Document:

Exhibit 10.94

	
 
    

 

NG ADVANTAGE LLC

 

COMMON UNIT PURCHASE AGREEMENT

 

October 14, 2014

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 1 AUTHORIZATION, SALE AND ISSUANCE
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
1.1
    	
Authorization
    	
 
    	
1
    
	
1.2
    	
Sale and Issuance of Units
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 2 CLOSING DATES AND DELIVERY
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
2.1
    	
Closing
    	
 
    	
1
    
	
2.2
    	
Issuance and Delivery
    	
 
    	
2
    
	
2.3
    	
Cancellation of Investor Notes
    	
 
    	
2
    
	
2.4
    	
Use of Proceeds
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE   COMPANY
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
3.1
    	
Organization, Good Standing and   Qualification
    	
 
    	
3
    
	
3.2
    	
Subsidiaries
    	
 
    	
3
    
	
3.3
    	
Capitalization
    	
 
    	
3
    
	
3.4
    	
Authorization
    	
 
    	
5
    
	
3.5
    	
Financial Statements
    	
 
    	
5
    
	
3.6
    	
Changes
    	
 
    	
6
    
	
3.7
    	
Intellectual Property
    	
 
    	
7
    
	
3.8
    	
Employee Proprietary Information   and Inventions Agreements
    	
 
    	
9
    
	
3.9
    	
Title to Properties and Assets;   Liens
    	
 
    	
9
    
	
3.10
    	
Compliance with Other   Instruments
    	
 
    	
10
    
	
3.11
    	
Litigation
    	
 
    	
10
    
	
3.12
    	
Governmental Consents
    	
 
    	
11
    
	
3.13
    	
Offering
    	
 
    	
11
    
	
3.14
    	
Registration and Voting Rights
    	
 
    	
11
    
	
3.15
    	
Agreements; Actions
    	
 
    	
12
    
	
3.16
    	
Related-Party Transactions
    	
 
    	
13
    
	
3.17
    	
Permits
    	
 
    	
13
    
	
3.18
    	
Environmental and Safety Laws
    	
 
    	
13
    
	
3.19
    	
Employee Benefit Plans
    	
 
    	
14
    
	
3.20
    	
Tax Returns, Payments and   Elections
    	
 
    	
14
    
	
3.21
    	
Insurance
    	
 
    	
15
    
	
3.22
    	
Company Records
    	
 
    	
15
    
	
3.23
    	
Labor Agreements and Actions;   Employee Compensation
    	
 
    	
15
    
	
3.24
    	
Section 83(b) Elections
    	
 
    	
17
    
	
3.25
    	
Investment Company
    	
 
    	
17
    
	
3.26
    	
Real Property Holding Company
    	
 
    	
17
    
	
3.27
    	
No “Bad Actor” Disqualification
    	
 
    	
17
    
	
3.28
    	
Anti-Corruption
    	
 
    	
17
    
	
3.29
    	
Money Laundering Laws
    	
 
    	
18
    
	
3.30
    	
OFAC
    	
 
    	
18
    
	
3.31
    	
Brokers or Finders
    	
 
    	
18
    
	
3.32
    	
Disclosure
    	
 
    	
18
    
	
3.33
    	
Customers and Suppliers
    	
 
    	
18
    

 

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TABLE OF CONTENTS
 (continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
3.34
    	
Regulatory Matters
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE   INVESTORS
    	
 
    	
20
    
	
 
    	
 
    	
 
    
	
4.1
    	
No Registration
    	
 
    	
20
    
	
4.2
    	
Investment Intent
    	
 
    	
20
    
	
4.3
    	
Investment Experience
    	
 
    	
20
    
	
4.4
    	
Speculative Nature of   Investment
    	
 
    	
20
    
	
4.5
    	
Accredited Investor
    	
 
    	
20
    
	
4.6
    	
Residency
    	
 
    	
21
    
	
4.7
    	
Rule 144
    	
 
    	
21
    
	
4.8
    	
No Public Market
    	
 
    	
21
    
	
4.9
    	
Authorization
    	
 
    	
21
    
	
4.10
    	
Brokers or Finders
    	
 
    	
22
    
	
4.11
    	
Tax Advisors
    	
 
    	
22
    
	
4.12
    	
Legends
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 5 CONDITIONS TO INVESTORS’ OBLIGATIONS TO   CLOSE
    	
 
    	
23
    
	
 
    	
 
    	
 
    
	
5.1
    	
Representations and Warranties
    	
 
    	
23
    
	
5.2
    	
Covenants
    	
 
    	
23
    
	
5.3
    	
Blue Sky
    	
 
    	
23
    
	
5.4
    	
Operating Agreement
    	
 
    	
23
    
	
5.5
    	
Voting Agreement
    	
 
    	
23
    
	
5.6
    	
Right of First Offer and   Co-Sale Agreement
    	
 
    	
23
    
	
5.7
    	
Closing Deliverables
    	
 
    	
24
    
	
5.8
    	
Indemnification Agreement
    	
 
    	
24
    
	
5.9
    	
Payoff Letters
    	
 
    	
24
    
	
5.10
    	
Legal Opinion
    	
 
    	
24
    
	
5.11
    	
Milton Purchase Agreement
    	
 
    	
24
    
	
5.12
    	
Permits, Qualifications and   Consents
    	
 
    	
25
    
	
5.13
    	
Proceedings and Documents
    	
 
    	
25
    
	
5.14
    	
Conversion and Cancellation of   Series A Preferred Units and Investor Notes
    	
 
    	
25
    
	
5.15
    	
Waiver of Rights
    	
 
    	
25
    
	
5.16
    	
Termination   of Investors’ Rights Agreement
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 6 CONDITIONS TO COMPANY’S OBLIGATION TO CLOSE
    	
 
    	
26
    
	
 
    	
 
    	
 
    
	
6.1
    	
Representations and Warranties
    	
 
    	
26
    
	
6.2
    	
Covenants
    	
 
    	
26
    
	
6.3
    	
Compliance with Securities Laws
    	
 
    	
26
    
	
6.4
    	
Operating Agreement
    	
 
    	
26
    
	
6.5
    	
CLNE Common Purchase Note
    	
 
    	
26
    
	
6.6
    	
Voting Agreement
    	
 
    	
26
    
	
6.7
    	
Right of First Offer and   Co-Sale Agreement
    	
 
    	
27
    
	
6.8
    	
Accredited Investor   Questionnaire
    	
 
    	
27
    

 

ii

 

TABLE OF CONTENTS
 (continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 7 MISCELLANEOUS
    	
 
    	
27
    
	
 
    	
 
    	
 
    
	
7.1
    	
Election of CLNE Managers
    	
 
    	
27
    
	
7.2
    	
Amendment
    	
 
    	
27
    
	
7.3
    	
Notices
    	
 
    	
27
    
	
7.4
    	
Governing Law
    	
 
    	
28
    
	
7.5
    	
Brokers or Finders
    	
 
    	
28
    
	
7.6
    	
Expenses
    	
 
    	
28
    
	
7.7
    	
Survival; Indemnification
    	
 
    	
29
    
	
7.8
    	
Successors and Assigns
    	
 
    	
29
    
	
7.9
    	
Entire Agreement
    	
 
    	
29
    
	
7.10
    	
No Waiver
    	
 
    	
29
    
	
7.11
    	
Remedies
    	
 
    	
30
    
	
7.12
    	
Severability
    	
 
    	
30
    
	
7.13
    	
Counterparts
    	
 
    	
30
    
	
7.14
    	
Telecopy Execution and Delivery
    	
 
    	
30
    
	
7.15
    	
Jurisdiction; Venue
    	
 
    	
31
    
	
7.16
    	
Titles and Subtitles
    	
 
    	
31
    
	
7.17
    	
Further Assurances
    	
 
    	
31
    
	
7.18
    	
Jury Trial
    	
 
    	
31
    

 

iii

 

NG ADVANTAGE LLC

 

COMMON UNIT PURCHASE AGREEMENT

 

This Common Unit Purchase Agreement (this “Agreement”) is dated as of October 14, 2014, by and among NG Advantage LLC, a Delaware limited liability company (the “Company”), and the persons and entities (each, an “Investor” and collectively, the “Investors”) listed on the Schedule of Investors attached hereto as Schedule A (the “Schedule of Investors”).  The Company and each Investor hereby agree as follows:

 

SECTION 1

  AUTHORIZATION, SALE AND ISSUANCE

 

1.1                               Authorization.

 

The Company will, prior to the Closing (as defined below), authorize the sale and issuance of up to 3,045,789 units (the “Units”) of the Company’s Common Units (as such term is defined in the Operating Agreement (as defined below)), having the rights, privileges, preferences and restrictions set forth in the amended and restated limited liability company operating agreement of the Company, in substantially the form attached hereto of Exhibit A (the “Operating Agreement”).

 

1.2                               Sale and Issuance of Units.

 

Subject to the terms and conditions of this Agreement, each Investor agrees, severally and not jointly, to purchase at the Closing, and the Company agrees to sell and issue to each Investor, the number of Units set forth opposite such Investor’s name on the Schedule of Investors attached hereto as Schedule A (the “Schedule of Investors”), at, subject to Section 2.3, a cash purchase price of $15.26 per unit (the “Per Unit Purchase Price”, and the per Unit purchase price paid by each Investor hereunder, multiplied by the number of Units purchased by such Investor hereunder, such Investor’s “Purchase Price”). The Company’s agreement with each Investor is a separate agreement, and the sale and issuance of the Units to each Investor is a separate sale and issuance.

 

SECTION 2

  CLOSING DATES AND DELIVERY

 

2.1                               Closing.

 

The purchase, sale and issuance of the Units shall take place at one closing (the “Closing”). The Closing shall take place at the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 701 Fifth Avenue, Suite 5100, Seattle, WA 98104-7036, at 10:00 a.m. local time on October 14, 2014, or such other time and date as the Company and Investors to receive a majority of the Common Units to be issued pursuant to this Agreement (which, in all cases, shall include CLNE (as defined below)) shall mutually agree orally or in writing.

 

 

2.2                               Issuance and Delivery.

 

At the Closing, the Company shall update its unit ledger and all other applicable books and records to reflect the issuance to each Investor of the number of Units that such Investor is purchasing in the Closing (except solely for the Units purchased by the CLNE Common Purchase Note (as defined below), which shall be reflected in the Company’s unit ledger and all other applicable books and records as provided thereunder), and each Investor shall make its payment of the purchase price therefor as set forth in the column designated “Purchase Price” opposite such Investor’s name on the Schedule of Investors, by (a) if the Investor is Clean Energy, a California corporation (“CLNE”), (i) cancellation of indebtedness owed under that certain Promissory Note issued by the Company on September 23, 2014, (ii) a wire transfer, in accordance with the Company’s instructions, of an amount equal to $18,999,996.04 less the amount of indebtedness cancelled pursuant to clause (a)(i) above, and (iii) the issuance of the promissory note in substantially the form of Exhibit B (the “CLNE Common Purchase Note”) in the aggregate principal amount of $18,650,300.00, and (b) for all other Investors hereunder, by cancellation of indebtedness pursuant to the conversion of the Investor Notes (as defined below) pursuant to Section 2.3. In the event that payment by an Investor is made, in whole or in part, by cancellation of indebtedness, then such Investor shall surrender to the Company for cancellation at the Closing any evidence of indebtedness or shall execute an instrument of cancellation in form and substance acceptable to the Company.

 

2.3                               Cancellation of Investor Notes.

 

Each of the undersigned Investors holding a Subordinated Convertible Promissory Note issued by the Company on or after November 25, 2013 in the original aggregate principal amount of up to $6,180,000 (the “Investor Notes”) hereby acknowledges and agrees that, at the Closing, the outstanding principal under such Investor’s Investor Note will be automatically converted, at a price per Unit equal to 70.0% of the Per Unit Purchase Price, into that number of Units set forth in the column designated “Number of Units” or “Number of Common Units” opposite such Investor’s name on the Schedule of Investors and Schedule 5.14 hereto, and the accrued and unpaid interest under such Investor’s Investor Note will be automatically converted into a warrant, with an exercise price equal to the Per Unit Purchase Price, to purchase the number of Common Units set forth in the column designated “Number of Bridge Warrant Common Units” (each, a “Bridge Warrant”) opposite such Investor’s name on Schedule 5.14 hereto, and as of the Closing, each such Investor Note will automatically be deemed cancelled and repaid in full and the Company will no longer owe any obligation to the holder of any such Investor Note with respect thereto.  Each such Investor shall surrender to the Company at the Closing for cancellation such Investor’s Investor Note or shall execute an instrument of cancellation in form and substance acceptable to the Company with respect thereto.  Upon such surrender or execution of an instrument of cancellation, the Company shall update its unit ledger and all other applicable books and records to reflect the issuance of the Units to each such Investor and deliver the Bridge Warrant to each such Investor, in each case that such Investor is receiving upon conversion of such Investor’s Investor Note.

 

2.4                               Use of Proceeds.

 

The Company shall use the proceeds from the sale of Units hereunder for general working capital purposes, including but not limited to the expansion of the Company’s business, the purchase 

 

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of additional equipment, the repurchase of certain Common Units as contemplated by Exhibit E to the Right of First Offer and Co-Sale Agreement (as defined below) and the repayment of the debt obligations as set forth on Schedule 5.9.

