,
by and among the Sellers. The Parties agree that the Option Payment is equal to
Seven Hundred Sixty-Six Thousand, Eight Hundred Twenty Seven Dollars ($766,827).

 

"Organizational Documents" means (a) the articles or certificate of
incorporation or formation and bylaws of a corporation; (b) the partnership
agreement and any statement of partnership or formation of a general
partnership; (c) the limited partnership agreement and the certificate of
limited partnership of a limited partnership; (d) the certificate of formation,
limited liability company agreement, regulations or comparable documents of a
limited liability company; and (e) any amendment to any of the foregoing.

 

"Owned Real Property" has the meaning provided therefor in Section 5.10(c).

 

"Party" or "Parties" has the meaning provided therefor in the preamble to this
Agreement.

 

"Permits" has the meaning provided therefor in Section 5.14(a).

 

"Person" means any individual, sole proprietorship, corporation, partnership,
joint venture, limited liability partnership, limited liability company, trust,
unincorporated association, institution or other entity, including a
Governmental Authority.

 

"Powerhouse One" has the meaning provided therefor in the recitals to this
Agreement.

 

"Powerhouse One Interests" has the meaning provided therefor in the recitals to
this Agreement.

 

"Pre-Effective Time Tax Period" means any taxable period that ends prior to the
Effective Time for any Straddle Period.

 

"Principal Solar" has the meaning provided therefor in the preamble to this
Agreement.

 

"Proceeding" means a charge, complaint, action, order, writ, injunction,
judgment, decree, inquiry, suit, litigation, proceeding, hearing, dispute,
arbitration, audit, investigation, claim or demand (whether civil, criminal or
administrative), pending, commenced, brought, conducted or heard by or before,
any Governmental Authority or arbitrator.

 

"Project" and "Projects" have the meaning provided therefor in Section 5.1.

 

"Project Attributes" means the renewable energy certificates or credits, green
tags, emission credits, carbon offsets and any other environmental attribute
currently available or available at any time in the future related to each
Company or Project.

 

"Project Company" and "Project Companies" have the meaning provided therefor in
the recitals to this Agreement.

 

 
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"Project Company Interests" has the meaning provided therefor in the recitals to
this Agreement.

 

"Project Costs" means (a) all direct operating costs attributable to the
ownership and operation of the Business (including, without limitation, (i)
costs of insurance relating specifically to the Projects, (ii) amounts payable
to third parties on account of electric generation from the Projects, (iii)
Taxes based upon or measured by the ownership or operation of the Projects or
the electric generated therefrom and (iv) debt service, including amounts owed
and payable under the Bridge Bank Loan Agreement), (b) all direct capital
expenditures incurred in the ownership and operation of the Projects in the
ordinary course of business, and (c) overhead costs charged to the Projects, if
any, by unaffiliated third parties, excluding any Excluded Project Costs.

 

"Proration Statement" has the meaning provided therefor in Section 2.4(a).

 

"Proration Statement Date" has the meaning provided therefor in Section 2.4(a).

 

"Purchase Price" has the meaning provided therefor in Section 2.2.

 

"Purchaser" has the meaning provided therefor in the preamble to this Agreement.

 

"Purchaser Fundamental Representations" has the meaning provided therefor in
Section 8.3(c).

 

"Purchaser Indemnified Parties" means the Purchaser and its Affiliates
(including, after the Closing, the Companies and any Affiliates thereof) and
their respective shareholders, members, partners, directors, managers, officers,
employees, representatives, consultants and agents (which in no event shall
include or be deemed to include any Seller).

 

"Purchaser Reimbursement" means an amount equal to the sum of the following
items (without duplication): (a) all Project Costs and all other expenditures
attributable to the Projects (whether capitalized or expensed), other than Taxes
and pre-paid costs and expenses, attributable to the period of time commencing
prior to the Effective Time and paid by the Purchaser; (b) any sales proceeds
and any other monies collected by the Sellers and not remitted or paid to the
Purchaser with respect to the ownership or operation of the Projects and
attributable to the period of time commencing at the Effective Time, including
insurance proceeds collected by the Sellers with respect to losses and events
that occurred on or after the Effective Time; (c) all Taxes allocated to the
Sellers in accordance with Section 7.9(e), but that are paid by the Purchaser;
(d) all pre-paid costs and expenses allocated to the Sellers in accordance with
Section 2.3(b), but that are paid by the Purchaser; (e) the amount by which, if
any, the Estimated Net Working Capital exceeds the Actual Net Working Capital,
and (f) the amount of any Excluded Project Costs paid by the Purchaser.

 

"PV System" means a photovoltaic system, including photovoltaic panels, racks,
wiring and other electrical devices, conduit, weatherproof housings, hardware,
one or more inverters, remote monitoring systems, connectors, meters,
disconnects and over current devices.

 

"Real Property Interests" has the meaning provided therefor in Section 5.10(a).

 

 
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"Registered Intellectual Property" has the meaning provided therefor in Section
5.13(a).

 

"Seller Indemnified Parties" means the Sellers and their respective
shareholders, members, directors, managers, officers, employees and agents
(which in no event shall include or be deemed to include the Purchaser, the
Companies, or any of their Affiliates).

 

"Seller" and "Sellers" have the meaning provided therefor in the preamble to
this Agreement.

 

"Sellers' Fundamental Representations" has the meaning provided therefor in
Section 8.3(a)(ii).

 

"Seller Reimbursement" means an amount equal to the sum of the following items
(without duplication): (a) the amount of all Project Costs and all other
expenditures attributable to the Projects (whether capitalized or expensed),
other than Taxes and pre-paid costs and expenses, attributable to the period of
time commencing at the Effective Time and paid by the Sellers, (b) any sales
proceeds and any other monies collected by the Purchaser and not remitted or
paid to the Sellers with respect to the ownership or operation of the Projects
and attributable to the period of time prior to the Effective Time, including
insurance proceeds collected by the Purchaser with respect to losses and events
that occurred prior to the Effective Time, (c) the amount equal to all Taxes
allocated to the Purchaser in accordance with Section 7.9(e), but that are paid
by the Sellers; (d) all pre-paid costs and expenses allocated to the Purchaser
in accordance with Section 2.3(b), but that are paid by the Seller; and (e) the
amount by which, if any, the Actual Net Working Capital exceeds the Estimated
Net Working Capital.

 

"Sellers' Representative" has the meaning provided therefor in the preamble to
this Agreement.

 

"Solar Data" means any and all solar data with regard to the Projects included
on Schedule 5.23.

 

"Solar Tax Credits" means (a) any grant under Section 1603 of Division B of the
American Recovery and Reinvestment Act of 2009, P.L. 111-5, as amended,
including any similar provision concerning a refundable tax credit that replaces
such grant program, (b) any investment tax credit under Title 26, Section 48 of
the Code or any successor or other similar provision, including any similar
provision concerning a refundable tax credit that replaces such investment tax
credit program, and (c) other tax credits established by the United States
Internal Revenue Service or a state of the United States for the purchase, lease
or other acquisition of a PV System.

 

"Straddle Period" means any taxable period that begins before the Effective Time
and ends after the Effective Time.

 

"Tax" means all (a) United States federal, state or local or non-United States
taxes, assessments, duties, levies, fees and other charges of any nature imposed
by any Governmental Authority, including all income, franchise, profits, capital
gains, capital stock, transfer, sales, use, occupation, property, excise,
severance, windfall profits, stamp, stamp duty reserve, license, payroll,
withholding, ad valorem, value added, alternative minimum, environmental,
customs, social security (or similar), unemployment, sick pay, disability,
registration and other taxes, assessments, charges, duties, fees or levies,
whether disputed or not, together with all estimated taxes, deficiency
assessments, additions to tax, penalties and interest thereon; (b) any liability
for the payment of any amount of a type described in clause (a) arising as a
result of being or having been a member of any consolidated, combined, unitary
or other group or being or having been included or required to be included in
any Tax Return of any such group; and (c) any liability for the payment of any
amount of a type described in clause (a) or clause (b) as a result of any
obligation to indemnify or otherwise assume or succeed to the liability of any
other Person.

 

 
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"Tax Return" means all reports, estimates, declarations of estimated Tax,
information statements and returns relating to, or required to be filed in
connection with, any Taxes and any schedules attached to or amendments of
(including refund claims with respect to) any of the foregoing.

 

"Termination Date" has the meaning provided therefor in Section 9.1(b).

 

"Third-Party Claim" has the meaning provided therefor in Section 8.5(a).

 

"Transactions" means the transactions contemplated by this Agreement and the
other agreements contemplated hereby.

 

"Vis Solis" has the meaning provided therefor in the preamble to this Agreement.

 

ARTICLE II
PURCHASE AND SALE OF THE INTERESTS

 

2.1     Sale of the Interests to the Purchaser. At the Closing, but effective as
of the Effective Time, the Purchaser shall acquire all of the Powerhouse One
Interests from the Sellers, and the Sellers shall sell, assign, transfer and
deliver to the Purchaser, all of the Interests, free and clear of any and all
Encumbrances, for the Purchase Price.

 

2.2     Purchase Price. In consideration of the Interests and the Transactions,
and subject to the terms and conditions set forth in this Agreement, the
Purchaser shall, at the Closing: (a) deliver, or cause to be delivered, to
Principal Solar the Base Purchase Price, in immediately available funds; (b)
deliver, or cause to be delivered, to Vis Solis and AstroSol the Option Payment
(with 25.1% of such Option Payment delivered to Vis Solis and 74.9% of such
Option Payment delivered to AstroSol), subject to Section 2.6, in immediately
available funds and (c) deliver, or cause to be delivered, to Bridge Bank,
National Association, the Bridge Bank Indebtedness, in immediately available
funds (collectively, the "Purchase Price").

 

2.3     Proration of Project Costs and Revenues.

 

(a)     Except as expressly provided otherwise in this Agreement, the Sellers
shall remain entitled to all of the rights of ownership (including the right to
all electric generation, proceeds of electric generation and other proceeds),
and shall remain responsible for all Project Costs, in each case attributable to
the period of time prior to the Effective Time. Except as expressly provided
otherwise in this Agreement, and subject to the occurrence of the Closing, the
Purchaser shall be entitled to all of the rights of ownership (including the
right to all electric generation, proceeds of electric generation and other
proceeds), and shall be responsible for all Project Costs, in each case
attributable to the period of time commencing at the Effective Time.

 

 
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(b)     The determination of whether Project Costs or any other items are
attributable to the period of time prior to the Effective Time or the period of
time commencing at the Effective Time shall be in accordance with the following:
(i) for debt service and all other payment obligations (other than Taxes,
pre-paid costs and expenses and Excluded Project Costs), such determination
shall be based on when the payment obligation is due; and (ii) for all other
Project Costs and other items, such determination shall be based on when
services are rendered, when the goods are delivered, or when the work is
performed. Notwithstanding the foregoing, (y) Taxes shall be allocated between
the Purchaser and the Sellers in accordance with Section 7.9(e), and (z)
pre-paid costs and expenses covering a period of time that begins before the
Effective Time and ends on or after the Effective Time shall be allocated
between the Purchaser and the Seller based on the number of days in the
applicable period falling before, and the number of days in the applicable
period falling at or after the Effective Time. All Excluded Project Costs shall
be remain the responsibility of, and shall be allocated entirely to, the
Sellers.

 

2.4     Confirmation of Proration.

 

(a)     No later than forty-five (45) days after the Closing, the Purchaser
shall prepare and deliver to the Sellers, in accordance with this Agreement, an
itemized statement (the "Proration Statement") setting forth any Purchaser
Reimbursement and any Seller Reimbursement as of the date of such statement (the
"Proration Statement Date"). As soon as practicable after receipt of the
Proration Statement, and no later than ten (10) days after such receipt, the
Sellers shall deliver to the Purchaser a written report containing any changes
that the Sellers propose to the Proration Statement. If the Sellers fail to
propose any changes to the Proration Statement within the ten-day period set
forth above, it shall be deemed that the Sellers agree with the Proration
Statement, which shall become final and binding on the Parties. If the Sellers
propose any changes to the Proration Statement within the ten-day period set
forth above, the Sellers and the Purchaser shall undertake to agree with respect
to the disputed amounts not later than fifteen (15) days after receipt by the
Purchaser of the Sellers' requested changes (such date, the "Final Settlement
Date"). If the Parties reach an agreement on the Proration Statement on or
before the Final Settlement Date, the Proration Statement, as agreed to by the
Parties, shall be final, binding, and conclusive on the Parties, and within
three (3) Business Days after the Final Settlement Date, (i) the Purchaser will
pay to Principal Solar the amount, if any, by which the Seller Reimbursement
exceeds the Purchaser Reimbursement or (ii) Principal Solar will pay to the
Purchaser the amount, if any, by which the Purchaser Reimbursement exceeds the
Seller Reimbursement. If the Sellers and the Purchaser are not able to agree on
the final Proration Statement on or prior to the Final Settlement Date, then the
Sellers and the Purchaser will resolve such differences solely in accordance
with Section 2.5.