 

SECTION 3

  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

A Schedule of Exceptions, attached hereto as Schedule B (the “Schedule of Exceptions”), shall be delivered to the Investors in connection with the Closing. Except as set forth on the Schedule of Exceptions, the Company hereby represents and warrants to the Investors, as of the date hereof and as of the Closing (except for the representations and warranties that speak as of a specific date, which shall be made as of such date) as follows:

 

3.1                               Organization, Good Standing and Qualification.

 

The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the requisite limited liability company power and authority to own and operate its properties and assets, to carry on its business as presently conducted and as proposed to be conducted, to execute and deliver this Agreement, the Voting Agreement (as defined below) and the Right of First Offer and Co-Sale Agreement (all such agreements collectively, the “Agreements”), to issue and sell the Units and to perform its obligations pursuant to the Agreements and the Operating Agreement. The Company is presently qualified to do business as a foreign corporation in each jurisdiction where the failure to be so qualified could reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Company’s condition, assets, properties, operating results, business or prospects, financially or otherwise, as now conducted and as proposed to be conducted (a “Material Adverse Effect”).

 

3.2                               Subsidiaries.

 

The Company does not own or control, directly or indirectly, any interest in any corporation, partnership, limited liability company, association or other business entity.  The Company is not a participant in any joint venture, general or limited partnership or similar arrangement.

 

3.3                               Capitalization.

 

After effectiveness of the Operating Agreement and immediately prior to the Closing, the authorized units representing Membership Rights (as defined in the Operating Agreement) in the Company (such units referred to herein as “membership units”) will consist of 5,499,503 Common Units, of which 1,684,186 Common Units are issued and outstanding.  The full capitalization table of the Company, as of immediately after the Closing, is set forth on Schedule C hereto.

 

(a)         The outstanding Common Units have been duly authorized and validly issued in compliance with applicable laws, are fully paid and nonassessable and were issued in accordance with the registration or qualification provisions of the Securities Act of 1933, as amended (the “Securities Act”), and any relevant state securities laws, or pursuant to valid exemptions therefrom.

 

(b)         As of the Closing, the Company has reserved:

 

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(i)             the Units for issuance pursuant to this Agreement;

 

(ii)          216,667 Common Units authorized for issuance to employees, consultants and directors pursuant to the Company’s 2013 Unit Option Plan (the “2013 Plan”), under which options to purchase 158,500 Common Units are outstanding as of the date of this Agreement;

 

(iii)       127,200 Common Units authorized for issuance pursuant to certain warrants to purchase Common Units of the Company that are outstanding as of the date of this Agreement (the “Outstanding Warrants”); and

 

(iv)      37,933 Common Units authorized for issuance pursuant to the Bridge Warrants (as defined below).

 

(c)          The Units, when issued and delivered and paid for in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable. The Units will be free of any liens or encumbrances, other than any liens or encumbrances created by the Investors; provided, however, that the Units are subject to restrictions on transfer under U.S. state and/or federal securities laws and as set forth herein, in the Operating Agreement and in the Right of First Offer and Co-Sale Agreement. Except as set forth in the Operating Agreement or the Right of First Offer and Co-Sale Agreement, the Units are not subject to any preemptive rights or rights of first offer.

 

(d)         Except for the rights provided pursuant to the Right of First Offer and Co-Sale Agreement, the Operating Agreement or as otherwise described in this Agreement, outstanding options to purchase Common Units pursuant to the 2013 Plan, the Outstanding Warrants and the Bridge Warrants, there are no options, warrants, other rights (including conversion or preemptive rights) or agreements to purchase any of the Company’s authorized and unissued membership units.

 

(e)          All outstanding securities of the Company, including, without limitation, all outstanding membership units of the Company, all membership units of the Company issuable upon the conversion or exercise of all convertible or exercisable securities and all other securities that the Company is obligated to issue, are subject to a one hundred eighty (180) day “market stand-off” restriction upon an initial public offering of the Company’s securities pursuant to a registration statement filed with the Securities and Exchange Commission (“SEC”) pursuant to the Securities Act.

 

(f)           Section 3.3(f) of the Schedule of Exceptions sets forth a complete list of each security of the Company owned by any officer, director or, in the Company’s reasonable belief, key employee of the Company, or by any affiliate or any member of the immediate family of any such individual, together with a description of the material terms of the vesting provisions and any rights of first offer and rights of repurchase applicable to each such security.  Except as may be set forth in Section 3.3(f) of the Schedule of Exceptions, no stock plan, stock purchase, stock option or other agreement or understanding between the Company and any holder of any securities or rights exercisable or convertible for securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of the occurrence of any event.

 

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3.4                               Authorization.

 

All limited liability company action on the part of the Company and its managers, officers and members necessary for the authorization, execution, delivery and performance of the Agreements by the Company, the authorization, sale, issuance and delivery of the Units, and the performance of all of the Company’s obligations under the Agreements has been taken or will be taken prior to the Closing. The Agreements, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company, enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by rules of law governing specific performance, injunctive relief or other equitable remedies and by general principles of equity.

 

3.5                               Financial Statements.

 

(a)         The Company has delivered to the Investor (i) the audited balance sheet, statement of operations and statement of members’ equity (deficit) of the Company as of and for the period ended December 31, 2013 (including any notes thereto, the “Audited Financial Statements”) and (ii) the unaudited balance sheet, statement of operations and statement of members’ equity (deficit) of the Company as of and for the period ended July 31, 2014 (including any notes thereto, the “Unaudited Financial Statements” and, together with the Audited Financial Statements, the “Financial Statements”). The Financial Statements are correct in all material respects and present fairly the financial condition and operating results of the Company as of the date(s) and during the period(s) indicated therein. The Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated and with each other, except that the Unaudited Financial Statements do not contain all footnotes required by generally accepted accounting principles.  Except as set forth in the Financial Statements, the Company has no material liabilities (contingent or otherwise) other than (A) liabilities incurred in the ordinary course of business subsequent to, with respect to the Audited Financial Statements, December 31, 2013, and with respect to the Unaudited Financial Statements, July 31, 2014, and (B) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in the Financial Statements, which, in both cases, individually or in the aggregate, are not material to the financial condition or operating results of the Company.  The Company does not have and has not engaged in any off-balance sheet arrangements or transactions.  Except as disclosed in the Financial Statements, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.  The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with generally accepted accounting principles, and the Company’s accounting firm has not informed the Company in writing that it has any material questions, challenges or disagreements regarding or pertaining to the Company’s accounting policies or practices.  The Company has delivered to the Investor copies of each management letter or other letter, if any, delivered to the Company by its accounting firm in connection with such Financial Statements.

 

(b)         The Company maintains a system of accounting and internal controls and procedures as are necessary to provide reasonable assurances that: (i) the financial records and financial statements are complete and accurate in all material respects; (ii) transactions are executed 

 

5

 

with management’s authorization; (iii) transactions are recorded as necessary to permit preparation of the financial statements of the Company and to maintain accountability for the Company’s assets; (iv) access to the Company’s assets is permitted only in accordance with management’s authorization; (v) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis; and (vi) material information regarding the operations of the Company and its financial condition is accumulated and communicated to the Company’s management, including its principal executive and financial officers.  There are no significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting that could reasonably be expected to adversely affect the Company’s ability to record, process, summarize and report financial information, and there is no fraud that involves any of the managers, officers or members of the Company.  The Company has delivered to the Investor copies of each management letter or other letter, if any, delivered to the Company by its accounting firm relating to any review by such accounting firm of the internal controls of the Company.

 

3.6                               Changes.

 

Except as contemplated by this Agreement (including the Schedule of Exceptions hereto), since July 31, 2014, there has not been: (a) any change in the assets, liabilities, financial condition or operating results of the Company from that reflected in the Financial Statements, except changes in the ordinary course of business that have not, in the aggregate, had a Material Adverse Effect; (b) any material change in the contingent obligations of the Company by way of guarantee, endorsement, indemnity, warranty or otherwise; (c) any damage, destruction or loss, whether or not covered by insurance, that, individually or in the aggregate, has resulted in a Material Adverse Effect; (d) any waiver by the Company of a material right or of a material debt owed to it; (e) any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company, except in the ordinary course of business and that is not material to the assets, properties, condition, operating results or business of the Company (as such business is presently conducted and as it is proposed to be conducted); (f) any material change or amendment to a material contract or arrangement by which the Company or any of its assets or properties is bound or subject; (g) any material change in any compensation arrangement or agreement with any employee, officer or manager of the Company; (h) any sale, assignment, license or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets (other than (i) the sale or license of the Company’s products and services in the ordinary course of business, (ii) acquisition of Off-the-Shelf Software or Public Software, (iii) disclosure or receipt of confidential information pursuant to non-disclosure agreements in substantially the forms provided to the Investors and entered into in the ordinary course of business, or (iv) assignments to the Company pursuant to agreements with employees, consultants and contractors entered into in the ordinary course of business); (i) any resignation or termination of employment of any officer or key employee of the Company; (j) any mortgage, pledge, transfer of a security interest in, or lien, created by the Company, with respect to any of its material properties or assets, except liens for taxes not yet due or payable; (k) any loans or guarantees made by the Company to or for the benefit of its employees, officers, managers or members holding more than ten percent (10%) of the voting interests of the Company, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business; (l) any debt, obligation or liability incurred, assumed or guaranteed by the Company except for those incurred in the ordinary course of the Company’s business (but not in excess of $50,000 in the aggregate) and in amounts which would not, individually, reasonably be

 

6

 

expected to have a Material Adverse Effect; (m) any declaration, setting aside or payment or other distribution in respect of any of the Company’s membership units, or any direct or indirect redemption, purchase or other acquisition of any of such membership units by the Company other than the repurchase of membership units from employees, officers, managers or consultants pursuant to agreements approved by the Board of Managers of the Company under which the Company has the option to repurchase such shares at cost upon the occurrence of certain events, such as termination of employment or consultancy; (n) any failure to conduct business in the ordinary course, consistent with the Company’s past practices; (o) to the best of the Company’s knowledge, any other event or condition of any character that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; or (p) any agreement or commitment by the Company to do any of the things described in this Section 3.6.

 

3.7                               Intellectual Property.

 

(a)         Definitions:

 

(i)             “Off-the-Shelf Software” means any software (including software provided on a “software as a service” or similar basis) that is made generally and widely available to the public on a commercial basis and is licensed or otherwise made available to the Company on a non-exclusive basis under standard terms and conditions and, in each case, is used by the Company solely for its internal operations and is nor provided, or included in materials provided, to its customers.

 

(ii)          “Public Software” means any software that contains, includes, incorporates, or has instantiated therein, or is derived in any manner (in whole or in part) from, any software that is distributed as free software, open source software (e.g., Linux) or similar licensing or distribution models, including software licensed or distributed under any of the following licenses or distribution models, or licenses or distribution models similar to any of the following: (1) GNU’s General Public License (GPL) or Lesser/Library GPL (LGPL); (2) the Artistic License (e.g., PERL); (3) the Mozilla Public License; (4) the Netscape Public License; (5) the Sun Community Source License (SCSL); (6) the Sun Industry Standards License (SISL); (7) the BSD License; and (8) the Apache License.

 

(b)         To the knowledge of the Company, the Company owns or possesses sufficient legal rights to use all patents, trademarks, service marks, trade names, domain names, copyrights, trade secrets, licenses, information, processes and other proprietary rights used in or necessary to the business of the Company as presently conducted, without any conflict with or infringement of the rights of others.

 

(c)          Section 3.7(c) of the Schedule of Exceptions contains a complete list of all of the United States and foreign registered intellectual property rights that have not expired or been abandoned, including issued patents and pending patent applications, copyrights, trademarks and domain names owned by the Company (the “Company Registered IP”).  All of the Company Registered IP is valid and subsisting and in full force and effect.  There are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership arrangements of any kind granted by the Company relating to the Company Registered IP.

 

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(d)         The Company is not bound by or a party to any written options, licenses, agreements, claims, encumbrances or shared ownership arrangements of any kind with respect to the patents, trademarks, service marks, trade names, domain names, copyrights, trade secrets, licenses, information, processes and other proprietary rights of any other person or entity, except, in any case, for (i) standard end-user agreements with respect to Off-the-Shelf Software or Public Software, (ii) agreements regarding the license to use the Company’s Customer Portal in connection with the sale of the Company’s products and services in the ordinary course of business, (iii) agreements with respect to the disclosure or receipt of confidential information entered into in the ordinary course of business, and (iv) assignments to the Company of any such patents, trademarks, service marks, trade names, domain names, copyrights, trade secrets, licenses, information, processes and other proprietary rights pursuant to agreements with employees, consultants and contractors entered into in the ordinary course of business.

 

(e)          The Company has not received any written communications alleging that the Company has violated or, by conducting its business as proposed would violate, any of the patents, trademarks, service marks, trade names, domain names, copyrights or trade secrets or other proprietary rights of any other person or entity, nor, to the Company’s knowledge, is there any reasonable basis therefor.

 

(f)           The Company is not obligated to make any payments by way of royalties, fees or otherwise to any owner of, licensor of or claimant to any intellectual property or other proprietary rights with respect to the use of such rights in connection with the conduct of the Company’s business as now conducted or as proposed to be conducted other than fees or other payments due pursuant to agreements for Off-the-Shelf Software.

 

(g)          The Company is not aware that any of its officers or other employees is obligated under (i) any intellectual property or proprietary information-related terms, conditions or provisions of any contract (including licenses, covenants or commitments of any nature) or other agreement or (ii) any judgment, decree or order of any court or administrative agency or any other restriction relating to intellectual property or proprietary information, in each case that would interfere with the use of his or her best efforts to promote the interests of the Company or that would conflict with the Company’s business as now conducted or that would prevent such officers or other employees from assigning to the Company inventions conceived or reduced to practice in connection with services rendered to the Company.  The execution and delivery of the Agreements will not, to the Company’s knowledge, (x) conflict with or result in a breach of the intellectual property or proprietary information-related terms, conditions or provisions of, or constitute a default under, any contract (including licenses, covenants or commitments of any nature) or other agreement or (y) conflict with or result in a breach of, or constitute a default under, any judgment, decree or order of any court or administrative agency or any other restriction relating to intellectual property or proprietary information, in each case under which any officer or other employee of the Company is now obligated.

 

(h)         The Company does not believe it is or will be necessary to utilize any inventions of any of its employees made prior to or outside the scope of their employment by the Company except to the extent that the Company can obtain rights to such inventions pursuant to agreements for Off-the-Shelf Software or Public Software.

 

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(i)             In the past three years, there has not been any litigation commenced or threatened in writing against the Company with respect to any of its intellectual property or other proprietary rights.

 

3.8                               Employee Proprietary Information and Inventions Agreements.

 

(a)         Each current and former employee and consultant of the Company has executed, as applicable, (i) an employee proprietary information and inventions assignment agreement or (ii) an independent contractor agreement containing proprietary information and inventions assignment provisions in favor of the Company, in each case in substantially the forms provided to the Investor.  Except as set forth on Section 3.8 of the Schedule of Exceptions, no such person has excluded from any such agreement any works or inventions that were made by such person before their employment or consulting relationship with the Company and that are relevant to the Company’s business as now conducted or as proposed to be conducted except to the extent that the Company can obtain rights to such works or inventions pursuant to agreements for Off-the-Shelf Software or Public Software.  The Company is not aware that any of its current or former employees or consultants is in violation thereof.

 

(b)         No third party has claimed in writing, or to the Company’s knowledge has reason to claim, that any employee or consultant of the Company (i) has violated or may be violating any of the terms or conditions of such employee’s or consultant’s employment, non-competition, non-solicitation or non-disclosure agreement with such third party or (ii) has or may have disclosed or utilized any trade secret or proprietary information or documentation of such third party in a manner that violated any confidential relationship which such third party.

 

3.9                               Title to Properties and Assets; Liens.

 

(a)         The Company has good title in and to its tangible personal property and assets (excluding real property) free and clear of all mortgages, liens, loans and encumbrances, except for Permitted Liens.  With respect to the tangible personal property and assets it leases, the Company is in compliance with such leases in all material respects and holds a valid leasehold interest free of any liens, claims or encumbrances.  All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by the Company are in good operating condition and repair (subject to ordinary wear and tear) and are reasonably fit and usable for the purposes for which they are being used.

 

(b)         Except for Permitted Liens, the Company has good title or a valid leasehold interest in and to each parcel of real property that it owns or leases, as applicable, free of any liens, claims or encumbrances.  The Company has not received any written notice of any material condemnation, rezoning or taking actions pending, or, to the Company’s knowledge, threatened, with respect to any parcel of real property owned by the Company.

 

(c)          As used herein, the term “Permitted Liens” means (i) statutory liens for taxes imposed in the ordinary course of business, which are not yet delinquent or are being contested in good faith by appropriate proceedings, (ii) statutory or common law liens or encumbrances to secure landlords, lessors or renters under leases or rental agreements, (iii) deposits or pledges made in connection with, or to secure payment of, workers compensation, unemployment insurance, old age

 

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pension or other social security programs, (iv) statutory or common law liens or encumbrances in favor of carriers, warehousemen, mechanics and materialmen to secure claims for labor, materials or supplies and other like liens or encumbrances, in each case arising in the ordinary course of business for sums which are not yet delinquent or are being contested in good faith by appropriate proceedings, (v) liens or encumbrances imposed on the underlying fee interest in real property leased, subleased or licensed by the Company, solely to the extent a violation of or default under any such lien or encumbrance would not impact the Company’s lease, sublease or license of such real property, (vi) any zoning, land use or other similar governmental restrictions reserving the right of a governmental authority to control or regulate any Company owned or leased real property, (vi) restrictions on transfer of securities imposed by applicable state and federal securities laws, (vii) liens and encumbrances set forth in Section 3.9 of the Schedule of Exceptions and (viii) such encumbrances and liens as do not materially impair the Company’s ownership or use of such property or assets.

 

3.10                        Compliance with Other Instruments.

 

The Company is not in violation of its Certificate of Formation as in effect on the date hereof or any term of the Operating Agreement, as amended to date, or, in any material respect, of any term or provision of any mortgage, indebtedness, indenture, contract, agreement, instrument, judgment, order or decree to which it is party or by which it is bound.  To the best of the Company’s knowledge, the Company is not in violation of any federal, state or local statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof applicable to the Company, the conduct of its business or its properties.  The execution and delivery of the Agreements by the Company, the performance by the Company of its obligations pursuant to, and consummation of the transactions contemplated by, the Agreements (including, without limitation, the Company’s offer to purchase its units as described on Exhibit E to the Right of First Offer and Co-Sale Agreement and the consummation of such offer), and the issuance of the Units, will not (a) result in any violation of, or conflict with, or constitute, with or without the passage of time and giving of notice, a default under, or constitute an event that could entitle any counterparty or other third party to exercise any additional rights under or result in the acceleration of the maturity of any material indebtedness of the Company or the performance of any obligation of the Company under, the Company’s Certificate of Formation or its Operating Agreement or any such mortgage, indebtedness, indenture, contract, agreement, instrument, judgment order or decree, (b) result in the violation of, or conflict with, any federal or state statute, rule or regulation applicable to the Company or its properties, (c) constitute an event that results in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company, or (d) constitute an event that results in the suspension, revocation, impairment, forfeiture or nonrenewal of any material franchise, permit, license, authorization or approval (all such franchises, permits, licenses, authorizations or approvals, collectively, “Permits”) applicable to the Company, its business or operations or any of its assets or properties.

 

3.11                        Litigation.

 

(a)         No actions (including, without limitation, derivative actions), suits or proceedings are pending or, to the knowledge of the Company, threatened against the Company at law or in equity in any court or before any other governmental authority.  The foregoing includes, without limitation, to the knowledge of the Company, actions, suits or proceedings pending or threatened (or

 

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any basis therefor known to the Company) involving the prior employment or consulting relationship of any of the Company’s employees or consultants, their use in connection with the Company’s business of any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers.  None of the Company nor any of its managers or officers, in their capacity as such, is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality, which, in the case of the Company’s mangers and officers, could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  There is no action, suit or proceeding by the Company currently pending or that the Company intends to initiate.

 

(b)         The Company has not admitted in writing its inability to pay its debts generally as they become due, filed or consented to the filing against it of a petition in bankruptcy or a petition to take advantage of any insolvency act, made an assignment for the benefit of creditors, consented to the appointment of a receiver for itself or for the whole or any substantial part of its property, or had a petition in bankruptcy filed against it, been adjudicated a bankrupt or filed a petition or answer seeking reorganization or arrangement under any bankruptcy laws or any other similar law or statute of the United States of America or any other jurisdiction.

 

3.12                        Governmental Consents.

 

No consent, approval, order or authorization of or registration, qualification, designation, declaration or filing with any governmental authority on the part of the Company is required in connection with the valid execution and delivery of the Agreements, or the offer, sale or issuance of the Units, or the consummation of any other transaction contemplated by the Agreements, except (i) the filing of such notices as may be required under the Securities Act and (ii) such filings as may be required under applicable state securities laws, which will be timely filed within the applicable periods therefor.

 

3.13                        Offering.

 

Subject to the accuracy of the Investors’ representations and warranties in Section 4, the offer, sale and issuance of the Units to be issued in conformity with the terms of this Agreement, constitute transactions exempt from the registration requirements of Section 5 of the Securities Act and will not result in a violation of the qualification or registration requirements of applicable state securities laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption.

 

3.14                        Registration and Voting Rights.

 

The Company is presently not under any obligation and has not granted, or agreed to grant, any rights to register under the Securities Act any of its presently outstanding securities or any of its securities that may hereafter be issued. To the Company’s knowledge, except as contemplated in the Voting Agreement, no member or any other person or entity of the Company has entered into any agreements with respect to the voting of membership units of the Company.

 

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3.15                        Agreements; Actions.

 

(a)         Except as set forth in Section 3.15(a) of the Schedule of Exceptions, except for agreements explicitly contemplated hereby and by the other Agreements, and except for salary, bonus and benefits paid to or stock option or stock purchase agreements with officers or employees of the Company, there are no material agreements, understandings or proposed transactions between the Company and any of its current or former officers, members, managers or affiliates, or any affiliate thereof.

 

(b)         Except as set forth in Section 3.15(b) of the Schedule of Exceptions, there are no leases, agreements, commitments, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party or by which it is bound that (i) may involve obligations (contingent or otherwise) of, or payments to, the Company in excess of $250,000 or that set forth rights or obligations material to the Company or its business that extend for more than six months after the date of this Agreement, (ii) constitute firm delivery contracts or arrangements, pursuant to which the Company is obligated to perform thereunder on a firm commitment rather than an interruptible basis, (iii) constitute fixed price contracts or arrangements, pursuant to which the Company is obligated to provide goods or perform services based on a fixed rather than a variable price, (iv) may involve the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than (A) licenses for Off-the-Shelf Software or Public Software, (B) agreements regarding the license to use the Company’s Customer Portal in connection with the sale of the Company’s products and services in the ordinary course of business, (C) disclosure or receipt of confidential information pursuant to non-disclosure agreements in substantially the form provided to the Investors and entered into in the ordinary course of business, or (D) assignment to the Company pursuant to agreements with employees, consultants and contractors entered into in the ordinary course of business), (v) may involve provisions restricting or affecting the development, manufacture or distribution of the Company’s products or services, in each case, by the Company, (vi) may involve indemnification by the Company with respect to infringements of proprietary rights (other than in connection with the sale or license of the Company’s products and services in the ordinary course of business), or (vii) may involve agreements not to compete with any person or entity or not to engage in any particular line of business (all of the foregoing, collectively, “Material Contracts”).  All of the Material Contracts are valid, binding and in full force and effect and enforceable by the Company in accordance with their respective terms, as limited by laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies and by general principles of equity.  The Company is not in material violation of or default under any Material Contract and, to the knowledge of the Company, no other party to any of the Material Contracts is in material violation thereof or default thereunder, except for such violations or defaults as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has made available to the Investor true, correct and complete copies of each Material Contract.

 

(c)          The Company has not (i) authorized or made any distribution upon or with respect to any or its membership units, (ii) incurred any outstanding indebtedness for money borrowed or any other liabilities, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its material assets or rights, other than the sale of its inventory in the ordinary course of business.

 

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(d)         The Company is not a party to and is not bound by any contract, agreement or instrument, or subject to any restriction under its Operating Agreement that, individually or in the aggregate, has or could reasonably be expected to have a Material Adverse Effect.

 

(e)          Neither the Company nor any member holding more than ten percent (10%) of the voting interests in the Company has engaged in the past three (3) months in any discussion (i) with any representative of any corporation or corporations regarding the consolidation or merger of the Company with or into any such corporation or corporations, (ii) with any corporation, partnership, association or other business entity or any individual regarding the sale, conveyance or disposition of all or substantially all of the assets of the Company or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, or (iii) regarding any other form of acquisition, liquidation, dissolution or winding up of the Company.

 

3.16                        Related-Party Transactions.

 

Other than the Investor Notes (as defined below), no current or former employee, officer manager or member holding more than ten percent (10%) of the voting interests of the Company or , to the best of the Company’s knowledge, member of his or her immediate family is indebted to the Company, nor is the Company indebted (or committed to make loans or extend or guarantee credit) to any of them other than for accrued salaries, reimbursement for reasonable expenses incurred on the Company’s behalf or other standard employee benefits.  To the best of the Company’s knowledge, none of such persons has any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation that competes with the Company, except that employees, officers or managers of the Company and members of their immediate families may own stock in publicly-traded companies that may compete with the Company to the extent of not more than five percent (5%) of the issued and outstanding securities of such companies.  No current or former officer, manager or employee or, to the best of the Company’s knowledge, no member of the immediate family of any officer, manager or employee of the Company is directly or indirectly interested in any material contract with the Company.

 

3.17                        Permits.

 

The Company has all Permits required by law and necessary for the conduct of its business as now being conducted, the lack of which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and all such Permits are current and valid.  The Company is not in default in any material respect under any of such Permits.  The Company has not received any written notice of proceedings relating to the revocation, suspension or modification of any such Permit which, if the subject of an unfavorable decision, ruling or finding, would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

3.18                        Environmental and Safety Laws.

 

To the Company’s knowledge, the Company is not, and at no time has been, in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, where such violation could reasonably be expected to have a Material Adverse Effect, and to the Company’s knowledge, no material expenditures are required as of the date hereof in order to

 

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comply with any such existing statute, law or regulation.  As used herein, “Environmental Laws” means all applicable federal, state and local laws, rules, regulations, codes, ordinances, judgments, decrees and the common law governing or regulating the environment, employee health or safety, including the federal Clean Air Act, the federal Clean Water Act, the federal Resource Conservation and Recovery Act, the federal Comprehensive Environmental Response, Compensation and Liability Act, the federal Toxic Substances Control Act and their state and local counterparts.  The term “Hazardous Materials” means the existence in any form of polychlorinated biphenyls, asbestos or asbestos containing materials, urea formaldehyde foam insulation, oil, gasoline, petroleum, petroleum products and petroleum-derived substances (other than in vehicles operated in the ordinary course of business), pesticides and herbicides, and any other chemical, material or substance regulated by a governmental authority under any Environmental Laws.  The Company’s operations of its facilities and properties owned or leased have been in material compliance with the Environmental Laws, and the Company has not stored, used, disposed of, treated, released or discharged Hazardous Materials in material violation of Environmental Laws.  The Company has not received any written notice from any governmental body claiming any material violation by the Company of any Environmental Law, or requiring the Company to undertake any material environmental investigation, cleanup or remedial work to comply with Environmental Laws, and the Company has not received any written notice claiming that a release of Hazardous Materials has occurred or existed on, in or under any facility or property owned, leased or operated currently or in the past by the Company that required remediation by the Company.  The Company has provided to the Investors copies of any Phase 1 or Phase 2 Environmental Site Assessment reports relating to the properties of the Company in its possession.