 

(b)     After the Proration Statement Date, (i) if either Party receives monies
belonging to the other Party, including, without limitation, any proceeds of
electric generation, then such amount shall, within thirty (30) days after the
end of the calendar month in which such amounts were received, be paid over to
the proper Party, (ii) if either Party pays monies for Project Costs which are
the obligation of the other Party, then such other Party shall, within thirty
(30) days after the end of the calendar month in which the applicable invoice
and proof of payment of such invoice were received, reimburse the Party which
paid such Project Costs, (iii) if a Party receives an invoice of an expense or
obligation which is owed by the other Party, such Party receiving the invoice
shall promptly forward such invoice to the Party obligated to pay the same, and
(iv) if an invoice or other evidence of an obligation is received by a Party,
which is partially an obligation of both the Sellers and the Purchaser, then the
Parties shall consult with each other, and each shall promptly pay its portion
of such obligation to the obligee thereof.

 

 
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2.5     Dispute Resolution.

 

(a)     In the event the Sellers and the Purchaser are required to resolve a
dispute regarding the Proration Statement, a certified public accountant or a
firm of certified public accountants mutually acceptable to the Purchaser and
the Sellers, which firm shall not include any of the six largest international
accounting firms (i.e., Deloitte, PricewaterhouseCoopers, Ernst & Young, KPMG,
BDO International and Grant Thornton International) (the "Agreed Accounting
Firm") shall act as an expert to decide all points of such dispute in accordance
with the terms of this Agreement. If the Parties are unable to agree upon the
designation of the Agreed Accounting Firm, then the Sellers or the Purchaser
shall in writing request the Dallas, Texas office of the American Arbitration
Association ("AAA") to designate the Agreed Accounting Firm in Dallas, Texas. If
issues are submitted to the Agreed Accounting Firm for resolution, the Sellers
and the Purchaser will each enter into a customary engagement letter with the
Agreed Accounting Firm at the time the issues remaining in dispute are submitted
to the Agreed Accounting Firm. The Agreed Accounting Firm will be directed to
(i) review the initial draft of the Proration Statement submitted by the
Purchaser, the written report submitted by the Sellers and the records relating
thereto only with respect to items that remain disputed immediately following
the Final Settlement Date, as identified by the Sellers in such written report
and (ii) determine the final calculations for the Purchaser Reimbursement and
the Seller Reimbursement.

 

(b)     The Sellers and the Purchaser will each furnish the Agreed Accounting
Firm such work papers and other records and information relating to the
objections in dispute as the Agreed Accounting Firm may reasonably request and
that are available to such Party or its Affiliates (and such parties'
independent public accountants). The Sellers and the Purchaser will, and will
cause their representatives to, cooperate and assist in the conduct of any
review by the Agreed Accounting Firm, including making available books, records
and, as available, personnel as reasonably required. The Agreed Accounting Firm
will conduct the expert determination proceedings in Dallas, Texas in accordance
with the terms of this Section 2.5. The Agreed Accounting Firm's determination
will be made within forty-five (45) days after submission of the matters in
dispute. The determination by the Agreed Accounting Firm will be final and
binding on both parties, without right of appeal. In determining the proper
amount of any adjustment to the Purchaser Reimbursement or the Seller
Reimbursement proposed by the Purchaser, the Agreed Accounting Firm may not
increase or decrease any item included in the Purchaser Reimbursement or the
Seller Reimbursement more than the increase or the decrease, as applicable,
proposed by the Sellers in its report, and may not award damages or penalties to
the Sellers or the Purchaser with respect to any matter.

 

(c)     Within three (3) days after the decision of the Agreed Accounting Firm
with respect to the final calculations for the Purchaser Reimbursement and the
Seller Reimbursement, (i) the Purchaser will pay to Principal Solar the amount,
if any, by which the Seller Reimbursement exceeds the Purchaser Reimbursement or
(ii) Principal Solar will pay to the Purchaser the amount, if any, by which the
Purchaser Reimbursement exceeds the Seller Reimbursement. In the event the
Purchaser or Principal Solar files an action in a court of law or equity to
enforce the ruling of the Agreed Accounting Firm, such Party shall also recover
from the other its costs and reasonable attorneys' fees incurred in seeking and
obtaining judicial enforcement of the ruling of the Agreed Accounting Firm. It
is the intent of the Parties that any adjustment made pursuant to this Section
2.5 shall be made only once and without duplication. The procedure set forth in
this Section 2.5 is the exclusive procedure for determining the Final Purchase
Price.

 

 
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(d)     The Sellers and the Purchaser will each bear its own legal fees and
other costs of presenting its case to the Agreed Accounting Firm. The costs and
expenses of the Agreed Accounting Firm shall be shared one-half by Principal
Solar and one-half by the Purchaser. The Parties intend that the procedures set
forth in this Section 2.5 shall not constitute or be handled as arbitration
proceedings under the Federal Arbitration Act or any applicable state
arbitration act, and that the provisions of this clause (d) shall be
specifically enforceable.

 

2.6     Option Payment. The Parties acknowledge and agree that the payment of
the Option Payment in accordance with Section 2.2 will constitute the exclusive
method by which the Option Payment will be paid among the Parties. Upon payment
by the Purchaser of the Option Payment in accordance with Section 2.2, the
Purchaser will have no further obligation to Vis Solis or AstroSol with respect
to the Option Payment or any other payment other than pursuant to this
Agreement, and neither Vis Solis nor AstroSol will have no further right to
receive payment of such amounts.

 

ARTICLE III
CLOSING

 

3.1     Closing. Subject to the terms and conditions of this Agreement, the
execution and delivery by the Parties of this Agreement and the closing of the
Transactions (the "Closing") shall take place on the date that is five (5)
Business Days after the Purchaser provides the Sellers with written notice of
Closing (such date that the Closing occurs, the "Closing Date") at the
Purchaser's offices, and the Closing shall be deemed to have occurred, and be
effective, as of 9:00 a.m. EST on the Closing Date.

 

3.2     Conditions Precedent to the Purchaser's Obligation to Close. The
Purchaser's obligation to purchase the Interests and consummate the Transactions
is subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:

 

(a)     Accuracy of Representations. The representations and warranties set
forth in Article IV and Article V that are qualified with respect to materiality
must be true and correct in all respects, and the representations and warranties
set forth in Article IV and Article V that are not so qualified must be true and
correct in all material respects, in each case as of the Closing Date, except
for those representations and warranties which are as of a specific date, which
shall be true and correct as of such date.

 

(b)     The Sellers' Performance. The Sellers shall have performed and complied
in all material respects with the covenants, obligations, agreements and
conditions required to be performed or complied with by them hereunder on or
prior to the date of the Closing.

 

 
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(c)     Compliance Certificate. The Purchaser shall have received a certificate
of the Sellers certifying as to the matters set forth in Sections 3.2(a) and
3.2(b).

 

(d)     No Material Adverse Change. There has been no material adverse change to
the Companies, the Projects or the Business.

 

(e)     No Violation. The consummation of the Transactions shall not violate any
applicable Law.

 

(f)     Necessary Documents. The Purchaser has received all documents (i)
evidencing all requisite approvals of the Sellers and the Companies authorizing
the Transactions, and (ii) otherwise required for the consummation or
performance of any of the Transactions.

 

(g)     Required Consents. The Sellers and the Companies shall have received all
governmental, regulatory and contractual consents and approvals for or in
connection with the Transactions or the other agreements, documents and
instruments of the Companies contemplated by this Agreement and no such consent
or approval shall have been withdrawn, suspended or conditioned.

 

(h)     No Injunction. No Proceeding by any Governmental Authority or other
Person shall have been instituted or threatened that questions or challenges the
validity of, or seeks to enjoin, the consummation of the Transactions, and the
consummation of the Transactions shall not violate any order, decree or judgment
of any court, Permit, Law, or Governmental Authority having competent
jurisdiction.

 

(i)     Actions and Proceedings. Prior to the Closing, all actions, proceedings,
instruments and documents required to carry out the Transactions contemplated
hereby or incident hereto and all other legal matters required for such
Transactions are reasonably satisfactory to counsel for the Purchaser.

 

3.3     Conditions Precedent to the Sellers' Obligation to Close. The Sellers'
obligation to sell the Interests and consummate the Transactions is subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions:

 

(a)     Accuracy of Representations. The representations and warranties set
forth in Article VI that are qualified with respect to materiality must be true
and correct in all respects, and the representations and warranties set forth in
Article VI that are not so qualified must be true and correct in all material
respects, in each case as of the Closing Date, except for those representations
and warranties which are as of a specific date, which shall be true and correct
as of such date.

 

(b)     The Purchaser's Performance. The Purchaser shall have performed and
complied in all material respects with the covenants, obligations, agreements
and conditions required to be performed or complied with by it hereunder on or
prior to the date of the Closing.

 

(c)     Compliance Certificate. The Sellers shall have received a certificate of
the Purchaser certifying as to the matters set forth in Sections 3.3(a) and
3.3(b) above.

 

 
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(d)     No Violation. The consummation of the Transactions shall not violate any
applicable Law.

 

(e)     Necessary Documents. The Sellers have received all documents (i)
evidencing all requisite approvals of the Purchaser authorizing the
Transactions, and (ii) otherwise required for the consummation or performance of
any of the Transactions.

 

(f)     Required Consents. The Purchaser shall have received all governmental,
regulatory and contractual consents and approvals for or in connection with the
Transactions or the other agreements, documents and instruments of the Purchaser
contemplated by this Agreement and no such consent or approval shall have been
withdrawn, suspended or conditioned.

 

(g)     No Injunction. No Proceeding by any Governmental Authority or other
Person shall have been instituted or threatened that questions or challenges the
validity of, or seeks to enjoin, the consummation of the Transactions, and the
consummation of the Transactions shall not violate any order, decree or judgment
of any court, Permit, Law, or Governmental Authority having competent
jurisdiction.

 

(h)     Actions and Proceedings. Prior to the Closing, all actions, proceedings,
instruments and documents required to carry out the Transactions contemplated
hereby or incident hereto and all other legal matters required for such
Transactions are reasonably satisfactory to counsel for the Sellers.

 

3.4     Deliveries and Actions Taken at the Closing.

 

(a)     Deliveries by the Sellers. On the Closing Date:

 

(i)     the Sellers shall assign the Powerhouse One Interests, free and clear of
any and all Encumbrances, in an assignment of membership interest in the form of
Exhibit A;

 

(ii)     the Sellers shall deliver to the Purchaser a certificate of the
Secretary of State of Tennessee, and each state in which each Company is
required to be qualified to do business, stating that each Company is in good
standing or has comparable active status in such state;

 

(iii)     the Sellers shall deliver to the Purchaser a certificate executed by a
duly authorized officer certifying that the conditions described in
Section 3.2(a) and Section 3.2(b) have been satisfied;

 

(iv)     the Sellers shall deliver to the Purchaser a certificate of the
Secretary of each Company certifying that attached to such certificate are true
and complete copies of (A) each Company's Organizational Documents, as amended
through and in effect on the Closing Date, and (B) resolutions of each Company's
board of managers or similar governing body and the Sellers, authorizing the
execution, delivery and performance of this Agreement and the other agreements
contemplated hereby to which the Companies are a party and the consummation of
the Transactions;

 

 
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(v)     the Sellers shall deliver to the Purchaser a non-foreign person
affidavit duly executed by the Sellers dated as of the Closing Date in the form
attached hereto as Exhibit B;

 

(vi)     the Sellers shall deliver to the Purchaser the written resignation,
effective as of the Closing Date, of the managers and non-employee officers of
the Companies set forth on Schedule 3.4(a)(vi);

 

(vii)     the Sellers shall deliver to the Purchaser payoff letters from all
holders of Indebtedness (including all Indebtedness arising under the Bridge
Bank Loan Agreement) and release documentation evidencing the release of all
Encumbrances, each in a form acceptable to the Purchaser;

 

(viii)     the Sellers shall deliver to the Purchaser copies of all third party
consents and Governmental Authority consents set forth on Schedule 4.4(b) in
form and substance acceptable to the Purchaser in its sole discretion; and

 

(ix)     the Sellers shall have delivered such other documents and instruments
as the Purchaser or the Purchaser's counsel may reasonably request so as to
better evidence or effectuate the Transactions.