 

3.19                        Employee Benefit Plans.

 

Section 3.19 of the Schedule of Exceptions sets forth each employee benefit plan maintained, established or sponsored by the Company, or which the Company participates in or contributes to, that is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  The Company has made all required contributions and has no liability to any such employee benefit plan, other than liability for health plan continuation coverage described in Part 6 of Title I(B) of ERISA, and has complied in all material respects with all applicable laws for any such employee benefit plan.  The Company and its ERISA Affiliates are not and have not ever maintained or been obligated to contribute to a Multiple Employer Plan, a Multi-Employer Plan or a Defined Benefit Pension Plan.  For purposes of this Agreement, (a) “ERISA Affiliate” means, with respect to any person or entity, any other person or entity that is a member of a “controlled group of corporations” with, or is under “common control” with, or is a member of the same “affiliated service group” with such person or entity as defined in Section 414(b), 414(c), or 414(m) or 414(o) of the Internal Revenue Code of 1986, as amended (the “Code”), (b) “Multi-Employer Plan” shall have the meaning set forth in Section 3(37) of ERISA, (c) “Multiple Employer Plan” shall have the meaning set forth in Section 413 of the Code and (d) “Defined Benefit Pension Plan” shall have the meaning set forth in Section 3(35) of ERISA.

 

3.20                        Tax Returns, Payments and Elections.

 

The Company has filed all material tax returns and reports as required by law.  All such returns and reports are true and correct in all material respects.  The Company has paid all material taxes and other assessments due, except those contested by it in good faith and that are listed in

 

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Section 3.20 of the Schedule of Exceptions, if any.  The provision for taxes of the Company as shown in the Financial Statements is adequate for taxes due or accrued as of the date thereof.  The Company has not made any elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company is treated as a partnership for federal income tax purposes and has not elected to be treated other than as a partnership for income tax purposes under the Code.  The Company has never had any tax deficiency proposed or assessed against it and has not executed any waiver of any statute of limitations on the assessment or collection of any tax or governmental charge.  None of the Company’s federal income tax returns and none of its state income or franchise tax or sales or use tax returns has ever been audited by governmental authorities.  Since the date of the Financial Statements, the Company has not incurred any taxes, assessments or governmental charges other than in the ordinary course of business and the Company has made adequate provisions on its books of account for all taxes, assessments and governmental charges with respect to its business, properties and operations for such period.  The Company has withheld or collected from each payment made to each of its employees, the amount of all taxes (including, but not limited to, federal income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes) required to be withheld or collected therefrom, and has paid the same to the proper tax receiving officers or authorized depositories.

 

3.21                        Insurance.

 

The Company has in full force and effect (a) fire and casualty insurance policies, with financially sound and reputable insurers, with extended coverage, sufficient in amount (subject to reasonable deductibles) to allow it to replace any of its material tangible properties that might be damaged or destroyed and in all other respects customary for similarly situated companies, (b) insurance against other hazards, risks and liabilities to persons and property to the extent and in the manner customary for similarly situated companies and (c) directors and officers liability insurance in coverage and amounts customary for similarly situated companies.

 

3.22                        Company Records.

 

The Company has made available to the Investor true and complete copies of its Certificate of Formation and Operating Agreement, each as amended to date and as in full force and effect as of the date hereof.  The minute books of the Company provided or made available to the Investor contain a complete summary of all meetings and written consents of the Board of Managers and the members of the Company since the time of the Company’s formation and reflect all transactions referred to in such minutes or written consents accurately in all material respects.

 

3.23                        Labor Agreements and Actions; Employee Compensation.

 

(a)         The Company is not and has never been bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union or other collective bargaining representative, and no labor union or other collective bargaining representative has requested or, to the best of the Company’s knowledge, has sought to represent any of the employees, representatives or agents of the Company.  There is no pending, or to the best of the Company’s knowledge, threatened (i) strike or other labor dispute involving the Company, (ii) material charge, grievance proceeding or other

 

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claim against or affecting the Company relating to the alleged violation of any law pertaining to labor relations or employment matters, including any charge or complaint filed by an employee or union with the National Labor Relations Board, the Equal Employment Opportunity Commission or any comparable Governmental Authority, (iii) employee or union organizational activity or other labor or employment dispute against or affecting the Company, or (iv) application for certification of a collective bargaining agent.

 

(b)         Except as set forth on the Schedule of Exceptions, the Company is not a party to or bound by any currently effective employment contract, deferred compensation agreement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employee compensation agreement.  The Company does not have a present intention to terminate the employment of any of its officers or other key employees, and the Company, to the best of its knowledge, does not know of the impending resignation or termination of employment of any such officer or key employee.  The employment of each officer and employee of the Company is terminable at the will of the Company and at the will of the officer or employee, without advance notice by the Company or the officer and employee and without any obligation by the Company for payment of compensation or damages.  The Company has paid in full to all of its current and former officers and other employees all wages, salaries, commissions, bonuses and other compensation due to such officers and other employees and there are no severance payments which are or could become payable by the Company to any such officer or employee under the terms of any oral or written agreement or commitment or any applicable law, custom, trade or practice.

 

(c)          To the best of its knowledge, the Company has at all times complied in all material respects with all applicable state and federal laws related to employment and employment practices, including, without limitation, all applicable laws regarding wages and hours, the collection and payment of withholding and/or social security taxes, employment documentation, equal employment opportunities, fair employment practices, plant closings and mass layoffs, sexual harassment, discrimination based on sex, race, disability, health status, pregnancy, religion, national origin, age or other tortious conduct, workers’ compensation, family and medical leave, the Immigration Reform and Control Act, and occupational safety and health requirements, and the Company has not engaged in any unfair labor practice.  The Company is not, nor has it ever been, liable for the payment of any compensation, damages, taxes, fines, penalties or other amounts, however designated, for failure to comply with any of the foregoing.  The Company is and has at all times been in compliance in all material respects with its obligations under the Worker Adjustment and Retraining Notification Act, as applicable, and similar applicable laws, and all other notification and bargaining obligations arising under any applicable agreement, statute, or otherwise.

 

(d)         All persons that are performing or have performed services for the Company and are classified by the Company as non-employees, including, without limitation, independent contractors, consultants, or otherwise, do satisfy and have satisfied the requirements of applicable law to be so classified, and the Company has fully and accurately reported its compensation on Internal Revenue Service Forms 1099 when required to do so.  The Company has no direct or indirect liability, whether absolute or contingent, with respect to any misclassification of any person as an independent contractor rather than as an employee or vice versa, or with respect to any employee leased from another employer.

 

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3.24                        Section 83(b) Elections.

 

To the best of the Company’s knowledge, all individuals who have purchased unvested membership units of the Company have timely filed elections under Section 83(b) of the Code and any analogous provisions of applicable state tax laws.

 

3.25                        Investment Company.

 

The Company is not an “investment company” or a company “controlled” by an “investment company,” within the meanings of the Investment Company Act of 1940, as amended.

 

3.26                        Real Property Holding Company.

 

The Company is not a “real property holding company” within the meaning of Section 897 of the Code.

 

3.27                        No “Bad Actor” Disqualification.

 

The Company has exercised reasonable care, in accordance with SEC rules and guidance, to determine whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act (“Disqualification Events”).  To the Company’s knowledge, no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act.  The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act.  “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company; any predecessor or affiliate of the Company; any director, executive officer, other officer participating in the offering, general partner or managing member of the Company; any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the sale of the Units; and any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Units (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or other officer participating in the offering of any Solicitor or general partner or managing member of any such Solicitor.

 

3.28                        Anti-Corruption.

 

Neither the Company nor, to the Company’s knowledge, any agent or other person acting on behalf of the Company has: (a) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (b) made any unlawful  payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (c) failed to disclose fully any material contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (d) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended or any other applicable anti-corruption or anti-bribery law.

 

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3.29                        Money Laundering Laws.

 

The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to any Money Laundering Laws is pending or, to the best of the Company’s knowledge, threatened.

 

3.30                        OFAC.

 

Neither the Company nor any of its officers or managers, nor, to the best of the Company’s knowledge, any of its employees, consultants, agents or affiliates is or has been the subject or target of any sanctions or trade embargoes administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

3.31                        Brokers or Finders.

 

Other than Raymond James & Associates (“Raymond James”), the Company has not engaged any brokers, finders or agents.  Other than the Company’s payment obligation to Raymond James if the Closing occurs, the Company has not incurred, and will not incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Agreements, the offer, sale and issuance of the Units or any of the other transactions contemplated hereby and thereby.

 

3.32                        Disclosure.

 

The Company has fully provided the Investor with all the information that the Investor has requested for deciding whether to purchase the Units. None of the Agreements, nor any other statements or certificates made or delivered in connection herewith or therewith contains any untrue statement of a material fact or, to the best of the Company’s knowledge, omits to state a material fact necessary to make the statements herein or therein not misleading, in light of the circumstances in which they were made.  With respect to any projections of its future operations provided to the Investor by the Company, the Company represents that such projections were prepared in good faith and that the Company believes there is a reasonable basis for such projections.

 

3.33                        Customers and Suppliers.

 

Section 3.33 of the Schedule of Exceptions sets forth the ten (10) largest customers of the Company by revenue and the ten (10) largest suppliers of the Company by expense, in each case for the twelve (12) month period ended on December 31, 2013 and the seven (7) month period ended July 31, 2014 (each, a “Material Customer” or “Material Supplier” as applicable).  No Material Customer or Material Supplier has terminated or adversely changed its relationship with the Company, and, to the best of the Company’s knowledge, no Material Customer or Material Supplier intends to terminate or adversely change such relationship.  The Company has not granted any credit, rebate, trade-in, free return or other sales terms to customers or others which materially differ

 

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from terms granted in the ordinary course of business consistent with past practice.  There are no currently pending or threatened disputes between the Company and any of its customers or suppliers that (i) could reasonably be expected to adversely affect the relationship between the Company and any Material Customer or Material Supplier or (ii) could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

3.34                        Regulatory Matters.

 

(a)         The Company is not a “natural-gas company” as such term is defined in the Natural Gas Act of 1938 as amended and codified at 15 U.S.C. §717 et seq. (“Natural Gas Act”).  The Investor shall not, solely by virtue of the execution and delivery of the Agreements, the purchase of the Units, the consummation of the transactions contemplated by the Agreements, and the performance of obligations under the Agreements, be or become subject to regulation as a “natural-gas company” as such term is defined in the Natural Gas Act.

 

(b)         The Company is not a “gas utility company,” a “holding company”, a “natural gas company,” a “public-utility company,” an “affiliate” or a “subsidiary company” as such terms are defined under the Public Utility Holding Company Act of 2005 and the Federal Energy Regulatory Commission’s implementing regulations at 18 C.F.R. §366 (“PUHCA 2005”).  The Investor shall not, solely by virtue of the execution and delivery of the Agreements, the purchase of the Units, the consummation of the transactions contemplated by the Agreements and the performance of obligations under the Agreements, be or become subject to regulation under PUHCA 2005.

 

(c)          The Company does not own, lease or operate a “natural gas facility,” a “natural gas transmission line,” a “manufactured-gas facility,” a “storage facility” or any structure incident to any of the above as such terms are defined in 30 V.S.A. §248.  The Company is regulated under Vermont law as provided in the State of Vermont Public Service Board Declaratory Ruling re: Regulatory Status of NG Advantage LLC, Docket No. 7866 (Oct. 10, 2012).  To the knowledge of the Company, the Company is not a “gas corporation” as such term is defined in New York Public Service Law §2(11).  The Company does not own, lease or operate “gas plant” as such term is defined in New York Public Service Law §2(10).  The Company is not subject to rate or financial and organizational regulation as a utility under the laws of the State of Vermont (except as expressly set forth above), the State of New York, the State of New Hampshire, the Commonwealth of Massachusetts or, to the Company’s knowledge, any other U.S. state or local jurisdiction.  The Investor shall not, solely by virtue of the execution and delivery of the Agreements, the purchase of the Units, the consummation of the transactions contemplated by the Agreements and the performance of obligations under the Agreements, be or become subject to rate or financial and organizational regulation as a utility under the laws of the State of Vermont, the State of New York, the State of New Hampshire, the Commonwealth of Massachusetts or, to the Company’s knowledge, any other U.S. state or local jurisdiction.

 

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SECTION 4

 

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

 

Each Investor hereby, severally and not jointly, represents and warrants to the Company, as of the date hereof and as of the Closing (except for the representations and warranties that speak as of a specific date, which shall be made as of such date) as follows:

 

4.1                               No Registration.

 

The Investor understands that the sale and issuance of the Units have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor’s representations as expressed herein or otherwise made pursuant hereto.

 

4.2                               Investment Intent.

 

The Investor is acquiring the Units for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. The Investor further represents that it does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity or to any third person or entity with respect to any of the Units.

 

4.3                               Investment Experience.

 

The Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company and acknowledges that the Investor can protect its own interests. The Investor has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of its investment in the Company.