 

(b)     Deliveries by the Purchaser. On the Closing Date:

 

(i)     the Purchaser will deliver the Purchase Price to the Sellers at the
Closing wired to an account designated by the Sellers;

 

(ii)     the Purchaser shall deliver to the Sellers a certificate of the
Secretary of State of Delaware stating that the Purchaser is in good standing or
has comparable active status in such state;

 

(iii)     the Purchaser shall deliver to the Sellers a certificate executed by a
duly authorized officer certifying that the conditions described in
Section 3.3(a) and Section 3.3(b) have been satisfied;

 

(iv)     the Purchaser shall deliver to the Sellers a certificate of the
Secretary of the Purchaser certifying that attached to such certificate are true
and complete copies of (A) the Purchaser's Organizational Documents, as amended
through and in effect on the Closing Date, and (B) resolutions of the
Purchaser's board of managers or similar governing body authorizing the
execution, delivery and performance of this Agreement and the other agreements
contemplated hereby to which the Purchaser is a party and the consummation of
the Transactions;

 

(v)     the Purchase Price allocation to be delivered pursuant to
Section 7.9(a); and

 

(vi)     the Purchaser shall have delivered such other documents and instruments
as the Sellers or the Sellers' counsel may reasonably request so as to better
evidence or effectuate the Transactions.

 

 
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

Each of the Sellers, jointly and severally, represents and warrants to the
Purchaser as of the Execution Date and Closing Date as follows:

 

4.1     Organization. Principal Solar is duly formed, validly existing and in
good standing under the Laws of the State of Delaware. Vis Solis is duly formed,
validly existing and in good standing under the Laws of the State of Tennessee.
AstroSol, Inc. is duly formed, validly existing and in good standing under the
Laws of the State of Tennessee. Schedule 4.1 sets forth each jurisdiction in
which each Seller is qualified to transact business as a foreign corporation.
Except as set forth on Schedule 4.1, each Seller is duly qualified to do
business and in good standing in each jurisdiction where such qualification is
required, except to the extent the failure to be so qualified would not be
material. The Organizational Documents of each Seller that have previously been
furnished to the Purchaser reflect all amendments thereto and are correct and
complete. None of the Sellers is in default under or in violation of any
provision of its Organizational Documents.

 

4.2     Authority. Each Seller has all requisite power and authority to (a)
execute and deliver this Agreement and perform its obligations hereunder and (b)
execute and deliver all other agreements and instruments to be executed and
delivered by the Sellers pursuant to this Agreement and perform its respective
obligations thereunder. The execution, delivery and performance of this
Agreement and each other document to which each Seller is or will be a party and
the consummation of each of the transactions and undertakings contemplated
thereby have been duly and validly authorized by all requisite action on the
part of the Sellers and no other proceedings by the Sellers are necessary to
authorize the execution and delivery of the Agreement and the consummation of
the Transactions.

 

4.3     Enforceability. This Agreement has been executed by each of the Sellers
and constitutes a valid and binding obligation of each of the Sellers
enforceable against each Party in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting creditors' rights
generally and by general principles of equity.

 

4.4     No Conflicts; Consents and Approvals.

 

(a)     The execution and delivery of this Agreement and the consummation of the
Transactions will not (i) conflict with any provision of the Organizational
Documents of any of the Sellers, (ii) violate any applicable Law, Permit or
other authorization of a Governmental Authority applicable to the Sellers, (iii)
breach, violate or result in a default under (with or without notice or lapse of
time or both), terminate, amend, cancel, modify or give rise to any right on the
part of any Person to terminate, amend, cancel, modify, accelerate any
obligation under, or require any of the Sellers to make a payment under, any
Material Contract, (iv) create or impose any Encumbrance on any Company, Project
or Asset, or (v) create any other consequence that would have a material adverse
effect on any of the Companies.

 

(b)     Except as set forth on Schedule 4.4(b), no consent, approval or
authorization of, filing with or notice to any third party or any Governmental
Authority is required on the part of any Seller in connection with the execution
and delivery of this Agreement or the consummation of the Transactions.

 

 
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4.5     Litigation. There are no Proceedings pending and, to the Knowledge of
the Sellers, there are no Proceedings threatened against any Seller, in any such
case at law or in equity, before any Governmental Authority or arbitral body
against or affecting any Seller, that would reasonably be expected to have an
adverse effect on the ability of a Seller to perform its obligations under the
Agreement or to consummate the Transactions.

 

4.6     Interests. The authorized and issued and outstanding number and class of
all equity interests in the Companies are set forth on Schedule 4.6. The
Interests constitute 100% of the issued and outstanding equity interests in the
Companies. The Sellers are the record and beneficial owners of, and hold good
and valid title to, the Powerhouse One Interests, free and clear of any and all
Encumbrances. Powerhouse One is the record and beneficial owner of, and holds
good and valid title to, the Project Company Interests, free and clear of any
and all Encumbrances. At the Closing, the Sellers will transfer the Powerhouse
One Interests to the Purchaser, free and clear of any and all Encumbrances. The
Project Company Interests are free and clear of any and all Encumbrances. All
outstanding Interests have been duly authorized and validly issued and are fully
paid and nonassessable. No Company has violated any securities Laws or
preemptive right or right of first refusal of any Person in connection with the
offer, sale or issuance of any its equity securities. No Company has the right
to acquire any capital stock or other equity interest of any other Person and no
Project Company (a) owns any capital stock, security, partnership interest or
other equity interest of any kind in any Person, or (b) is a partner or member
of any partnership, limited liability company or joint venture.

 

4.7     Brokers. Except as set forth on Schedule 4.7, all negotiations relating
to this Agreement and the Transactions have been carried out without the
services of any Person acting on behalf of any of the Sellers, any Affiliate of
the Sellers or any Company in such manner as to give rise to any valid claim
against the Purchaser or any Company for any brokerage or finder's commission or
similar compensation.

 

4.8     Solvency. No petition or notice has been presented, no order has been
made and no resolution has been passed for the bankruptcy, liquidation,
winding-up or dissolution of either Seller. No receiver, trustee, custodian or
similar fiduciary has been appointed over the whole or any part of either
Seller's assets or the income of either Seller. Neither Seller has any plan or
intention of, or has received any notice that any other Person has any plan or
intention of, filing, making or obtaining any such petition, notice, order or
resolution or of seeking the appointment of a receiver, trustee, custodian or
similar fiduciary. Neither Seller is now insolvent nor will be rendered
insolvent by any of the Transactions. As used in this Section 4.8, "insolvent"
means that the sum of the debts and other liabilities of each Seller exceed the
fair market value of such Seller's assets. Immediately after giving effect to
the consummation of the Transactions, each Seller (a) will be able to pay its
liabilities as they become due; and (b) will have assets (calculated at fair
market value) that exceed its liabilities.

 

 
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANIES

 

Each of the Sellers, jointly and severally, represents and warrants to the
Purchaser as of the Execution Date and Closing Date as follows:

 

5.1     Organization. Each Company is duly formed, validly existing and in good
standing under the Laws of the State of Tennessee. Schedule 5.1 sets forth each
jurisdiction in which each Company is qualified to transact business as a
foreign company. Except as set forth on Schedule 5.1, each Company is duly
qualified to do business and in good standing in each jurisdiction where such
qualification is required, except to the extent the failure to be so qualified
would not be material. The Organizational Documents of each Company that have
previously been furnished to the Purchaser reflect all amendments thereto and
are correct and complete. No Company is in default under or in violation of any
provision of its Organizational Documents. The only business activity that has
been carried or is currently carried on by each Company is the development and
ownership of the photovoltaic solar electric generating facility described on
Schedule 5.1 (each a "Project", and collectively, the "Projects").

 

5.2     Authority. Each Company has all requisite limited liability company (and
corporate, as applicable) power and authority to own the Projects, the Assets
and to carry on its business as currently conducted. Each Company has all
requisite power and authority to (a) execute and deliver this Agreement and
perform its obligations hereunder and (b) execute and deliver all other
agreements and instruments to be executed and delivered by the Companies
pursuant to this Agreement and perform its obligations thereunder.

 

5.3     No Conflicts; Consents and Approvals.

 

(a)     The execution and delivery of this Agreement and the consummation of the
Transactions will not (i) conflict with any provision of the Organizational
Documents of any Company, (ii) violate any applicable Law, Permit or other
authorization of a Governmental Authority applicable to a Company, a Project or
its Assets, (iii) breach, violate or result in a default under (with or without
notice or lapse of time or both), terminate, amend, cancel, modify or give rise
to any right on the part of any Person to terminate, amend, cancel, modify,
accelerate any obligation under, or require any Company to make a payment under,
any Material Contract, (iv) cause a loss or adverse modification of any license,
franchise, permit or other authorization or right (contractual or otherwise) to
operate each Company's business or to own any Asset, (v) create or impose any
Encumbrance on any Asset, or (vi) create any other consequence that would have a
material adverse effect on a Company.

 

(b)     Except as set forth on Schedule 5.3(b), no consent, approval or
authorization of, filing with or notice to any third party or any Governmental
Authority is required on the part of any Company in connection with the
execution and delivery of this Agreement or the consummation of the
Transactions.

 

5.4     Capitalization of the Companies. Except as set forth on Schedule 5.4,
there are no (a) obligations, contingent or otherwise, of any Company to (i)
repurchase, redeem or otherwise acquire any equity interests of such Company; or
(ii) provide funds to, or make any investment in (in the form of a loan, capital
contribution or otherwise), or provide any guarantee with respect to the
obligations of any other Person; (b) preemptive or similar rights on the part of
any holder of equity interest of any Company; (c) subscriptions, options,
warrants, conversion, exchange or other rights, agreements or commitments of any
kind obligating any Company to issue, sell or purchase, or cause to be issued
and sold, any equity interests of such Company or any securities convertible
into or exchangeable for any such equity interests; (d) commitments of any
character (contingent or otherwise) pursuant to which any Person is or may be
entitled to receive any payment in respect of the equity interests or other
securities of any Company; (e) outstanding or authorized equity interest
appreciation, phantom equity interest, profit participation, or similar rights
with respect to any equity securities of any Company; (f) member agreements,
voting trusts or other agreements or understandings to which any Company is a
party, relating to the voting or transfer of any equity interests of any
Company; or (g) bonds, debentures, notes or other indebtedness which have the
right to vote (or which are convertible into, or exchangeable for, securities
having the right to vote) on any matters on which members of any Company are
entitled to vote.

 

 
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5.5     Financial Statements.

 

(a)     The Sellers have delivered to the Purchaser, a complete and correct copy
of (i) unaudited consolidated balance sheets by quarter of Powerhouse One as of
and for the years ended December 31, 2013 and December 31, 2014, and the related
statements of income; (ii) unaudited consolidated balance sheets by quarter of
Powerhouse One as of and for the two quarters ended June 30, 2015, and the
related statements of income; (iii) audited consolidated balance sheets of
Powerhouse One as of and for the years ended December 31, 2012 and December 31,
2011, and the related statements of income, retained earnings, and cash flow
(collectively, the "Financial Statements"). Except as set forth on Schedule
5.5(a), the Financial Statements (including in all cases the notes thereto, if
any) fairly present in all material respects the financial condition and results
of operations and cash flows of each Company as of the dates and for the periods
indicated and have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby.

 

(b)     All accounts receivable of each Company as of the Execution Date are (i)
bona fide receivables incurred in the ordinary course of business and arising
from sales actually made, (ii) properly reflected on such Company's books and
records and balance sheets in accordance with GAAP and (iii) valid and
enforceable claims and not subject to any counterclaim, or a claim for a
chargeback, deduction, credit, set-off or other offset, other than as reflected
by the reserve for bad debts. All accounts payable of each Company arose in bona
fide arm's length transactions in the ordinary course of business, and no
account payable is delinquent more than thirty (30) days in its payment.

 

5.6     Officers. Schedule 5.6 sets forth a correct and complete list of the
officers of each Company, if any.

 

5.7     Bank Accounts. Schedule 5.7 sets forth (a) the names and locations of
all banks and other financial institutions and depositories at which each
Company maintains accounts of any type or safe deposit boxes, (b) the account
number of each such account, (c) the number of each such safe deposit box, and
(d) the current authorized signatory or signatories on each such account or safe
deposit box.

 

5.8     Absence of Undisclosed Liabilities. Except as set forth on Schedule 5.8,
no Company has any Indebtedness, Encumbrance, obligation or liability (whether
accrued or fixed, absolute or contingent, matured or unmatured, determined or
determinable or otherwise), other than in the case of a Company those
(a) reflected on or disclosed in the Financial Statements or the notes thereto
or (b) disclosed in this Agreement or any of the Schedules hereto.