 

4.4                               Speculative Nature of Investment.

 

The Investor understands and acknowledges that the Company has a limited financial and operating history and that an investment in the Company is highly speculative and involves substantial risks. The Investor can bear the economic risk of the Investor’s investment and is able, without impairing the Investor’s financial condition, to hold the Units for an indefinite period of time and to suffer a complete loss of the Investor’s investment.

 

4.5                               Accredited Investor.

 

The Investor is an “accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated by the SEC under the Securities Act and shall submit to the Company such further assurances of such status as may be reasonably requested by the Company.

 

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4.6                               Residency.

 

The residency of the Investor (or, in the case of a partnership or corporation, such entity’s principal place of business) is correctly set forth on the Schedule of Investors.

 

4.7                               Rule 144.

 

The Investor acknowledges that the Units must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available. The Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit resale of securities purchased in a private placement subject to the satisfaction of certain conditions, which may include, among other things, the availability of certain current public information about the Company; the resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of securities being sold during any three-month period not exceeding specified limitations; the sale being effected through a “brokers’ transaction,” a transaction directly with a “market maker” or a “riskless principal transaction” (as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, if applicable. The Investor understands that the current public information about the Company referred to above is not now available and the Company has no present plans to make such information available. The Investor acknowledges and understands that the Company may not be satisfying the current public information requirement of Rule 144 at the time the Investor wishes to sell the Units, and that, in such event, the Investor may be precluded from selling such securities under Rule 144, even if the other applicable requirements of Rule 144 have been satisfied. The Investor acknowledges that, in the event the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the Units. The Investor understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

 

4.8                               No Public Market.

 

The Investor understands and acknowledges that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company’s securities.

 

4.9                               Authorization.

 

(a)         The Investor has all requisite power and authority to execute and deliver the Agreements, to purchase the Units hereunder and to carry out and perform its obligations under the terms of the Agreements. All action on the part of the Investor necessary for the authorization, execution, delivery and performance of the Agreements, and the performance of all of the Investor’s obligations under the Agreements, has been taken or will be taken prior to the Closing.

 

(b)         The Agreements, when executed and delivered by the Investor, will constitute valid and legally binding obligations of the Investor, enforceable in accordance with their terms

 

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except: (i)  as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies or by general principles of equity.

 

(c)          No consent, approval, authorization, order, filing, registration or qualification of or with any court, governmental authority or third person is required to be obtained by the Investor in connection with the execution and delivery of the Agreements by the Investor or the performance of the Investor’s obligations hereunder or thereunder.

 

4.10                        Brokers or Finders.

 

The Investor has not engaged any brokers, finders or agents, and the Investor has not incurred, and will not incur, directly or indirectly, as a result of any action taken by the Investor, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Agreements.

 

4.11                        Tax Advisors.

 

The Investor has reviewed with its own tax advisors the U.S. federal, state, local and foreign tax consequences of acquiring, owning and holding the Units. With respect to such matters, the Investor relies solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Investor understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of acquiring, owning and holding the Units.  Notwithstanding any potential contrary interpretation, nothing in this Section 4.11 shall affect any of the Company’s representations and warranties regarding tax matters set forth herein and the Company’s indemnification obligations set forth in Section 7.7.

 

4.12                        Legends.

 

The Investor understands and agrees that the certificates evidencing the Units, or any other securities issued in respect of the Units upon any unit split, unit dividend, recapitalization, merger, consolidation or similar event, shall bear the following legend (in addition to any legend required by the Agreements or under applicable state securities laws):

 

“THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.”

 

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SECTION 5

 

CONDITIONS TO INVESTORS’ OBLIGATIONS TO CLOSE

 

Each Investor’s obligation to purchase the Units at the Closing is subject to the fulfillment on or before the Closing of each of the following conditions, unless waived by the applicable Investor purchasing the Units in the Closing:

 

5.1                               Representations and Warranties.

 

Except as set forth in or modified by the Schedule of Exceptions, the representations and warranties made by the Company in Section 3 shall be true and correct as of the date of the Closing with the same force and effect as though such representations and warranties had been made as of such date.

 

5.2                               Covenants.

 

The Company shall have performed or complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by the Company on or prior to the Closing.

 

5.3                               Blue Sky.

 

The Company shall have obtained all necessary Blue Sky law permits and qualifications, or have the availability of exemptions therefrom, required by any state for the offer and sale of the Units.

 

5.4                               Operating Agreement.

 

The Operating Agreement shall have been duly authorized, executed and delivered by the members holding sufficient membership units to make such agreement effective.

 

5.5                               Voting Agreement.

 

The Company, the Founders, and the Investors holding sufficient membership units to make such agreement effective (each such term as described in the amended and restated voting agreement in substantially the form of Exhibit C (the “Voting Agreement”)) shall have executed and delivered the Voting Agreement.

 

5.6                               Right of First Offer and Co-Sale Agreement.

 

The Company, the Founders and the Investors holding sufficient membership units to make such agreement effective (each such term as described in the amended and restated right of first offer and co-sale agreement in substantially the form of Exhibit D (the “Right of First Offer and Co-Sale Agreement”)) shall have executed and delivered the Right of First Offer and Co-Sale Agreement.

 

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5.7                               Closing Deliverables.

 

The Company shall have delivered to counsel to the Investors (or their respective counsel, if any) the following:

 

(a)         a certificate executed by the Chief Executive Officer of the Company on behalf of the Company, in substantially the form of Exhibit E, certifying to the satisfaction of the conditions to closing listed in Sections 5.1 and 5.2.

 

(b)         a certificate executed by the Secretary of the Company on behalf of the Company, in substantially the form of Exhibit F, certifying to the accuracy and completeness of the Company’s Certificate of Formation, Operating Agreement, resolutions adopted by the Board of Managers approving the Agreements and the transactions contemplated thereby, and the incumbency of all officers of the Company signatory to any of the Agreements or any other documents referenced therein.

 

(c)          a certificate of the Secretary of State of the State of Delaware dated as of a date within five days of the date of the Closing, with respect to the good standing of the Company.

 

5.8                               Indemnification Agreement.

 

The Company shall enter into an indemnification agreement with each CLNE Manager (as defined in the Operating Agreement) and the CLNE Designated Manager (as defined in the Operating Agreement) in substantially the form attached hereto as Exhibit G.

 

5.9                               Payoff Letters.

 

The Company shall have obtained releases and payoff letters for the items of indebtedness set forth on Schedule 5.9, each in a form reasonably satisfactory to the Investors and the effectiveness of which shall be contingent upon the payment in full of the payoff amounts set forth therein.  The Company shall pay all such payoff amounts in full upon the Company’s receipt of the proceeds from the issuance and sale of Units hereunder.

 

5.10                        Legal Opinion.

 

As of the Closing, each of the Investors shall have received an opinion of Wilson Sonsini Goodrich & Rosati, counsel for the Company, dated as of the date of the Closing and addressed to the Investors, in substantially the form attached hereto as Exhibit H.

 

5.11                        Milton Purchase Agreement.

 

The Company and the Investor shall have executed and delivered the purchase agreement (in substantially the form of Exhibit I, the “Milton Purchase Agreement”) for the compressor station located in Milton, Vermont.

 

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5.12                        Permits, Qualifications and Consents.

 

All permits, authorizations, approvals or consents of, or filings with or notices to, any federal, state or local governmental authority or regulatory body of the United States or any other third party that are required in connection with the lawful issuance and sale of the securities pursuant to this Agreement, including, without limitation, those from the parties listed on Schedule 5.12, shall be duly obtained or made and shall be effective as of the Closing, except solely for those which are to be obtained or made after the Closing, all of which shall be obtained or made by the Company by the applicable deadlines therefor.

 

5.13                        Proceedings and Documents.

 

All limited liability company and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Investor and its counsel, and the Investor and its counsel shall have received all such counterpart original and certified or other copies of such other documents as any of them may reasonably request.

 

5.14                        Conversion and Cancellation of Series A Preferred Units and Investor Notes.

 

All outstanding membership units of any class or series other than Common Units (and excluding the outstanding options and warrants convertible into Common Units set forth in Sections 3.3(b)(ii), 3.3(b)(iii) and 3.3(b)(iv)), including without limitation the Series A Preferred Units, shall have been converted into that number of the Company’s Common Units set forth on Schedule 5.14 in the column designated “Number of Common Units” opposite the name of each holder of such membership units, and as of the Closing and as a result of such conversion, all such membership units will be deemed cancelled in all respects and the holders of such membership units shall no longer be entitled to any rights, preferences or privileges as a result of or deriving from such membership units except solely for the right to receive the Common Units into which such membership interests shall convert.  Substantially simultaneously with the Closing, the aggregate outstanding principal amount and all accrued and unpaid interest under all Investor Notes shall have been converted into (a) with respect to the outstanding principal amount under each Investor Note, that number of Units set forth in the column designated “Number of Units” or “Number of Common Units” opposite the name of each holder of any such Investor Note on the Schedule of Investors and Schedule 5.14 hereto, and (b) with respect to the accrued and unpaid interest under each Investor Note, a Bridge Warrant to purchase the number of Common Units set forth in the column designated “Number of Bridge Warrant Common Units” opposite the name of each holder of any such Investor Note on Schedule 5.14, and as of the Closing and as a result of such conversions, all Investor Notes shall be deemed fully repaid and cancelled in all respects and the Company will no longer owe any obligation to such holder of an Investor Note with respect thereto.

 

5.15                        Waiver of Rights.

 

At or prior to the Closing, the Company and all then-current members of the Company shall have waived any rights of first offer, preemptive rights or any other rights in connection with the issuance of the Units hereunder.

 

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5.16                        Termination of Investors’ Rights Agreement.

 

Effective as of and contingent upon the Closing, that certain Investors’ Rights Agreement, dated as of March 6, 2013, by and among the Company and the persons and entities listed on Exhibit A thereto, shall have been terminated in full and, from and after the Closing, such agreement shall have no further force or effect.

 

SECTION 6
  CONDITIONS TO COMPANY’S OBLIGATION TO CLOSE

 

The Company’s obligation to sell and issue the Units at the Closing is subject to the fulfillment on or before the Closing of the following conditions, unless waived by the Company:

 

6.1                               Representations and Warranties.

 

The representations and warranties made by the Investors in Section 4 shall be true and correct when made and shall be true and correct as of the date of the Closing with the same force and effect as though such representations and warranties had been made as of such date.

 

6.2                               Covenants.

 

The Investors shall have performed or complied with all covenants, agreements and conditions contained in the Agreements to be performed or complied with by the Investors on or prior to the date of the Closing.

 

6.3                               Compliance with Securities Laws.

 

The Company shall be satisfied that the offer and sale of the Units shall be qualified or exempt from registration or qualification under all applicable federal and state securities laws (including receipt by the Company of all necessary blue sky law permits and qualifications required by any state, if any).

 

6.4                               Operating Agreement.

 

The Operating Agreement shall have been duly authorized, executed and delivered by the members holding sufficient membership units to make such agreement effective.

 

6.5                               CLNE Common Purchase Note.

 

CLNE shall have delivered the executed CLNE Common Purchase Note.

 

6.6                               Voting Agreement.

 

The Company, the Founders and the Investors holding sufficient membership units to make such agreement effective (each such term as described in the Voting Agreement) shall have executed and delivered the Voting Agreement.

 

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6.7          Right of First Offer and Co-Sale Agreement.

 

The Company, the Founders and the Investors holding sufficient membership units to make such agreement effective (each such term as described in the Right of First Offer and Co-Sale Agreement) shall have executed and delivered the Right of First Offer and Co-Sale Agreement.

 

6.8          Accredited Investor Questionnaire.

 

Each Investor shall have executed an investor suitability questionnaire in form acceptable to the Company.

 

SECTION 7

 

MISCELLANEOUS

 

7.1          Election of CLNE Managers.

 

Promptly following the Closing, and in no event more than one (1) business day after the Closing, CLNE shall elect the CLNE Managers (as defined in the Operating Agreement), in accordance with the Operating Agreement.

 

7.2          Amendment.

 

Except as expressly provided herein, neither this Agreement nor any term hereof may be amended or waived other than by a written instrument referencing this Agreement and signed by (i) the Company and (ii) Investors holding a majority of the Common Units issued pursuant to this Agreement (which, in all cases, shall include CLNE); provided, however, that if any amendment or waiver operates in a manner that treats any Investor different from other Investors, the consent of such Investor shall also be required for such amendment or waiver. Any such amendment or waiver effected in accordance with this Section 7.2 shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities have been converted or exchanged or for which such securities have been exercised) and each future holder of all such securities.  Each Investor acknowledges that by the operation of this Section 7.2, the holders of a majority of the Units issued pursuant to this Agreement and then outstanding will have the right and power to diminish or eliminate all rights of such Investor under this Agreement.

 

7.3          Notices.

 

All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by electronic mail or otherwise delivered by hand, messenger or courier service addressed:

 

(a)   if to an Investor, to the Investor’s address or electronic mail address as shown in the Company’s records, as may be updated in accordance with this Section 7.3 and, with respect to CLNE, with a copy (which shall not constitute notice) to Steven G. Rowles, Morrison & Foerster LLP, 12531 High Bluff Drive, Suite 100, San Diego, California 92130;

 

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(b)   if to any other holder of any Units, to such address or electronic mail address as shown in the Company’s records, or, until any such holder so furnishes an address or electronic mail address to the Company, then to the address or electronic mail address of the last holder of such Units for which the Company has contact information in its records; or

 

(c)   if to the Company, to the attention of the Chief Executive Officer or General Counsel of the Company at 480 Hercules Drive, Colchester, Vermont 05446, tevslin@ngadvantage.com (email address), or at such other current address as the Company shall have furnished to the Investors in accordance with this Section 7.3, with a copy (which shall not constitute notice) to Michael Nordtvedt, Wilson Sonsini Goodrich & Rosati, P.C., 701 Fifth Avenue, Suite 5100, Seattle, Washington 98104-7036.

 

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via electronic mail, when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day.

 

7.4          Governing Law.

 

This Agreement shall be governed in all respects by the internal laws of the State of Delaware as applied to agreements entered into among Delaware residents to be performed entirely within Delaware, without regard to principles of conflicts of law.

 

7.5          Brokers or Finders.

 

The Company shall indemnify and hold harmless the Investor from any liability for any commission or compensation in the nature of a brokerage or finder’s fee or agent’s commission (and the costs and expenses of defending against such liability or asserted liability) for which the Investor or any of its officers, directors, employees, stockholders, agents or other representatives is responsible to the extent such liability is attributable to any inaccuracy or breach of the representations and warranties contained in Section 3.31, and the Investor agrees to indemnify and hold harmless the Company from any liability for any commission or compensation in the nature of a brokerage or finder’s fee or agent’s commission (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, managers, employees, members, agents or other representatives is responsible to the extent such liability is attributable to any inaccuracy or breach of the representations and warranties contained in Section 4.10.

 

7.6          Expenses.

 

The Company and the Investors shall each pay their own expenses in connection with the transactions contemplated by this Agreement.

 

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7.7          Survival; Indemnification.

 

(a)   The representations, warranties, covenants and agreements made in this Agreement shall survive the execution and delivery of the Agreements and the Closing and shall in no way be effected by any investigation made by or on behalf of any party hereto for two (2) years from the date of the Closing.

 

(b)   The Company shall indemnify and hold harmless the Investor and each of its directors, officers, stockholders, affiliates, agents and representatives from and against and in respect of any and all actions, causes of action, suits, proceedings, claims, appeals, demands, assessments, judgment, losses, damages, liabilities, interest, fines, penalties, costs and expenses (including, without limitation, attorneys’ fees and disbursements incurred in connection therewith and in seeking indemnification therefor, and any amounts or expenses required to be paid or incurred in connection therewith), resulting from, arising out of, or imposed upon or incurred by any person to be indemnified hereunder by reason of any breach of any representation, warranty, covenant or agreement of the Company made in this Agreement, any of the other Agreements, or any certificate or other instrument delivered by or on behalf of the Company pursuant hereto or thereto or in connection with the transactions contemplated hereby or thereby.

 

7.8          Successors and Assigns.

 

This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by any Investor without the prior written consent of the Company, except for any such assignment, transfer, delegation or sublicense by any Investor to any of its Permitted Transferees (as defined in the Operating Agreement). Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.  Nothing in this Agreement, express or implied, is intended to  confer upon any party other than the parties hereto or their respective successors, assigns, heirs, executors and administrators any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

7.9          Entire Agreement.

 

This Agreement, including the exhibits attached hereto and the other documents referred to herein, constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. No party shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein.

 

7.10        No Waiver.

 

Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in

 

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any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.

 

7.11        Remedies.

 

In addition to being entitled to exercise all rights provided herein or granted by applicable law, each party hereto acknowledges and agrees that monetary damages may not adequately compensate an injured party for the breach of this Agreement by any other party, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party waives any claim or defense that there is an adequate remedy at law for any such breach or threatened breach hereunder.  All remedies, either under this Agreement or by applicable law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative and a party’s exercise of any such remedy will not constitute a waiver of such party’s right to assert any other legal remedy available to it.

 

7.12        Severability.

 

If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the greatest extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

 

7.13        Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

 

7.14        Telecopy Execution and Delivery.

 

A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

 

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7.15        Jurisdiction; Venue.

 

Each of the parties hereto hereby submits and consents irrevocably to the exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the interpretation and enforcement of the provisions of this Agreement. Each of the parties hereto also agrees that the jurisdiction over the person of such parties and the subject matter of such dispute shall be effected by the mailing of process or other papers in connection with any such action in the manner provided for in Section 7.3 or in such other manner as may be lawful, and that service in such manner shall constitute valid and sufficient service of process.

 

7.16        Titles and Subtitles.

 

The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

7.17        Further Assurances.

 

Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be reasonably necessary to more fully effectuate this Agreement.

 

7.18        Jury Trial.

 

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

 

(signature pages follow)

 

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The parties are signing this Common Unit Purchase Agreement as of the date stated in the introductory clause.

 

 

	
 
    	
NG ADVANTAGE LLC
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Tom Evslin
    
	
 
    	
Title:
    	
Chief Executive Officer
    

 

(Signature page to the Common Unit Purchase Agreement)

 

 

The parties are signing this Common Unit Purchase Agreement as of the date stated in the introductory clause.

 

 

	
 
    	
INVESTOR
    
	
 
    	
 
    
	
 
    	
CLEAN ENERGY
    
	
 
    	
a California corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name: Andew J. Littlefair
    
	
 
    	
Title: President and Chief Executive   Officer
    

 

(Signature page to the Common Unit Purchase Agreement)

 

 

The parties are signing this Common Unit Purchase Agreement as of the date stated in the introductory clause.

 

 

	
 
    	
INVESTOR
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Print investor name)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Signature)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Print name of signatory,   if signing for an entity)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Print title of   signatory, if signing for an entity)Exhibit 10.95

 

PURCHASE AGREEMENT

 

THIS PURCHASE AGREEMENT (“Agreement”) is dated as of October 14, 2014, by and between NG ADVANTAGE LLC, a Delaware limited liability company (“Seller”), and CLEAN ENERGY, a California corporation (“Buyer”).

 

WHEREAS, Buyer and Seller have entered into a certain Common Unit Purchase Agreement dated as of the date hereof (the “Stock Purchase Agreement”) pursuant to which Buyer has agreed to buy and Seller has agreed to sell a majority of the ownership units of Seller, subject to the terms and conditions contained therein.

 

WHEREAS, concurrently with the execution of the Stock Purchase Agreement, Buyer desires to purchase from Seller and Seller desires to sell to Buyer, subject to the terms and conditions contained in this Agreement, certain real property, improvements, appurtenances, and personal property owned by Seller.

 

IN CONSIDERATION of the respective agreements hereinafter set forth, Seller and Buyer agree as follows:

 

1.                                      Property Included in Sale.  Seller hereby agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from Seller, subject to the terms and conditions set forth herein, the following:

 

(a)                                 that certain real property consisting of approximately 6.30 acres, more or less, located in the Town of Milton, Vermont, and being more particularly described in Exhibit A attached hereto (the “Real Property”);

 

(b)                                 all rights, privileges and easements appurtenant to the Real Property, including, without limitation, all minerals, oil, gas and other hydrocarbon substances on and under the Real Property (but excluding any natural gas used by Seller pursuant to the Leaseback (hereinafter defined)), as well as all development rights, air rights, water, water rights, riparian rights and water stock relating to the Real Property and any rights-of-way or other appurtenances used in connection with the beneficial use and enjoyment of the Real Property and all of Seller’s right, title and interest in and to all roads and alleys adjoining or servicing the Real Property (collectively, the “Appurtenances”);

 

(c)                                  subject to Seller’s rights under the Leaseback with respect to the Reserved Property (as hereinafter defined), all of Seller’s right, title and interest in and to all improvements and fixtures located on the Real Property, all apparatus, equipment and appliances used in connection with the operation or occupancy of the Real Property, including all pipes, pipelines, compressors, dispensers, dryers, chillers, systems, facilities and equipment used in connection with the operation of a compressed natural gas distribution facility and fueling station on the Real Property (collectively, the “Improvements”);

 

(d)                                 subject to Seller’s rights under the Leaseback with respect to the Reserved Property, all personal property owned by Seller located on or in or used in connection with the 

 

 

Real Property and Improvements as of the Closing Date (as defined in Paragraph 4 below) including, without limitation, those items described in Exhibit B attached hereto (the “Personal Property”); and

 

(e)                                  subject to Seller’s rights under the Leaseback with respect to the Reserved Property, any warranties, guarantees or sureties relating to the Real Property or the Personal Property (collectively, the “Intangible Property”).

 

All of the items referred to in subparagraphs (a), (b), (c), (d) and (e) above are collectively referred to as the “Property.”

 

Notwithstanding anything to the contrary set forth in this Agreement, the Property being conveyed pursuant to this Agreement does not include (and Seller expressly reserves all rights with respect thereto) (collectively, the “Excluded Property”) (i) any existing claims or causes of action with respect to the Property to the extent attributable to the period prior to the Closing Date including, without limitation, any tax rebates attributable to the period prior to the Closing (ii) those items set forth on Exhibit C attached hereto and made a part hereof, (iii) all licenses, permits, certificates of occupancy, and approvals issued or granted in connection with the Real Property and the use or operation thereof; and (iv) all of Seller’s right, title and interest in all federal, state and municipal land use permits and approvals for the use and occupancy of the Improvements on the Real Property (the “Permits”).

 

2.                                      Purchase Price.

 

(a)                                 The purchase price of the Property is Nine Million Dollars ($9,000,000) (the “Purchase Price”). A portion of the Purchase Price, in the amount of Seven Million Two Hundred Thousand Dollars ($7,200,000) shall be paid by Buyer to Seller in immediately available funds upon the closing of the purchase and sale contemplated hereunder (the “Closing”) as adjusted for adjustments for prorations as herein provided and less the amount of any withholding required to be made by Buyer under 32 V.S.A. Section 5847.  For purposes of determining the sales taxes, real property transfer taxes, and real property taxes, the Purchase Price shall be allocated among the components of the Property as follows:

 

PURCHASE PRICE ALLOCATION

 

	
Personal   Property Subtotal
    	
 
    	
$
    	
2,000,000
    	
 
    
	
Real   Property
    	
 
    	
$
    	
800,000
    	
 
    
	
Building/Improvements
    	
 
    	
$
    	
2,800,000
    	
 
    
	
Goodwill
    	
 
    	
$
    	
3,400,000
    	
 
    
	
Total
    	
 
    	
$
    	
9,000,000
    	
 
    

 

The allocation described in this Subparagraph 2(a) shall be conclusive and binding upon Buyer and Seller.

 

(b)                                 The remainder of the Purchase Price, in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000), shall be paid in the form of an unsecured promissory note in the form attached hereto as Exhibit D (the “Note”), to be delivered by Buyer to Seller

 

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upon the Closing.  Seller hereby waives any vendor’s lien or other lien, right, title or interest in the Property as security for the obligations of Buyer under the Note; acknowledges and agrees  that Buyer’s obligations under the Note are and shall be unsecured; and voluntarily accepts all risks associated with the acceptance of the unsecured Note.

 

(c)                                  Notwithstanding anything to the contrary in this Agreement or in the Note, it is understood and agreed that, in accordance with the Leaseback, Seller shall be required to increase the capacity of the Property by adding two new compressors, a new chiller and heat exchanger, new electrical switchgear and a new dispenser to the Improvements within the period required pursuant to the Leaseback (the “Upgrade Work”).  Buyer’s obligation to pay the sums evidenced by the Note shall be due and payable on the Special Upgrade Work Rent Payment Date (as defined in the Leaseback).  Seller acknowledges that, in accordance with the terms of the Leaseback, Seller, in its capacity as the tenant under the Leaseback, will be obligated to pay to Buyer, in its capacity as the landlord under the Leaseback, the Special Upgrade Work Rent Payment (as defined in the Leaseback) on the Special Upgrade Work Rent Payment Date (as defined in the Leaseback).  If the Special Upgrade Work Rent Payment is not paid to Buyer on or prior to the Special Upgrade Work Rent Payment Date, Buyer may offset the amount of such Special Upgrade Work Rent Payment against the sums otherwise payable on the Note on the Special Upgrade Work Rent Payment Date.

 

3.                                      Title to the Property.

 

(a)                                 At the Closing, Seller shall convey to Buyer marketable and insurable fee simple title to the Real Property, the Appurtenances and the Improvements, by a duly executed and acknowledged warranty deed substantially in the form attached hereto as Exhibit E (the “Deed”).  Evidence of delivery of marketable and insurable fee simple title shall be the issuance by Commonwealth Land Title Insurance Company (the “Title Company”), to Buyer of an ALTA owner’s policy of title insurance in the amount of the Purchase Price, insuring fee simple title to the Real Property, the Appurtenances and the Improvements in Buyer, subject only to the lien of real property taxes not yet payable and the exceptions set forth on Exhibit F attached hereto (which shall include the rights of Seller under the Leaseback) (collectively, the “Permitted Exceptions”), and in a form approved by Buyer (the “Title Policy”).  The Title Policy shall include such special endorsements as Buyer may require (the “Endorsements”).  The Title Policy may include an exception for matters that would be shown by a current survey of the Real Property and Improvements.  However, within ninety (90) after the Closing, Seller shall deliver to Buyer at Seller’s expense an “as-built” survey of the Real Property and Improvements prepared by a surveyor or civil engineer licensed in the State in which the Property is located.  Said survey shall be acceptable to, and certified to, Buyer and Title Company, signed by the surveyor or engineer preparing the survey and in sufficient detail to provide for a bring-down of the Title Policy without boundary, encroachment or survey exceptions, and shall meet the requirements set forth on Exhibit G attached hereto.  Within thirty (30) days after the delivery of the survey to the Title Company, Buyer shall cause the Title Company to issue a bring-down to the Title Policy that removes the exception for matters that would be shown by a current survey of the Real Property and Improvements and replaces it with a specific survey exception that identifies only those matters that are disclosed by the survey; that specific survey exception shall

 

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contain no matters that are objectionable to Buyer (unless affirmative coverage over such matters in a form acceptable to Buyer is included in the Title Policy bring-down).

 

(b)                                 At the Closing, Seller shall transfer title to the Personal Property by a warranty bill of sale in the form attached hereto as Exhibit H (the “Bill of Sale”), such title to be free of any liens, encumbrances or interests.

 

(c)                                  At the Closing, Seller shall transfer title to the Intangible Property by such instruments as Buyer may determine to be reasonably necessary, including, without limitation, an assignment of Intangible Property in the form attached hereto as Exhibit I (the “Assignment of Intangible Property”).

 

(d)                                 At or prior to the Closing, Seller shall cause all mortgages, equipment leases and other monetary liens and rights of third parties encumbering the Property to be paid and discharged in full, other than (i) inchoate mechanics’ liens arising from the Upgrade Work for which no claim of lien has been asserted or recorded and as to which no past due amounts are payable by Seller and (ii) leases related to Excluded Property.

 

(e)                                  Within thirty (30) after the Closing, Seller shall deliver to Buyer at Seller’s expense true and correct copies of all zoning permits for the Property (which shall confirm that the current use of the Property is in compliance with all applicable zoning requirements) and certificates of occupancy for two office trailers that Seller added to the site in 2013.

 

4.                                      Closing and Escrow.

 

(a)                                 Upon mutual execution of this Agreement, the parties hereto shall deposit an executed counterpart of this Agreement with Buyer’s local counsel, Robert H. Rushford of Gravel & Shea PC, and this Agreement shall serve as instructions to Robert H. Rushford as the escrow holder for consummation of the purchase and sale contemplated hereby substantially concurrently with the execution and delivery of this Agreement.  Seller and Buyer agree to execute such additional escrow instructions as may be appropriate to enable the escrow holder to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control.

 

(b)                                 The parties shall endeavor to conduct an escrow Closing pursuant to Subparagraph 4(a) above.  If, however, an escrow Closing is not practical, the Closing hereunder shall be held and delivery of all items to be made at the Closing shall be made at the offices of Morrison & Foerster LLP in San Diego, California.  The Closing shall occur substantially concurrently with the execution and delivery of this Agreement (date on which the Closing occurs is referred to herein as the “Closing Date”).

 

(c)                                  At or before the Closing, Seller shall deliver to Buyer or the Title Company, as appropriate, the following:

 

(i)                                     a duly executed and acknowledged Deed;

 

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(ii)                                  a duly executed Bill of Sale;

 

(iii)                               a duly executed lease between Seller, as tenant, and Buyer, as landlord, in the form attached hereto as Exhibit J (the “Leaseback”);

 

(iv)                              a duly executed Assignment of Intangible Property;

 

(v)                                 copies (to the extent available and in Seller’s possession) of the building Permits and certificates of occupancy for the Improvements;

 

(vi)                              each of the following, duly executed and in form sufficient for filing, and to the extent applicable:  (i) Vermont Property Transfer Tax Return; (ii) Vermont Land Gains Tax Return (if applicable); and (iii) Vermont Non-Resident Withholding Tax Return (if applicable);

 

(vii)                           a FIRPTA affidavit (in the form attached as Exhibit K) pursuant to Section 1445(b)(2) of the Internal Revenue Code of 1986 (the “Code”), and on which Buyer is entitled to rely, that Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code;

 

(viii)                        such resolutions, authorizations, bylaws or other corporate and/or partnership documents or agreements relating to Seller and its shareholders as shall be reasonably required by Buyer;

 

(ix)                              closing statement in form and content satisfactory to Buyer and Seller; and

 

(x)                                 any other instruments, records or correspondence called for hereunder which have not previously been delivered.

 

Buyer may waive compliance on Seller’s part under any of the foregoing items by an instrument in writing.

 

(d)                                 At or before the Closing, Buyer shall deliver to Seller or the Title Company, as appropriate, the following:

 

(i)                                     the Note, duly executed;

 

(ii)                                  a duly executed Leaseback;

 

(iii)                               a duly executed Assignment of Intangible Property; and

 

(iv)                              a closing statement in form and content satisfactory to Buyer and Seller.

 

(e)                                  Seller and Buyer shall each deposit such other instruments as are reasonably required by the escrow holder or otherwise required to close the escrow and consummate the purchase of the Property in accordance with the terms hereof.  Seller and Buyer

 

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hereby designate Robert H. Rushford of Gravel & Shea PC as the “Reporting Person” for the transaction pursuant to Section 6045(e) of the Code and the regulations promulgated thereunder.

 

(f)                                   The following are to be apportioned as of the Closing Date, as follows:

 

(i)                                     Utility Charges.  Since Seller (in its capacity as the tenant under the Leaseback) is paying the utility charges and other operating expenses under the Leaseback, there shall be no proration of the costs of utility charges or other operating expenses, and Seller shall be responsible for the payment of all such costs both with respect to the period prior to the Close of Escrow and, pursuant to the terms of the Leaseback, with respect to the period following the Close of Escrow.  After the Closing, Seller shall remain the party to which utility charges shall be billed, and Seller shall be responsible for the payment of such utility charges, for so long as the Leaseback shall remain in effect.

 

(ii)                                  Real Estate Taxes and Special Assessments.  Since Seller (in its capacity as the tenant under the Leaseback) is paying the real property taxes and other assessments under the Leaseback, there shall be no proration of the real property taxes or other assessments, and Seller shall be responsible for the payment of all real property taxes and other assessments both with respect to the period prior to the Close of Escrow and, pursuant to the terms of the Leaseback, with respect to the period following the Close of Escrow.  On or prior to the Closing Date, Seller shall pay all real property taxes and assessments that are delinquent.

 

(iii)                               Preliminary Closing Adjustment.  Seller and Buyer shall jointly prepare a preliminary Closing adjustment on the basis of the Leases and other sources of income and expenses, and shall deliver such computation to the Title Company prior to Closing.

 

(iv)                              Post-Closing Reconciliation.  If any of the aforesaid prorations cannot be calculated accurately on the Closing Date, then they shall be calculated as soon after the Closing Date as feasible.  Either party owing the other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other party.

 

(v)                                 Survival.  The provisions of this Subparagraph 4(f) shall survive the Closing.

 

(g)                                  Closing Costs.  Buyer and Seller shall each pay their own attorneys’ fees.  Seller shall pay one hundred percent (100%) of the Vermont Land Gains Tax applicable to the Real Property, if any, due on account of the transactions contemplated by this Agreement and fifty percent (50%) of the cost of any transfer taxes or documentary stamp taxes applicable to the sale.  Seller shall pay for an ALTA survey for the Property, sales tax (if any) on the Personal Property, the premium for the Title Policy (and bring-down thereof pursuant to Paragraph 3(a)) and the cost of the Endorsements and related title examination charges, the cost of recording all documents to remove encumbrances or defects in Seller’s title to the Property, if any, any costs, premiums or fees associated with payment of debt encumbering the Property, and fifty percent (50%) of the escrow fees.  Buyer shall pay the cost of recording the Deed, fifty percent (50%) of the cost of any transfer taxes or documentary stamp taxes applicable to the sale, and fifty percent (50%) of the escrow fees.  All other costs and charges of the escrow for the sale not otherwise

 

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provided for in this Subparagraph 4(g) or elsewhere in this Agreement shall be allocated in accordance with the closing customs for the county in which the Real Property is located.  Seller shall indemnify, defend, protect and hold harmless Buyer against all claims, demands, liabilities, losses, damages, costs and expenses (including, without limitation, attorneys’ fees and expenses)  that may be suffered or incurred by Buyer (including, without limitation, any tax liens that may be imposed upon the Property or any other asset of Buyer) as a result of the failure on the part of Seller to pay any required sales taxes or to file any sales tax return or report.

 

(h)                                 Withholding.  At the Closing, Seller shall provide to Buyer a sworn statement that Seller is a Vermont resident also setting forth Seller’s social security number, or a certificate from the Vermont Commissioner of Taxes, stating that no income tax is due with respect to the transaction or that Seller has provided adequate security to cover the liability; otherwise, consistent with Buyer’s obligations under 32 V.S.A. Section 5847, Buyer shall be entitled to withhold 2.5% of the consideration payable to Seller.

 

(i)                                     Bulk Transfers.  The parties waive compliance with the applicable provisions of the bulk sales law of the State of Vermont under 32 V.S.A. § 3260 in connection with the sale of the Property to Buyer.  Seller shall indemnify, defend, protect and hold harmless Buyer against all claims, demands, liabilities, losses, damages, costs and expenses (including, without limitation, attorneys’ fees and expenses) that may be suffered or incurred by Buyer arising out of any third-party assertions against Buyer as a result of such noncompliance.

 

(j)                                    Vermont Land Gains Tax.  The provisions of Schedule 4(j) attached hereto are incorporated herein by this reference.

 

5.                                      Representations and Warranties of Seller.  Seller hereby represents and warrants to Buyer as follows:

 

(a)                                 To the Seller’s actual knowledge, there are no material physical or mechanical defects of the Property, including, without limitation, the structural and load-bearing components of the Property, the roof(s), the parking lot(s), the plumbing, heating, air conditioning and electrical and life safety systems, and all such items are in good operating condition and repair and, to the best of Seller’s knowledge, in compliance with applicable building codes, environmental, zoning and land use laws, and other applicable local, state and federal laws and regulations (collectively, “Laws”).

 

(b)                                 To the Seller’s actual knowledge, the use and operation of the Property now are, and at the time of Closing will be, in compliance with all Laws.

 

(c)                                  To Seller’s actual knowledge, there are no condemnation, environmental, zoning or other land-use regulation proceedings, either instituted or planned to be instituted, which would detrimentally affect the use, operation or value of the Property, nor has Seller received notice of any special assessment proceedings affecting the Property.

 

(d)                                 All water, sewer, gas, electric, telephone, and drainage facilities and all other utilities required by law or by the normal use and operation of the Property are and at the

 

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time of Closing will be installed to the property lines of the Real Property, are and at the time of Closing will be connected pursuant to valid permits.

 

(e)                                  Except as provided in Section 3(e) above, Seller has obtained all licenses, permits, variances, approvals, authorizations, easements and rights of way, including proof of dedication, required from all governmental authorities having jurisdiction over the Property or  from private parties for the intended use, operation and occupancy of the Property and to insure vehicular and pedestrian ingress to and egress from the Property.

 

(f)                                   Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware; Seller is duly qualified as a foreign limited liability company in the State of Vermont; this Agreement and all documents executed by Seller which are to be delivered to Buyer at the Closing are and at the time of Closing will be duly authorized, executed and delivered by Seller, are and at the time of Closing will be legal, valid and binding obligations of Seller enforceable against Seller in accordance with their respective terms, are and at the time of Closing will be sufficient to convey title (if they purport to do so), and do not and at the time of Closing will not violate any provision of any agreement or judicial order to which Seller or the Property is subject.

 

(g)                                  At the time of Closing there will be no outstanding written or oral contracts made by Seller for any improvements to the Property which have not been fully paid for (except for contracts for the Upgrade Work listed on Exhibit L under which no sums payable by Seller are delinquent).

 

(h)                                 Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code.

 

(i)                                     Neither the Property nor, to Seller’s actual knowledge, any real estate in the vicinity of the Property, is in violation of any Environmental Requirement, as hereinafter defined.  Neither Seller nor, to Seller’s actual knowledge, any third party, has used, manufactured, generated, treated, stored, disposed of, or released any Hazardous Substance, as hereinafter defined, in violation of Environmental Requirements, on, under or about the Property or real estate in the vicinity of the Property or transported any Hazardous Substance over the Property in violation of Environmental Requirements.  Neither Seller nor, to Seller’s actual knowledge, any third party has installed, used or removed any storage tank on, from or in connection with the Property except in full compliance with all Environmental Requirements, and, to Seller’s actual knowledge, there are no storage tanks or wells (whether existing or abandoned) located on, under or about the Property and, to Seller’s actual knowledge, no storage tank has been installed on, used on or removed from or used in connection with the Property in violation of any Environmental Requirements.  To Seller’s actual knowledge, the Property does not consist of any building materials that contain any Hazardous Substance.

 

(j)                                    There are no contracts that would burden the Property or for which Buyer would have any liability following the Closing Date (other than service and other contracts for which Seller shall have sole responsibility in connection with its own operations on the Property pursuant to the Leaseback and under which Seller shall retain all obligations).

 

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(k)                                 Seller has not granted any option or right of first refusal or first opportunity to any party to acquire any interest in any of the Property.

 

(l)                                     There are no leases, agreements or options to lease, or rights of first refusal or first opportunity to lease in effect with respect to any portion of the Property.

 

6.                                      Representations and Warranties of Buyer.  Buyer hereby represents and warrants to Seller as follows:  Buyer is a corporation, duly organized and validly existing under the laws of the State of California; this Agreement and all documents executed by Buyer which are to be delivered to Seller at the Closing are or at the time of Closing will be duly authorized, executed and delivered by Buyer, and are or at the Closing will be legal, valid and binding obligations of Buyer, and do not and at the time of Closing will not violate any provisions of any agreement or judicial order to which Buyer is subject.

 

7.                                      Indemnification.

 

(a)                                 Each party hereby agrees to indemnify the other party and defend and hold it harmless from and against any and all claims, demands, liabilities, costs, expenses, penalties, damages and losses, including, without limitation, attorneys’ fees, resulting from any misrepresentation or breach of warranty or breach of covenant made by such party in this Agreement or in any document, certificate, or exhibit given or delivered to the other pursuant to or in connection with this Agreement.

 

(b)                                 Seller agrees to indemnify Buyer and its Buyer’s affiliates, lenders, and the directors, officers, partners, employees, attorneys and agents, heirs, personal representatives, successors and assigns of the foregoing (“Buyer Entities”) and defend, protect and hold Buyer and the Buyer Entities harmless from and against any and all liabilities (including strict liability), losses, damages (including consequential damages), causes of action, judgments, penalties, fines, costs and expenses (including fees, costs and expenses of attorneys, consultants, contractors, experts and laboratories) asserted against or incurred or suffered by Buyer or any of the Buyer Entities resulting from any claim or demand of any person other than the Buyer Entities (including, without limitation, any governmental agency) that arises from or relates to any act, condition or event relating to or occurring in, on or about the Property before the Closing Date, other than Environmental Claims and Losses (as hereinafter defined) for which Seller’s indemnification obligations shall be as provided in Section 7(c).

 

(c)                                  In addition to its obligations under Section 7(b), Seller agrees to indemnify Buyer and all Buyer Entities and defend, protect and hold Buyer and the Buyer Entities harmless from and against any and all claims, demands, liabilities (including strict liability), losses, damages (including consequential damages), causes of action, judgments, penalties, fines, costs and expenses (including fees, costs and expenses of attorneys, consultants, contractors, experts and laboratories), of any and every kind and character, contingent or otherwise, matured or unmatured, known or unknown, foreseeable or unforeseeable, made, incurred, suffered, brought, or imposed at any time and from time to time, and arising in whole or in part from any of the following matters, regardless of whether caused by Seller, any of Seller’s employees, agents, contractors, servants, visitors, suppliers, or invitees, any prior owner of the Property or its tenant

 

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or subtenant, or any third party, and whether now existing or hereafter arising (all, collectively, “Environmental Claims and Losses”):

 

(i)                                     The presence of any Hazardous Substance (as hereinafter defined) on the Property, or any escape, seepage, leakage, spillage, emission, release, discharge or disposal of any Hazardous Substance on or from the Property, or the migration or release or threatened migration or release of any Hazardous Substance to, from or through the Property; or

 

(ii)                                  Any act, omission, event or circumstance existing or occurring in connection with the handling, treatment, containment, removal, storage, decontamination, clean-up, transport or disposal of any Hazardous Substance which is or was present on the Property; or

 

(iii)                               Any violation of any Environmental Requirement (as hereinafter defined), regardless of whether any act, omission, event or circumstance giving rise to the violation constituted a violation at the time of the occurrence or inception of such act, omission, event or circumstance; or

 

(iv)                              Any investigative, enforcement, cleanup, removal, containment, remedial or other private or governmental or regulatory action at any time threatened, instituted or completed pursuant to any applicable Environmental Requirement against or with respect to the Property or any condition, use or activity on the Property, and any claim at any time threatened or made by any person against or with respect to the Property or any condition, use or activity on the Property, relating to damage, contribution, cost recovery, compensation, loss or injury resulting from or in any way arising in connection with any Hazardous Substance or any Environmental Requirement; or

 

(v)                                 The filing or imposition of any environmental lien against the Property, because of, resulting from, in connection with, or arising out of any of the matters referred to in clauses (i) through (iv) preceding.

 

Without limiting the generality of the foregoing, the matters for which Seller shall be responsible pursuant to its indemnification obligations under this Paragraph 7(c) include: (A) the investigation or remediation of any such Hazardous Substance or violation of any such Environmental Requirement, including the preparation of any feasibility studies or reports and the performance of any cleanup, remediation, removal, response, abatement, containment, closure, restoration, monitoring or similar work required by any Environmental Requirement or necessary to have full use and benefit of the Property; (B) injury or damage to any person, property or natural resource occurring on or off the Property, including the cost of demolition and rebuilding of any improvements on real property; (C) all liability to pay or indemnify any person or governmental authority for costs expended in connection with any of the matters included within the foregoing indemnification obligations; (D) the investigation and defense of any claim, whether or not such claim is ultimately defeated; and (E) the settlement of any claim or judgment.

 

(d)                                 Upon demand by any party entitled to indemnification hereunder, the indemnifying party shall diligently defend the claim for which indemnification has been asserted,

 

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all at the indemnifying party’s sole cost and expense and by counsel to be approved by the party entitled to indemnification in the exercise of its reasonable judgment.  In the alternative, at any time any party entitled to indemnification may elect to conduct its own defense through counsel selected by such party and at the cost and expense of the indemnifying party.

 

(e)                                  The indemnification provisions of this Paragraph 7 and in Paragraphs 4(g) and 4(i) shall survive beyond the Closing, or, if the Closing does not occur pursuant to this Agreement, beyond any termination of this Agreement.

 

(f)                                   As used herein:

 

(i)                                     The term “Hazardous Substance” means (A) any and all substances, chemicals, wastes, sewage, materials or emissions which are now or hereafter regulated, controlled, prohibited or otherwise affected by any Environmental Requirements now or hereafter in effect including, without limitation, any substance defined as a “hazardous substance”, “hazardous material”, “hazardous waste”, “toxic substance”, or “air pollutant” in the Comprehensive Environmental Response, Compensation and Liability Act, as amended (“CERCLA”), 42 U.S.C. § 9601, et seq., the Hazardous Substances Transportation Act, 49 U.S.C. § 1801, et seq., as amended, the Resource Conservation and Recovery Act, as amended (“RCRA”), 42 U.S.C. § 6901, et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251, et seq., or the Clean Air Act, as amended, 42 U.S.C. § 7401, et seq.; federal, state or local laws, ordinances, rules, regulations, court orders or common law related in any way to the protection of the environment, health or safety; (B) any substance the presence of which at the Property causes or threatens to cause a nuisance upon the Property or to adjacent properties or poses or threatens to pose a hazard to the health or safety of human beings; and (C) any substance the presence of which at the Property or at nearby or adjacent properties could constitute a trespass.  In addition to the foregoing, to the extent not already included therein, the term “Hazardous Substance” also means (I) asbestos (including, without limitation, asbestos containing materials); (II) flammable, explosive, infectious, carcinogenic, mutagenic, or radioactive materials; (III) petroleum or any substance containing or consisting of petroleum hydrocarbons (including, without limitation, gasoline, diesel fuel, motor oil, waste oil, grease or any other fraction of crude oil); (IV) paints and solvents; (V) lead; (VI) cyanide; (VII) DDT; (VIII) printing inks; (IX) acids; (X) pesticides; (XI) ammonium compounds; (XII) polychlorinated biphenyls; (XIII) radon and radon gas; and (XIV) electromagnetic or magnetic materials, substances or emissions.

 

(ii)                                  The term “Environmental Requirement” means all present and future statutes, regulations, rules, ordinances, codes, licenses, permits, orders and similar items of all governmental agencies, authorities, departments, commissions, boards, bureaus, or instrumentalities of the United States, any state (including, without limitation, the State of Vermont) and any political subdivisions thereof, and all applicable judicial, administrative, and regulatory decrees, judgments, and orders, all covenants, easements, and restrictions of record, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Buyer’s engineers and/or consultants in any way relating to (A) industrial hygiene, (B) environmental conditions on, in, under, or about the Property, including soil and groundwater conditions, (C) the use, generation, manufacture, production, installation,

 

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maintenance, removal, transportation, storage, spill, or release of any Hazardous Substance) or (D) the protection or other regulation of human health or safety, natural resources or the environment, including, without limitation, all of the statutes, ordinances, codes, rules, regulations, orders, decrees, permits and other laws referred to in Paragraph 7(e)(i) above.

 

8.                                      Possession.  Subject to the Leaseback, possession of the Property shall be delivered to Buyer on the Closing Date.

 

9.                                      Cooperation.  Seller and Buyer shall cooperate and do all acts as may be reasonably required or requested by the other with regard to the consummation of the  transactions contemplated hereby including execution of any documents, applications or permits.  Seller hereby irrevocably authorizes Buyer and its agents to make all inquiries of any third party, including any governmental authority, as Buyer may reasonably require to complete its due diligence.

 

10.                               Miscellaneous.

 

(a)                                 Allocation of Purchase Price.  If necessary, Buyer and Seller each agree to file an IRS Form 8594 in compliance with Section 1060 of the Code, as amended, and applicable regulations.  The filings shall be made on a consistent basis and in accordance with the allocations in Subparagraph 2(a) of this Agreement.

 

(b)                                 Notices.  Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, (c) by United Parcel Service or another reputable commercial overnight courier that guarantees next day delivery and provides a receipt, or (d) by email, and such notices shall be addressed as follows:

 

If to Seller:                                                                                    NG Advantage LLC
 480 Hercules Drive
 Colchester, VT 05446
 Attention:  Tom Evslin
 Email:  tevslin@ngadvantage.com

 

With a copy to:                                                            Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road
 Palo Alto, CA 94304-1050
 Attention: Matthew Smith, Esq.
 Email: msmith@wsgr.com

 

If to Buyer:                                                                                Clean Energy
 4675 MacArthur Court, Suite 800
 Newport Beach, CA 92660
 Attention:  Vice President and General Counsel
 Email:  njensen@cleanenergyfuels.com

 

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With a copy to:                                                            Morrison & Foerster LLP
 12531 High Bluff Drive
 San Diego, CA 92130-2040
 Attention:  Steven Rowles, Esq.
  Email:  srowles@mofo.com

 

or to such other address as either party may from time to time specify in writing to the other party.  Any notice sent by certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon.  Notices delivered by United Parcel Service or an overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to United Parcel Service or  courier.  If any notice is transmitted by email, the notice shall be deemed received on the date of transmission, provided that the sender obtains evidence of transmission acceptance or verification and, if the transmission occurs after 5:00 p.m. (at the destination), then on the next business day.  If notice is received on a Saturday, Sunday, or legal holiday, it shall be deemed received on the next business day.

 

(c)                                  Brokers and Finders.  Each party represents and warrants to the other that no broker or finder was instrumental in arranging or bringing about this transaction and that there are no claims or rights for brokerage commissions or finder’s fees in connection with the transactions contemplated by this Agreement.  In the event that any broker or finder perfects a claim for commission or finder’s fee based upon the transactions contemplated by this Agreement, the party through whom such broker or finder makes a claim shall indemnify, save harmless and defend the other party from said claim and all costs and expenses (including reasonable attorneys’ fees) incurred by the other party in defending against the same.  The provisions of this paragraph shall survive the Closing.

 

(d)                                 Successors and Assigns.  This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors, heirs, administrators and assigns.  Buyer shall have the right, with notice to Seller (but without the necessity of Seller’s consent), to assign its right, title and interest in and to this Agreement to one or more assignees at any time before the Closing Date, and in such event, the party originally designated as Buyer shall be relieved of any and all obligations under this Agreement and any other instruments executed pursuant hereto, and such assignee(s) shall be substituted in its place and will assume all obligations of Buyer hereunder.

 

(e)                                  Amendments.  Except as otherwise provided herein, this Agreement may be amended or modified only by a written instrument executed by Seller and Buyer.

 

(f)                                   Deadlines on Non-Business Days.  In the event any deadline specified herein falls on a day which is not a regular business day, then the deadline shall be extended to the end of the next following regular business day.

 

(g)                                  Continuation and Survival of Representations and Warranties, Etc.; Rights of Offset against the Note.  All representations and warranties by the respective parties contained herein or made in writing pursuant to this Agreement are intended to and shall remain true and

 

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correct as of the time of Closing, shall be deemed to be material, and, together with all conditions, covenants and indemnities made by the respective parties contained herein or made in writing pursuant to this Agreement (except as otherwise expressly limited or expanded by the terms of this Agreement), shall survive the execution and delivery of this Agreement and the Closing, or, to the extent the context requires, beyond any termination of this Agreement.

 

(h)                                 Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Vermont.

 

(i)                                     Merger of Prior Agreements.  This Agreement and the exhibits hereto constitute the entire agreement between the parties and supersede all prior agreements and understandings between the parties relating to the subject matter hereof.

 

(j)                                    Enforcement.  If either party hereto fails to perform any of its obligations under this Agreement or if a dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute shall pay any and all costs and expenses incurred by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and attorneys’ fees and disbursements.  Any such attorneys’ fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys’ fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment.

 

(k)                                 Time of the Essence.  Time is of the essence of this Agreement.

 

(l)                                     Severability.  If any provision of this Agreement, or the application thereof to any person, place, or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied to other persons, places and circumstances shall remain in full force and effect.

 

(m)                             Effective Date.  As used herein, the term “Effective Date” shall mean the first date on which both Seller and Buyer shall have executed this Agreement.

 

(n)                                 Counterparts.  This Agreement may be signed in counterparts and all counterparts so executed shall constitute one contract, binding on all parties hereto, even though all parties are not signatory to the same counterpart.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth below.

 

	
 
    	
 
    	
BUYER:
    	
CLEAN ENERGY, 
    
	
 
    	
 
    	
a California corporation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
October 14, 2014
    	
By:
    	
/s/ Andrew J. Littlefair
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Andrew J. Littlefair
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
President and Chief Executive Officer
    

 

 

	
 
    	
 
    	
SELLER:
    	
NG ADVANTAGE LLC, 
    
	
 
    	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
October 14, 2014
    	
By:
    	
/s/ Tom Evslin
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Tom Evslin
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    

 

15

 

Robert H. Rushford of Gravel & Shea PC agrees to act as escrow holder in accordance with the terms of this Agreement and to act as the Reporting Person (as such term is defined in this Agreement).

 

 

	
 
    	
ROBERT H. RUSHFORD
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert H. Rushford
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Robert H. Rushford
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Partner
    
	
 
    	
 
    	
 
    
	
 
    	
Dated:
    	
October 14, 2014
    

 

16

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