 

 
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5.9     Assets. Each Company owns, free and clear of any and all Encumbrances,
all of the real, personal, tangible and intangible property and assets (a) shown
on the Financial Statements or acquired thereafter, (b) necessary to conduct the
Project and such Company's business as presently conducted ((a) and (b)
collectively, the "Assets"), and (c) comprising the Project Attributes. All
improvements located on property and all of each Company's machinery, equipment
and other tangible personal property are free from defects and in good condition
and repair in all material respects, ordinary wear and tear excepted, and are
useable in the ordinary course of business and suitable for the purposes for
which they are presently used and presently proposed to be used. For each
Company, no Person other than the Company owns any equipment or other tangible
assets or properties situated on the premises of such Company or used in or
necessary to the operation of the business of such Company.

 

5.10     Real Property.

 

(a)     Schedule 5.10(a) contains a true, correct and complete list of all
Contracts, including Material Contracts, which provide the Companies with any
rights in or to real property, including rights in the nature of leases,
easements, licenses, rights of way, franchise agreements, restrictive covenants,
purchase agreements, agreements to relinquish or limit surface access rights
with regards to minerals, options to purchase or lease, or applications for or
bids to Governmental Authorities made by or on behalf of the Companies with
respect to, any of the foregoing interests in real property or other material
interests in real property (collectively, "Real Property Interests"), and all
amendments and supplements thereto to which each Company is a party or by which
such Company is bound (collectively, the "Material Property Contracts"). True,
correct and complete copies of such Material Property Contracts have been
delivered to the Purchaser. Each Material Property Contract is legal, valid,
binding and enforceable and in full force and effect and will continue to be
legal, valid, enforceable, binding and in full force and effect on the same
terms and conditions immediately subsequent to the Closing.

 

(b)     Except as set forth on Schedule 5.10(b), (i) to the Knowledge of the
Sellers, no Material Property Contract has been breached in any respect or
canceled by the other party that has not been duly cured or reinstated and no
Company has received written notice of any planned breach or cancellation; (ii)
each Company has performed all of the obligations required to be performed by it
on or before the Execution Date and the Closing Date under the Material Property
Contracts, and no Company is in receipt of any notice of default under any
Material Contract or any notice that the counterparty to any Material Property
Contract intends to modify, cancel or terminate such Material Property Contract;
(iii) no event has occurred which with the passage of time or the giving of
notice or both would result in a breach or default under any Material Property
Contract; (iv) there are no renegotiations of, attempts or requests to
renegotiate or outstanding rights to renegotiate, any terms of any of the
Material Property Contracts; and (v) no Material Property Contract is subject to
any ground leases, mortgages, deeds of trust or other superior Encumbrances or
interests that would entitle the holder thereof to interfere with or disturb the
lessee's use and enjoyment of the leased premises or the exercise of the
lessee's rights under the Material Property Contract so long as the lessee is
not in default, beyond all applicable notice and cure periods.

 

 
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(c)     Schedule 5.10(c) lists all items of real property owned by any Company
(the "Owned Real Property"). Except as set forth on Schedule 5.10(c), the
respective Company has good, marketable and indefeasible title to the Owned Real
Property, free and clear of any and all Encumbrances. There are no outstanding
options, rights of first offer or rights of first refusal to purchase any Owned
Real Property or any portion thereof or interest therein.

 

(d)     No Company has received notice of any pending or contemplated
condemnation, expropriation or other proceeding in eminent domain affecting the
Real Property Interests or any portion thereof or interest therein, and to the
Knowledge of the Sellers, no such proceeding has been threatened against the
Real Property Interests. No Seller or Company has received any notice that the
current use and occupancy of the Real Property Interests violates any Law in any
material respect, and to the Knowledge of the Sellers, no such violations exist.

 

5.11     Contracts. Schedule 5.11 sets forth a complete and correct list of all
Material Contracts and amendments and supplements thereto. The Sellers have
provided to the Purchaser complete and correct copies, or, in the case of oral
Material Contracts, a reasonably detailed written description, of the Material
Contracts (including all amendments thereto) as in effect on the Execute Date.
Except as set forth on Schedule 5.11, (i) to the Knowledge of the Sellers, no
Material Contract has been breached in any respect or canceled by the other
party that has not been duly cured or reinstated and neither the Sellers nor the
Companies have received written notice of any planned breach or cancellation,
(ii) each Company has performed all of the obligations required to be performed
by it on or before the Closing Date under the Material Contracts, and neither
the Sellers nor the Companies are in receipt of any notice of default under any
Material Contract or any notice that the counterparty to any Material Contract
intends to modify, cancel or terminate such Material Contract, (iii) no event
has occurred which with the passage of time or the giving of notice or both
would result in a breach or default under any Material Contract, (iv) there are
no renegotiations of, attempts or requests to renegotiate or outstanding rights
to renegotiate, any terms of any of the Material Contracts, and (v) no Company
is a party to any contract, agreement, arrangement or license the performance of
which could reasonably be expected to have a material adverse effect. Each
Material Contract is legal, valid, binding and enforceable and in full force and
effect and will continue to be legal, valid, enforceable, binding and in full
force and effect on the same terms and conditions immediately subsequent to the
Closing.

 

5.12     Employees; Employee Benefit Plans.

 

(a)     No Company has, and has not at any time had, any employees.

 

(b)     No Company sponsors, maintains or participates in, and has not at any
time in the past sponsored, maintained or participated in, any Benefit Plan.

 

5.13     Intellectual Property.

 

(a)     Schedule 5.13(a) lists all registered trademarks, copyrights, trade
names, service marks, logos and patents, including pending applications to
register any of the foregoing with any Governmental Authority, as well as any
domain names, that are owned by any Company and which have not expired or been
abandoned (the "Registered Intellectual Property"). The operation of each
Company and each Project, including the use by any Company of the Registered
Intellectual Property, has not infringed, misappropriated or otherwise violated
the Intellectual Property of any other Person in any manner that would be
material, and to the Knowledge of the Sellers, no Person is infringing on the
Intellectual Property owned by any Company; and there is no claim pending or, to
the Knowledge of the Sellers, threatened, related to any of the foregoing.

 

 
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(b)     Schedule 5.13(b) lists all written licenses to which any Company is a
party, pursuant to which (i) a Company permits any Person to use any of the
Intellectual Property owned by a Company or (ii) any Person permits a Company to
use any trademarks, logos, service marks, trade names, copyrights or patents not
owned by such Company, except for off-the-shelf software licenses (collectively,
"Licenses"). The Sellers have delivered to the Purchaser complete and correct
copies of the Licenses listed on Schedule 5.13(b). No Company is, and, to the
Knowledge of the Sellers, no other party thereto is, in breach or default, in
any material respect, under any License, and each License is in full force and
effect. The computer systems and software of each Company have been sufficient
for the operation of its business and have not suffered a material outage or
other failure in the past twenty-four (24) months.

 

5.14     Permits; Compliance with Law.

 

(a)     Schedule 5.14(a) lists all governmental and quasi-governmental licenses,
permits, certificates, entitlements, accreditations, certificates, or other
approvals and authorizations maintained by each Company in connection with the
conduct of its business as currently conducted (the "Permits"). The Permits
listed on Schedule 5.14(a) constitute all Permits necessary to permit each
Company lawfully to continue to conduct its business in the manner in which it
conducts such business and to own and use its assets in the manner in which it
owns and uses such assets. Each Permit is in full force and effect and no event
has occurred and is continuing that permits, or after notice or lapse of time or
both would permit, any modification, revocation, or termination of any such
Permit. Except as set forth on Schedule 5.14(a), (i) each Company has at all
times been in compliance with each Permit; and (ii) neither the Sellers nor the
Companies have received any notice or other communications from any Governmental
Authority regarding (A) any actual, alleged, or potential violation of, or
failure to comply with, any Permit or (B) any actual, proposed, or potential
revocation, suspension, cancellation, termination or modification of any Permit.

 

(b)     Except as set forth on Schedule 5.14(b), (i) each Company has complied
in all respects and is in compliance with applicable Laws and is in compliance
with the Permits (including with respect to bidding, pricing, billing and
performance of all contracts with any Governmental Authority); (ii) no notice,
charge, claim, action, investigation or assertion has been filed, commenced or,
to the Knowledge of the Sellers, threatened in writing against a Company
alleging any violation of any of the foregoing; (iii) no investigation with
respect to any of the foregoing has been commenced; and (iv) there are no facts
or circumstances which could form the basis of any violation of an applicable
Law. Neither the Companies nor any of their respective directors, officers,
employees, managers or agents has made any bribes, kickback payments or other
similar payments of cash or other consideration in violation of the Law,
including payments to customers or clients or employees of customers or clients
for purposes of doing business with such Persons.

 

 
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5.15     Litigation. Except as set forth on Schedule 5.15, there are no actions,
suits, or legal or arbitration proceedings (a) pending and, to the Knowledge of
the Sellers, there are no actions, suits or legal or arbitration proceedings
threatened against a Company or a Project, in any such case at law or in equity
before any Governmental Authority or arbitral body that, if determined
adversely, would materially affect the ownership, operation or value of a
Company or a Project; or (b) pending or threatened by the Sellers or a Company
against any Person, at law or in equity, or before or by any Governmental
Authority (including any proceedings with respect to the transactions
contemplated hereby). No Company is a party to or subject to, any judgment,
order, injunction or decree of any Governmental Authority.

 

5.16     Taxes. Except as set forth on Schedule 5.16:

 

(a)     (i) Each Company has timely filed all Tax Returns that it was required
to file; (ii) all such Tax Returns were correct and complete in all respects and
were prepared in compliance with all applicable Laws and regulations; (iii) all
Taxes owed by each Company, whether or not shown as due on any Tax Return, have
been paid; (iv) each Company has provided to the Purchaser true and complete
copies of each Tax Return filed by such Company, including each income Tax
Return and franchise or excise Tax Return based on income, filed since the date
of formation of such Company; and (v) all Taxes that each Company is required to
withhold or to collect for payment to any Governmental Authority have been duly
withheld and collected and paid to the proper Governmental Authority.

 

(b)     Each Company (i) has not been audited and has not received any written
or, to the Knowledge of the Sellers, other notice of initiation of an audit,
request for information related to Tax matters, or any notice of deficiency or
proposed adjustment of any Tax by any Governmental Authority, in each case for
any period for which the statute of limitations on assessment of Taxes remains
open, and (ii) has not extended any applicable statute of limitations on
assessment or collection of any Taxes, which statute of limitations remains
open.

 

(c)     Each Company (i) is not a party to any allocation, indemnification or
sharing agreement with respect to Taxes, (ii) has not participated, and has not
been required to be included, in the filing of any Tax Return by or for any
consolidated, combined, unitary or similar group for Tax purposes, and has never
been a member of any such group, (iii) is not currently the beneficiary of any
extension of time within which to file any Tax Return; and (iv) is not liable,
as a transferee or successor, by contract or otherwise, for the Taxes of any
other Person.

 

(d)     Each Project Company is and has at all times since its formation been
treated as a disregarded entity for U.S. federal income tax purposes, and no
election has been filed with respect to such Company to cause it to be treated
as an association taxable as a corporation for U.S. federal income tax purposes.

 

(e)     No written claim, and, to the Knowledge of the Sellers, no other claim
has ever been made by a Governmental Authority in a jurisdiction where a Company
does not file Tax Returns that a Company may be subject to taxation in or by
that jurisdiction. There are no Encumbrances on any of the assets of any Company
that arose in connection with any failure (or alleged failure) to pay any Tax.
No power of attorney with respect to any Taxes has been executed or filed with
any Governmental Authority with respect to a Company relating to any Tax Return
for which the applicable statute of limitations has not expired.

 

 
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(f)     No Company has engaged in a transaction that is or is substantially
similar to a listed transaction or a reportable transaction within the meaning
of any of Sections 6011, 6111 and 6112 of the Code.

 

(g)     Since December 31, 2011, no Company has made or changed any election for
Tax purposes, changed an annual accounting period for Tax purposes, filed any
amended Tax Return, entered into any closing agreement for Tax purposes, settled
any Tax claim or assessment relating to such Company, surrendered any right to
claim a refund of Taxes, consented to any extension or waiver of the limitation
period applicable to any Tax claim or assessment relating to such Company, or
taken any other action relating to the filing of any Tax Return or the payment
of any Tax, if such election, adoption, change, amendment, agreement,
settlement, surrender, consent or other action would have the effect of
increasing the Tax liability of the Purchaser or such Company for any period on
or after the Effective Time or decreasing any Tax attribute of the Purchaser or
such Company existing prior to the Effective Time.

 

(h)     No Company has agreed, and no Company is required, to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise, no Company has made any similar election, and no Company is
required to apply any similar rules, under any comparable state, local or
foreign Tax provision. No Company will be required to include any item of income
in, or exclude any item of deduction from, taxable income for any taxable period
(or portion thereof) ending on or after the Effective Time as a result of any
(i) change in method of accounting for a taxable period ending prior to the
Closing Date; (ii) installment sale or open transaction disposition made prior
to the Closing Date; (iii) use of the completed contract or percentage of
completion method of accounting, (iv) prepaid amount received prior to the
Closing Date; (v) closing agreement under Section 7121 of the Code (or other
comparable agreement) entered into prior to the Closing Date; or (vi)
cancellation of debt to which Section 108(i) of the Code applies.

 

(i)     None of the Assets constitutes tax-exempt bond financed property or
tax-exempt use property, within the meaning of Section 168 of the Code. No
Company is a party to any "safe harbor lease" that is subject to the provisions
of Section 168(f)(8) of the Internal Revenue Code as in effect prior to the Tax
Reform Act of 1986. None of the assets of any Company will, on or after the
Effective Time, be non-amortizable under Section 197(f) of the Code.

 

5.17     Environmental Matters.

 

(a)     Except for any matter set forth on Schedule 5.17(a):

 

(i)     Each Company is and has been in compliance in all respects with all
applicable Environmental Laws and has obtained, maintained and complied with the
terms of all permits, licenses, consents and approvals required under all
applicable Environmental Laws to entitle such Company to own and operate its
Assets and to carry on and conduct its business ("Environmental Permits"), with
each such Environmental Permit set forth on Schedule 5.17(a);

 

(ii)     There are no pending or, to the Knowledge of the Sellers, threatened
Proceedings, claims or demands arising under any Environmental Laws with respect
to the Companies, the Real Property Interests, the Projects or with respect to
any of the Assets (whether real, personal or mixed) formerly owned or operated
by either of the Companies;

 

 
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(iii)     No Company has treated, stored, transported, handled, manufactured,
distributed, released, exposed any Person to, disposed of, or arranged for or
permitted the disposal of, Hazardous Materials at or to a site, or owned, leased
or operated a site, that (A) pursuant to CERCLA or any other Law, has been
placed or is proposed to be placed by the United States Environmental Protection
Agency or similar state authority on the National Priorities List or similar
state list, (B) has been or is involved in any government-sponsored voluntary
cleanup program, or (C) is or has been contaminated by any Hazardous Materials
so as to give rise to any current or future environmental claims;

 

(iv)     No release or threatened release of Hazardous Materials is occurring or
has occurred at or from any Real Property Interests or any other property
formerly owned, operated, leased or used by any Company or the Sellers so as to
give rise to any current or future environmental claims or for which applicable
Environmental Law requires any Company to (A) provide notice to any Person, (B)
perform any investigation, or (C) undertake any form of response action;

 

(v)     No Company has agreed to indemnify for or defend against, nor has any
Company assumed, undertaken or otherwise become subject to, any material
Environmental Liability of any Person; and

 

(vi)     The Sellers have delivered to the Purchaser true and complete copies of
all environmental site assessments, compliance audits, remediation studies, or
release reports, copies of any notices of violation or documents initiating
regulatory or judicial or other proceedings, and any other documents materially
bearing on environmental, health or safety liabilities, that are in the
possession, custody, or control of the Sellers (including, in the case of such
assessments, audits, studies or reports, those that were prepared on behalf of
any Company) that relate to any Company, any Project or the current or former
business or facilities of any Company (including the Real Property Interests);
provided, that such reports and documents are provided as is, and the Sellers
make no representation or warranty as to the accuracy of any facts asserted,
statements made, or conclusions reached in any such reports or documents.

 

5.18     Absence of Changes. Since December 31, 2013, except as set forth on
Schedule 5.18, (a) each Project and the business of each Company has been
conducted in all material respects in the ordinary course consistent with past
practice; (b) neither the Sellers nor any Company has suffered any damage,
destruction or casualty loss over $5,000, whether or not covered by insurance;
(c) neither the Sellers nor any Company has discharged or satisfied any
Encumbrance or paid any material obligation or liability, other than current
liabilities paid in the ordinary course of business consistent with past custom
and practice, or cancelled, compromised, waived or released any material right
or material claim; (d) neither the Sellers nor any Company has failed to
promptly pay and discharge current liabilities except where disputed in good
faith by appropriate proceedings; (e) neither the Sellers nor any Company has
instituted or settled any material proceeding; (f) neither the Sellers nor any
Company has conducted its cash management customs and practices (including the
collection of receivables, payment of payables, maintenance of control and
credit practices) other than in the usual and ordinary course of business
consistent with past custom and practice; and (g) neither the Sellers nor any
Company has entered into any agreement, whether oral or written, to do any of
the foregoing other than this Agreement.

 

 
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5.19     Affiliate Transactions.

 

(a)     Except as set forth on Schedule 5.19(a), (i) no officer, director,
manager, stockholder, member, employee, or Affiliate of any Company or, to the
Knowledge of the Sellers, any immediate family member to any such individual or
any entity controlled by such a Person, is a party to any contract, agreement,
arrangement or license with any Company or has any interest in any Asset used by
any Company; (ii) there are no loans, leases or other agreements or transactions
between any Company and any other entity that controls or is under common
control with any Company; and (iii) none of the assets, tangible or intangible,
or properties that are used by any Company are owned by the Sellers or its
Affiliates (other than the Companies).

 

(b)     Schedule 5.19(b) contains a description of all intercompany services
provided to or on behalf of any Company by the Sellers or its Affiliates (other
than the Companies) and the costs associated therewith.

 

5.20     Insurance.

 

(a)     Schedule 5.20(a) contains a true and complete list of all insurance
policies (including policies providing property, vehicle, casualty, liability,
and workers' compensation coverage and bond and surety arrangements and
insurance certificates) to which any Company is a party or which provide
coverage to or for the benefit of or with respect to a Company or any director,
manager, employee or officer of a Company in his or her capacity as such (the
"Insurance Policies"), indicating in each case the type of coverage, name of the
insured, the insurer, the premium, the expiration date of each Insurance Policy
and the amount of coverage. Schedule 5.20(a) also describes any self-insurance
or co-insurance arrangements by or affecting any Company, including any reserves
established thereunder. Each Insurance Policy is in full force and effect and
shall remain in full force and effect in accordance with its terms following the
Closing. The Sellers have delivered to the Purchaser complete and correct copies
of the Insurance Policies. Neither Seller nor any Company has received any
notice of pending or threatened termination of any Insurance Policy, and each
Company is in compliance in all material respects with all terms and conditions
contained therein. All potential insurance claims for matters arising prior to
the Closing Date for which insurance coverage is (or would have been) available
have been timely and properly tendered to the respective insurance carrier by
each Company. No Company has been refused any insurance by any insurance carrier
to which it has applied for any such insurance or with which it has carried such
insurance. During the past three (3) years, no insurance carrier has questioned,
denied or disputed coverage of any claim in excess of $5,000 individually or
$25,000 in the aggregate or otherwise cancelled or threatened to cancel any
insurance policy which covered a Company (or its assets, properties, products,
employees, operations or business).

 

(b)     Schedule 5.20(b) sets forth a true, correct and complete list of all
claims pending on any Insurance Policy and there is no such claim (i) as to
which the Sellers or a Company has been notified that coverage has been
questioned, denied or disputed by the underwriter, and (ii) that has or could
erode historical or current insurance policy limits.

 

 
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5.21     Brokers. Except as set forth on Schedule 5.21, all negotiations
relating to this Agreement and the Transactions have been carried out without
the services of any Person acting on behalf of any Company in such manner as to
give rise to any valid claim against the Purchaser or any Company for any
brokerage or finder's commission or similar compensation.

 

5.22     Minutes; Books and Records. The Sellers have delivered to the Purchaser
true, complete and accurate copies, or the complete original, minute books, of
each Company. The books of account and other records of each Company are
complete and correct in all material respects. The minute books of each Company
accurately reflect in all material respects all actions taken at meetings, or by
written consent in lieu of meetings, of the stockholders, members, board of
directors, board of managers or others performing similar functions.

 

5.23     Solar Data and Project Attributes. Schedule 5.23 sets forth a true and
complete list of the Solar Data and Project Attributes as of the Effective Time.
The Sellers have delivered to the Purchaser true and complete copies of all
books and records containing the Solar Data and Project Attributes and any other
information listed on Schedule 5.23 in the format identified on said Schedule
5.23. With respect to each item of Solar Data and Project Attributes identified
on Schedule 5.23, (a) each Company possesses all right, title, and interest in
and to each item of Solar Data and Project Attribute and has the right, title,
interest and ability to convey the same to the Purchaser without reservations or
restrictions; (b) no item on Schedule 5.23 is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge; and (c) neither the
Sellers nor any Company has agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict with respect to
such items on Schedule 5.23.

 

5.24     Accuracy of Materials. No representation or warranty made by any Seller
or any Company in this Agreement or otherwise in connection with the
Transactions or any other materials made available to the Purchaser or its
agents and representatives pursuant to, or in connection with, this Agreement
and the Transactions, contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements in this Agreement or
other materials not misleading.

 

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser represents and warrants to the Sellers as of the Execution Date
and Closing Date as follows:

 

6.1     Organization. The Purchaser is duly formed, validly existing and in good
standing under the Laws of the State of Delaware. The Purchaser is not in
default under or in violation of any provision of its Organizational Documents.

 

6.2     Authority. The Purchaser has all requisite limited liability company
power and authority to (a) execute and deliver this Agreement and perform its
obligations hereunder and (b) execute and deliver all other agreements and
instruments to be executed and delivered pursuant to this Agreement and perform
its obligations thereunder. The execution, delivery and performance of this
Agreement and each other document to which the Purchaser is or will be a party
and the consummation of each of the transactions and undertakings contemplated
thereby have been duly and validly authorized by all requisite action on the
part of the Purchaser and no other proceedings by the Purchaser are necessary to
authorize the execution and delivery of the Agreement and the consummation of
the Transactions.

 

 
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6.3     Enforceability. This Agreement has been executed by a duly authorized
officer of the Purchaser and constitutes a valid and binding obligation of the
Purchaser, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting creditors' rights
generally and by general principles of equity.

 

6.4     No Conflicts; Consents and Approvals.

 

(a)     The execution and delivery of this Agreement and the consummation of the
Transactions by the Purchaser will not (i) breach or violate or result in a
default under any applicable Law, permit held by the Purchaser or other
authorization of a Governmental Authority applicable to the Purchaser or its
assets, (ii) conflict with the Organizational Documents of the Purchaser or
(iii) breach, violate or result in a default under (with or without notice or
lapse of time or both), terminate or give rise to or any right on the part of
any Person to terminate, any mortgage, lease, agreement, deed of trust,
indenture or any other instrument to which the Purchaser is a party or by which
the Purchaser or any of its properties or assets are bound.

 

(b)     No consent, approval or authorization of or filing with any third party
or Governmental Authority is required on the part of the Purchaser in connection
with the execution and delivery of this Agreement or the consummation of the
Transactions.

 

6.5     Brokers. Except as set forth on Schedule 6.5, all negotiations relating
to this Agreement and the Transactions have been carried out without the
services of any Person acting on behalf of the Purchaser or any Affiliate of the
Purchaser in such manner as to give rise to any valid claim against the Sellers
for any brokerage or finder's commission or similar compensation.

 

6.6     Litigation. There are no Proceedings pending and, to the Knowledge of
the Purchaser, there are no Proceedings threatened against the Purchaser, in any
such case at law or in equity before any Governmental Authority or arbitral body
against or affecting the Purchaser, that would reasonably be expected to have an
adverse effect on the ability of the Purchaser to perform its obligations under
the Agreement or to consummate the Transactions.

 

ARTICLE VII
COVENANTS

 

7.1     Access. The Sellers shall give to the Purchaser and its representatives,
from and after the Execution Date, access during normal business hours to the
premises, employees, agents and consultants of the Sellers and the Companies,
and such copies of the Financial Statements, Material Contracts, books and
records, and Leases and other documentation, so as to enable the Purchaser to
inspect and evaluate all aspects of the Companies' business and operations,
Assets, operating results (including revenues, cash flows and tax returns for
the last three (3) years), condition (financial and otherwise), current and
contingent liabilities, capitalization, ownership, and legal affairs relating to
the business. The Purchaser agrees to conduct its review, and to cause its
representatives to conduct their review, in a manner designed to minimize any
disruption of the Companies' business.

 

 
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7.2     Conduct of the Business. The Sellers shall cause the Companies to
operate and conduct the Companies' business diligently and only in the ordinary
course, consistent with past practices and not make any material change in its
methods of accounting (except as required by GAAP), management or operations. In
furtherance thereof, unless the Purchaser's prior consent to do otherwise is
obtained, no Seller shall, and no Seller shall cause any of the Companies to,
take any of the following actions:

 

(a)     enter into any Contract with any Person that imposes aggregate payment
obligations on any Company other than contracts that are terminable without
penalty or payment on notice of thirty (30) days or less;

 

(b)     amend, terminate, extend, violate or breach any Material Contract;

 

(c)     issue, sell, pledge, encumber, authorize the issuance of, enter into any
contract to issue, sell, pledge, encumber, or authorize the issuance of, or
otherwise permit to become outstanding, any additional shares of equity
interest, or any appreciation rights, or any option, warrant, conversion, or
other right to acquire any such equity interest, or any security convertible
into any such equity interest, or pay or declare or agree to pay or declare any
dividend or other distribution with respect to any equity interests;

 

(d)     purchase or redeem, or agree to purchase or redeem, any equity interest;

 

(e)     sell, lease, grant, transfer or otherwise dispose of any asset or make
any material commitment relating to its assets or enter into or terminate any
lease of real property;

 

(f)     enter into or propose to enter into an agreement providing for the
possible acquisition (by way of merger, purchase of capital stock, purchase of
assets or otherwise) of any material portion of the capital stock or assets of
another entity;

 

(g)     borrow any money, incur any Indebtedness, or become contingently liable
for any obligation or liability of others;

 

(h)     enter into any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any Person;

 

(i)     make or commit to make any capital expenditure, or enter into any lease
of capital equipment as lessee or lessor;

 

(j)     pay, prepay or discharge any liability other than in the ordinary course
of business or fail to pay any liability when due;

 

(k)     write-off or write-down any Assets;

 

(l)     make any changes in its accounting methods or practices or revalue its
assets, except for (i) those changes required by GAAP, and (ii) changes in its
tax accounting methods or practices that may be necessitated by changes in
applicable Tax Laws;

 

 
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(m)     authorize or effect any change in such Company's Organizational
Documents;

 

(n)     cancel, compromise or settle any material claim or action of such
Company (unless such claim is otherwise paid or discharged by the Sellers at or
before Closing);

 

(o)     voluntarily adopt a plan of complete or partial liquidation or
dissolution of such Company;

 

(p)     create or incur any Encumbrance on any property or asset of any Company,
or on the equity interests in any Company;

 

(q)     materially modify, amend, terminate, transfer, assign, convey, or
deliver any Permit or waive, release, or assign any material rights or claims
thereunder;

 

(r)     submit an application for, or modify, revoke, withdraw or otherwise
adversely affect any pending application for, any Permit for a Project;

 

(s)     enter into any Contract with any Seller, any Affiliate of any Seller or
any directors, officers, employees, or managers; or

 

(t)     authorize any of, or commit or agree to take any of, the foregoing
actions.

 

7.3     Books and Records. The Sellers shall provide to the Purchaser,
reasonably promptly but in no event later than five (5) Business Days after the
Closing, all of the books and records of the Sellers related to the Companies
and all of the books and records of the Companies; provided that the Sellers
shall be entitled to retain, at the Sellers' sole expense, copies of such books
and records delivered to the Purchaser pursuant to this Section 7.3.

 

7.4     Bank Accounts and Email Addresses. The Sellers shall, no later than the
Closing, transfer to the Purchaser (i) all signing authority and other rights to
all accounts of any time and safe deposit boxes with all banks and other
financial institutions an depositories for each Company; and (ii) access to, and
control over, all email addresses used by the Companies.

 

7.5     Energy Regulatory Filings. As promptly as is reasonably practicable, and
in any case within five (5) days after the Execution Date, the Sellers and the
Purchaser, as applicable shall file or cause to be filed with the applicable
energy regulatory authorities such applications as are necessary to obtain any
required approval for the various transactions contemplated hereby.

 

7.6     Notification of Certain Matters.

 

(a)     The Sellers shall give prompt notice to the Purchaser of (i) the
occurrence or non-occurrence, to the Knowledge of the Sellers, of any event the
occurrence or non-occurrence of which would cause any representation or warranty
of the Sellers contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Closing Date; (ii) any failure to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 7.6 shall not limit or otherwise affect the remedies
available hereunder to the Purchaser; and (iii) any governmental complaints,
investigations or hearings (or communications indicating that the same may be
contemplated), adjudicatory proceedings or submissions involving any property or
other assets of any Company.

 

 
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(b)     The Purchaser shall give prompt notice to the Sellers of (i) the
occurrence or non-occurrence, to the Knowledge of the Purchaser, of any event
the occurrence or non-occurrence of which would cause any representation or
warranty of the Purchaser contained in this Agreement to be untrue or inaccurate
in any material respect at or prior to the Closing Date; (ii) any failure to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 7.6 shall not limit or otherwise affect the remedies
available hereunder to the Sellers.

 

7.7     Further Assurances. Each Party agrees that from and after the Execution
Date, each of them will:

 

(a)     execute and deliver such further instruments of conveyance and transfer
and take such other action as may reasonably be requested by any Party to carry
out the purposes and intents hereof; and

 

(b)     take any and all actions requested by the Sellers, the Companies, the
Purchaser or their respective Affiliates with respect to any (i) required
consents and (ii) Permit to ensure such Permits are validly issued, effective,
and in full force and effect after consummation of the Transactions.

 

7.8     Governmental Approvals. Each Party hereby agrees, from and after the
Execution Date, to take cause to be taken the following actions:

 

(a)     in the event that any permanent, preliminary or temporary injunction,
decision, order, judgment, determination or decree is entered or issued, in any
proceeding that would make consummation of the Transactions in accordance with
the terms of this Agreement unlawful, or that would prevent, enjoin or otherwise
prohibit consummation of Transactions, the prompt taking of any and all steps
(including the appeal thereof and the posting of a bond, but excluding the
taking of the steps contemplated by Section 7.8(b)) necessary to vacate, modify,
reverse, suspend, eliminate or remove such actual injunction, decision, order,
judgment, determination or decree so as to permit such consummation contemplated
by this Agreement; and

 

(b)     the prompt taking of any and all actions (the sequence of which shall
lie in the sole discretion of the Purchaser) necessary to avoid the entry of any
permanent, preliminary or temporary injunction or other order, decree, decision,
determination or judgment that would delay, restrain, prevent, enjoin or
otherwise prohibit consummation of the Transactions, including the defense
through litigation on the merits of any claim asserted in any court, agency or
other proceedings by any person or entity, including any Governmental Authority,
seeking to delay, restrain, prevent, enjoin or otherwise prohibit consummation
of the Transactions.

 

 
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7.9     Tax Matters.

 

(a)     Purchase Price Allocation. At the Closing, the Purchaser shall provide
the Sellers with an allocation of the Purchase Price for Tax purposes. The
Parties and their respective Affiliates shall file all Tax Returns consistent in
all respects with such allocation.

 

(b)     Tax Returns Relating to a Pre-Closing Tax Period. The Sellers shall, at
the Sellers' own expense, prepare and file (or cause to be filed) any Tax Return
of the Companies for any taxable period ending prior to the Closing Date that is
due after the Closing Date. The Purchaser shall prepare and file any Tax Return
of the Companies that is due after the Closing Date for any taxable period
beginning on or before the Closing Date.

 

(c)     Tax Return Preparation and Filing Procedures; Refunds.

 

(i)     All Tax Returns for which the Sellers are responsible under
Section 7.9(b) shall be (A) prepared in accordance with past custom and practice
of the Companies and the Sellers in preparing its Tax Returns and, in any event,
in accordance with applicable Law, and (B) made available by the Sellers (along
with the associated Tax workpapers) to the Purchaser for review no later than
thirty (30) days before the due date (including extensions) for filing such Tax
Returns (or if such Tax Returns are due less than sixty (60) days after Closing,
then promptly after such Tax Returns have been prepared). Within fifteen (15)
days of such delivery, the Purchaser shall deliver to the Sellers a written
statement describing the Purchaser's objections, if any, to such Tax Return and
all grounds therefor. If the Purchaser and the Sellers are unable to resolve
such objections, then any remaining disputes shall be resolved as provided in
Section 7.9(c)(iii). If any disputes over such Tax Returns are not resolved at
least five (5) days before such Tax Returns are due, then such Tax Returns shall
be filed as prepared by the Sellers (with such changes as the Purchaser and the
Sellers may have agreed upon), following which, if such Tax Returns have been
filed in a manner inconsistent with the resolution of such disputes, they shall
be amended. Each such Tax Return shall be filed on or before the due date
(including extensions) for filing such Tax Return and the Sellers shall pay any
Tax owed by the Companies as shown on such Tax Return.

 

(ii)     The Purchaser shall, with respect to any Tax Return for which the
Purchaser is responsible under Section 7.9(b), make such Tax Return and the
associated Tax workpapers available for review by the Sellers no later than
thirty (30) days before the due date (including extensions) for filing such Tax
Returns (or if such Tax Returns are due less than sixty (60) days after Closing,
then promptly after such Tax Returns have been prepared). Within fifteen (15)
days of such delivery (but no later than five (5) days before such returns are
due), the Sellers shall deliver to the Purchaser a written statement describing
its objections, if any, to such Tax Return and all grounds therefor. If the
parties are unable to resolve such objections within such 15-day period (and, in
any event, at least five (5) days before such Tax Returns are due), then such
Tax Return shall be filed as prepared by the Purchaser, and any remaining
disputes shall be resolved as provided in Section 7.9(c)(iii), following which,
if such Tax Returns have been filed in a manner inconsistent with such
resolution, they shall be amended. The Purchaser shall file (or cause to be
filed) each such Tax Return before the due date (including extensions) for
filing such Tax Return and the Sellers shall pay any Tax owed by the Companies
as shown on such Tax Return to the extent such Tax relates to a Pre-Closing Tax
Period (as determined under Section 7.9(e) below).

 

 
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(iii)     If the Sellers and the Purchaser are unable to agree upon any Tax
Return prepared pursuant to Section 7.9(c)(i) or Section 7.9(c)(ii) or to the
allocation prepared pursuant to Section 7.9(a), then the Sellers and the
Purchaser will refer the matter to the AAA to resolve such dispute pursuant to
binding arbitration in New York, New York in accordance with the Commercial
Arbitration Rules of the AAA. The arbitration will be conducted before a single
arbitrator, which arbitrator shall be mutually agreed upon by the Sellers and
the Purchaser (such selected arbitrator, the "Arbitrator"). The Arbitrator shall
be instructed to resolve any disputes referred to it within thirty (30) days
after such referral. The resolution of disputes by the Arbitrator shall be set
forth in writing and shall be conclusive and binding upon all Parties and the
Parties shall join in the execution and cooperate in the filing of any amended
Tax Return required to implement such resolution. The fees and expenses of the
Arbitrator shall be borne by the Party whose positions generally did not prevail
in such determination, or if the Arbitrator determines that neither the Sellers
nor the Purchaser could be fairly found to be the prevailing party, then such
fees, costs and expenses shall be borne fifty (50%) by the Sellers and fifty
(50%) by the Purchaser.

 

(d)     Cooperation on Tax Matters.

 

(i)     The Parties shall cooperate fully, to the extent reasonably requested by
the other Parties, in connection with the filing of Tax Returns and any audit,
litigation or other Proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other Party's request) the provision of
records and information which are reasonably relevant to any such Tax Return, or
any such audit, litigation or other Proceeding and making employees available on
a mutually convenient basis to provide additional information and explanation of
any material provided hereunder.

 

(ii)     The Parties agree to (A) retain or cause to be retained all books and
records with respect to Tax matters pertinent to the Companies relating to any
Tax period beginning before the Execution Date until the expiration of the
applicable statute of limitations (and, to the extent notified by the Purchaser
or the Sellers, any extensions thereof) of the respective Tax periods, and to
abide by all record retention agreements entered into with any Tax authority,
(B) provide to the other Parties, upon request, all books and records with
respect to Tax matters pertinent to the Companies relating to any taxable period
beginning before the Execution Date until the expiration of the statute of
limitations (and, to the extent notified by the Purchaser or the Sellers, any
extensions thereof) of the respective periods, and (C) give the other Parties
reasonable written Notice prior to transferring, destroying or discarding any
such books and records and, if any of the other Parties so requests, the other
Parties shall allow such requesting Party to take possession of such books and
records.

 

(e)     Allocation of Taxes. In the case of any Straddle Period, the amount of
any Taxes for the Pre-Effective Time Tax Period shall (i) in the case of ad
valorem property Taxes, be deemed to be the amount of such Taxes for the entire
Straddle Period multiplied by a fraction, the numerator of which is the number
of calendar days during the Straddle Period before the Effective Time and the
denominator of which is the total number of calendar days in the Straddle
Period, and (ii) in the case of all other Taxes, be determined based on an
interim closing of the books immediately prior to the Effective Time.

 

(f)     Certain Taxes. All transfer, documentary, sales, use, real property
gains, stamp, registration, and other similar Taxes and fees incurred in
connection with this Agreement shall be paid by the Sellers when due, and the
Sellers will, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, real
property gains, stamp, registration, and other similar Taxes and fees.

 

 
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(g)     Solar Tax Credits. Neither the Purchaser nor the Sellers shall take any
action, or fail to take any action, that could reasonably be expected to, or
actually does, result in any disallowance, expiration, forfeiture, recapture or
other reduction of any Solar Tax Credits.

 

7.10     Confidentiality. After the Closing, each Seller shall and shall cause
its respective Affiliates to continue to maintain the confidentiality of all
information, documents and materials relating in any manner to the Transactions,
the Companies, and the Projects, except to the extent disclosure of any such
information is required by Law. In the event that any Seller reasonably believes
after consultation with counsel that it or he is required by Law to disclose any
confidential information described in this Section 7.10, such Seller will (a)
provide the Purchaser with prompt Notice before such disclosure so that the
Purchaser may obtain a protective order or other assurance that confidential
treatment will be accorded such confidential information and (b) cooperate with
the Purchaser in attempting to obtain such order or assurance.

 

7.11     The Sellers' Representative.

 

(a)     Appointment. In addition to the other rights and authority granted to
the Sellers' Representative elsewhere in this Agreement, upon and by virtue of
the approval of this Agreement by the Sellers, all of the Sellers collectively
irrevocably constitute and appoint the Sellers' Representative as their agent
and representative to act from and after the date hereof and to do any and all
things and execute any and all documents which may be necessary, convenient or
appropriate to facilitate the consummation of the transactions contemplated by
this Agreement, including but not limited to: (i) execution of the documents and
certificates pursuant to this Agreement; (ii) receipt of payments under or
pursuant to this Agreement and disbursement thereof to the Sellers and others,
as contemplated by this Agreement; (iii) receipt and forwarding of notices and
communications pursuant to this Agreement; (iv) administration of the provisions
of this Agreement; (v) giving or agreeing to, on behalf of all or any of the
Sellers, any and all consents, waivers, amendments or modifications deemed by
the Sellers' Representative, in its reasonable and good faith discretion, to be
necessary or appropriate under this Agreement and the execution or delivery of
any documents that may be necessary or appropriate in connection therewith; (vi)
amending this Agreement or any of the instruments to be delivered to the
Purchaser pursuant to this Agreement; (vii) (A) submitting claims for
indemnification on behalf of the Sellers pursuant to Article VIII, and (B)
agreeing to, negotiating, entering into settlements and compromises of matter
relating to claims for indemnification made by the Sellers pursuant to Article
VIII, (viii) in addition to those matters specifically referenced in clauses
(vii) above, (A) disputing or refraining from disputing, on behalf of each
Seller relative to any amounts to be received by such Seller under this
Agreement or any agreements contemplated hereby, any claim made by the Purchaser
under this Agreement or other agreements contemplated hereby, (B) negotiating
and compromising, on behalf of each Seller, any dispute that may arise under,
and exercising or refraining from exercising any remedies available under, this
Agreement or any other agreement contemplated hereby, and (C) executing, on
behalf of each such Seller, any settlement agreement, release or other document
with respect to such dispute or remedy; except, in each case, with respect to a
dispute between a Seller, on the one hand, and the Sellers' Representative, on
the other hand; (ix) engaging, and paying fees relating to, attorneys,
accountants, agents or consultants on behalf of such the Sellers in connection
with this Agreement or any other agreement contemplated hereby and the
transactions contemplated hereby and thereby; and (x) taking all actions
necessary or appropriate in the judgment of the Sellers' Representative for the
accomplishment of any of the foregoing.

 

 
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(b)     Authority. A decision, act, consent or instruction of the Sellers'
Representative shall constitute a decision of all the Sellers and shall be
final, binding and conclusive upon each Seller, and the Purchaser may rely upon
any decision, act, consent or instruction of the Sellers' Representative as
being the decision, act, consent or instruction of each and every Seller. The
Purchaser is hereby relieved from any liability to any person for any acts done
by it in accordance with such decision, act, consent or instruction of the
Sellers' Representative. Notices or communications to or from the Sellers'
Representative shall constitute notice to or from each of the Sellers for
purposes of this Agreement.

 

(c)     Additional Authorization; Irrevocable Appointment. Notwithstanding
anything to the contrary in Section 7.11(a) or 7.11(b), in the event that the
Sellers' Representative is of the opinion that it requires further authorization
or advice from the Sellers on any matters concerning this Agreement, the
Sellers' Representative shall be entitled to seek such further authorization
from the Sellers prior to acting on their behalf. The appointment of the
Sellers' Representative is coupled with an interest and shall be irrevocable by
any Seller in any manner or for any reason. This authority granted to the
Sellers' Representative shall not be affected by the death, illness,
dissolution, disability, incapacity or other inability to act of the principal
pursuant to any applicable Law.

 

(d)     Payment to the Sellers. The Purchase Price and any other amounts
received by the Sellers' Representative from the Purchaser pursuant to this
Agreement shall be distributed (i) if specified in this Agreement, in accordance
with the terms of this Agreement, and (ii) if not specified in this Agreement,
in the discretion of the Sellers' Representative.

 

ARTICLE VIII
INDEMNIFICATION

 

8.1     Indemnification. Subject to the other provisions of this Article VIII:

 

(a)     Each Seller, jointly and severally, shall indemnify the Purchaser
Indemnified Parties from and against Damages incurred by the Purchaser
Indemnified Parties arising, directly or indirectly, from or in connection with:

 

(i)     any breach of any representation or warranty of any Company or any
Seller set forth in this Agreement or any other agreement executed by any
Company or any Seller in connection with this Agreement;

 

(ii)     any breach of or failure by any Company or any Seller to perform any
covenant or obligation of the Companies or the Sellers set forth in this
Agreement or any other agreement executed by any Seller in connection with this
Agreement;

 

 
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(iii)     any disallowance, expiration, forfeiture, recapture or other reduction
of any Solar Tax Credits as a result of (A) the transactions contemplated by
this Agreement, (B) any action accruing prior to the Closing Date, (C) any
action taken by, or with respect to, any Company or any Project prior to or on
the Closing Date, or (D) any action taken, or failure to take any action, by the
Sellers or its Affiliates prior to, on or after the Closing Date;

 

(iv)     any Damages (including legal fees and disbursements, court costs, the
cost of appellate proceedings, and any other costs of defense and litigation)
arising out of any litigation set forth, or that should be set forth, on any
Schedule to this Agreement;

 

(v)     any Damages (including legal fees and disbursements, court costs, the
cost of appellate proceedings, and any other costs of defense and litigation)
arising in connection with any option, deposit, contingent, or any other type of
payment due by any of the Sellers to any of the other Sellers; and

 

(vi)     any Damages (including reasonable legal fees and disbursements, court
costs, the cost of appellate proceedings, and any other reasonable costs of
litigation) that any the Purchaser Indemnified Party incurs to establish and
enforce its right to the indemnification provisions in this Article VIII,
provided the Purchaser Indemnified Party is successful in establishing that
right.

 

(b)     The Purchaser shall indemnify the Seller Indemnified Parties from and
against Damages incurred by the Seller Indemnified Parties arising, directly or
indirectly, from or in connection with:

 

(i)     any breach of any representation or warranty of the Purchaser set forth
in this Agreement or any other agreement executed by the Purchaser in connection
with this Agreement;

 

(ii)     any breach of or failure by the Purchaser to perform any covenant or
obligation of the Purchaser set forth in this Agreement or any other agreement
executed by the Purchaser in connection with this Agreement;

 

(iii)     any disallowance, expiration, forfeiture, recapture or other reduction
of any Solar Tax Credits as a result of any action taken by the Purchaser, any
Company or any Project after the Closing Date; and

 

(iv)     any Damages (including reasonable legal fees and disbursements, court
costs, the cost of appellate proceedings, and any other reasonable costs of
litigation) that any Seller Indemnified Party incurs to establish and enforce
its right to the indemnification provisions in this Article VIII, provided the
Seller Indemnified Party is successful in establishing that right.

 

(c)     Without limiting the foregoing, (i) all representations, warranties,
covenants and agreements set forth in this Agreement or in any schedule or
exhibit to this Agreement, and the Purchaser Indemnified Parties' and Seller
Indemnified Parties' right to rely on them as written and the related right to
indemnification as contemplated herein, will not be affected by any examination
made for or on behalf of any of the Parties or the knowledge of any of their
officers, directors, managers, security holders, employees, agents or
representatives or the acceptance of any certificate or opinion; and (ii) no
Party shall be entitled to any indemnification hereunder in respect of any
Damage to the extent caused by any matter constituting a breach of such Party's
representations, warranties or covenants in the Agreement.

 

 
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8.2     Claim Procedures. Any claim for Damages pursuant to this Article VIII
shall be in writing (an "Indemnifying Notice"), shall be given by the applicable
Indemnified Party to the Party or Parties from whom indemnity is sought
(collectively, the "Indemnifying Party"), and shall describe the claim in
reasonable detail and indicate the estimated amount of such claim, if reasonably
practical. If the Indemnifying Party does not notify the Indemnified Party
within thirty (30) days following its receipt of an Indemnification Notice that
the Indemnifying Party disputes its liability to the Indemnified Party, the
applicable indemnification claim specified in such Indemnification Notice shall
be conclusively deemed an obligation of the Indemnifying Party hereunder, and
the Indemnifying Party shall pay the Indemnified Party an amount equal to the
amount of such indemnification claim.

 

8.3     Survival of Claims. The right of the Purchaser Indemnified Parties and
the Seller Indemnified Parties to assert an indemnification claim for Damages
pursuant to this Article VIII shall survive the Closing for the periods set
forth in this Section 8.3.

 

(a)     The right of the Purchaser Indemnified Parties to assert a claim for
Damages pursuant to Section 8.1(a)(i) for a breach of the representations or
warranties set forth in this Agreement shall terminate at the Claim Deadline;
provided, however, that the right of the Purchaser Indemnified Parties to assert
a claim for Damages:

 

(i)     (A) for a breach of the representations and warranties of the Companies
in Section 5.12 (Employees; Employee Benefit Plans), Section 5.16 (Taxes) or
Section 5.17 (Environmental Matters); or (B) arising, directly or indirectly,
from or in connection with Taxes attributable to the Pre-Closing Tax Period, in
each case shall survive the Closing for seven (7) years; and

 

(ii)     (A) for breaches of the representations and warranties of (A) the
Sellers in Sections 4.1 (Organization), 4.2 (Authority), 4.3 (Enforceability),
4.4 (No Conflicts; Consents and Approvals), 4.5 (Litigation), 4.6 (Interests)
and 4.7 (Brokers) (collectively, the "Sellers' Fundamental Representations"); or
(B) for breaches of the representations and warranties of the Companies in
Sections 5.1 (Organization), 5.2 (Authority), 5.3 (No Conflicts; Consents and
Approvals), 5.4 (Capitalization of the Companies), 5.15 (Litigation),
Section 5.19 (Affiliate Transactions) and 5.21 (Brokers) (collectively, the
"Company Fundamental Representations"), in each case shall survive the Closing
indefinitely.

 

(b)     The right of the Purchaser Indemnified Parties to assert a claim for
Damages for any claim pursuant to Section 8.1(a)(ii), Section 8.1(a)(iii),
Section 8.1(a)(iv) or Section 8.1(a)(v) shall survive the Closing indefinitely.

 

(c)     The right of the Seller Indemnified Parties to assert a claim for
Damages pursuant to Section 8.1(b)(i) for a breach of the representations or
warranties set forth in this Agreement shall terminate at the Claim Deadline;
provided, that the right of the Seller Indemnified Parties to assert a claim for
Damages for a breach of the representations and warranties of the Purchaser in
Sections 6.1 (Organization), 6.2 (Authority), 6.3 (Enforceability), 6.4 (No
Conflicts; Consents and Approvals) and 6.5 (Brokers) (collectively, the
"Purchaser Fundamental Representations"), in each case, shall survive the
Closing indefinitely.

 

 
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(d)     The right of the Seller Indemnified Parties to assert a claim for
Damages for any claim pursuant to Section 8.1(b)(ii), Section 8.1(b)(iii) or
Section 8.1(b)(iv) shall survive the Closing indefinitely.

 

8.4     Exclusive Remedy. If Closing occurs, the indemnities set forth in this
Agreement (as limited by Section 8.3) shall be the sole and exclusive remedy of
the Parties indemnified hereunder for breach of any representation, warranty or
covenant set forth in this Agreement; provided, however, nothing in this
Section 8.4 (i) shall be deemed to affect any Person's right to equitable relief
(including specific performance in a court of law) for breach of a covenant set
forth in this Agreement (whether or not such covenant is set forth in Article
VII) and (ii) shall not be applicable to any Damages to the extent that the
Party against whom relief is sought is found by a court of competent
jurisdiction in a final nonappealable decision to have committed fraud.

 

8.5     Third-Party Claims.

 

(a)     If any claim by an Indemnified Party hereunder results from any claim or
Proceeding by a third party (a "Third-Party Claim"), then such Indemnified Party
shall give the Indemnifying Party written Notice thereof (together with a copy
of such Third-Party Claim, process or other legal proceeding) promptly after
becoming aware of such Third-Party Claim; provided, however, that the failure of
such Indemnified Party to give such Notice shall not impair the rights of such
Indemnified Party under this Article VIII, except to the extent that (and only
to the extent that) the Indemnifying Party is actually and materially prejudiced
by such failure to give Notice. The Indemnifying Party shall have the right to
defend, at its own expense and by its own counsel reasonably acceptable to the
Indemnified Party, any such matter involving the asserted liability of the
Indemnified Party; provided, however, that the Indemnified Party shall have the
rights to participate in the defense of such asserted liability at the
Indemnified Party's own expense. In the event that such Indemnifying Party shall
decline to participate in or assume the defense of such action, or if the
Indemnifying Party discontinues the diligent and timely conduct thereof, any of
the Indemnified Parties may undertake such defense and the Indemnifying Party
shall be responsible for reimbursing the Indemnified Parties for their legal
fees and expenses in connection therewith as and when such fees and expenses are
incurred by them.

 

(b)     (i) The Indemnifying Party shall obtain the prior written consent of the
Indemnified Party before entering into any settlement of a claim or ceasing to
defend such claim if, pursuant to or as a result of such settlement or
cessation, injunctive or other equitable relief will be imposed against the
Indemnified Party or if such settlement does not expressly and unconditionally
release the Indemnified Party from all liabilities and obligations with respect
to such claim, without prejudice and (ii) the Indemnifying Party shall promptly
inform the Indemnified Party of any settlement offers received and shall inform
any third party claimant that any such settlement offers shall and must be
shared with the Indemnified Party.

 

 
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ARTICLE IX
TERMINATION

 

9.1     Causes of Termination. This Agreement and the Transactions may be
terminated:

 

(a)     At any time by mutual written consent of the Sellers and the Purchaser;

 

(b)     By the Sellers or the Purchaser, upon written notice to the other Party
if the Closing does not occur on or prior to August 30, 2015 (the "Termination
Date"); provided that the right to terminate this Agreement pursuant to this
Section 9.1(b) shall not be available to any Party that is in material breach of
this Agreement at such time;

 

(c)     By the Sellers if, on the Closing Date, any of the conditions set forth
in Section 3.3 shall not have been satisfied or waived (or have become incapable
of fulfillment), other than through the failure of the Sellers to comply with
its material obligations under this Agreement; or

 

(d)     By the Purchaser if, on the Closing Date, any of the conditions set
forth in Section 3.2 shall not have been satisfied or waived (or have become
incapable of fulfillment), other than through the failure of the Purchaser to
comply with its material obligations under this Agreement.

 

9.2     Effect of Termination. In the event of a valid termination of this
Agreement as provided in Section 9.1, this Agreement shall cease to have force
and effect, and there shall be no further liability or obligation on the part of
the Sellers or the Purchaser, except that the applicable provisions of Article
I, Section 4.7, Section 5.21, Section 6.5, Article IX, and Article X shall
survive termination of this Agreement.

 

9.3     Specific Performance. The Parties agree that, prior to the Closing Date,
irreparable damage would occur in the event that any of the provisions of this
Agreement are not performed by the Parties in accordance with their specific
terms or are otherwise breached, including any wrongful failure to consummate
the Closing. It is accordingly agreed that the Purchaser shall be entitled to an
injunction or injunctions or other specific performance or equitable relief to
prevent breaches of this Agreement and to cause the Closing to occur on the
terms and subject to the conditions thereto set forth herein. In that regard,
the Sellers hereby waive (a) any defenses in any action for specific performance
that such other Party is required to mitigate damages or otherwise has an
adequate remedy under law and (b) any requirement under any Law to post a bond
or other security as a prerequisite to obtaining such equitable relief. If the
Purchaser brings any action to enforce specifically the performance of the terms
and provisions hereof by the other Party, the Termination Date shall
automatically be extended by (i) the amount of time during which such action is
pending, plus twenty (20) Business Days or (ii) such other time period
established by the court presiding over such action. The Sellers agree that they
will not oppose the granting of any injunction, specific performance or other
equitable relief sought in accordance with this Section 9.3 on the basis that
the other Party has an adequate remedy at law or that any award of specific
performance is not an appropriate remedy for any reason at law or in equity.

 

ARTICLE X
MISCELLANEOUS

 

10.1     Entire Agreement. This Agreement, including the exhibits and schedules
hereto and the other agreements contemplated hereby, embody the entire agreement
and understanding among the Parties with respect to the subject matter hereof
and supersede all prior understandings related to the subject matter hereof.

 

 
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10.2     No Waiver; Modifications in Writing. No amendment, waiver, consent,
modification or termination of any provision of this Agreement shall be
effective unless executed in writing by the Parties hereto. Any amendment,
waiver, supplement or modification of or to any provision of this Agreement
shall be effective only in the specific instance and for the specific purpose
for which made or given.

 

10.3     Communications. Any notice, request, instruction, consent,
correspondence or other document to be given hereunder by any Party to the other
Parties (herein collectively called "Notice") shall be in writing and delivered
in person or by courier service requiring acknowledgment of receipt of delivery
or mailed by certified mail, postage prepaid and return receipt requested, or by
facsimile (confirmed by facsimile as received), as follows:

 

If to the Purchaser or, after the Closing, the Companies:

 

Greenbacker Group

369 Lexington Avenue, Suite 312

New York, New York 10017

Attention: Charles Wheeler

Telephone: 646-237-7884

Email: charles.wheeler@greenbackercapital.com

 

With a copy (which shall not constitute notice) to:

 

Winstead PC

500 Winstead Building

2728 N. Harwood St.

Dallas, Texas 75201

Attention: Sargon Daniel

Telephone: 214-745-5841

Email: sdaniel@winstead.com

  

and, if to the Sellers:

 

Principal Solar, Inc.

2560 King Arthur Blvd, Suite 124 PMB 65

Lewisville, Texas 75056

Attention: Chief Executive Officer

 

With a copy (which shall not constitute notice) to:

 

Settle & Pou, PC

3333 Lee Parkway, Eighth Floor

Dallas, Texas 75219

Attention: Quentin Faust

Telephone: 214-520-3300

Facsimile: 214-526-4145

 

 
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or to such other address as the Purchaser or the Sellers may designate in
writing by giving Notice as provided above. Notice shall be deemed to have been
duly given: at the time delivered, if personally delivered; upon actual receipt
(or at the beginning of the recipient's next Business Day if not received during
recipient's normal business hours), if sent by facsimile; upon actual receipt
(or, if not actually received, on the fifth Business Day following deposit with
the U.S. Post Office), if mailed; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.

 

10.4     Costs and Expenses. Except as specifically provided to the contrary in
this Agreement, whether or not the Transactions are consummated, each Party
shall pay its own costs and expenses incident to or incurred in connection with
preparation and execution of this Agreement and the consummation of the
Transactions.

 

10.5     Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile or other
electronic copies (such as .pdf files delivered by electronic mail) of
signatures shall constitute original signatures for all purposes of this
Agreement and any enforcement hereof.

 

10.6     Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of each Company, each Seller, the Sellers' Representative
and the Purchaser, and their respective permitted successors and assigns. Except
as expressly provided in this Agreement, this Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the Parties to
this Agreement, and their respective permitted successors and assigns. No Party
may assign its rights and obligations under this Agreement to any other Person
without the prior written consent of the other Parties, and any such attempted
assignment without such consent shall be void; provided, however, that the
Purchaser may assign its rights and obligations hereunder, in whole or in part,
to any of its Affiliates.

 

10.7     Governing Law and Jurisdiction; Waiver of Jury Trial. This Agreement
will be constructed, interpreted and enforced in accordance with, and the
respective rights and obligations of the parties will be governed by, the laws
of the state of New York without regard to principles of conflicts of law, and
all claims relating to or arising out of this Agreement, or the breach thereof,
whether sounding in contract, tort or otherwise, will likewise be governed by
the laws of New York (without regard to conflicts of law principles). Any action
or proceeding under or in connection with this Agreement must be brought in a
state or federal court situated in New York, New York, and each Party hereby
irrevocably (a) submits to the exclusive jurisdiction of such courts, and (b)
waives any objection it may now or hereafter have as to the venue of any such
action or proceeding brought in such court or that such court is an inconvenient
forum. THE PARTIES HEREBY WAIVE AND SHALL NOT SEEK JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, CLAIM, COUNTERCLAIM, DEFENSE OR OTHER LITIGATION OR DISPUTE UNDER OR
IN RESPECT OF THIS AGREEMENT.

 

 
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10.8     Severability of Provisions. Any provision of this Agreement that is
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without invalidating the remaining provisions hereof or
affecting or impairing the validity or enforceability of such provision in any
other jurisdiction.

 

10.9     Headings; Exhibits and Schedules. The article, section and other
headings and captions and Table of Contents used or contained in this Agreement
or the schedules or exhibits hereto are for convenience of reference only and
shall not affect the interpretation or construction of this Agreement. The
schedules or exhibits referred to herein are attached hereto and incorporated
herein by this reference. Any matter disclosed on one schedule hereto shall be
deemed to be disclosed on any other schedule(s) hereto only to the extent that
the relevance or applicability of such disclosure to such other schedule(s) is
reasonably apparent on its face.

 

10.10     Terms Generally. The words "hereby," "herein," "hereof," "hereunder"
and words of similar import refer to this Agreement as a whole (including any
Exhibits and Schedules hereto) and not merely to the specific Section, paragraph
or clause in which such word appears. All references in this Agreement to
Sections, Exhibits and Schedules are references to Sections of, and Exhibits and
Schedules to, this Agreement unless the context otherwise requires. The words
"include," "includes" and "including" are deemed to be followed by the phrase
"without limitation." The definitions given in this Agreement apply equally to
both the singular and plural forms of the terms defined. Whenever the context
requires, any pronoun includes the corresponding masculine, feminine and neuter
forms.

 

10.11     Joint Effort. Preparation of this Agreement has been a joint effort of
the Parties and the resulting document shall not be construed more severely
against one Party than against the other Party.

 

*     *     *     *     *

 

 
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IN WITNESS WHEREOF, the Purchaser, the Sellers and the Sellers' Representative
have executed this Agreement as of the date first written above.

 

 

 

 

THE PURCHASER:  

 

 

 

 

 

 

MAGNOLIA SUN LLC  

 

 

 

 

 

 

By:

/s/ Charles Wheeler

 

 

Name:

Charles Wheeler

 

 

Title:

Authorized Signatory

 

 

 

 

SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT]

 

 
 

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SELLERS:

 

 

 

 

 

 

PRINCIPAL SOLAR, INC.

 

 

 

 

 

 

By:

/s/ Michael Gorton

 

 

Name:

Michael Gorton

 

 

Title:

Chief Executive Officer

 

 

 

VIS SOLIS, INC.

 

 

 

 

 

 

By:

/s/ R. Keith Gordon, Esq., LEED AP

 

 

Name:

R. Keith Gordon, Esq., LEED AP          

 

 

Title:

General Counsel

 

 

 

AstroSol, inc.

 

 

 

 

 

 

By:

/s/ R. Keith Gordon, Esq., LEED AP

 

 

Name:

R. Keith Gordon, Esq., LEED AP 

 

 

Title:

General Counsel

 

 

 

 

 

SELLERS' REPRESENTATIVE:

 

 

 

 

 

 

PRINCIPAL SOLAR, INC.

 

 

 

 

 

 

By:

/s/ Michael Gorton

 

 

Name:

Michael Gorton

 

 

Title:

Chief Executive Officer

 

 

  

 

SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT]