Document:

exhibit10-2.htm

    
      Exhibit 10.2

       

    

    Execution Version 

     

    MEMBERSHIP INTEREST PURCHASE AGREEMENT

     

    by and between: 

     

    Landfill Energy Systems LLC,
a Delaware
limited liability company

     

    and

     

    MOWOOD, LLC,
a Delaware limited liability
company 

     

     

     

    Dated as of December 31, 2009

     

    

    
    

    TABLE OF CONTENTS 

     

    
      	
            	
            	
            	
            	Page
	SECTION 1.	Sale and Purchase of Interests; Related
      Transactions	1
	          
	Section 1.1.	          
      	Sale and Purchase of Interests	1
	
            	Section 1.2.	 	Closing Payment	1
	
            	Section 1.3.	 	Payment of the Closing Payment	1
	
            	Section 1.4.	 	Closing; Use of Proceeds	2
	
            	Section 1.5.	 	Actions at the Closing	2
	
            	Section 1.6.	 	Adjustment Procedure	3
	
            	Section 1.7.	 	Guaranty	3
	
            	Section 1.8.	 	Contingent Payments	4
	SECTION 2.	Representations and Warranties of the
      Seller Regarding the Interests	5
	
            	Section 2.1.	 	Title	5
	
            	Section 2.2.	 	No Agreements	6
	
            	Section 2.3.	 	Power and Authority	6
	 	Section 2.4.	 	Enforceability	6
	
            	Section 2.5.	 	Non-Contravention	6
	
            	Section 2.6.	 	Consents	6
	
            	Section 2.7.	 	Brokers	6
	SECTION 3.	Representations and Warranties of the
      Seller Regarding the Company and the Subsidiary	
            
	
            	Section 3.1.	 	Subsidiaries	7
	
            	Section 3.2.	 	Organization	7
	
            	Section 3.3.	 	Authority; Binding Nature of
      Agreements	7
	
            	Section 3.4.	 	Non-Contravention; Consents	7
	
            	Section 3.5.	 	Capitalization	8
	
            	Section 3.6.	 	Books and Records; Bank Accounts	8
	
            	Section 3.7.	 	Financial Statements	9
	
            	Section 3.8.	 	Absence of Changes	9
	
            	Section 3.9.	 	Title to Assets	11
	
            	Section 3.10.	 	Liabilities and Indebtedness; Accounts Payable;
    Receivables	11
	
            	Section 3.11.	 	Compliance With Legal
    Requirements	12

    

    -i-

     

    

    
    

    TABLE OF CONTENTS
(continued) 

     

    
      	          
	
            	          
	
            	Page
	
            	Section 3.12.	 	Governmental Authorizations	12
	
            	Section 3.13.	 	Inventory	13
	
            	Section 3.14.	 	Real Property	13
	
            	Section 3.15.	 	Contracts	14
	
            	Section 3.16.	 	Tax Matters	15
	
            	Section 3.17.	 	Employee and Labor Matters	17
	
            	Section 3.18.	 	Employee Benefit Plans; ERISA	17
	
            	Section 3.19.	 	Proceedings; Orders	17
	
            	Section 3.20.	 	Insurance	18
	
            	Section 3.21.	 	Intellectual Property	19
	
            	Section 3.22.	 	Environmental Matters	20
	
            	Section 3.23.	 	Customers; Suppliers	20
	
            	Section 3.24.	 	Brokers	21
	
            	Section 3.25.	 	Status	21
	
            	Section 3.26.	 	Regulatory Status	21
	
            	Section 3.27.	 	Certain Related Party Transactions	22
	
            	Section 3.28.	 	Absence of Certain Business
      Practices	22
	 	Section 3.29.	 	Disclosure	23
	
            	Section 3.30.	 	Knowledge of The Seller	23
	
            	Section 3.31.	 	Ownership of Environmental Attributes	23
	SECTION 4.	Representations and Warranties of the
      Purchaser	23
	
            	Section 4.1.	 	Due Organization and Existence	23
	
            	Section 4.2.	 	Power and Authority	23
	
            	Section 4.3.	 	Enforceability	24
	
            	Section 4.4.	 	Non-Contravention	24
	
            	Section 4.5.	 	Consents	24
	
            	Section 4.6.	 	Proceedings	24
	
            	Section 4.7.	 	Brokers	24
	
            	Section 4.8.	 	Experienced and Knowledgeable
      Purchaser	24
	SECTION 5.	Confidentiality	25

    

    -ii-

     

    

    
    

    TABLE OF CONTENTS
(continued)

     

    
      	          
	
            	          
	
            	Page
	SECTION 6.	Conditions Precedent to The Purchaser’s
      Obligation to Close	26
	
            	Section 6.1.	
            	Accuracy of Representations	26
	
            	Section 6.2.	
            	Approval of Transactions;
    Consents	26
	
            	Section 6.3.	
            	No Prohibition	26
	
            	Section 6.4.	
            	Performance of Obligations	26
	
            	Section 6.5.	
            	No Injunction	27
	
            	Section 6.6.	
            	No Material Adverse Effect	27
	
            	Section 6.7.	
            	Title Insurance and Surveys	27
	
            	Section 6.8.	
            	Estoppel Certificates	28
	
            	Section 6.9.	
            	Proceedings	28
	
            	Section 6.10.	
            	Opinions	28
	
            	Section 6.11.	
            	Engineering Reports	28
	
            	Section 6.12.	
            	Management Services Agreement	28
	
            	Section 6.13.	 	Termination of Management Services Agreement	28
	
            	Section 6.14.	
            	Larimer Actions	28
	
            	Section 6.15.	
            	Documentation of Material Contracts	28
	
            	Section 6.16.	
            	Environmental Attributes
    Agreement	28
	
            	Section 6.17.	
            	Sublease	28
	SECTION 7.	Conditions Precedent to the Seller’s
      Obligation to Close	29
	
            	Section 7.1.	
            	Accuracy of Representations	29
	
            	Section 7.2.	
            	Performance of Obligations	29
	SECTION 8.	Indemnification	30
	
            	Section 8.1.	
            	Survival of Representations	30
	
            	Section 8.2.	
            	Indemnification	30
	
            	Section 8.3.	
            	Limitations on Indemnification
      Liability	30
	 	Section 8.4.	
            	Indemnification Procedures	31
	
            	Section 8.5.	
            	Set-off	33
	
            	Section 8.6.	
            	Indemnity Escrow Agreement	33
	
            	Section 8.7.	
            	Exclusive Remedy	33
	SECTION 9.	
            	Other Agreements	34

    

    -iii-

     

    

    
    

    TABLE OF CONTENTS
(continued) 

     

    
      	          
	
            	          
	
            	Page
	
            	Section 9.1.	 	Consummation of Transactions and
      Obtaining Approvals	34
	
            	Section 9.2.	 	Pre-Closing Period Actions	34
	
            	Section 9.3.	 	Access to Information	36
	
            	Section 9.4.	 	Further Actions	36
	
            	Section 9.5.	 	Employees	37
	
            	Section 9.6.	 	Transfer and Sales Tax	37
	 	Section 9.7.	 	Update of Disclosure Schedules	38
	
            	Section 9.8.	 	No Interference	38
	
            	Section 9.9.	 	Tilden Receivable	38
	
            	Section 9.10.	 	Larimer Actions	38
	SECTION 10.	Termination	40
	
            	Section 10.1.	 	Reasons for Termination	40
	
            	Section 10.2.	 	Effect of Termination	41
	SECTION 11.	Miscellaneous Provisions	41
	
            	Section 11.1.	 	Fees and Expenses	41
	
            	Section 11.2.	 	Attorneys’ Fees	41
	
            	Section 11.3.	 	Notices	41
	
            	Section 11.4.	 	Time of the Essence	42
	
            	Section 11.5.	 	Headings	42
	
            	Section 11.6.	 	Counterparts	42
	
            	Section 11.7.	 	Governing Law; Consent to
      Jurisdiction	42
	
            	Section 11.8.	 	Successors and Assigns	43
	
            	Section 11.9.	 	Remedies Cumulative	43
	
            	Section 11.10.	 	No Waiver	44
	
            	Section 11.11.	 	Amendments	44
	
            	Section 11.12.	 	Severability	44
	
            	Section 11.13.	 	Parties in Interest	44
	
            	Section 11.14.	 	Entire Agreement	44
	
            	Section 11.15.	 	Construction	44

    

    -iv-

     

    

    
    

    
  EXHIBITS 

     

    
      	EXHIBIT A	CAPITALIZED TERMS
	EXHIBIT B	PROJECTS
	EXHIBIT C	FORM OF LLC INTEREST ASSIGNMENT
      AGREEMENT
	EXHIBIT D	FORM OF INDEMNITY ESCROW
    AGREEMENT
	EXHIBIT E	FORM OF EIFREH GUARANTY
	EXHIBIT F	FORM OF NON-FOREIGN
  CERTIFICATE
	EXHIBIT G	FORM OF TTO GUARANTY
	EXHIBIT H	RESERVED
	EXHIBIT I	FORM OF SEMINOLE AMENDMENT
	EXHIBIT J	FORM OF SARASOTA COUNTY
    AMENDMENT
	 
	SCHEDULES
	 
	SCHEDULE 1.3	 	      	WIRE INSTRUCTIONS
	SCHEDULE 3.2	 	
            	JURISDICTIONS
	SCHEDULE 3.4(a)	 	
            	VIOLATIONS
	SCHEDULE 3.4(b)	 	
            	CONSENTS
	SCHEDULE 3.5	 	
            	CAPITALIZATION
	SCHEDULE 3.6(a)	 	
            	OFFICERS, DIRECTORS AND MANAGERS
	SCHEDULE 3.6(b)	 	
            	BANK ACCOUNTS AND COMPANY CREDIT
      CARDS
	SCHEDULE 3.7(a)(ii)	 	
            	INTERIM BALANCE SHEET
	SCHEDULE 3.8	 	
            	CHANGES
	SCHEDULE 3.9(a)	 	
            	TITLE TO EQUITY INTERESTS IN THE SUBSIDIARY
	SCHEDULE 3.9(c)	 	
            	PERMITTED ENCUMBRANCES
	SCHEDULE 3.9(d)	 	
            	THIRD PARTY RIGHTS
	SCHEDULE 3.9(e)	 	
            	CONDITION OF ASSETS
	SCHEDULE 3.10(a)	 	
            	PAYOFF DEBT
	SCHEDULE 3.10(b)	 	
            	ACCOUNTS PAYABLE
	SCHEDULE 3.10(c)	 	
            	ACCOUNTS RECEIVABLE
	SCHEDULE 3.11(a)	 	
            	COMPLIANCE WITH LEGAL
    REQUIREMENTS
	SCHEDULE 3.12(a)	 	
            	GOVERNMENTAL AUTHORIZATIONS
	SCHEDULE 3.12(b)	 	
            	COMPLIANCE WITH GOVERNMENTAL
      AUTHORIZATIONS
	SCHEDULE 3.14(a)	 	
            	REAL PROPERTY LEASES
	SCHEDULE 3.15(a)	 	
            	MATERIAL CONTRACTS
	SCHEDULE 3.15(b)	 	
            	DEFAULTS
	SCHEDULE 3.15(c)	 	
            	CONTINGENT PAYMENTS
	SCHEDULE 3.16(a)	 	
            	TAX RETURNS
	SCHEDULE 3.16(c)	 	
            	TAX DEFICIENCIES
	SCHEDULE 3.16(d)	 	
            	TAX AUDITS
	SCHEDULE 3.16(e)	 	
            	TAX PROCEEDINGS
	SCHEDULE 3.17	 	
            	EMPLOYEE AND LABOR MATTERS
	SCHEDULE 3.19(a)	 	
            	PROCEEDINGS
	SCHEDULE 3.20(a)	 	
            	INSURANCE POLICIES
	SCHEDULE 3.20(c)	 	
            	PENDING
CLAIMS

    

    2 

     

    

    
    

    
      	SCHEDULE 3.21(a)	 	      	INTELLECTUAL PROPERTY
RIGHTS
	SCHEDULE 3.21(d)	
            	 	ROYALTIES
	SCHEDULE 3.22(a)	
            	 	ENVIRONMENTAL COMPLIANCE
	SCHEDULE 3.22(b)	
            	 	ENVIRONMENTAL PERMITS
	SCHEDULE 3.22(c)	
            	 	STORAGE TANKS
	SCHEDULE 3.22(d)	
            	 	RELEASES
	SCHEDULE 3.23(a)	
            	 	MAJOR CUSTOMERS
	SCHEDULE 3.23(b)	
            	 	MAJOR SUPPLIERS
	SCHEDULE 3.23(c)	
            	 	CHANGES TO EXISTING
    RELATIONSHIPS
	SCHEDULE 3.23(d)	
            	 	CHANGES TO SUPPLY TERMS
	SCHEDULE 3.27	 	 	RELATED PARTY TRANSACTIONS
	SCHEDULE 3.31	
            	 	OWNERSHIP OF ENVIRONMENTAL ATTRIBUTES
	SCHEDULE 6.8	
            	 	ESTOPPEL CERTIFICATE
  PARTIES

    

    3 

     

    

    
    

    MEMBERSHIP INTEREST PURCHASE AGREEMENT

     

         THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”), dated as of December 31, 2009 (the
“Effective Date”), is by and between Landfill Energy Systems
LLC, a Delaware limited liability company (the “Purchaser”), and Mowood, LLC, a Delaware limited
liability company (the “Seller”). Certain capitalized terms used in this
Agreement are defined on Exhibit A attached
hereto. 

     

    PRELIMINARY STATEMENTS 

     

         A. The Seller owns all of the issued and
outstanding membership interests (the “Interests”) of Timberline Energy, LLC, a Delaware
limited liability company (the “Company”); and 

     

         B. The Seller desires to sell the Interests to
the Purchaser, and the Purchaser desires to purchase the Interests from the
Seller, on the terms and conditions set forth in this Agreement. 

     

    AGREEMENT 

     

         NOW, THEREFORE, in
consideration of the foregoing and the respective representations, warranties,
covenants and agreements set forth herein and subject to the conditions and
other terms set forth herein, the parties hereto, desiring to be bound by the
terms hereof, hereby agree as follows: 

     

         SECTION 1. SALE AND PURCHASE OF INTERESTS; RELATED TRANSACTIONS. 

     

              Section 1.1. SALE AND PURCHASE OF INTERESTS. At the closing of the transaction
contemplated by this Agreement (the “Closing”), the Seller shall sell, transfer and
deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept
from the Seller, all of the Seller’s right, title and interest in and to the
Interests, free and clear of all Encumbrances, on the terms and subject to the
conditions set forth in this Agreement. 

     

              Section 1.2. CLOSING PAYMENT. The aggregate purchase
price to be paid by the Purchaser for the Interests at the Closing shall be
$XXXXXXX (as adjusted pursuant to the following sentence, the “Closing Payment,” and together with any Contingent Payments
made pursuant to Section 1.8, the “Purchase Price”).

     

              Section 1.3. PAYMENT OF THE CLOSING PAYMENT. The Purchaser shall pay the Closing Payment
to the Seller for the Interests on the Closing Date. In order to implement such
payment for the Interests, the Purchaser shall make the following direct
payments in immediately available funds at the Closing pursuant to wire
instructions set forth in Schedule 1.3 or delivered by the Seller not later than two
(2) business days prior to the Closing Date: 

     

              (a) first, the
Purchaser shall transfer to the Escrow Agent an amount equal to the Indemnity
Escrow Amount;

     

    

    
    

              (b) second, the
Purchaser shall transfer an amount equal to the Payoff Amount to the Seller (or
to the appropriate lender at the Seller’s request); and

     

              (c) third, the
Purchaser shall pay all amounts remaining with respect to the Closing Payment to
the Seller. 

     

    The payments
described above shall be treated for all purposes as follows: (i) all payments
by the Purchaser made pursuant to this Section 1.3 shall be treated as payment by the Purchaser
to the Seller for the Interests; and (ii) the Purchaser’s payment to the Seller
(or to the appropriate lender at the Seller’s request) of the Payoff Amount
shall be treated as a capital contribution by the Seller to the Company
immediately prior to or coincident with the Closing.

     

              Section 1.4. CLOSING; USE OF
PROCEEDS. The
Closing shall take place at the offices of HUSCH
BLACKWELL SANDERS LLP, 4801 MAIN STREET, SUITE 1000, KANSAS CITY, MISSOURI 64112 AT 10:00 A.M. (KANSAS CITY TIME) on a date to be
specified by the parties hereto, which shall be no later than the third business
day after satisfaction or waiver of the conditions set forth in Sections 6 and 7 (the “Closing Date”) but in no event earlier than fifteen (15)
business days following the Effective Date. The transfer of the Interests by the
Seller to the Purchaser shall be deemed to occur at 12:01 a.m., Kansas City
time, on the Closing Date.

     

              Section 1.5. ACTIONS AT THE CLOSING. At the Closing, the
Seller and the Purchaser (as applicable) shall take or cause to be taken the
following actions (the “Closing Actions”): 

     

              (a) TRANSFER OF INTEREST. Upon receipt of the Closing Payment by the
Seller, (i) the Seller shall execute and deliver to the Purchaser, and the
Purchaser shall execute and deliver to the Seller, the LLC Interest Assignment
Agreement, and (ii) the Seller and the Purchaser shall cause the Purchaser to be
admitted as a member of the Company.

     

              (b) INDEMNITY ESCROW AGREEMENT. Each of the Seller and the Purchaser shall
execute and deliver the Indemnity Escrow Agreement.

     

              (c) MANAGEMENT SERVICES AGREEMENT. The Seller shall cause Mowood Services Corp.
to, and the Purchaser shall, execute and deliver the Management Services
Agreement; provided, that Purchaser acknowledges and agrees that
Seller intends, in conjunction with the Closing, to transfer 100% of its
ownership in Mowood Services Corp. to Tilden, Joseph Hopper and Joseph Pirozzoli
or an entity controlled by them.

     

              (d) NON-FOREIGN CERTIFICATE. The Seller shall furnish the Purchaser with
a non-foreign affidavit dated as of the Closing Date, sworn under penalty of
perjury and in form and substance required under Treasury regulations issued
pursuant to Section 1445 of the Code stating that the Seller is not a “foreign
person” as defined in Section 1445 of the Code, substantially in the form of
Exhibit F hereto (the “Non-Foreign Certificate”). 

     

              (e) ADDITIONAL ACTIONS. The parties shall execute and deliver, or
cause to be executed and delivered, all other documents, and take such other
actions, in each case as shall be necessary or appropriate to consummate the
transactions contemplated hereby, all in accordance with the provisions of this
Agreement. 

     

    2 

     

    

    
    

              Section 1.6. ADJUSTMENT PROCEDURE.

     

              (a) WORKING CASH AT CLOSING. At the Closing, the Seller shall cause the
Company and the Subsidiary to have Working Cash in its accounts in an amount
that is no less than the greater of either: (a) Current Liabilities minus
Current Receivables of the Company and the Subsidiary as of the Closing Date and
(b) $200,000. At the Closing, the Seller shall provide evidence satisfactory to
the Purchaser of the Seller’s satisfaction of this Section 1.6(a).

     

              (b) THE CLOSING FINANCIAL STATEMENTS. The Purchaser will cause a certified public
accountant to prepare consolidated financial statements (the “Closing Financial Statements”) of the Company and the Subsidiary as of the
Closing Date and for the period from the Interim Balance Sheet Date through the
Closing Date, including a computation of Working Cash, Current Liabilities and
Current Receivables as of the Closing Date. The Purchaser will deliver the
Closing Financial Statements to the Seller within sixty days after the Closing
Date. If within thirty days following delivery of the Closing Financial
Statements, the Seller has not given the Purchaser notice of its objection to
the Closing Financial Statements (such notice must contain a statement of the
basis of the Seller’s objection), then the Closing Financial Statements will be
conclusive and binding upon the parties hereto. If the Seller gives a timely
notice of any objection to the Closing Financial Statements, then the Purchaser
and the Seller will negotiate in good faith to resolve any such objection. If
the parties are unable to resolve all such objections on or prior to the 30th
day after the Seller’s notice is given, then, at either party’s option in
writing, the Buyer or the Seller may submit the dispute to a national and
reputable accounting firm that is mutually selected by the parties (the
“Accountants”) for resolution. If issues in dispute are
submitted to the Accountants for resolution, (i) the parties will furnish to the
Accountants such workpapers and other documents and information relating to the
disputed issues as the Accountants may request and are available to the relevant
party (or its independent public accountants), and will be afforded the
opportunity to present to the Accountants any material relating to the
determination and to discuss the determination with the Accountants, (ii) the
determination by the Accountants, as set forth in a notice delivered to the
parties by the Accountants, will be binding and conclusive on the parties, and
(iii) the Purchaser and Seller will each bear 50% of the fees of the Accountants
for such determination. 

     

              (c) WORKING CASH ADJUSTMENT PAYMENTS. On the tenth business day following the day
the Closing Financial Statements become final and binding, (i) if such Closing
Financial Statements indicate that at Closing, the Company and the Subsidiary
had Working Cash in its accounts in amounts that exceed an amount equal to the
Current Liabilities minus the Current Receivables of the Company and the
Subsidiary on the Closing Date, then the Purchaser shall pay to the Seller such
excess in immediately available funds pursuant to the wire instructions set
forth in Schedule 1.3, and (ii) if such Closing Financial
Statements indicate that at Closing, the Company and the Subsidiary did not have
Working Cash in its accounts in amounts that equaled or exceeded the Current
Liabilities minus the Current Receivables of the Company and the Subsidiary on
the Closing Date, then the Seller shall pay to Purchaser such shortfall within
thirty days after demand by the Purchaser therefor.

     

              Section 1.7. GUARANTY. As of the Effective Date, the parties
acknowledge and agree that TTO has executed and delivered to the Purchaser the
TTO Guaranty and that EIF Renewable Holdings has executed and delivered to the
Seller the EIFREH Guaranty.

     

    3 

     

    

    
    

              Section 1.8. CONTINGENT PAYMENTS. Subject to the conditions set forth below,
the Purchaser shall make the following Contingent Payments to the Seller:

     

              (a) BUTLER CONTINGENT PAYMENT. 

     

              (i) PAYMENT. Within thirty (30) days following the Butler
Contingent Payment Date, the Purchaser shall pay, or cause to be paid, to the
Seller the sum of $XXXXXXX (the “Butler Contingent Payment”) pursuant to the wire instructions set forth
in Schedule 1.3. 

     

              (ii) CONDITIONS. The “Butler Contingent Payment
Date” shall be the date no
later than December 31, 2011, on which the Purchaser has received evidence
reasonably satisfactory to it that Butler County Landfill, Inc. either has
received the following Governmental Authorizations with respect to an 130 acre
expansion or is not required to obtain such Governmental Authorizations for the
construction, ownership or operation of such expanded landfill
area:

     

                        (A) a Conditional Use Permit for such expanded landfill area issued by the
Butler County Zoning Administrator following approval of the resolution for the
expanded Conditional Use Permit by the Butler County Board of Supervisors, with
reference to parcels 120035917 and 120035918; 

     

                        (B) a Municipal Solid Waste Disposal Area Permit issued by the Nebraska
Department of Environmental Quality Integrated Waste Management
Program;

     

                        (C) a National Pollution Discharge Elimination System Industrial Storm Water
Permit for stormwater discharge issued by the Nebraska Department of
Environmental Quality Water Quality Division;

     

                        (D) an Air Construction Permit issued by the Nebraska Department of
Environmental Quality Air Quality Division; and 

     

                        (E) an Air Operating Permit issued by the Nebraska Department of
Environmental Quality Air Quality Division. 

     

              (b) SARASOTA CONTINGENT PAYMENT. 

     

              (i) PAYMENT. Within thirty (30) days following the
Sarasota Contingent Payment Date, the Purchaser shall pay, or cause to be paid,
to the Seller the sum of $XXXXXXX (the “Sarasota Contingent Payment”) pursuant to the wire instructions set forth
in Schedule 1.3. 

     

              (ii) CONDITIONS. The “Sarasota Contingent Payment
Date” shall be the date no
later than April 30, 2010, on which all of the following conditions have been
satisfied with respect to the Sarasota Project: 

     

                        (A) The Purchaser shall have received an executed waiver from Seminole
Electric Cooperative, Inc., in the form of Exhibit I; and

     

    4 

     

    

    
    

                        (B) The Purchaser shall have received an executed waiver from Sarasota
County, in the form of Exhibit J.

     

              (c) ERIE CONTINGENT PAYMENT. 

     

              (i) PAYMENT. On or before the Erie Contingent Payment
Date, the Purchaser shall pay, or cause to be paid, to the Seller the sum of
$XXXXXXX (the “Erie Contingent Payment”) pursuant to the wire instructions set forth
on Schedule 1.3. The
“Erie Contingent Payment Date” shall be the date no later than sixty (60)
days following the Closing Date on which the Purchaser decides, in its sole
discretion, to pursue development of the Erie Project. 

     

              (ii) CONDITIONS. If the Purchaser decides, in its sole
discretion, not to pursue development of the Erie Project, at Seller’s request,
the Purchaser shall cause the Company to quitclaim all of the Assets related to
the Erie Project (the “Erie Assets”) to the Seller for consideration of $1.00 so
long as: (A) such transfer complies with applicable Legal Requirements and any
applicable Material Contract, (B) the Seller accepts and assumes all of the
Company’s obligations with respect to the Erie Assets (including under any
Contract related to the Erie Project); provided that the Seller shall not accept or assume
any obligations with respect to the Erie Assets to the extent such obligation is
incurred or arises out of events occurring after the Closing Date, (C) the
Seller releases and covenants not to sue the Purchaser or any of its Affiliates
with respect to any claim or loss attributable or related to the Erie Assets
assumed by Seller, (D) the Seller agrees to indemnify any Purchaser Indemnitee
from any Damages incurred by such Purchaser Indemnitee with respect to the Erie
Assets assumed by Seller, and (E) neither the Company nor the Purchaser has any
on-going Liability with respect to the Erie Assets assumed by Seller. In
connection with such transfer and assignment of the Erie Assets, the Purchaser,
at no cost to it, the Company or its or their Affiliates, shall cooperate with
all reasonable requests to assist the Seller with the consummation of such
transfer after the Closing.

     

              (d) RIGHT OF SET-OFF. Without limiting any of the Purchaser’s rights
or remedies available hereunder or at law or in equity, at the Purchaser’s
election, the Purchaser or any Purchaser Indemnitee may offset against
Contingent Payments due the Seller hereunder any amount remaining owed the
Purchaser or any Purchaser Indemnitee hereunder. Amounts set off under this
Section 1.8(d) shall be treated for all purposes as payment
by the Purchaser hereunder in the amount of such set-off.

     

         SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING THE INTERESTS. The Seller represents and warrants as of the
Effective Date and as of the Closing, to and for the benefit of the Purchaser as
follows: 

     

              Section 2.1. TITLE. The Seller is the record
and beneficial owner of the Interests and has good, valid and marketable title
to the Interests and owns such Interests free and clear of any and all
Encumbrances. The Interests constitute 100% of the issued and outstanding
limited liability company membership interests in the Company. At the Closing,
the Seller will transfer to the Purchaser good, valid and marketable title of
the Interests free and clear of all Encumbrances. 

     

    5 

     

    

    
    

              Section 2.2. NO AGREEMENTS. Except for this
Agreement, the Seller is not a party or subject to any outstanding options,
warrants, contracts, calls, puts, rights to subscribe, conversion or preemptive
rights or other agreements or rights providing for the issuance, disposition or
acquisition of any of the Company’s securities, including the Interests, or any
rights or interests exercisable therefor. Other than the operating agreement of
the Company, the Seller is not party to any Contract limiting the transfer of
the Interests or otherwise affecting the voting rights or other rights related
to the Interests. The Seller has not granted any Person any proxy or other right
with respect to the Interests. 

     

              Section 2.3. POWER AND AUTHORITY. The Seller is a limited liability company, duly formed and validly
existing in good standing under the laws of the State of Delaware. The Seller is
qualified to do business in all jurisdictions where the failure to qualify would
materially and adversely affect its ability to execute, deliver or perform its
obligations under this Agreement and the Transaction Documents to which it is or
may become a party. The Seller has the full right, power and authority to enter
into and to perform its obligations under this Agreement and each Transaction
Document to which it is or may become a party. All limited liability company
action on the part of the Seller necessary for the authorization, execution and
delivery of, and performance under, this Agreement and the Transaction Documents
to which it is or may become a party have been taken. 

     

              Section 2.4. ENFORCEABILITY. This Agreement and each Transaction Document to which the Seller is or
may become a party, when executed by the Seller, constitutes the legal, valid
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting generally
the enforcement of creditors’ rights and by general principles of equity.

     

              Section 2.5. NON-CONTRAVENTION. The execution and delivery by the Seller of
this Agreement and any of the Transaction Documents to which it is or may become
a party, and the consummation and performance of any of the Transactions, will
not directly or indirectly (with or without notice or lapse of time): (a)
contravene, conflict with or result in a violation of (i) any of the provisions
of the Seller’s certificate of formation or operating agreement, or (ii) any
resolution adopted by the Seller’s members and the Seller’s Management
Committee; (b) contravene, conflict with or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
Transactions or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which the Seller is subject; or (c) contravene,
conflict with or result in a violation of, any Contract to which the Seller is a
party or by which any of the Seller’s properties or assets are or may be
bound.

     

              Section 2.6. CONSENTS. The execution and
delivery by the Seller of this Agreement and each of the Transaction Documents
to which the Seller is or may become a party and the consummation and
performance of the Transactions do not and will not require the Seller to make
any filing with or give any notice to, or obtain any Consent from any Person.

     

              Section 2.7. BROKERS. The Seller has not agreed or become
obligated to pay, or has taken any action that might result in any Person
claiming to be entitled to receive, any brokerage commission, finder’s fee or
similar commission or fee from the Purchaser, any of its Affiliates, the Company
or the Subsidiary in connection with any of the Transactions, other than the
Seller has engaged Ewing Bemiss & Co. (“Ewing Bemiss”) as its financial advisor in connection with
the Transactions and is solely responsible to pay Ewing Bemiss for such
services.

     

    6

     

    

    
    

         SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING THE COMPANY AND THE SUBSIDIARY. The
Seller represents and warrants, to and for the benefit of the Purchaser, on the
Effective Date and as of the Closing, as follows: 

     

              Section 3.1. SUBSIDIARIES. Except for the Company’s
ownership of 50% of the outstanding equity interests (the “Larimer Interests”) of Larimer Energy, LLC, a Delaware limited
liability company (the “Subsidiary”), the Company does not have any subsidiaries
and has never owned, beneficially or otherwise, any shares or other securities
of, or any direct or indirect interest of any nature in, any Entity.

     

              Section 3.2. ORGANIZATION. The Company and
the Subsidiary are each limited liability companies duly formed and validly
existing in good standing under the laws of the State of Delaware. The Company
and the Subsidiary are each qualified to do business in each jurisdiction in
which the nature of the Business or the character or location of the Assets
owned, leased or operated by it makes such qualification necessary, except where
the failure to so qualify is not reasonably likely to have a Material Adverse
Effect. Schedule 3.2 contains a complete and accurate list of the
jurisdictions in which the Company and the Subsidiary are qualified to do
business as foreign entities. 

     

              Section 3.3. AUTHORITY; BINDING NATURE OF AGREEMENTS. 

     

              (a) AUTHORITY. Each of the Company and the Subsidiary has
the requisite limited liability company power and authority to conduct its
Business in the manner in which its Business is currently being conducted and to
own, lease and operate its Assets in the manner in which its Assets are
currently owned and used. 

     

              (b) ORGANIZATIONAL DOCUMENTS. The Seller has delivered
to the Purchaser accurate and complete copies of each of the Company’s and the
Subsidiary’s certificates of formation and operating agreements, each as amended
as of the Effective Date, and no amendments have been made thereto or have been
authorized since the Effective Date. 

     

              Section 3.4. NON-CONTRAVENTION; CONSENTS. 

     

              (a) NON-CONTRAVENTION. Except as set forth in Schedule 3.4(a), neither the execution and delivery of this
Agreement or any of the Transaction Documents, nor the consummation or
performance of any of the Transactions, will directly or indirectly (with or
without notice or lapse of time): 

     

              (i) contravene, conflict with or result in a violation of any Legal
Requirement or any Order to which the Company or the Subsidiary, or any of the
Assets of the Company or the Subsidiary, is subject; 

     

    7

     

    

    
    

              (ii) contravene, conflict with or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate or modify, any Governmental Authorization that is
held by the Company or the Subsidiary or that otherwise relates to the Business
or to the Assets of the Company or the Subsidiary;

     

              (iii) contravene, conflict with or result in a violation or breach of, or
result in a default under, any provision of any Contract to which the Company or
the Subsidiary is a party or by which any of their Assets are
bound; 

     

              (iv) give any Person the right to (A) declare a default or exercise any remedy
under any Contract to which the Company or the Subsidiary is a party or by which
any of their Assets are bound, (B) accelerate the maturity or performance of any
Contract to which the Company or the Subsidiary is a party or by which any of
their Assets are bound or (C) cancel, terminate, modify or otherwise affect any
rights of the Company under any Contract to which the Company or the Subsidiary
is a party or by which any of their Assets are bound; or 

     

              (v) result in the imposition or creation of any Encumbrance upon the
Interests or any of the Assets of the Company or the Subsidiary. 

     

              (b) CONSENTS. Except as set forth in Schedule 3.4(b), neither the Company nor the Subsidiary was,
is or will be required to make any filing with or give any notice to, or to
obtain any Consent from, any Person in connection with the execution and
delivery of any of the Transaction Documents or the consummation or performance
of any of the Transactions. 

     

              Section 3.5. CAPITALIZATION. Part I of Schedule 3.5 sets forth a complete and correct list of all
of the holders of any equity interest in the Company and the Subsidiary and the
percentage interests of each such equity holder. The Interests and the Larimer
Interests have been duly authorized and are validly issued and outstanding in
compliance with all applicable Legal Requirements, fully paid and nonassessable.
Except for this Agreement and as set forth on Part II of Schedule 3.5, there is no: (i) outstanding subscription,
option, call, warrant or right (whether or not currently exercisable) to acquire
any Interests or the Larimer Interests; (ii) outstanding security, instrument or
obligation that is or may become convertible into or exchangeable for any
Interests or the Larimer Interests; (iii) Contract under which the Company or
the Subsidiary is or may become obligated to sell or otherwise issue any
Interests or the Larimer Interests; or (iv) condition or circumstance that may
directly or indirectly give rise to or provide a basis for the assertion of a
claim by any Person to the effect that such Person is entitled to acquire or
receive any Interests or the Larimer Interests. Other than the operating
agreement of the Subsidiary, the Company is not party to any Contract limiting
the transfer of, or otherwise affecting the voting rights or other rights
related to, the Larimer Interests. The Company has not granted any Person any
proxy or other right with respect to the Larimer Interests. 

     

              Section 3.6. BOOKS AND RECORDS; BANK ACCOUNTS.

     

              (a) BOOKS AND RECORDS. Accurate and complete copies of the contents
of the minute books of the Company and the Subsidiary have been delivered to the
Purchaser. The Books and Records of the Company and the Subsidiary are complete
and correct in all material respects and have been maintained in accordance with
sound business practices. Schedule 3.6(a) accurately lists each current officer,
director and manager of the Company and the Subsidiary. 

     

    8 

     

    

    
    

              (b) ACCOUNTS. Part I of Schedule 3.6(b) contains an accurate and complete list of:
(i) the name of each bank or other financial institution in which the Company
and the Subsidiary has an account (including any certificates of deposit) or
safe deposit box, (ii) the recent balances of the accounts held in such banks,
(iii) the names of all Persons authorized to draw thereon or to have access
thereto, and (iv) the names of all Persons other than the officers of the
Company and the Subsidiary who are authorized to incur Liabilities on behalf of
the Company or the Subsidiary for borrowed funds. At the Closing, copies of all
material records in the Seller’s, the Company’s or the Subsidiary’s possession,
including all signature and authorization cards, pertaining to such accounts and
safe deposit boxes will be delivered or made available to the Purchaser. Part II
of Schedule 3.6(b) is an accurate and complete list of any
Persons who have been issued a company credit card, including the type of card
and account number. 

     

              Section 3.7. FINANCIAL STATEMENTS. 

     

              (a) COMPANY FINANCIAL STATEMENTS. The Seller has delivered to the Purchaser
accurate and complete copies of the following financial statements and notes
(collectively, the “Company Financial
Statements”):

     

              (i) the balance sheet of the Company as of November 30, 2008, and the related
statements of earnings, members’ equity and cash flows of the Company for the
fiscal year then ended, together with the notes thereto and the unqualified
report and certification of Stone Carlie & Company, L.L.C. relating thereto;
and 

     

              (ii) the unaudited balance sheet of the Company (the “Interim Balance Sheet”) as of the Interim
Balance Sheet Date, and the related unaudited income statement, changes in
members’ equity and cash flows of the Company for the nine months then ended,
together with the notes thereto, accurate and complete copies of which are
attached as Schedule 3.7(a)(ii). 

     

              (b) PREPARATION OF COMPANY FINANCIAL STATEMENTS. The Company
Financial Statements (i) have
been prepared in accordance with GAAP consistently applied, subject, in the case
of the Interim Balance Sheet, to the lack of all required footnotes, (ii) are
accurate and complete in all material respects, and (iii) fairly present in all
material respects the financial condition, changes in members’ equity, results
of operations and cash flows as of the respective dates and for the respective
periods covered thereby.

     

              Section 3.8. ABSENCE OF CHANGES. Except as set forth in
Schedule 3.8, since November 30, 2008: 

     

              (a) to the Knowledge of the Seller, there has not been any change and no
event has occurred that could reasonably be expected to have a Material Adverse
Effect, and there has been no adverse change in the financial performance of the
Company or the Subsidiary that could reasonably be expected to have a Material
Adverse Effect; 

     

    9 

     

    

    
    

              (b) there has not been any material loss, damage or destruction to, or any
interruption in the use of, any of the Assets of the Company or the Subsidiary
(whether or not covered by insurance); 

     

              (c) neither the Seller, the Company nor the Subsidiary has sold or otherwise
issued or pledged, hypothecated or granted any Encumbrance in, any Interests,
the Larimer Interests, membership interests or any other securities;

     

              (d) neither the Company nor the Subsidiary has amended its certificate of
formation or operating agreement; 

     

              (e) neither the Company nor the Subsidiary has effected, or been party to,
any merger, consolidation, recapitalization or reclassification of membership
interests; 

     

              (f) neither the Company nor the Subsidiary has leased, licensed, sold or
abandoned or otherwise disposed of any Asset, other than sales of landfill gas
(or electricity or environmental attributes generated from sales of landfill
gas) in the Ordinary Course of Business; 

     

              (g) neither the Company nor the Subsidiary has incurred or committed for any
capital expenditure;

     

              (h) neither the Company nor the Subsidiary has written off as uncollectible,
or established any extraordinary reserve with respect to, any Receivable or
other Indebtedness; 

     

              (i) neither the Company nor the Subsidiary has pledged or hypothecated any of
its Assets or otherwise permitted any of its Assets to become subject to any
Encumbrance; 

     

              (j) neither the Company nor the Subsidiary has made any loan or advance to
any other Person; 

     

              (k) neither the Company nor the Subsidiary has (i) established, adopted,
amended or terminated any Plan (including any amendment with a future effective
date), or (ii) hired any employees; 

     

              (l) neither the Company nor the Subsidiary has incurred, assumed, guaranteed
or otherwise become subject to any Liability, other than accounts payable
incurred by the Company in the Ordinary Course of Business; 

     

              (m) neither the Company nor the Subsidiary has discharged any Encumbrance or
discharged or paid any Indebtedness or other Liability, except for accounts
payable and accrued Liabilities that have been discharged or paid in the
Ordinary Course of Business; 

     

              (n) neither the Company nor the Subsidiary has forgiven any Indebtedness or
otherwise released or waived any right or claim; 

     

              (o) neither the Company nor the Subsidiary has changed any of its accounting
practices in any material respect; 

     

    10 

     

    

    
    

              (p) neither the Company nor the Subsidiary has entered into any material
transaction or taken any other action outside the Ordinary Course of Business;
and 

     

              (q) neither the Company nor the Subsidiary has agreed or committed (in
writing or otherwise) to take any of the actions referred to in clauses
(c) through (p) above. 

     

              Section 3.9. TITLE TO ASSETS. 

     

              (a) TITLE TO THE EQUITY INTERESTS IN THE SUBSIDIARY. Except as set forth in Schedule 3.9(a), the Company is the record and beneficial
owner of the Larimer Interests and has good, valid and marketable title to the
Larimer Interests, free and clear of any and all Encumbrances. 

     

              (b) SUFFICIENCY OF ASSETS. No assets other than the Assets of the
Company and the Subsidiary are necessary to conduct or operate, or have been
material to the conduct or the operation of, the Business of the Company and the
Subsidiary. 

     

              (c) TITLE TO ASSETS. The Company and the Subsidiary each has good
and marketable title to, or in the case of leased property has a valid leasehold
interest in, all of its Assets free and clear of any Encumbrances, except as set
forth in Schedule 3.9(c) (the “Permitted Encumbrances”). Notwithstanding the foregoing, the Seller
shall not be deemed to have made representations regarding any landlord’s
interest in, or title to, any real estate leased pursuant to the Real Property
Leases. 

     

              (d) THIRD PARTY RIGHTS. Except as set forth in Schedule 3.9(d), no Person (other than
the Purchaser by reason of this Agreement) has any contractual or other right of
first refusal or any other right or option to acquire the Assets of the Company
or the Subsidiary or any portion thereof. 

     

              (e) CONDITION OF ASSETS. Except as set forth in Schedule 3.9(e), all of the Tangible Property (i) is located
at the Company’s and the Subsidiary’s respective offices or facilities, (ii) is
in good operating condition and repair (taking account the age of any such
item), ordinary wear and tear excepted, (iii) is adequate for the purposes for
which it is being used, and (iv) has been maintained in accordance with
commercially reasonable practices. 

     

              Section 3.10. LIABILITIES AND INDEBTEDNESS; ACCOUNTS PAYABLE; RECEIVABLES. 

     

              (a) LIABILITIES AND INDEBTEDNESS. 

     

              (i) Neither the Company nor the Subsidiary has any Liabilities, except for
(i) Liabilities identified as such in the “liabilities” column of the Interim
Balance Sheet; (ii) the Payoff Debt listed on Schedule 3.10(a), (iii) Liabilities incurred by the Company in
the Ordinary Course of Business since the Interim Balance Sheet Date and not
incurred in breach of this Agreement, including the representations and
warranties contained in Section 3.8 hereof; and (iv) the Company’s and the
Subsidiary’s obligations under the Contracts disclosed on the Disclosure
Schedules, provided that no such Liability consisted of or
resulted from a default under or violation of any such Contract.

     

              (ii) As of the Closing, the Company shall have no Indebtedness.

     

    11 

     

    

    
    

              (b) ACCOUNTS PAYABLE. Schedule 3.10(b) provides an accurate and complete aging of
the Company’s and the Subsidiary’s accounts payable as of the Effective Date or
the Closing Date, as applicable. Except as set forth in Schedule 3.10(b), there are no unpaid invoices or bills which
the Company or the Subsidiary, as applicable, has disputed or determined to
dispute or refused to pay. All payables of the Company and the Subsidiary arose
in bona fide arm’s length transactions in the Ordinary Course of Business and no
such payable is delinquent in its payment.

     

              (c) ACCOUNTS RECEIVABLE. Schedule 3.10(c) provides an accurate and complete aging of
Receivables of the Company and the Subsidiary as of the Effective Date or the
Closing Date, as applicable. All of the Receivables of the Company and the
Subsidiary (i) arose from bona fide transactions entered into in the ordinary
course of business and are not subject to any counterclaim or setoff, and (ii)
are current, subject to the reserves shown on the accounting records of the
Company and the Subsidiary as of the Closing Date, which have been determined
consistent with GAAP. 

     

              Section 3.11. COMPLIANCE WITH LEGAL REQUIREMENTS. 

     

              (a) LEGAL REQUIREMENTS. Except as set forth in Schedule 3.11(a), each of the Company and the Subsidiary is,
and at all times has been, in material compliance with each Legal Requirement
that is applicable to it, or to the conduct of its Business or the ownership or
use of its Assets and no event has occurred, and no condition or circumstance
exists, that is reasonably likely to constitute or result in a material
violation by the Company or the Subsidiary of, or a failure on the part of the
Company or the Subsidiary to materially comply with, any Legal Requirement
applicable to it.

     

              (b) NOTICE OF NON-COMPLIANCE. None of the Seller, the Company or the
Subsidiary has received, at any time, any written notice or, to the Knowledge of
the Seller, any other communication from any Governmental Body or any other
Person regarding any actual or alleged violation of, or failure to comply with,
any Legal Requirement applicable to it which has not been fully resolved without
any continuing effect on the Company or on the Subsidiary. 

     

              Section 3.12. GOVERNMENTAL AUTHORIZATIONS. 

     

              (a) OWNERSHIP. Schedule 3.12(a) lists all Governmental Authorizations by
which the Company and the Subsidiary or their Assets are bound, accurate and
complete copies of which have been delivered to the Purchaser. The Governmental
Authorizations identified in Schedule 3.12(a) constitute all of the Governmental
Authorizations necessary (i) to enable each of the Company and the Subsidiary to
conduct its respective Business in the manner in which it is currently being
conducted, and (ii) to permit each of the Company and the Subsidiary to
construct, own and operate its Assets in the manner in which they are currently
operated. Each Governmental Authorization identified or required to be
identified in Schedule 3.12(a) is valid, in full force and effect and held
in the name of the Company or the Subsidiary required to construct, own and
operate the Assets as currently operated. 

     

    12 

     

    

    
    

              (b) COMPLIANCE. Except as set forth in Schedule 3.12(b): 

     

              (i) each of the Company and the Subsidiary is in material compliance with all
of the terms and requirements of each Governmental Authorization identified or
required to be identified in Schedule 3.12(a);

     

              (ii) no event has occurred, and no condition or circumstance exists, that
(with or without notice or lapse of time) (A) constitutes or results in or is
reasonably likely to constitute or result in a violation of or a failure to
comply with any term or requirement of any Governmental Authorization identified
in Schedule 3.12(a), or (B) would result in the revocation,
withdrawal, suspension, cancellation, termination or modification of any
Governmental Authorization identified in Schedule 3.12(a); 

     

         (iii) none of the Seller, the Company or the
Subsidiary has received any written notice or, to the Knowledge of the Seller,
any other communication from any Governmental Body or any other Person
regarding, and, to the Knowledge of the Seller, there is no basis for (A) any
actual or alleged violation of or failure to comply with any term or requirement
of any Governmental Authorization, or (B) any actual, proposed, possible or
potential revocation, withdrawal, suspension, cancellation, termination or
modification of any Governmental Authorization identified in Schedule 3.12(a); and 

     

         (iv) all applications required to have been filed
for the renewal of the Governmental Authorizations identified or required to be
identified in Schedule 3.12(a) have been duly filed on a timely basis with
the appropriate Governmental Bodies in order to maintain in effect any
applicable Governmental Authorization during the review of such application, and
each other notice or filing required to have been given or made with respect to
such Governmental Authorizations has been duly given or made on a timely basis
with the appropriate Governmental Bodies. 

     

              Section 3.13. INVENTORY. All of the Company’s and the Subsidiary’s
existing inventory is of such quality as to be usable by the Company and the
Subsidiary in the Ordinary Course of Business and the inventory levels
maintained by the Company and the Subsidiary are adequate for the conduct of the
Company’s and the Subsidiary’s operations as currently conducted. 

     

              Section 3.14. REAL PROPERTY. 

     

              (a) REAL PROPERTY LEASES. Schedule 3.14(a) accurately identifies all real property
leases, easements, licenses, rights of way, and other Contracts pursuant to
which the Company or the Subsidiary has any real property rights to which the
Company or the Subsidiary is a party (the “Real Property Leases”), accurate and complete copies of which have
been delivered to the Purchaser. Except for the leaseholds and other real
property interests created under the Real Property Leases, there is no real
property or any interest in real property used or utilized in connection with
the Assets or Business of the Company or the Subsidiary. Neither the Company nor
the Subsidiary owns any real property. 

     

    13 

     

    

    
    

              (b) ENFORCEABILITY. The Real Property Leases are valid and in
full force and effect and constitute valid, binding and enforceable obligations
of the Company and the Subsidiary, respectively, and to the Knowledge of the
Seller, the other parties thereto. 

     

              (c) NO DEFAULTS. Neither the Company nor the Subsidiary, or
to the Seller’s Knowledge the other parties thereto, is in breach or default of
any Real Property Lease. Neither the Company nor the Subsidiary has received or
given any notice or threat claiming any violation of, or breach, default or
liability under any Real Property Lease or Legal Requirement applicable to it,
or requiring or calling attention to the need for material work, repairs,
construction, alteration or installments to the real property under the Real
Property Leases. 

     

              (d) SUFFICIENCY OF REAL PROPERTY LEASES. All plants, facilities, structures and other improvements are
generally suitable for the purposes used and are generally adequate and
sufficient for all current operations of the Business of the Company and the
Subsidiary, and are generally in good operating condition and repair (taking
into account the age of any such item), ordinary wear and tear excepted.

     

              (e) UTILITIES. The real property occupied by the Company
and the Subsidiary pursuant to the Real Property Leases is serviced by adequate
and sufficient water, sewer and utility service in connection with the current
use thereof, at, to the Knowledge of the Seller, normal and customary rates.

     

              (f) OTHER REAL PROPERTY AGREEMENTS. Other than the Real Property Leases, there
are no leases, subleases, licenses, concessions, or other agreements, written or
oral, granting to any Person other than the Company or the Subsidiary the right
of use or occupancy of any real property. 

     

              (g) CONDEMNATION. (i) Neither the Company nor the Subsidiary
has received written notice or, to the Seller’s Knowledge, any oral
communication, of, (ii) there are no existing, and (iii) the Seller has no
Knowledge of, in each case, any proposed or contemplated, condemnation or
eminent domain actions of any type, or special assessments of any type affecting
any portion of any of the Projects and/or any real property which is the subject
of the Real Property Leases. 

     

              Section 3.15. CONTRACTS. 

     

              (a) MATERIAL CONTRACTS. The Seller has delivered to the Purchaser
accurate and complete copies of all Material Contracts to which the Company or
the Subsidiary is bound (or in the case of oral contracts, accurate and complete
written summaries thereof), and each such Contract is listed in Schedule 3.15(a). The Contracts listed in Schedule 3.15(a) constitute all of the Contracts necessary to
operate, or material to the operation of, the Business of the Company and the
Subsidiary. Each Contract listed in Schedule 3.15(a) is valid and in full force and effect and
constitutes a valid, binding and enforceable obligation of the Company or the
Subsidiary, respectively, and, to the Knowledge of the Seller, the other parties
thereto. 

     

              (b) NO DEFAULTS. Except as set forth in Schedule 3.15(b), with respect to the
Contracts listed in Schedule 3.15(a): (i) neither the Company nor the Subsidiary
has violated or breached, or declared or committed any default under, any
Material Contract and, to the Knowledge of the Seller, no other Person has
violated, breached, or declared or committed any default under, any Material
Contract; (ii) no event has occurred, and no circumstance or condition exists,
that is reasonably likely to (with or without notice or lapse of time) (A)
result in a violation or breach of any of the provisions of any Material
Contract by the Company or the Subsidiary or, to the Knowledge of the Seller, by
any other parties thereto, (B) give any Person the right to declare a default or
exercise any remedy under any Material Contract, (C) give any Person the right
to accelerate the maturity or performance of any Material Contract, or (D) give
any Person the right to cancel, terminate or modify any Material Contract; (iii)
neither the Company nor the Subsidiary has received any notice or other
communication (in writing or otherwise) regarding any actual or alleged
violation or breach of, or default under, any Material Contract; (iv) neither
the Company nor the Subsidiary has waived any of its rights under any Material
Contract; and (v) no Person is renegotiating or, to the Knowledge of the Seller,
has the right to renegotiate, any amount paid or payable to the Company or any
Subsidiary under any Material Contract or any other term or provision of any
Material Contract.

     

    14 

     

    

    
    

              (c) CONTINGENT PAYMENTS. Schedule 3.15(c) lists all contingent or other conditional
payment obligations of the Company or the Subsidiary under any Material
Contract.

     

              Section 3.16. TAX MATTERS.

     

              (a) TAX RETURNS. Except as set forth in Schedule 3.16(a), the Company and the
Subsidiary have properly and timely filed all Tax Returns that they were
required to file, all of which were accurately prepared and completed in full
compliance with all applicable Legal Requirements. All Taxes due and owing by
the Company and the Subsidiary (whether or not shown on any Tax Return) have
been timely paid, and each of the Company and the Subsidiary have withheld and
paid all Taxes required to have been withheld and paid in connection with any
amounts paid or owing to any employee, independent contractor, creditor, member,
or other third party. No extension or waiver of the limitation period applicable
to any of the Tax Returns of the Company or the Subsidiary has been granted. The
Seller has delivered to the Purchaser accurate and complete copies of all income
Tax Returns filed by the Company since November 9, 2006. The Subsidiary has
never filed any Tax Return.

     

              (b) DISCLOSURE OF TAXES. The Company Financial Statements properly
accrue all actual and contingent Liabilities for Taxes required to be accrued
with respect to all periods through the dates thereof in accordance with GAAP.
Since November 30, 2008, neither the Company nor the Subsidiary has incurred any
Liabilities for Taxes (including Liabilities for interest, additions to tax and
penalties thereon and related expenses) except in the Ordinary Course of
Business. Any Taxes of the Company or the Subsidiary relating or attributable to
any Tax period or portion thereof through and including the Closing Date (the
“Pre-Closing Tax Period” that are not yet due and payable as of the
Closing Date will be reflected as Liabilities on the Closing Financial
Statements, whether or not required to be reflected on a balance sheet in
accordance with GAAP.

     

              (c) TAX DEFICIENCIES. Except as set forth in Schedule 3.16(c), neither the Company
nor the Subsidiary has received any written notice or, to the Knowledge of the
Seller, any other communication of any Tax deficiency, adjustment or similar
document and there is no reasonable basis for any Tax deficiency or adjustment
to be assessed against the Company. 

     

    15 

     

    

    
    

              (d) TAX AUDITS. Schedule 3.16(d) identifies each examination or audit of any
Tax Return of the Company that has been conducted since November 9, 2006. No
audit has been threatened or initiated with respect to the Larimer Project. No
audit of the Company or the Subsidiary by any Governmental Body is currently
pending or, to the Knowledge of the Seller, threatened. 

     

              (e) TAX ENCUMBRANCES. Except as set forth in Schedule 3.16(e), no claim or other Proceeding is pending or,
to the Knowledge of the Seller, has been threatened in writing against or with
respect to the Company or the Subsidiary in respect of any Tax.

     

              (f) TAX SHARING AGREEMENTS. Neither the Company nor the Subsidiary is,
or has ever been, a party to or bound by any tax indemnity agreement, tax
sharing agreement, tax allocation agreement or similar agreement. 

     

              (g) DISREGARDED ENTITY. The Company is and has
been disregarded as a separate entity and treated as part of the Seller for all
relevant income tax purposes, and will continue to be so classified up to the
Closing. 

     

              (h) GOLDEN PARACHUTE ARRANGEMENTS. Neither the Company nor the Subsidiary is a
party to any agreement, contract, arrangement or plan that has resulted or could
result, separately or in the aggregate, in the payment of any “excess parachute
payment” within the meaning of Section 280G of the Code (or any corresponding
provision of state, local, or non-U.S. Tax law). 

     

              (i) NON-QUALIFIED DEFERRED COMPENSATION PLANS. Each “nonqualified deferred compensation plan” (as defined in
Section 409A(d)(1) of the Code) of the Company and the Subsidiary has been
operated in compliance in all material respects with Section 409A of the Code.

     

              (j) FOREIGN PERSON. The Seller is not a “foreign person” as
defined in Section 1445 of the Code. 

     

              (k) TAX-EXEMPT FINANCING; SUBSIDIES. None of the Projects have benefited from any
grant, tax-exempt bonds (or similar tax-exempt financing), subsidized energy
financing or other credits, in each case within the meaning of Section 45(b)(3)
of the Code. There are no contracts originally entered into before January 1,
1987 under which electricity produced by the Projects will be sold to a utility.
None of the Projects is a facility that is excluded from the definition of
“qualified facility” by reason of Section 45(e)(9) of the Code as in effect as
of the date of this Agreement or Section 45(e)(9) of the Code as in effect
immediately prior to the amendment thereof by Public Law 109-58 (Energy Tax
Incentives Act of 2005).

     

              (l) ALTERNATE DEPRECIATION SYSTEM. None of the Assets of the Company or the
Subsidiary are subject to the Alternative Depreciation System within the meaning
of Section 168(g) of the Code (or equivalent provision of state or local law) or
constitute tax-exempt bond financed property or tax-exempt use property within
the meaning of Section 168 of the Code, and none of such Assets is subject to a
lease, safe-harbor lease, or other arrangement as a result of which the Company
or the Subsidiary, as applicable, will not be treated as the owner for federal
income tax purposes following the Closing. 

     

              (m) REPORTABLE TRANSACTIONS. None of the Seller, the Company or the
Subsidiary is or has been a party to any ‘‘reportable transaction,’’ as defined
in Section 6707A(c)(1) of the Code and Section 1.6011-4(b) of the Treasury
regulations. 

     

    16 

     

    

    
    

              Section 3.17. EMPLOYEE AND LABOR MATTERS. Except with respect to Mark Oliger pursuant
to the Employment Agreement dated June 11, 2007, neither the Company nor the
Subsidiary employs any employees nor has the Company or the Subsidiary ever
employed any employees, either as a regular employer, primary employer, special
employer or joint employer (in each case, whether or not properly classified by
the Company or the Subsidiary). Neither the Company nor the Subsidiary (a) has
retained or employed any individual Persons as “independent contractors” (in
each case, whether or not properly classified by the Company or the Subsidiary),
except as set forth in Schedule 3.17; (b) controls the method, manner or means by
which any individual Person performs work at the Company, the Subsidiary or any
Project; (c) establishes or controls the terms and conditions of any employee’s
employment at the Company, the Subsidiary or any Project; (d) is a party to, a
guarantor of, or bound by, any collective bargaining agreement with any labor
union or labor organization, nor is aware of any organizational effort made or
threatened, currently or within the past two (2) years, by or on behalf of any
labor union with respect to the Company or the Subsidiary; (e) is a party to, or
a guarantor of, any contract of employment with any individual Person; (f) has,
or can reasonably be expected to have, any Liability with respect to any
employee of any Person or any individual independent contractor retained by any
Person, whether under any Legal Requirement or Contract or otherwise; (g) is a
party to, or has been, has been, in the last two (2) years, a party to any
lawsuit or administrative action, or has been the recipient of any formal or
informal complaint, in which any Person has asserted that such Person is an
employee or independent contractor of the Company or the Subsidiary, or that the
Company or the Subsidiary has employment Liability to such Person; or (h) is a
party to, or has been, in the last two (2) years, a party to any proceeding
asserting that the Company or the Subsidiary has committed an unfair labor
practice, or seeking to compel the Company or the Subsidiary to bargain with any
labor union or labor organization. 

     

              Section 3.18. EMPLOYEE BENEFIT PLANS; ERISA. Neither the
Company nor the Subsidiary: (a) maintains, sponsors, contributes to or
participates in (nor has the Company or the Subsidiary ever maintained,
sponsored, contributed to or participated in) any Plan; or (b) has incurred or
is reasonably expected to incur any Liability to or in respect of any Plan of
any ERISA Affiliate. No ERISA Affiliate has ever maintained, established,
sponsored, participated in, contributed to or otherwise incurred any Liability
(including without limitation, contingent Liability) under any Plan that is
subject to Section 412 of the Code or Title IV of ERISA. None of the Company,
the Subsidiary or any ERISA Affiliate of the Company has ever had or can be
reasonably expected to have any Liability to the Pension Benefit Guaranty
Corporation (PBGC). 

     

              Section 3.19. PROCEEDINGS; ORDERS. 

     

              (a) PROCEEDINGS. Except as set forth in Schedule 3.19(a), there is no pending Proceeding, and, to the
Knowledge of the Seller, no Person has threatened to commence any Proceeding
against the Company or the Subsidiary or against any other Person that otherwise
relates to or is reasonably likely to result in a Material Adverse Effect on the
Business of the Company or the Subsidiary or any of the Assets of the Company or
the Subsidiary; or that challenges, or that is reasonably likely to have the
effect of preventing, delaying or making illegal any of the Transactions. Except
as set forth in Schedule 3.19(a), to the Knowledge of the Seller, no event has
occurred, and no claim, dispute or other condition or circumstance exists, that
is reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding. The Seller has delivered to the Purchaser accurate and
complete copies of all pleadings, correspondence and other written materials
that relate to the Proceedings identified in Schedule 3.19(a).

     

    17 

     

    

    
    

              (b) ORDERS. There is no Order to which the Company or
the Subsidiary, the Business or any of the Company’s or the Subsidiary’s Assets
is subject. 

     

              (c) ORDERS AFFECTING DIRECTORS, OFFICERS OR EMPLOYEES. To the Knowledge of the Seller, no director, officer
or employee of the Company or the Subsidiary is subject to any Order that
prohibits such director, officer or employee from engaging in or continuing any
conduct, activity or practice relating to the Business. 

     

              (d) PROPOSED ORDERS. To the Knowledge of the Seller, there is no
proposed Order that, if issued or otherwise put into effect, would have a
Material Adverse Effect or may have the effect of preventing, delaying or making
illegal any of the Transactions. 

     

              Section 3.20. INSURANCE. 

     

              (a) POLICIES. Schedule 3.20(a) contains an accurate and complete list and
description (including the numbers, for the terms, with the companies and the
amounts) of each insurance policy maintained by the Company or the Subsidiary
with respect to the Assets or Business of the Company or the Subsidiary. The
Seller has delivered to the Purchaser copies of each of the insurance policies
identified in Schedule 3.20(a) (including all renewals thereof and
endorsements thereto). The premiums on such insurance policies have been
currently paid, and such policies are valid, enforceable and in full force and
effect, and neither the Company nor the Subsidiary is in default under any such
insurance policy. 

     

              (b) COMMUNICATIONS WITH CARRIERS. All claims under the insurance policies
identified in Schedule 3.20(a) (including all incidents or occurrences that
are defined as “claims” under the policies) have been properly reported
(including by providing all notices and information without inaccuracies or
errors) to the insurance carriers, and no reservation of rights has been issued
that may jeopardize such coverage. Neither the Company nor the Subsidiary has
received written notice (i) of cancellation of any such insurance policies, (ii)
regarding any actual or possible adjustments in the amount of the premiums
payable with respect to the insurance policies identified in Schedule 3.20(a), or (iii) of any actual or possible refusal of
coverage, or any actual or possible rejection of any claim, under any of the
insurance policies identified in Schedule 3.20(a). The consummation of the Transactions will
not result in the termination of any insurance policy identified in Schedule 3.20(a). 

     

              (c) PENDING CLAIMS. Except as set forth in
Schedule 3.20(c), there is no pending claim under or based
upon any of the insurance policies identified in Schedule 3.20(a). 

     

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              Section 3.21. INTELLECTUAL PROPERTY. 

     

              (a) COMPANY INTELLECTUAL PROPERTY RIGHTS. Schedule 3.21(a) contains an accurate and complete list of all
applications and registrations included in the Company Intellectual Property
Rights and all material unregistered trademarks included in the Company
Intellectual Property Rights. 

     

              (b) OWNERSHIP. The Company Intellectual Property Rights
consist solely of items and rights that are: (i) owned by the Company or (ii)
rightfully used by the Company pursuant to a valid license or similar agreement
(the “Licensed Intellectual
Property”). Either the
Company or the Subsidiary, as applicable, has (whether by virtue of ownership,
license or otherwise) all rights in the Company Intellectual Property Rights
necessary to carry out their Business as currently conducted or contemplated to
be conducted. 

     

              (c) NO INFRINGEMENT. The conduct of the Business of the Company
and the Subsidiary as currently conducted or contemplated to be conducted does
not, to the Knowledge of the Seller, infringe (either directly or indirectly,
such as through contributory infringement) any Intellectual Property Rights
owned or controlled by any third party. There is no pending or, to the Knowledge
of the Seller, threatened claim or Proceeding in any jurisdiction, whether
against the Company or the Subsidiary or any third party, (i) involving any
Company Intellectual Property Rights, or involving any Licensed Intellectual
Property; (ii) alleging that the activities or the conduct of the Business, or
the possession or use of any Company Intellectual Property Rights by any
customer or other licensee of the Company or the Subsidiary, does or will
infringe upon, violate or constitute the unauthorized use of the Intellectual
Property Rights of any third party; or (iii) challenging the ownership, use,
validity, enforceability or registrability of any Company Intellectual Property
Rights, nor, to the Knowledge of the Seller, is there any reasonable basis for
any such claim or Proceeding. To the Knowledge of the Seller, there is no
unauthorized use, infringement or misappropriation of any of the Company
Intellectual Property Rights by any third party, including any current or former
employee or contractor of the Company or the Subsidiary (or its Affiliates or
predecessors in interest). The Company and the Subsidiary have taken all
necessary measures to protect the proprietary nature of the Company Intellectual
Property Rights that are material to the Business as currently conducted or
contemplated to be conducted. 

     

              (d) ROYALTIES. There are no royalties, fees, honoraria or
other payments payable by the Company or the Subsidiary to any Person or Entity
by reason of the ownership, development, use, license, sale or disposition of
any Company Intellectual Property Rights, other than license fees owed pursuant
to those written agreements listed in Schedule 3.21(d). 

     

              (e) NO CONFLICTS. Neither the Company nor the Subsidiary is,
and as a result of the execution or delivery of this Agreement or any of the
other Transaction Documents, or the consummation or performance of any of the
Transactions, will be, in violation of any Contract relating to Company
Intellectual Property Rights, cause the diminution, termination, transfer or
forfeiture of any of the Company’s rights in any Company Intellectual Property
Rights or require the consent of any Governmental Body or third party in respect
of any such Company Intellectual Property Rights. To the Knowledge of the
Seller, each Contract relating to Company Intellectual Property constitutes the
valid and binding obligation of all parties thereto, enforceable in accordance
with its terms, and there exists no breach and no event or circumstance which
will result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default by the Company or the Subsidiary
thereunder, or to the Knowledge of the Seller, any other party
thereto.

     

    19

     

    

    
    

              Section 3.22. ENVIRONMENTAL MATTERS.

     

              (a) COMPLIANCE WITH ENVIRONMENTAL LAW. Except as disclosed in Schedule 3.22(a), the Company and the Subsidiary are in
compliance with all applicable Environmental Laws, and there are no
non-compliance orders, warning letters, notices of violation, claims, suits,
actions, judgments, penalties, fines, or administrative or judicial
investigations or Proceedings pending or, to the Knowledge of the Seller,
threatened against the Company or the Subsidiary or any of the real property
which is the subject of the Real Property Leases, issued by any Governmental
Body or third party with respect to any Environmental Laws or Environmental
Permits. 

     

              (b) ENVIRONMENTAL PERMITS. Schedule 3.22(b) discloses all Governmental Authorizations
required by any applicable Environmental Law (collectively, “Environmental Permits”) necessary to construct, own and operate the
Assets as presently operated and to conduct the Business of the Company and the
Subsidiary. Each such Environmental Permit is valid, in full force and effect
and issued in the name of the Company or the Subsidiary required to hold such
Environmental Permit in order to operate the Assets as presently operated, and
neither the Company nor the Subsidiary is in breach or default of any material
terms or conditions contained in such Environmental Permits. 

     

              (c) UNDERGROUND STORAGE TANKS. Except as disclosed in Schedule 3.22(c), neither the Company nor the Subsidiary uses,
nor has it used, any aboveground or underground storage tanks, and, to the
Knowledge of the Seller, there are not now nor have there ever been any such
tanks beneath any of the real property which is the subject of any of the Real
Property Leases. Except as set forth in Schedule 3.22(c), to the Knowledge of the Seller, those tanks
disclosed in Schedule 3.22(c) have been operated at all times in compliance
with Environmental Laws and there have been no Releases from them. 

     

              (d) RELEASES. Except as disclosed in Schedule 3.22(d), there has not occurred, nor is there
presently occurring, a Release, or threatened Release, by the Company or the
Subsidiary, nor, to the Knowledge of the Seller, by any other Person, of any
Hazardous Material on, into or beneath the surface of any of the real property
which is the subject of any of the Real Property Leases or on, into or under any
other real property to which Hazardous Materials originating from or on the real
property leased pursuant to the Real Property Lease have been transported, in
either case, in (i) an amount requiring a notice or report to be made to a
Governmental Body, or (ii) in such a manner as to give rise to any Liability for
the Company or the Subsidiary under Environmental Laws. 

     

              Section 3.23. CUSTOMERS; SUPPLIERS. 

     

              (a) MAJOR CUSTOMERS. Schedule 3.23(a) accurately identifies, and provides an
accurate and complete breakdown of the revenues generated from, each customer or
other Person who accounted for revenues of the Company or the Subsidiary in
excess of $100,000 in the aggregate in the twelve (12) month period ended as of
the Effective Date (each a “Major Customer”).

     

    20 

     

    

    
    

              (b) MAJOR SUPPLIERS. Schedule 3.23(b) accurately identifies, and provides an
accurate and complete breakdown of the amounts paid to, each supplier that was
paid more than $100,000 in the aggregate from the Company or the Subsidiary in
the twelve (12) month period ended as of the Effective Date (each a
“Major Supplier”). 

     

              (c) CHANGES TO EXISTING RELATIONSHIPS. Except as set forth in Schedule 3.23(c), neither the Company nor the Subsidiary has
received any notice or other communication (in writing or otherwise) indicating
that, and neither the Company nor the Subsidiary has any reason to believe that,
any Major Customer or any significant end user that places orders through any
Major Customer (i) intends to, or has threatened to, cease dealing with the
Company or the Subsidiary, respectively, or (ii) is, or may become, unable to
satisfy all of such Person’s current and future monetary and other obligations
to the Company or the Subsidiary, respectively. 

     

              (d) CHANGES TO SUPPLY TERMS. Except as set forth in Schedule 3.23(d), no Major Supplier has changed any
significant supply terms since November 30, 2008, and neither the Company nor
the Subsidiary has received any notice or other communication (in writing or
otherwise) indicating that such Supplier may change any significant supply terms
after the Closing Date. 

     

              (e) ADVERSE EFFECT ON RELATIONSHIPS. To the Knowledge of the Seller, the
Transactions will not adversely affect the Company’s or the Subsidiary’s
relations with any of their respective customers or suppliers. 

     

              Section 3.24. BROKERS. Neither the
Company nor the Subsidiary has agreed or become obligated to pay, or has taken
any action that might result in any Person claiming to be entitled to receive,
any brokerage commission, finder’s fee or similar commission or fee in
connection with any of the Transactions and/or in connection with any of the
Real Property Leases. 

     

              Section 3.25. STATUS. The Company (a) owns no other assets and has
no Liabilities of any kind except for Liabilities related to the Projects and
obligations under the Material Contracts; and (b) does not engage, and has never
engaged, in any business other than development and ownership of the Projects.
The Subsidiary was (a) owns no other assets and has no Liabilities of any kind
except for Liabilities related to the Larimer Project and obligations under the
Material Contracts relating to the Larimer Project; and (b) does not engage, and
has never engaged, in any business other than development and ownership of the
Larimer Project. 

     

              Section 3.26. REGULATORY STATUS.

     

              (a) REGULATORY STATUS. The Company and the Subsidiary either are
not subject to or are exempt from regulation under the Public Utility Holding
Company Act of 2005 (“PUHCA”). Neither the Company nor the Subsidiary is
subject to rate, financial or corporate regulation of utilities under the
Federal Power Act (“FPA”) or the laws of any state, except as a
“qualifying small power production facility” within the meaning of the
FPA.

     

    21 

     

    

    
    

              (b) QUALIFYING FACILITIES. The following Projects are duly certified as
and meet the requirements for status as a “qualifying small power production
facility” within the meaning of the FPA: (i) the Operating Project located in
Hernando, Florida; (ii) the Development Project located in Sarasota, Florida;
and (iii) the Development Project located in Weld County, Colorado.

     

              (c) PIPELINE REGULATORY COMPLIANCE. The Company and the Subsidiary are in
compliance in all material respects with the requirements of 49 U.S.C. 60101
et seq. and the regulations issued by the United
States Department of Transportation pursuant thereto with respect to all
pipelines owned or operated by the Company or the Subsidiary, as applicable,
which are used in connection with the collection, treatment, processing or
delivery of landfill gas by the Operating Projects or the Larimer Project, as
applicable (the “Pipelines”), to the extent such laws and regulations
are applicable thereto. None of the Pipelines, and neither the Company’s nor the
Subsidiary’s ownership or operation thereof, as applicable, are subject to
regulation (i) under the Natural Gas Act of 1938, as amended, (ii) under the
Natural Gas Policy Act of 1978, as amended, or (iii) as a public utility or
utility under the laws, rules or regulations of any state.

     

              Section 3.27. CERTAIN RELATED PARTY TRANSACTIONS. Except as set forth on Schedule 3.27, neither the Company nor the Subsidiary is
indebted, either directly or indirectly, to any Related Party; no Related Party
is indebted to either the Company or the Subsidiary or, to the Seller’s
knowledge, has any direct or indirect ownership interest in any Person with
which the Company or the Subsidiary is affiliated or with which the Company or
the Subsidiary has a business relationship, or any Person which competes with
the Company or the Subsidiary. No Related Party has a direct or indirect
interest in any Contract with the Company or the Subsidiary. All Related Party
transactions listed on Schedule 3.27 will be terminated at or prior to the
Closing.

     

              Section 3.28. ABSENCE OF CERTAIN BUSINESS PRACTICES.

     

              (a) GENERALLY. None of the Seller, the Company, the
Subsidiary or any Representative of any such Person, nor any other Person acting
on their behalf, has, directly or indirectly, given or agreed to give any
payment (in kind or in cash), gift or similar benefit to any customer, supplier,
governmental employee, lobbyist, labor union, political action committee,
candidate for public office or other Person who is or may be in a position to
help or hinder the business of such Person (or assist any of them in connection
with any actual or proposed transaction) which (a) might subject the Purchaser
to any damage or penalty in any civil, criminal or governmental Proceeding, (b)
if not given in the past, might have materially and adversely affected the
assets, business or operations of any Project, or (c) if not continued in the
future, might adversely affect the business of any Project or the Purchaser, or
might subject the Purchaser to any Proceeding. 

     

              (b) ANTITRUST MATTERS. No Representative of the Company or the
Subsidiary has violated any state or federal antitrust law (the “Antitrust Laws”) during the past five (5) years. Each of the
Company and the Subsidiary is currently in compliance with all Antitrust Laws.
Neither the Company, the Subsidiary nor any of its Representatives has received
a grand jury subpoena, trial subpoena, summons, civil investigative demand or
other request for disclosure of any documents or information relating to any
alleged violation of the Antitrust Laws. No facts or circumstances exist which,
to the Seller’s Knowledge, would reasonably be expected to form the basis for
any such violation or noncompliance.

     

    22 

     

    

    
    

              Section 3.29. DISCLOSURE. No material report, financial statement,
certificate or other written information furnished by or on behalf of the Seller
to the Purchaser, any of its Affiliates or its or their Representatives in
connection with this Agreement and the Transactions or delivered hereunder when
taken as a whole contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein (taken as a whole),
in light of the circumstances under which they were made, not materially
misleading. Except for specific events or circumstances that would not cause a
Material Adverse Effect, the Seller has no Knowledge of any specific events or
circumstances involving the Company, the Subsidiary or any Project that would,
in the reasonable opinion of Seller, individually or in the aggregate, be
considered material by a reasonable investor in making an investment decision
regarding the Company, except for any such events or circumstances which have
been disclosed in this Agreement or the other Transaction Documents.

     

              Section 3.30. KNOWLEDGE OF THE SELLER. With respect to the Seller, no individuals
associated with the Seller, the Company or the Subsidiary, or its Affiliates,
other than the individuals listed in the definition of “Knowledge” with respect
to the Seller, could reasonably be expected to be more knowledgeable about the
subject matters covered in the Seller’s representations in this Agreement than
such listed individuals. 

     

              Section 3.31. OWNERSHIP OF ENVIRONMENTAL ATTRIBUTES. After taking into account the Environmental Attributes
Agreement, the Company and the Subsidiary, as applicable, has good and
marketable title to all Environmental Attributes accrued by or otherwise
attributable to its Assets, and except as set forth on Schedule 3.31, the Environmental Attributes are owned by
the Company or the Subsidiary, as applicable, free and clear of any
Encumbrance.

     

         SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. 

     

         The Purchaser represents and
warrants, to and for the benefit of the Seller as follows: 

     

              Section 4.1. DUE ORGANIZATION AND EXISTENCE. The Purchaser is a
limited liability company duly formed and
validly existing in good standing under the laws of the State of Delaware. The
Purchaser is qualified to do business in all jurisdictions where the failure to
qualify would materially and adversely affect its ability to execute, deliver or
perform its obligations under this Agreement and the Transaction Documents to
which it is or may become a party. 

     

              Section 4.2. POWER AND AUTHORITY. The Purchaser has the full right, power and
authority to enter into and perform its obligations under this Agreement and
each Transaction Document to which the Purchaser is or may become a party. The
execution, delivery and performance of this Agreement and each Transaction
Document to which the Purchaser is or may become a party have been duly
authorized by all necessary action on the part of the Purchaser.

     

    23 

     

    

    
    

              Section 4.3. ENFORCEABILITY. This Agreement and each Transaction Document
to which the Purchaser is or may become a party, when executed by the Purchaser,
constitutes the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting generally the enforcement of creditors’ rights and
by general principles of equity. 

     

              Section 4.4. NON-CONTRAVENTION. The execution and delivery by Purchaser of
this Agreement and any of the Transaction Documents to which Purchaser is or may
become a party, and the consummation and performance of any of the Transactions,
will not directly or indirectly (with or without notice or lapse of time): (a)
contravene, conflict with or result in a violation of (i) any of the provisions
of the Purchaser’s certificate of formation or operating agreement, or (ii) any
resolution adopted by the Purchaser’s members; or (b) contravene, conflict with
or result in a violation of, or give any Governmental Body or other Person the
right to challenge any of the Transactions or to exercise any remedy or obtain
any relief under, any Legal Requirement or any Order to which the Purchaser is
subject; or (c) contravene, conflict with or result in a violation of, any
Contract to which the Purchaser is a party or by which any of the Purchaser’s
properties or assets are or may be bound. 

     

              Section 4.5. CONSENTS. The execution, delivery
and performance by the Purchaser of this Agreement and each of the Transaction
Documents to which the Purchaser is or may become a party, require no notice to,
filing with, or Consent of any Governmental Body or other Person.

     

              Section 4.6. PROCEEDINGS. There are no Proceedings
pending, or to the Purchaser’s Knowledge, threatened to which the Purchaser is a
party in any case at law or in equity before any Governmental Body against or
affecting the Purchaser or its properties or assets, which would reasonably be
expected to materially and adversely affect (a) the ability of the Purchaser to
perform its obligations under this Agreement or any of the Transaction Documents
to which the Purchaser is or may become a party, or (b) the financial condition
of the Purchaser.

     

              Section 4.7. BROKERS. The Purchaser has
not agreed or become obligated to pay, and has not taken any action that might
result in any Person claiming to be entitled to receive, any brokerage
commission, finder’s fee or similar commission or fee from the Seller in
connection with any of the Transactions. 

     

              Section 4.8. EXPERIENCED AND KNOWLEDGEABLE PURCHASER. The Purchaser is, or is being advised by, an experienced and knowledgeable
investor in the power generation and development business. Prior to entering
into this Agreement, the Purchaser was advised by its counsel, accountants,
financial advisors, and such other Persons it has deemed appropriate concerning
this Agreement and has relied solely (except for the representations and
warranties of the Seller set forth in Section 3) on an independent investigation and
evaluation of, and appraisal and judgment with respect to, the Company and the
Subsidiary, the Business, the Assets (including the Projects), Liabilities,
results of operations, condition (financial or otherwise) and prospects of the
Company and the Subsidiary, and the revenue, price, and expense assumptions
applicable thereto.

     

    24 

     

    

    
    

              SECTION 5. CONFIDENTIALITY. Each party agrees that
neither it nor its Affiliates or its or their Representatives shall reveal to
any other Person (a) the terms of this Agreement or the Transaction Documents
and (b) any financial, commercial or technical information relating to the
Purchaser, the Seller, the Company or the Subsidiary (collectively, the
“Information”). Except to the extent otherwise required by
law, the Information will be used solely for the purposes of evaluating the
Transactions and will be kept confidential by the receiving party, its
Affiliates and its and their Representatives; provided, however, that the obligations set
forth in the preceding text of this Section 5 shall not apply to the disclosure of any
Information: 

     

              (a) to any of the Representatives of the receiving party as necessary for the
consummation of the Agreement and the Transactions;

     

              (b) as to which the disclosing party consents in writing; 

     

              (c) to auditors, rating agencies, attorneys and financing parties of the
receiving party;

     

              (d) to any Person in connection with the financing, disposition of Assets in,
or Assets of, the receiving party, the Company or the Subsidiary, or any direct
or indirect owner of any of the forgoing; 

     

              (e) to the extent required to be disclosed by any applicable Legal
Requirement; and 

     

              (f) in connection with (i) any Proceeding by a party to enforce its rights
under this Agreement or any of the documents to be executed pursuant hereto or
(ii) the defense of any Proceeding against a party, any of its Affiliates or any
Representatives of the foregoing;

     

    Notwithstanding the
foregoing, “Information” shall not include information that (i) is publicly
known at the time of its disclosure, (ii) is lawfully received from a third
party not subject to any confidentiality agreement, or (iii) is published or
otherwise made known to the public by a Person other than a party to this
Agreement through no breach by a party hereto of its obligations hereunder. Each
party shall take all steps necessary or appropriate to maintain the strict
confidentiality of the Information and to assure compliance with this Agreement.
If this Agreement terminates pursuant to Section 10 hereof, the receiving party will promptly
return to the disclosing party all material containing or reflecting the
Information. Each party agrees that the remedy at law for any breach of this
Section 5 would be inadequate and that either party
shall be entitled to seek injunctive relief in addition to any other remedy it
may have upon breach of any provision of this Section 5. 

     

    25 

     

    

    
    

         SECTION 6. CONDITIONS PRECEDENT TO THE PURCHASER’S OBLIGATION TO CLOSE. 

     

         The obligation of the Purchaser to purchase
the Interests and to take the other actions required to be taken by the
Purchaser at the Closing are subject to the satisfaction, on and as of the
Closing, of each of the following conditions: 

     

              Section 6.1. ACCURACY OF REPRESENTATIONS. All of the
representations and warranties made by the Seller in this Agreement (considered
individually and in the aggregate) shall be true and correct on and as of the
Closing Date (except for representations and warranties which address matters
only as of a particular date, which need only be true and correct as of such
date). 

     

              Section 6.2. APPROVAL OF TRANSACTIONS; CONSENTS. 

     

              (a) The Purchaser’s sole member shall have authorized the execution and
delivery of this Agreement by the Purchaser and shall have authorized the
consummation of the Transactions. 

     

              (b) Each of the Consents identified in Schedule 3.4(b) shall have been obtained and shall be in full
force and effect. 

     

              Section 6.3. NO PROHIBITION. Neither the
consummation nor the performance of any of the Transactions will, directly or
indirectly (with or without notice or lapse of time), contravene or conflict
with or result in a violation of, or cause the Purchaser or any Affiliate of the
Purchaser to suffer any adverse consequence under (a) any applicable Legal
Requirement or Order, (b) any Legal Requirement or Order that has been proposed
by or before any Governmental Body and would be applicable to the Purchaser or
any Affiliate of the Purchaser, or any of the Projects, or (c) any Contract to
which the Company and/or the Subsidiary is a party. 

     

              Section 6.4. PERFORMANCE OF OBLIGATIONS. 

     

              (a) The Seller shall have delivered to the Purchaser the following:

     

              (i) possession and control of the Interests and of the Company and the
Subsidiary, including all of the Company’s and the Subsidiary’s Assets, Tangible
Property and Books and Records; 

     

              (ii) a copy of (A) the certificate of formation of the Company and the
Subsidiary, certified by the Secretary of the State of Delaware within five (5)
days prior to the Closing Date, and certified by a manager of the Company and of
the Subsidiary to be true, complete and correct as of the Closing Date, (B) the
operating agreement of the Company and of the Subsidiary (as amended through the
Closing Date), certified by a manager or officer of the Company and of the
Subsidiary, as applicable, to be true, complete and correct as of the Closing
Date, and (C) a list of the incumbent officers and specimen signatures of the
Company and of the Subsidiary, dated as of the Closing Date, and certified by a
manager of the Company and the Subsidiary, as applicable, to be true, complete
and correct as of the Closing Date;

     

    26 

     

    

    
    

              (iii) good standing certificates issued by the Secretary of the State of
Delaware and by the Secretary of State of all jurisdictions in which the Company
and the Subsidiary are qualified to do business and tax clearance certificates
issued by the department of revenue or other appropriate Governmental Body in
all jurisdictions in which the Company and the Subsidiary are required to pay
taxes showing that all taxes due and owing have been paid in full, each dated
within five (5) days of the Closing Date; 

     

              (iv) certificates of a manager of the Seller evidencing satisfaction of the
conditions specified in this Section 6 as reasonably requested by the
Purchaser;

     

              (v) pay-off letters and UCC termination statements showing the release of all
Encumbrances affecting the Interests, the Company or the Subsidiary or any of
their Assets; 

     

              (vi) evidence of resignation or removal as of the Closing of all officers and
directors of the Company and the Subsidiary listed on Schedule 3.6(a);

     

              (vii) the Non-Foreign Certificate; and

     

              (viii) evidence satisfactory to the Purchaser that CD #0089467167, on deposit
with Regions Bank to secure the Letter of Credit issued to the City of David
City, Nebraska (Reference Number 55102915), has been transferred to, and is
listed in the name of, the Company. 

     

              (b) Each of the Transaction Documents shall have been duly authorized,
executed and delivered by the parties thereto, shall be in full force and
effect, and the Seller or any Affiliate of Seller shall not be in breach or
default of any provision thereof, and the Seller shall have tendered its Closing
Actions. 

     

              (c) All of the other covenants and obligations that the Seller is required to
comply with or to perform at or prior to the Closing and each of said covenants
and obligations shall have been duly complied with and performed in all material
respects. 

     

              Section 6.5. NO INJUNCTION. There shall not be in
effect any injunction that shall have been entered by a court of competent
jurisdiction that prohibits the sale of the Interests by the Seller to the
Purchaser. 

     

              Section 6.6. NO MATERIAL ADVERSE EFFECT. No Material Adverse
Effect shall have occurred and be continuing. 

     

              Section 6.7. TITLE INSURANCE AND SURVEYS. The Purchaser shall have
received 2006 ALTA extended coverage leasehold owner’s title insurance policies,
purchased by the Purchaser at its sole expense, in the name of the Company,
insuring the Purchaser for the full value of the real estate rights associated
with each of the Operating Projects, and an ALTA survey showing ownership of all
rights and interests in and to the real property of the Operating Projects, in
each case subject only to the Permitted Encumbrances.

     

    27 

     

    

    
    

              Section 6.8. ESTOPPEL CERTIFICATES. The Purchaser shall have
received written estoppel and non-disturbance certificates from those Persons
listed on Schedule 6.8 under any Material Contract. 

     

              Section 6.9. PROCEEDINGS. No Proceedings shall have been initiated, or to the Purchaser’s
Knowledge, threatened by any Governmental Body, which in any case would prohibit
the Transactions or the ability of the Purchaser or the Seller to consummate any
of such Transactions.

     

              Section 6.10. OPINIONS. The Seller shall have delivered an opinion
from counsel to the Seller addressed to Purchaser in form and substance
acceptable to the Purchaser.

     

              Section 6.11. ENGINEERING REPORTS. The Purchaser shall have received Phase I
environmental assessments with respect to the Operating Projects, in form and
substance acceptable to the Purchaser in its sole discretion and paid for by the
Purchaser at its sole expense. 

     

              Section 6.12. MANAGEMENT SERVICES AGREEMENT. Each of the Company and Mowood Services
Corp. have entered into a management services agreement for the provision by
Mowood Services Corp. of certain management services to the Company (the
“Management Services
Agreement”) in form and
substance satisfactory to the Purchaser.

     

              Section
6.13. TERMINATION OF MANAGEMENT SERVICES AGREEMENT. The Seller shall have provided to the Purchaser evidence that the Management
Services Agreement, dated as of March 3, 2008, between Mowood Services Corp. and
the Company shall have been terminated with no liability to the
Company.

     

              Section 6.14. LARIMER ACTIONS. If applicable pursuant to Section 9.10, the Larimer Actions shall have been
satisfied.

     

              Section
6.15. DOCUMENTATION OF MATERIAL CONTRACTS. All Material Contracts described on Schedule 3.15 as being oral (or otherwise not reduced to
writing) shall have been documented in a writing signed by the parties thereto
in form and substance acceptable to Purchaser.

     

              Section 6.16. ENVIRONMENTAL ATTRIBUTES AGREEMENT. The Purchaser shall have received evidence
satisfactory to it that the conditions precedent referenced in the Environmental
Attributes Agreement (other than the Closing) have been satisfied.

     

              Section 6.17. SUBLEASE. The Seller and the Purchaser shall have
entered into a sublease for that certain office space commonly known as Orchard
Town Center, Building A, Suite 200, in Westminster Colorado (the “Office Space”), for a term of one year and an annual rent
of $1.00, in form and substance satisfactory to the Purchaser, which such
sublease shall have been approved by the landlord pursuant to Article 16 of that
certain Office Lease, by and between FC Orchard Town Center, Inc., a Colorado
corporation and the Seller, dated as of November 13, 2007. Notwithstanding the
foregoing, the Seller and the Purchaser agree that if during the term of the
sublease the Purchaser (or its designee) does not occupy the Office Space for a
period of 90 consecutive days, the sublease shall automatically
terminate.

     

    28

     

    

    
    

         SECTION 7.
CONDITIONS PRECEDENT TO THE SELLER’S OBLIGATION TO CLOSE. 

     

         The Seller’s obligation to sell the Interests
and to take the other actions required to be taken by the Seller, at the Closing
is subject to the satisfaction, at or prior to the Closing, of each of the
following conditions: 

     

              Section 7.1. ACCURACY OF REPRESENTATIONS. All of the
representations and warranties made by the Purchaser in this Agreement
(considered individually and in the aggregate) shall be true and correct on and
as of the Closing Date as if made on the Closing Date (except for
representations and warranties which address matters only as of a particular
date, which need only be true and correct as of such date). 

     

              Section
7.2. PERFORMANCE OF OBLIGATIONS. 

     

              (a) The
Purchaser shall have delivered to the Seller the following: 

     

              (i) the
Closing Payment in accordance with Section 1.3 hereof;

     

              (ii) a
copy of (A) the certificate of formation of the Purchaser, certified by the
Secretary of the State of Delaware within five (5) days prior to the Closing
Date, and certified by an officer of the Purchaser to be true, complete and
correct as of the Closing Date, (B) the operating agreement of the Purchaser (as
amended through the Closing Date), certified by an officer of the Purchaser to
be true, complete and correct as of the Closing Date, and (C) a list of the
incumbent officers and specimen signatures of the Purchaser, dated as of the
Closing Date, and certified by an officer of the Purchaser to be true, complete
and correct as of the Closing Date;

     

              (iii) good standing certificates issued by the
Secretary of the State of Delaware and by the
Secretary of State of all jurisdictions in which the Purchaser is qualified to
do business, dated within five (5) days prior to the Closing Date;

     

              (iv) certificates of an officer of Purchaser evidencing satisfaction of the
conditions specified in this Section 7 as reasonably requested by the
Seller;

     

              (b) Each
of the Transaction Documents, including the EIFREH Guaranty, shall have been
duly authorized, executed and delivered by the parties thereto, shall be in full
force and effect, and the Purchaser shall not be in breach or default of any
provision thereof, and the Purchaser shall have tendered its Closing Actions;

     

              (c) Each
of the Company and Mowood Services Corp. have entered into the Management
Services Agreement in form and substance satisfactory to the
Seller;

     

              (d) All
of the other covenants and obligations that the Purchaser is required to comply
with or to perform pursuant to this Agreement at or prior to the Closing, shall
have been complied with and performed in all material respects; and

     

              (e)
The Seller shall have received evidence satisfactory to it that the conditions
precedent referenced in the Environmental Attributes Agreement (other than the
Closing) have been
satisfied.

     

    29

     

    

    
    

         SECTION 8.
INDEMNIFICATION. 

     

              Section 8.1. SURVIVAL OF REPRESENTATIONS. The representations and warranties contained
in this Agreement and the Transaction Documents shall survive (regardless of any
investigation at any time made by or on behalf of the beneficiary of any such
representation or warranty) until the date that is eighteen (18) months after
the Closing Date; provided, however, notwithstanding the foregoing, (i) the
representations and warranties given or made in Sections 2.1, 3.5, 3.9 (a), 3.9(c) and 3.9(d) shall survive the Closing and continue in
full force and effect without limitation; and (ii) the representations and
warranties given or made in Sections 3.16, 3.17, 3.18 and 3.22 shall survive until ninety (90) days after
the expiration of the applicable statute of limitations. No claim shall be made
with respect to any representation or warranty after it ceases to survive in
accordance with this Section 8.1. The expiration of any representation or
warranty shall not affect the Seller’s obligations under this Section 8 if the Purchaser Indemnitee provided the
Seller with proper notice of the claim or event for which indemnification is
sought prior to such expiration. 

     

              Section 8.2. INDEMNIFICATION. The Seller (the “Indemnifying
Party”), to the
fullest extent permitted by applicable law, shall defend, hold harmless and
indemnify each of the Purchaser Indemnitees from and against, and shall
compensate and reimburse each of the Purchaser Indemnitees for, any Damages
which are suffered or incurred by any of the Purchaser Indemnitees or to which
any of the Purchaser Indemnitees may otherwise become subject at any time
(regardless of whether or not such Damages relate to any third party claim) and
which arise directly or indirectly from or as a direct or indirect result of, or
are directly or indirectly connected with: 

     

              (a)
any Breach of any representation
or warranty made by the Seller or TTO in this Agreement or the Transaction
Documents; and

     

              (b)
any Breach of any covenant or
other obligation of the Seller or TTO contained in this Agreement or the
Transaction Documents.

     

              Section
8.3. LIMITATIONS ON INDEMNIFICATION LIABILITY. 

     

              (a)
OVERALL LIMITATION ON LIABILITY. Notwithstanding anything to the contrary
contained in this Agreement (other than Section 8.7): 

     

              (i)
The Indemnifying Party shall not
be required to make any indemnification payment pursuant to Section 8.2(a) hereof for any Damages until such time as the
total amount of all Damages that have been directly or indirectly suffered or
incurred by any one or more of the Purchaser Indemnitees, or to which any one or
more of the Purchaser Indemnitees has or have otherwise become subject, exceeds
$100,000 in the aggregate. In the event the aggregate amount of all such Damages
exceeds $100,000, the Purchaser shall be entitled to indemnification for the
amount of all such Damages (i.e. including the initial $100,000); 

     

    30

     

    

    
    

              (ii) except as set forth in
Section 8.3(a)(iii), the aggregate amount to be paid by the
Indemnifying Party under Section 8.2(a) hereof shall be limited to an amount equal to
twenty percent (20%) of the Purchase Price; and

     

              (iii) the aggregate amount to
be paid by the Indemnifying Party under Section 8.2(a) hereof arising from a Breach of the
representations contained in Sections 3.16 and 3.17 shall be limited to an amount equal to the
Purchase Price;

     

    provided, however, that the limitations contained in this Section 8.3(a) shall not apply to
Damages arising from a Breach of the representations contained in Sections 2.1, 2.3, 2.4, 3.5, or 3.9(a), (c) or (d). 

     

              (b) WAIVER. Each party
waives any provision of law to the extent that it would limit or restrict the
agreements contained in this Section
8. Nothing herein shall prevent either party from terminating this
Agreement in accordance with Section 10.

     

              Section
8.4. INDEMNIFICATION PROCEDURES. 

     

              (a) NOTICE OF THIRD PARTY CLAIMS. In the event of the assertion or
commencement by any Person of any claim or Proceeding with respect to which the
Indemnifying Party may become obligated to indemnify, hold harmless, compensate
or reimburse any Purchaser Indemnitee pursuant to this Section 8, the Purchaser agrees to give reasonably
prompt notice to the Indemnifying Party specifying in reasonable detail the
assertion of any claim, or the commencement of any Proceeding in respect of
which indemnity may be sought under this Section 8. However, the failure to give or delay in
giving notice to the Indemnifying Party in a timely fashion shall not result in
a waiver of a right to indemnification hereunder except to the extent the
Indemnifying Party is prejudiced thereby and only to the extent of such
prejudice. Thereafter, the Indemnifying Party shall deliver to the Purchaser
Indemnitee, within five (5) business days after receipt thereof, copies of all
notices and documents (including court papers) relating to such claim or
Proceeding. 

     

              (b) DEFENSE OF THIRD PARTY CLAIMS. 

     

              (i) BY THE INDEMNIFYING PARTY. In the event of the assertion or
commencement by any Person of any claim or Proceeding with respect to which the
Indemnifying Party may become obligated to indemnify, hold harmless, compensate
or reimburse any Purchaser Indemnitee pursuant to this Section 8, the Indemnifying Party may, at its election,
assume the defense of such claim or Proceeding at its sole expense. If the
Indemnifying Party so elects to assume the defense of any such claim or
Proceeding: 

     

                        (A) the Indemnifying Party shall proceed to defend such claim or Proceeding
in a diligent manner with counsel reasonably satisfactory to the Purchaser
Indemnitee; 

     

                        (B) the Purchaser Indemnitee shall make available to the Indemnifying Party
any non-privileged documents and materials in the possession or control of the
Purchaser Indemnitee that may be necessary to the defense of such claim or
Proceeding; 

     

    31

     

    

    
    

                        (C) the
Indemnifying Party shall keep the Purchaser Indemnitee informed of all material
developments and events relating to such claim or Proceeding; 

     

                        (D) the
Purchaser Indemnitee shall have the right to participate in the defense of such
claim or Proceeding with counsel of its choice if (i) the Indemnifying Party
chooses counsel not reasonably acceptable to the Purchaser Indemnitee, (ii) the
Indemnifying Party does not pursue with reasonable diligence such defense,
negotiation or settlement, or (iii) in the reasonable opinion of such Purchaser
Indemnitee and its counsel, such claim or Proceeding involves the potential
imposition of criminal liability upon such Purchaser Indemnitee or a conflict of
interest between such Indemnified Party and the Purchaser Indemnitee;
provided, that such participation shall be at the
Purchaser Indemnitee’s own expense. 

     

                        (E) the
Indemnifying Party shall not settle, adjust or compromise such claim or
Proceeding without the prior written consent of the Purchaser Indemnitee, which
shall not be unreasonably withheld; provided, however, that no consent shall be required if any
such settlement, adjustment or compromise (i) relates solely to the payment of
money Damages, all of which shall by paid by the Indemnifying Party, and (ii)
includes as an unconditional term thereof the giving of a release from all
liability with respect to such claim by each claimant or plaintiff to each
Purchaser Indemnitee that is or may be subject to the third party claim.

     

                        (F) the
Purchaser Indemnitee may at any time (notwithstanding the prior designation of
the Indemnifying Party to assume the defense of such claim or Proceeding) assume
the defense of such claim or Proceeding at its own expense; provided, however, that the Purchaser Indemnitee may not
settle, adjust or compromise such claim or Proceeding without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld. 

     

              (ii) BY THE PURCHASER INDEMNITEE. If the Indemnifying Party does not elect to
assume the defense of any such claim or Proceeding, the Purchaser shall have the
right to proceed with the defense of such claim or Proceeding on its own. If the
Purchaser Indemnitee so proceeds with the defense of any such claim or
Proceeding on its own: 

     

                        (A) all
expenses relating to the defense of such claim or Proceeding (whether or not
incurred by the Purchaser Indemnitee) shall be borne and paid exclusively by the
Indemnifying Party; 

     

                        (B) the
Indemnifying Party shall make available to the Purchaser Indemnitee any
documents and materials in the possession or control of the Indemnifying Party
that may be necessary to the defense of such claim or Proceeding; 

     

                        (C) the
Purchaser Indemnitee shall keep the Indemnifying Party informed of all material
developments and events relating to such claim or Proceeding; and 

     

                        (D) the
Purchaser Indemnitee shall not settle, adjust or compromise such claim or
Proceeding without the prior written consent of the Indemnifying Party, which
shall not be unreasonably withheld. 

     

    32

     

    

    
    

                  
(c) SATISFACTION OF INDEMNIFICATION OBLIGATIONS. In the event a Purchaser
Indemnitee is entitled to indemnification under this Section 8, in any amount, from the Indemnifying Party
under this Agreement, such indemnification obligation shall be satisfied
directly by the Indemnifying Party, subject to the limitations set forth in
Section 8.3 hereof. 

     

                  
(d) PAYMENT OF INDEMNIFICATION OBLIGATIONS. Without limiting the generality of this Section 8 and subject to Sections 8.3 and 8.4(c) above, after any final judgment or award
shall have been rendered by a court, arbitration board or administrative agency
of competent jurisdiction and the expiration of the time in which to appeal
therefrom, or a settlement shall have been consummated, or the Purchaser
Indemnitee or the Indemnifying Party shall have arrived at a mutually binding
agreement with respect to a claim hereunder, the Purchaser Indemnitee shall
forward to the Indemnifying Party notice of any sums due and owing
(collectively, the “Amount Due”) pursuant to this Agreement and the final
judgment or award or the settlement with respect to such matter and the Amount
Due shall be promptly paid or reimbursed to the Purchaser Indemnitee pursuant to
the terms of this Agreement, by the delivery by wire transfer of immediately
available funds within twenty (20) business days after the date such notice is
sent. 

     

              Section
8.5. SET-OFF. The rights and obligations of
indemnification under this Section 8 shall not be limited or subject to set-off
based on any violation or alleged violation of any obligation under this
Agreement or otherwise, including breach or alleged breach by the Purchaser
Indemnitee of any representation, warranty, covenant or agreement contained in
this Agreement.

     

              Section
8.6. INDEMNITY ESCROW AGREEMENT. Subject to the Indemnity Escrow Agreement,
for payment of any indemnification to be made by the Indemnifying Party to a
Purchaser Indemnitee hereunder, such Purchaser Indemnitee shall be entitled to
draw the amount of such indemnification payment directly from the Indemnity
Escrow Fund to the extent the any funds remain in the Indemnity Escrow Fund.
Subject to the Indemnity Escrow Agreement, on the eighteen month anniversary of
the Closing Date, the Indemnifying Party shall be entitled to draw all amounts
of the Indemnity Escrow Fund in excess of an amount sufficient in the
Purchaser’s reasonable judgment to cover all then-pending claims for
indemnification against the Indemnifying Party.

     

              Section
8.7. EXCLUSIVE REMEDY. Except for actions grounded in fraud or
willful, knowing or intentional misrepresentation, from and after the Closing,
the indemnities provided in this Article 8 shall constitute the sole and exclusive
remedy of a Purchaser Indemnitee for Damages arising out of, resulting from or
incurred in connection with any claims related to or arising out of a Breach of
the representations and warranties in this Agreement; provided, however, that this exclusive remedy for Damages does
not preclude a party from bringing an action for specific performance or other
equitable remedy to require a party to perform its obligations under this
Agreement, including an intentional failure to consummate the Closing hereunder
when and if required to do so.

     

    33

     

    

    
    

         SECTION 9.
OTHER AGREEMENTS. 

     

              Section 9.1. CONSUMMATION OF TRANSACTIONS AND OBTAINING APPROVALS. Each party hereto shall (a) as promptly as
is reasonably practicable, diligently and in good faith use all commercially
reasonable efforts to cause the Closing conditions in this Agreement to be
satisfied as soon as possible, and (b) coordinate and cooperate with the other
party hereto in providing such information and supplying such assistance as may
be reasonably requested by such other party hereto in connection with the
foregoing. Without limiting the generality of the foregoing, each party hereto
shall use all commercially reasonable efforts to obtain all Consents of, and to
give all notices to and make all filings with, all Governmental Bodies
(including those pertaining to the Governmental Authorizations) and third
parties that may be or become necessary for its performance of its obligations
under this Agreement and shall cooperate fully with the other party in promptly
seeking to obtain all such Consents, giving such notices, and making such
filings.

     

              Section 9.2. PRE-CLOSING PERIOD ACTIONS. Except as otherwise contemplated herein,
during the Pre-Closing Period, the Seller shall (to the extent applicable to the
Interests, the Company, the Subsidiary and the Business and Assets of the
Company and the Subsidiary), and shall cause the Company and the Subsidiary to,
operate in the Ordinary Course of Business and: 

     

              (a)
maintain in full force and
effect, and continuously perform its obligations under, all Material
Contracts;

     

             
(b) not amend, modify or terminate any Material
Contract;

     

              (c)
not enter into any Contract,
agreement, commitment or other arrangement with any Person; 

     

              (d)
use commercially reasonable
efforts to preserve the Company’s and the Subsidiary’s business organization
intent and preserve its relationships with customers, suppliers and others with
whom it deals; 

     

              (e)
maintain in full force and effect
insurance policies and programs reflecting coverage that is reasonably
consistent with prudent industry practice; 

     

              (f)
not lease, license, sell,
encumber, pledge, hypothecate, abandon or otherwise dispose of any Asset, other
than sales of landfill gas (or electricity or environmental attributes generated
from sales of landfill gas) in the Ordinary Course of Business; 

     

              (g)
make or commit to make any
capital expenditure, with the exception of immaterial capital expenditures for
the Operating Projects;

     

              (h)
not amend its certificate of
formation or operating agreement or recapitalize or reclassify any of the
ownership interests in the Company or the Subsidiary; 

     

              (i)
not redeem or otherwise acquire
any ownership interests or issue any ownership interests or any option, warrant
or right relating thereto; 

     

    34

     

    

    
    

              (j)
maintain its corporate existence
and not merge or consolidate with any other Entity; 

     

              (k)
not lend, advance or borrow any
money or become contingently liable for any obligation or liability of
others;

     

              (l)
not sell, pledge or otherwise
encumber, in whole or in part, any of the Interest or the Larimer Interest;

     

              (m)
give the Purchaser reasonable
notice of any material event concerning the Company or the Subsidiary or of any
negotiation of a Material Contract, consult with the Purchaser regarding such
event or contract negotiation, and consider reasonable requests of the Purchaser
regarding such event or contract negotiation; 

     

              (n)
not make new elections with
respect to income taxes or revoke or change any current elections with respect
to income taxes; 

     

              (o)
not change any tax accounting
practices, procedures or methods relating to any material amount of Taxes of the
Company or the Subsidiary or settle or compromise any Tax Proceeding or other
controversy relating to any material increase or decrease in the amount of Taxes
of the Company or the Subsidiary, or enter into any other agreement to do any of
the foregoing; 

     

              (p)
not prepare or file any Tax
Return in a manner inconsistent with past practice and custom; 

     

              (q)
not settle any claim or
Proceeding that results in an unfunded or unpaid liability of the Company or the
Subsidiary that will not be paid or discharged in full prior to the Closing;

     

              (r)
pay any invoices that are due and
payable in the Ordinary Course of Business and in a manner consistent with past
practice and custom;

     

              (s)
forgive any Indebtedness owed to
the Company or the Subsidiary or release or waive any right or
claim;

     

              (t) hire
any employee or establish or adopt any Plan;

     

              (u)
not incur any additional
obligations or advance, change, withdraw, amend or terminate any Contract or
other obligation with respect to the Development Projects or the Larimer
Project; and 

     

              (v)
not commit, authorize or agree to
take any of the actions set forth in the preceding subsections of this
Section 9.2. 

     

    35

     

    

    
    

              Section 9.3. ACCESS TO INFORMATION. During the Pre-Closing Period, the Seller
shall, during ordinary business hours and upon reasonable notice, and consistent
with the policies, rules and procedures followed at the Project sites, (a) give
the Purchaser and the Purchaser’s
authorized representatives (or obtain for the Purchaser and the Purchaser’s
authorized representatives) reasonable access to (i) all Books and Records of
the Company and the Subsidiary, (ii) all safety and maintenance manuals,
engineering design plans, blueprints and as-built plans, compliance plans,
environmental procedures, surveys, permit applications, permits and similar
records relating to the development, construction, ownership, operation,
maintenance and management of the Projects, and (iii) the Projects and each of
the Project sites; (b) permit the Purchaser and its consultants, including
engineering consultants and environmental consultants, to make such reasonable
inspections and investigations of the Projects and the Project sites as the
Purchaser may reasonably request (and the Purchaser shall indemnify, defend and
hold the Seller harmless from and against any and all claims, damages and causes
of action relating directly or indirectly to the Purchaser or its agents’ or
authorized representatives’ inspections of the Projects or the Project sites);
(c) furnish the Purchaser with such other information in the Seller’s possession
with respect to the Projects and the Project sites as the Purchaser may from
time to time reasonably request; and (d) furnish the Purchaser a copy of each
material report, schedule, permit, license or other document filed or received
by the Seller with respect to the Project and the Project sites; provided, however, that (x) the Seller shall not be required to
take any action that would constitute a waiver of the attorney-client privilege,
(y) the Seller shall not be required to supply the Purchaser with any
information that Seller is under a legal or contractual obligation not to
supply, and (z) the Seller’s obligation to furnish information shall be limited
to information in its possession at the time of such request for information by
the Purchaser. Notwithstanding the foregoing, the Seller shall use commercially
reasonable efforts to seek permission to disclose the information, documents and
other materials which have been withheld for confidentiality reasons under
clause (y) of the immediately preceding sentence. 

     

              Section
9.4. FURTHER ACTIONS. 

     

              (a)
FURTHER ASSURANCES. From and after the Closing Date, the Seller
shall fully cooperate with the Purchaser, and shall promptly execute and deliver
such documents and take such other actions as the Purchaser may reasonably
request, for the purpose of evidencing the Transactions and putting the
Purchaser in possession and control of all of the Interests and the Assets and
Business of the Company and of the Subsidiary and shall not take any action,
directly or indirectly, alone or together with others, which obstructs or
impairs the smooth assumption by the Purchaser of the Business and Assets of the
Company and of the Subsidiary or the Interests. 

     

              (b) TAX MATTERS. 

     

              (i)
The Seller and the Purchaser will
cooperate in good faith in connection with the filing of Tax Returns, any audit
or Proceeding with respect to Taxes and in connection with any other Proceeding
in each case relating to the Interests, the Assets or the Business of the
Company and of the Subsidiary, as and to the extent reasonably requested by the
Purchaser or the Seller. Such cooperation shall include (A) the retention and
(upon a party’s request) the provision of records and information which are
reasonably relevant to the preparation of Tax Returns or to any such Proceeding,
and (B) making relevant employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. The Seller and the Purchaser shall (x) retain all Books and Records
with respect to Tax matters pertinent to the Business relating to any period
beginning before the Closing Date until
the expiration of all relevant statutes of limitations (and, to the extent
notified by the Seller or the Purchaser, any extensions thereof), and abide by
all record retention agreements entered into with any Governmental Body with
respect to Taxes (with respect to agreements of another party, to the extent
notified thereof), and (y) give the other parties to this Agreement reasonable
written notice prior to transferring, destroying or discarding any such Books
and Records.

     

    36

     

    

    
    

              (ii) The Purchaser shall
prepare an allocation of the Purchase Price (and all other capitalized costs)
among the Assets of the Company in accordance with Section 1060 of the Code and
the Treasury regulations thereunder (and any similar provision of state, local,
or non-U.S. law, as appropriate), which allocation shall be binding upon the
Seller. The Purchaser shall deliver such allocation to the Seller within sixty
(60) days after the Closing Date. The Purchaser and the Seller and their
Affiliates shall report, act and file Tax Returns (including, but not limited to
Internal Revenue Service Form 8594) in all respects and for all purposes
consistent with such allocation prepared by the Purchaser. The Seller shall
timely and properly prepare, execute, file and deliver all such documents, forms
and other information as the Purchaser may reasonably request to prepare such
allocation. Neither the Purchaser nor the Seller shall take any position
(whether in audits, tax returns or otherwise) that is inconsistent with such
allocation unless required to do so by applicable law.

     

              (iii) The Seller shall not make
an election to treat the Company as a corporation for income tax purposes during
the Pre-Closing Period or thereafter.

     

              (iv) Except to the extent
reflected as a Liability on the Closing Financial Statements, the Seller shall
defend, hold harmless and indemnify each of the Purchaser Indemnitees from and
against any Taxes of the Company or the Subsidiary relating or attributable to
the Pre-Closing Tax Period; provided, that any real, personal and intangible
property taxes for any Tax period that includes but does not end on the Closing
Date (each, a “Straddle Period”) shall be allocated to the portion of the
Straddle Period ending on the Closing Date on a per diem basis, and all other
Taxes for any Straddle Period shall be allocated as if such Straddle Period
ended on the Closing Date, except that exemptions, allowances or deductions that
are calculated on an annual basis, other than with respect to property placed in
service after the Closing, shall be allocated on a per diem basis. 

     

              Section 9.5. EMPLOYEES. The Purchaser and the
Seller agree to cooperate reasonably with each other on all transition matters
relating to the employees of Mowood Services, Inc. 

     

              Section 9.6. TRANSFER AND SALES TAX. Notwithstanding any provisions of law
imposing the burden of such Taxes on the Seller or the Purchaser, as the case
may be, the Seller shall be responsible for and shall pay (a) all sales, stamp,
document, use and transfer taxes and (b) all governmental charges, if any, upon
the Transactions, including the sale and transfer of the Interests and/or any
deemed sale or transfer of any Assets arising from the Transactions. If the
Seller shall fail to pay such amounts on a timely basis, the Purchaser may pay
such amounts to the appropriate Governmental Authority or Governmental
Authorities, and the Seller shall promptly reimburse the Purchaser for any
amounts so paid by the Purchaser.

     

    37

     

    

    
    

              Section 9.7. UPDATE OF DISCLOSURE SCHEDULES. Each party hereto has the continuing right
and obligation (a) to supplement, modify or amend, during the Pre-Closing
Period, the information required to be set forth on the Disclosure Schedules
applicable in each case to representations made by such party with respect to
any matter hereafter arising or discovered which, if existing or known on the
Effective Date, would have been required to have been set forth on such
Disclosure Schedules and (b) if necessary or appropriate to correct any
inaccuracy in a representation made by such party, to add a schedule to the
Disclosure Schedules, with a corresponding reference in this Agreement (such
information and additional schedules collectively being called the “Updating Information”). The delivery of any Updating Information
pursuant to this Section 9.7 shall not be deemed to amend or supplement
the Disclosure Schedules or to prevent or cure any misrepresentation, breach of
warranty or breach of covenant or other agreement, except updates to
Sections 3.10(b) and 3.10(c) to the extent of changes in the Ordinary
Course of Business or Tilden Receivables and not in breach of this
Agreement.

     

              Section 9.8. NO INTERFERENCE. With respect to each Project, from and after
the Closing Date, neither the Seller nor any of its Affiliates or its or their
Representatives shall develop, co-develop, acquire or otherwise participate in,
except as explicitly contemplated by the Management Services Agreement, perform
or agree to perform any work or services with respect to such Project or with
any third party host, power purchaser or site owner for or with respect to such
Project (whether located at the Project site or otherwise).

     

              Section 9.9. TILDEN RECEIVABLE. From and after the Closing, the Purchaser
shall cause the Company to pay to the Seller any Tilden Receivable actually
received by the Company net of all reasonable expenses, including royalties,
incurred by the Company in collecting such Tilden Receivable. For purposes of
this Agreement, “Tilden Receivable” shall mean those Receivables designated as
such by the Seller on Schedule 3.10(c), which result from the documented sale,
transfer, optioning or other disposition of any the sale of carbon and methane
credits that are attributed to, result from or generated prior to the Closing
Date by or at the projects located in Hernando, Florida, Butler County,
Nebraska, Oklahoma City, Oklahoma and the Denver Regional North and South and
the Front Range Landfill.

     

              Section
9.10. LARIMER ACTIONS.

     

              (a)
GENERALLY. The
parties hereto have agreed that, subject to this Section 9.10, the Company may quitclaim the Larimer
Interests to Tilden for consideration of $1.00 (the “Larimer Sale”). The Larimer Sale shall be subject to the
following conditions:

     

              (i)
the Larimer Sale shall be
documented and consummated at no cost to the Company, the Purchaser or
Purchaser’s Affiliates, and the Seller shall reimburse such Persons for any
costs incurred by them in connection with the Larimer Sale;

     

              (ii)
the documentation for such sale
shall be in form and substance acceptable to the Purchaser and at a minimum: (x)
shall not require the Company to make any representations (including as to good
title) to Tilden, or otherwise require the Company to indemnify Tilden, with
respect to the Larimer Interests or the Business or Assets of the Subsidiary;
(y) shall contain a release of, and a covenant not to sue from Tilden, with
respect to any claim or loss
attributable or related to the Larimer Interests or the Business or Assets of
the Subsidiary; and (z) shall contain an indemnity from Tilden with respect to
any Damages incurred by the Purchaser Indemnitees with respect to the Larimer
Interests or the Business or Assets of the Subsidiary.

     

    38

     

    

    
    

              (iii)
Tilden shall have entered into an
agreement not to compete with the Company in form and substance acceptable to
the Purchaser;

     

              (iv)
BEF Renewable Incorporated shall
have approved the Larimer Sale on terms that impose no liability or obligations
on the Company or require other consideration by the Company, including
compensation or the surrender or waiver of any rights; and

     

              (v)
The Management Agreement, dated
as of July 16, 2009, by and between Larimer Energy, LLC and the Company either
shall have been (x) terminated without any liability to the Company or (y)
assigned to, and assumed by, Tilden or other Person acceptable to the Purchaser
and Larimer shall have released the Company from all obligations of the Company
thereunder.

     

              (b)
TIMING OF LARIMER SALE. The parties hereto agree that the
consummation of the Larimer Sale shall not be a condition to the Closing;
provided, that if the Larimer Sale does close prior to
the Closing, the satisfaction of the requirements set forth in Sections 9.10(a) (the “Larimer Actions”) shall be conditions precedent to the
Purchaser’s obligation to consummate the Closing.

     

              (c)
EFFECT ON THIS AGREEMENT. Subject to this Section 9.10, nothing in this Agreement shall prevent the
Seller from causing the Company to consummate the Larimer Sale prior to the
Closing, and if the Larimer Sale is completed prior to the Closing, the terms
and conditions of this Agreement shall not apply solely with respect to the
Subsidiary, and the Seller shall not be deemed to have made any representation
or warranty about the Larimer Interests or the Business or Assets of the
Subsidiary, and the Seller shall be permitted to update its Disclosure Schedules
to reflect changes resulting from such sale.

     

              (d) FAILURE TO CONSUMMATE THE LARIMER SALE.

     

              (i)
COMPANY OBLIGATIONS. If the Larimer Sale is not consummated prior
to the Closing, then the Purchaser, at no cost to it, the Company or its or
their Affiliates, shall cooperate with all reasonable requests to assist with
the consummation of the Larimer Sale after the Closing. For the avoidance of
doubt, following the Closing, the Purchaser and the Company shall not be
obligated to consummate the Larimer Sale if any of the Larimer Actions have not
been satisfied.

     

              (ii)
OUTSIDE DATE. If the Larimer Sale has not been consummated
by June 30, 2010, then notwithstanding any provision in any documentation with
respect to the Larimer Sale to the contrary, neither the Purchaser nor the
Company shall have any obligation to cause the Larimer Sale to
occur.

     

    39

     

    

    
    

              (e)
INDEMNIFICATION, RELEASE AND COVENANT NOT TO SUE. The Indemnifying Party shall to the fullest extent permitted by applicable
law defend, hold harmless and indemnify each of the Purchaser Indemnitees from
and against, and shall compensate and reimburse each of the Purchaser
Indemnitees for, any Damages which are suffered or incurred by any of the
Purchaser Indemnitees or to which any of the Purchaser Indemnitees may otherwise
become subject at any time (regardless of whether or not such Damages relate to
any third party claim) and which arise directly or indirectly from or as a
direct or indirect result of, or are directly or indirectly connected with the
Larimer Interests or the Assets or the Business of the Subsidiary; provided, that the Indemnifying Party shall have no
obligation to indemnify or defend under this Section 9.10(e) for any claim arising out of events occurring
during such time the Purchaser is the indirect owner of the Subsidiary. The
Seller, on behalf of it and its Affiliates, hereby releases and forever
discharges, and covenants not to sue, each of the Purchaser Indemnitees from,
and with respect to, any event, omission or circumstance arising from or related
to the Larimer Interests or the Assets or the Business of the Subsidiary.

     

         SECTION 10.
TERMINATION. 

     

              Section
10.1. REASONS FOR TERMINATION. This Agreement
may be terminated at any time prior to the Closing, only in the following
manner: 

     

             
(a) By mutual written agreement of the Seller and
the Purchaser; 

     

              (b)
By the Purchaser or the Seller by
written notice if the Closing shall not have occurred on or before February 28,
2010; provided, that such date may be extended by the
Purchaser or the Seller by written notice to other party to any date not later
than the date that is sixty (60) days after the Effective Date, if the reason
for such extension is the failure to satisfy one or more conditions to the
Closing and the party requesting the extension reasonably believes that the
condition(s) to the Closing can be satisfied by the new termination deadline.
Notwithstanding the foregoing, termination under this provision shall not be
available to a party if the Closing has not occurred solely by reason of any
breach by such party under this Agreement; 

     

              (c)
By the Seller upon written notice
to the Purchaser if the Purchaser shall have breached in any material respect
any of its covenants contained in this Agreement, but only if (i) the Seller
shall have first given written notice to the Purchaser identifying such breach,
and (ii) the Purchaser has not cured or remedied such breach (including, where
payment of compensation would reasonably be considered an adequate remedy, the
payment of such adequate compensation) within thirty (30) days of receipt of
such notice; or 

     

              (d)
By the Purchaser upon written
notice to the Seller if the Seller shall have breached in any material respect
any of its covenants contained in this Agreement, but only if (i) the Purchaser
shall have first given notice to the Seller identifying such breach, and (ii)
the Seller has not cured or remedied such breach (including, where payment of
compensation would reasonably be considered an adequate remedy, the payment of
such adequate compensation) within thirty (30) days of receipt of such
notice.

     

    40

     

    

    
    

              Section 10.2. EFFECT OF TERMINATION. In the event of a termination of this
Agreement as permitted by Section 10.1, this Agreement shall cease to have force and
effect, and there shall be no further liability or obligation on the part of the
Seller or the Purchaser, except that (a) the provisions of Sections 5, 10 and 11 shall continue to apply following any such
termination, and (b) if this Agreement is terminated pursuant to paragraphs (c)
or (d) of Section 10.1, the Seller or the Purchaser, as the case may
be, shall be entitled to all remedies the Seller or the Purchaser, as
applicable, and subject to Section 8.7, may have arising out of or relating to such
termination and the circumstances giving rise thereto. 

     

         SECTION 11. MISCELLANEOUS PROVISIONS. 

     

              Section 11.1. FEES AND EXPENSES. Except as otherwise expressly set forth herein, each party to this
Agreement shall bear and pay all fees, costs and expenses (including all legal
fees and expenses) that have been incurred or that are in the future incurred
by, on behalf of or for the benefit of such party in connection with (a) the
negotiation, preparation and review of any term sheet or similar document
relating to any of the Transactions, (b) the investigation and review conducted
by such party and its Representatives with respect to the Transactions, (c) the
negotiation, preparation and review of this Agreement (including the Disclosure
Schedules), the other Transaction Documents, certificates, opinions and other
instruments and documents delivered or to be delivered in connection with the
Transactions, (d) the preparation and submission of any filing or notice
required to be made or given in connection with any of the Transactions, and the
obtaining of any Consent required to be obtained in connection with any of the
Transactions, and (e) the consummation and performance of the
Transactions.

     

              Section 11.2. ATTORNEYS’ FEES. If any legal action or
other Proceeding relating to any of the Transaction Documents or the enforcement
of any provision of any of the Transaction Documents is brought against any
party hereto, the prevailing party shall be entitled to recover reasonable
attorneys’ fees, costs and disbursements (in addition to any other relief to
which the prevailing party may be entitled). 

     

              Section 11.3. NOTICES. Any notice or other
communication required or permitted to be delivered to any party under this
Agreement shall be in writing and shall be deemed properly delivered, given and
received when delivered (by hand, by registered mail, by courier or express
delivery service or by facsimile) to the address or facsimile number set forth
beneath the name of such party below (or to such other address or facsimile
number as such party shall have specified in a written notice given to the other
party hereto): 

     

    
      	(1)	        	if to the
      Seller or the Company:
	 
	
            	
            	Tortoise
      Capital Resources Corporation
	
            	
            	11550 Ash
      Street, Suite 300
	
            	
            	Leawood,
      Kansas 66211
	
            	
            	Attention: Ed
      Russell
	
            	
            	Facsimile:
      913-981-1021
	 
	
            	
            	with a copy to:

    

    41

     

    

    
    

    
      	(2)	        	Husch Blackwell
      Sanders LLP
	 
	
            	
            	4800 Main Street,
      Suite 1000
Kansas City, Missouri 64112
Attention: Eric J. Gervais,
      Esq.
Facsimile: 816-983-8080
	 
	(3)	
            	if to the
      Purchaser: 
	 
	
            	
            	c/o EIF Renewable
      Energy Holdings LLC
	
            	
            	591 Redwood Hwy,
      Ste 3100
	
            	
            	Mill Valley, CA
      94941
	 	 	Attention: Scott
      Parkes
	 	 	Facsimile: (415)
      380-0527
	 	 	 
  
	
            	
            	c/o Energy
      Investors Funds
	
            	
            	Three Charles River Place
	
            	
            	63 Kendrick
      Street, Suite 101
	
            	
            	Needham, MA 02494
	
            	
            	Attention:
      General Counsel
	
            	
            	Telephone: (781) 292-7000
	 
	
            	
            	and:
	 
	
            	
            	c/o LES Project
      Holdings LLC
29261 Wall Street
Wixom, MI 48393
Attention: Scott
      Salisbury
Facsimile: (248) 380-2038

    

     

              Section 11.4. TIME OF THE ESSENCE. Time is of the essence with respect to this
Agreement. 

     

              Section 11.5. HEADINGS. The headings of
each section in this Agreement are for convenience of reference only, shall not
be deemed to be a part of this Agreement and shall not be referred to in
connection with the construction or interpretation of this Agreement.

     

              Section 11.6. COUNTERPARTS. This Agreement may be
executed in several counterparts (including via facsimile or similar electronic
transmission), each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement. 

     

              Section
11.7. GOVERNING LAW; CONSENT TO JURISDICTION. 

     

              (a) APPLICABLE LAW. This Agreement,
and any instrument or agreement required hereunder (to the extent not otherwise
expressly provided for therein), shall be governed by, and construed under, the
laws of the State of New York, without reference to conflicts of laws rules
(other than Section 5-1401 of the New York General Obligations Law).

     

    42

     

    

    
    

              (b) CONSENT TO JURISDICTION. The parties agree that any Proceeding by or
against any party (or its Affiliates or designees) with respect to or arising
out of this Agreement or any other Transaction Document shall be brought
exclusively in the United States District Court for the Southern District of New
York or the courts of the State of New York, in the City of New York, as the
party instituting such Proceeding may elect. By execution and delivery of this
Agreement, each party (for itself, its Affiliates and its designees):

     

              (i) expressly and irrevocably consents and submits to the jurisdiction of
each state and federal court located in the Southern District of New York (and
each appellate court located in the State of New York) in connection with any
such Proceeding;

     

              (ii) agrees that each state and federal court located in the Southern District
of New York shall be deemed to be a convenient forum; and

     

              (iii) agrees not to assert (by way of motion, as a defense or otherwise), in
any such Proceeding commenced in any state or federal court located in the
Southern District of New York, any claim that such party is not subject
personally to the jurisdiction of such court, that such Proceeding has been
brought in an inconvenient forum, that the venue of such Proceeding is improper
or that this Agreement or the subject matter of this Agreement may not be
enforced in or by such court and waives any right it may have to assert the
doctrine of forum non conveniens or similar doctrine or to object to venue with
respect to any Proceeding. 

     

              (c) Each party to this Agreement irrevocably waives the right to a jury trial
in connection with any Proceeding relating to this Agreement or the enforcement
of any provision to this Agreement.

     

              (d) CONSENT TO SERVICE OF PROCESS. The parties irrevocably consent to the
service of process in any such Proceeding by the mailing of copies thereof by
registered or certified mail, first class postage prepaid to the addresses set
forth in Section 11.3.

     

              Section 11.8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon: the Seller and its successors and
assigns (if any) and the Purchaser and its successors and assigns (if any). This
Agreement shall inure to the benefit of the Seller, the Purchaser, the Purchaser
Indemnitees, and the respective successors and assigns (if any) of the
foregoing. The Seller may not assign this Agreement without the prior written
consent of the Purchaser. The Purchaser may not assign this Agreement without
the prior written consent of the Seller, provided, however, that the Purchaser may freely assign any or
all of its rights under this Agreement (including its indemnification rights
under Section 8 hereof), in whole or in part, without
obtaining the consent or approval of the Seller (a) to any Affiliate or Person
providing debt, equity or other financing of the Purchaser or its Affiliates, at
any time and (b) to any Person after the Closing. 

     

              Section 11.9. REMEDIES CUMULATIVE. The rights and remedies of the parties
hereto shall be cumulative (and not alternative). 

     

    43

     

    

    
    

              Section
11.10. NO WAIVER. 

     

              (a)
No failure on the part of any
Person to exercise any power, right, privilege or remedy under this Agreement,
and no delay on the part of any Person in exercising any power, right, privilege
or remedy under this Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or of
any other power, right, privilege or remedy. 

     

              (b)
No Person shall be deemed to have
waived any claim arising out of this Agreement, or any power, right, privilege
or remedy under this Agreement, unless the waiver of such claim, power, right,
privilege or remedy is expressly set forth in a written instrument duly executed
and delivered on behalf of such Person; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is
given. 

     

              Section 11.11. AMENDMENTS. This Agreement may not be amended, modified,
altered or supplemented other than by means of a written instrument duly
executed by each of the parties hereto. 

     

              Section 11.12. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law, then such
invalidity, illegality or unenforceability shall not affect any other provision,
and such provision or portion thereof shall be struck from the remainder of this
Agreement, which shall remain in full force and effect. In such case, this
Agreement shall be reformed, construed and enforced in such jurisdiction so as
to best give effect to the intent of the parties under this Agreement. The
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.

     

              Section 11.13. PARTIES IN INTEREST. Except as expressly set
forth in Section 11.8 hereof, none of the provisions of this
Agreement is intended to provide any rights or remedies to any Person other than
the parties hereto and their respective successors and assigns (if any).

     

              Section 11.14. ENTIRE AGREEMENT. This Agreement (together
with the Schedules attached hereto) and the other Transaction Documents set
forth the entire understanding of the parties relating to the subject matter
hereof and thereof and supersede any and all prior agreements, understandings,
negotiations, discussions, undertakings, arrangements or contracts, oral or
written, between the parties with respect to the subject matter of the
Transaction Documents. 

     

              Section
11.15. CONSTRUCTION. 

     

              (a)
INTERPRETATION.
Except where otherwise expressly provided or unless the context otherwise
necessarily requires, in this Agreement (including in the preliminary statements
hereto): 

     

    44

     

    

    
    

              (i)
For purposes of this Agreement,
whenever the context requires: the singular number shall include the plural, and
vice versa; the masculine gender shall include the feminine and neuter genders;
the feminine gender shall include the masculine and neuter genders; and the
neuter gender shall include the masculine and feminine genders.

     

              (ii)
The parties hereto agree that any
rule of construction to the effect that ambiguities are to be resolved against
the drafting party shall not be applied in the construction or interpretation of
this Agreement.

     

              (iii)
The words “include” and
“including,” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without
limitation,” whether or not in fact followed by such words or words of like
import. 

     

              (iv)
All references in this Agreement
to “Sections” and “Exhibits” are intended to refer to Sections of this Agreement
and Exhibits to this Agreement. 

     

              (v)
A reference to any Legal
Requirement or any Contract includes any amendment, modification or successor
thereto. 

     

              (vi)
A reference to a Person includes
its predecessors, successors and permitted assigns. 

     

              (vii)
Accounting terms not otherwise
defined have the meanings assigned to them by GAAP. 

     

              (viii) All
references to “dollars” and “$”refer to U.S. Dollars.

     

              (b)
JOINT EFFORT. The parties
hereto agree that preparation of this Agreement has been a joint effort of the
parties and that the resulting document shall not be construed more severely
against one party than against the other party.

     

    [Signature Page Follows]

     

    45

     

    

    
    

              The parties hereto have caused this Agreement
to be executed and delivered as of the date first written above. 

     

    
      	“Purchaser”:	LANDFILL ENERGY SYSTEMS LLC,
	
            	a
      Delaware limited liability company
	 
	 
	
            	By:  	/s/ Scott C.
Parkes
	
            	
            	Name:	Scott C.
      Parkes
	
            	
            	Title:	Vice
      President
	 
	 
	“Seller”:	MOWOOD, LLC,
	
            	a
      Delaware limited liability company
	 
	 
	 
	
            	By:	/s/ Ed Russell
	
            	
            	Name:  	Ed
      Russell
	
            	
            	Title:	Tortoise
      Capital Resources Corp.,
	
            	
            	
            	its Majority
      Member

    

    46

     

    

    
    

    EXHIBIT A

     

    CAPITALIZED TERMS

     

         For purposes of the Agreement (including this
Exhibit A), the following capitalized terms shall have
the respective meanings set forth below: 

     

         “Accountants” shall have the meaning specified in Section
1.6(a) of this Agreement.

     

         “Affiliate” shall mean with respect to any Person, any
other Person controlling or controlled by or within common control with such
Person. 

     

         “Agreement” shall mean the Membership Interest Purchase
Agreement to which this Exhibit A is
attached (including the Disclosure Schedules and Exhibits attached hereto), as
it may be amended or supplemented from time to time. 

     

         “Amount Due” shall have the meaning specified in
Section 8.4(d) of this Agreement. 

     

         “Antitrust Laws” shall have the meaning specified in
Section 3.28(b) of this Agreement.

     

         “Asset” shall mean
any real, personal, mixed, tangible or intangible property of any nature
including cash, readily marketable securities, cash-equivalent liquid assets,
prepayments, deposits, security deposits under any leases, escrows, Receivables,
Tangible Property, Real Property Leases, Contracts, Intangibles, Intellectual
Property Rights, goodwill and other intangibles, and claims, causes of action
and other legal rights and remedies. 

     

         “Books and Records” shall mean all books, records, original
documents, files and papers of the Company and the Subsidiary, whether in hard
copy or electronic format, in the possession or control of the Company or the
Subsidiary as of the Closing Date, including all customer files, customer
account records, equipment maintenance data, inventory records, sales and sales
promotional data, advertising materials, customer lists, cost and pricing
information, supplier lists, business plans, reference catalogs and any other
similar records. 

     

         “Breach” of a representation, warranty, covenant,
obligation or other provision shall be deemed to have occurred if there is or
has been any inaccuracy in or breach of, or any failure to comply with or
perform, such representation, warranty, covenant, obligation or other provision;
and the term “Breach” shall be deemed to refer to any such inaccuracy, breach,
failure, claim or circumstance. 

     

         “Business” shall mean with respect to the Company and
the Subsidiary, the development, ownership, and operation of landfill gas to
energy Assets. 

     

         “Butler Contingent Payment” shall have the meaning specified in Section 1.8(a)(i) of this
Agreement.

     

         “Butler Contingent Payment
Date” shall have the
meaning specified in Section 1.8(a)(ii) of this Agreement. 

     

    A-1

     

    

    
    

         “Closing Actions” shall have the meaning specified in
Section 1.5 of this Agreement.

     

         “Closing” shall have the meaning specified in Section 1.1 of this
Agreement.

     

         “Closing Date” shall have the meaning specified in Section 1.4 of this Agreement.

     

         “Closing Financial
Statements” shall have the
meaning specified in Section 1.6(a) of this Agreement. 

     

         “Closing Payment” shall have the meaning specified in
Section 1.2 of this Agreement. 

     

         “Code” shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder, all as
the same shall be in effect from time to time. 

     

         “Company” shall have the meaning specified in the
preliminary statements of this Agreement. 

     

          “Company Financial
Statements” shall have the
meaning specified in Section 3.7(a) of this Agreement. 

     

         “Company Intellectual Property
Rights” means all
Intellectual Property Rights used, held for use, developed, licensed or required
at any time by the Company or the Subsidiary in the conduct of their Business as
presently conducted or contemplated to be conducted. 

     

         “Consent” shall mean any registration, qualification,
approval, consent, ratification, permission, waiver or authorization (including
any Governmental Authorization). 

     

         “Contingent Payments” shall mean, collectively, the Butler
Contingent Payment, the Sarasota Contingent Payment and the Erie Contingent
Payment.

     

         “Contract” shall mean any written, oral, implied or
other agreement, contract, understanding, arrangement, instrument, note,
guaranty, indemnity, representation, warranty, deed, lease, assignment, power of
attorney, certificate, license, sublicense, purchase order, work order,
insurance policy, benefit plan, commitment, covenant, assurance or undertaking
of any nature. For the avoidance of doubt, Real Property Leases and Material
Contracts shall for all purposes be deemed “Contracts.”

     

          “Current Liability” shall mean any current Liability of the
Company or the Subsidiary having a positive value as determined in accordance
with GAAP in a manner consistent with the Interim Balance Sheet, excluding any
Liability associated with the Development Project located in Sarasota, Florida
or the Development Project to be located at the Denver Regional Landfill North
and South and the Front Range Landfill commonly known as the Erie Project as
shown on Schedule 3.8 as of the Agreement Date.

     

         “Current Receivable” shall mean any Receivable due within thirty
days after the Closing Date, other than any Tilden Receivable.

     

    A-2

     

    

    
    

          “Damages” shall include any loss, damage, injury,
decline in value, lost opportunity, Liability, claim, demand, obligation,
settlement, judgment, award, proceeding, fine, penalty, Tax, fee (including any
legal fee, expert fee, accounting fee or advisory fee), charge, cost (including
any cost of investigation or cost incurred in connection with the commencement
and conduct of any Proceeding to enforce any rights granted under this
Agreement) or expense of any nature, but excluding all consequential, incidental
and punitive damages of any kind. 

     

         “Development Projects” shall mean the projects described on
Exhibit B attached hereto as the “Development
Projects.” 

     

         “Disclosure Schedules” shall mean the schedules (dated as of the
date of this Agreement) delivered to the Purchaser on behalf of the Seller, a
copy of which is attached to this Agreement and incorporated in this Agreement
by reference. 

     

          “Effective Date” shall have the meaning specified in the
preamble to this Agreement. 

     

         “EIF Renewable Holdings” means EIF Renewable Energy Holdings LLC, a
Delaware limited liability company.

     

         “EIFREH Guaranty” means that certain Guaranty by EIF Renewable
Holdings, substantially in the form attached hereto as Exhibit E.

     

         “Encumbrance” shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, equity, trust, equitable
interest, claim, preference, right of possession, lease, tenancy, license,
encroachment, covenant, infringement, interference, Order, proxy, option, right
of first refusal, preemptive right, community property interest, legend, defect,
impediment, exception, reservation, limitation, impairment, imperfection of
title, condition or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset) but shall
not include any restrictions or transfer imposed by federal or state securities
laws. 

     

         “Entity” shall mean any corporation (including any
non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, cooperative, foundation,
society, political party, union, company (including any limited liability
company or joint stock company), firm or other enterprise, association,
organization or entity. 

     

         “Environmental Attributes” shall mean any and all credits, benefits,
emissions, reductions, offsets, allowances, incentives, rebates or grants,
howsoever entitled, that exist before, on or after the Effective Date including:
(a) any federal or state tax credits associated with the collection, production,
transfer or sale of landfill gas; (b) any non-greenhouse gas emission reduction
allowance or credit required by law or regulation to be held, purchased, retired
or submitted by a landfill gas processing facility; (c) any premium in gas or
electricity payments attributable to environmental attributes; (d) any renewable
energy credits, certificates, green tags, or other aspect, claim,
characteristic, right or benefit associated with the generation of electricity
from a renewable source, including landfill gas, whether existing or created
pursuant to contract, voluntary standard or program or international, federal,
regional, state or local law, regulation, order, ordinance or judicial decree; (e) any emission
reductions, emission reduction credits, benefits, offsets, allowances,
incentives, rebates or grants linked to the reduction, avoidance, mitigation, removal, sequestration,
flaring, emission or destruction of methane (CH4), carbon dioxide (CO2) or any other greenhouse
gas, whether existing or created pursuant to contract, voluntary standard or program or
international, federal, regional, state or local law, regulation, order,
ordinance or judicial decree; and (f) any other benefit attributable to or in
connection with any renewable energy production or emission, avoidance or
displacement.

     

    A-3

     

    

    
    

         “Environmental Attributes
Agreement” shall mean that
certain Environmental Attributes Agreement, dated as of December 31, 2009, by
and among TTO, the Seller, Mowood Services Corp., the Purchaser, the Company,
Tilden and Joseph Hopper.

     

         “Environmental Laws” mean any and all federal, state and local
laws, statutes, ordinances, judgments, orders, decrees, licenses, permits, rules
and regulations, or other binding requirement relating to pollution or
protection of human health and the environment, or to worker health and safety,
including laws, statutes, ordinances, judgments, orders, decrees, licenses,
permits, rules and regulations or other binding requirements relating to
renewable energy credits, carbon credits, emission reduction credits, or other
green attributes, emissions, discharges, releases or threatened releases of any
Hazardous Material, or otherwise relating to the use, treatment, storage,
disposal, transport or handling of any Hazardous Material. 

     

         “Environmental Permits” shall have the meaning specified in
Section 3.22(b) of this Agreement. 

     

         “Erie Assets” shall have the meaning specified in
Section 1.7(c)(ii) of this Agreement.

     

         “Erie Contingent Payment” shall have the meaning specified in
Section 1.8(c)(i) of this Agreement. 

     

         “Erie Contingent Payment
Date” shall have the
meaning specified in Section 1.8(c)(i) of this Agreement.

     

         “Erie Project” shall mean the Development Project described
on Exhibit B attached hereto as the “Erie Project.”

     

         “ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder, all as the same shall be in effect from time to time. 

     

         “ERISA Affiliate” shall mean any Entity under “common control”
with the Company under Code Sections 414(b), 414(c), 414(m) or 414(o) or ERISA
Section 4001(a)(14)(B). 

     

         “Escrow Agent” shall mean the financial institution that is
mutually acceptable to the Seller and the Purchaser, as escrow agent under the
Indemnity Escrow Agreement.

     

         “Ewing Bemiss” shall have the meaning specified in
Section 2.7 of this Agreement. 

     

         “FPA” shall have the meaning specified in
Section 3.26(a) of this Agreement. 

     

    A-4

     

    

    
    

         “GAAP” shall mean generally accepted accounting
principles, applied on a basis consistent with the basis on which the Company
Financial Statements were prepared. 

     

         “Governmental Authorization” shall mean any: (a) permit, license,
certificate, franchise, concession, approval, consent, ratification, permission,
clearance, confirmation, endorsement, waiver, certification, designation,
rating, registration, qualification or authorization issued, granted, given or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement; or (b) right under any Contract with any
Governmental Body. 

     

         “Governmental Body” shall mean any: (a) nation, principality,
state, commonwealth, province, territory, county, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal, foreign
or other government; (c) governmental or quasi-governmental authority of any
nature (including any governmental division, subdivision, department, agency,
registering authority, bureau, branch, office, commission, council, board,
instrumentality, officer, official, representative, organization, unit, body or
Entity and any court or other tribunal); (d) multi-national organization or
body; or (e) individual, Entity or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature. 

     

         “Hazardous Material” shall mean any pollutant or contaminant, or
hazardous or toxic substance, constituent, waste or material, including
petroleum products and their derivatives, natural gas and natural gas liquids,
or other substances regulated under or pursuant to Environmental Laws.

     

         “Indebtedness” shall mean with respect to a Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising in
the Ordinary Course of Business, (d) all obligations of such Person under leases
which are or should be, in accordance with GAAP, recorded as capital leases in
respect of which such Person is liable, (e) all obligations of such Person to
purchase securities (or other property) which arise out of or in connection with
the sale of the same or substantially similar securities (or property), (f) all
deferred obligations of such Person to reimburse any bank or other Person in
respect of amounts paid or advanced under a letter of credit or other
instrument, (g) all Indebtedness of others secured by an Encumbrance on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person, and (h) all Indebtedness of others guaranteed directly or indirectly by
such person or as to which such Person has an obligation substantially the
economic equivalent of a guarantee. 

     

         “Indemnifying Party” shall have the meaning specified in
Section 8.2 of this Agreement. 

     

         “Indemnity Escrow Agreement” shall mean the Indemnity Escrow Agreement,
dated as of the Effective Date, by and between the Seller and the Purchaser
substantially in the form attached hereto as Exhibit D.

     

    A-5

     

    

    
    

         “Indemnity Escrow Amount” shall mean the sum of XXXXXXX Dollars
($XXXXXXX), delivered to the Escrow Agent. 

     

         “Indemnity Escrow Fund” shall mean, at any time, the remaining
portion of the Indemnity Escrow Payment held under the Indemnity Escrow
Agreement.

     

         “Information” shall have the meaning specified in
Section 5.1 of this Agreement. 

     

         “Intangibles” shall mean any and all rights in, arising
out of or associated with any of the foregoing: goodwill; Internet web sites and
web-site designs; databases and data collections and all rights therein
throughout the world; Company Intellectual Property Rights; and all similar or
equivalent rights to any of the foregoing throughout the world, whether in use,
under development or design, or inactive. 

     

         “Intellectual Property
Rights” means all (i)
patents, patent applications, patent disclosures and inventions, (ii)
trademarks, service marks, trade dress, trade names, logos and corporate names
and registrations and applications for registration thereof together with all of
the goodwill associated therewith, (iii) copyrights (registered or unregistered)
and copyrightable works and registrations and applications for registration
thereof, (iv) mask works and registrations and applications for registration
thereof, (v) computer software programs, applications, data, data bases and
related technical documentation, (vi) trade secrets (including, without
limitation, ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, manufacturing
and production processes and techniques, research and development information,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial and marketing plans and customer and supplier
lists and information), (vii) Internet domain names and Internet domain name
applications, (viii) other intellectual property rights and (ix) copies and
tangible embodiments thereof (in whatever form or medium), excluding shrink
wrapped, off-the-shelf licenses. 

     

         “Interests” shall have the meaning specified in the
preliminary statements of this Agreement. 

     

         “Interim Balance Sheet” shall have the meaning specified in
Section 3.7(a)(ii) of this Agreement.

     

         “Interim Balance Sheet Date” shall mean November 30, 2009.

     

         “IRS” shall mean the United States Internal
Revenue Service. 

     

         “Knowledge” of a particular fact or other matter shall
be deemed to be possessed by an individual if such individual is actually aware
of, or if such individual in the reasonable exercise of his position with the
Company or the Subsidiary should know of, such fact or other matter after due
inquiry. The Seller shall be deemed to have “Knowledge” of a particular fact or
other matter if Tilden, Joseph Hopper or Joseph Pirozzoli has Knowledge of such
fact or other matter. The Purchaser shall be deemed to have “Knowledge” of a
particular matter if Scott Parkes, Scott Salisbury or Jose Torres-Monllor has
Knowledge of such fact or other matter. 

     

    A-6

     

    

    
    

         “Landfill Gas” shall have the meaning given such term in
the California Energy Commission’s Renewable Energy Program Overall Program
Guidebook (January 2008).

     

         “Larimer Actions” shall have the meaning specified in
Section 9.10(b) of this Agreement.

     

         “Larimer Interests” shall have the meaning specified in
Section 3.1 of this Agreement. 

     

         “Larimer Project” shall mean the project described on
Exhibit B attached hereto as the “Larimer Project.”

     

         “Larimer Sale” shall have the meaning specified in
Section 9.10(a) of this Agreement.

     

         “Legal Requirement” shall mean any federal, state, local,
municipal, foreign or other law, statute, legislation, constitution, principle
of common law, resolution, ordinance, code, edict, decree, proclamation, treaty,
convention, rule, regulation, ruling, directive, pronouncement, requirement,
specification, determination, decision, opinion or interpretation that is or has
been issued, enacted, adopted, passed, approved, promulgated, made, implemented
or otherwise put into effect by or under the authority of any Governmental Body
and shall specifically include with respect to TTO, all obligations of TTO
resulting from the registration of its common stock pursuant to Section 12(b) of
the Securities Exchange Act of 1934, as amended. 

     

         “Liability” shall mean any Indebtedness, obligation,
duty or liability of any nature (including any unknown, undisclosed, unmatured,
unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious,
derivative, joint, several or secondary liability), regardless of whether such
Indebtedness, obligation, duty or liability would be required to be disclosed on
a balance sheet prepared in accordance with GAAP and regardless of whether such
Indebtedness, obligation, duty or liability is immediately due and payable.

     

         “Licensed Intellectual
Property” shall have the
meaning specified in Section 3.21(b) of this Agreement. 

     

         “LLC Interest Assignment
Agreement” shall mean the
assignment and assumption agreement in the form attached hereto as Exhibit C.

     

         “Major Customer” shall have the meaning specified in
Section 3.23(a) of this Agreement. 

     

         “Major Supplier” shall have the meaning specified in
Section 3.23(b) of this Agreement. 

     

         “Management Services
Agreement” shall have the
meaning specified in Section 6.12 of this Agreement. 

     

         “Material Adverse Effect” means any change, effect, event, occurrence,
state of facts or developments that, individually or, together with any related
change, effect, event or circumstance in the aggregate, could reasonably be
expected to be materially adverse to the Business, Assets, Liabilities, results
of operations, condition (financial or otherwise), properties or prospects of
the Company and the Subsidiary taken as a whole or a material impairment or
delay in the ability of the Seller to perform its obligations hereunder and
consummate the Transactions. 

     

    A-7

     

    

    
    

         “Material Contracts” shall mean means each of the following
Contracts (whether written or oral) to which the Company or the Subsidiary is a
party: (a) any Real Property Lease, (b) any gas rights agreement, gas sales
agreement, power purchase agreement, operation and maintenance agreement,
interconnection agreement, transmission agreement, energy or environmental
attribute sales agreement, commodity hedge agreement or similar project
agreement related to the sale of gas, electricity, transmission services or
Environmental Attributes of any Project, (c) any services agreement involving
annual payments by or to the Company or the Subsidiary, (d) any Contract
relating to Indebtedness or any material performance obligation of the Company
or the Subsidiary, including any leases, guarantees, letter of credit
arrangements or bonding arrangements, (e) any Contract creating or relating to
Encumbrances on any Assets of the Company or the Subsidiary securing any
obligation created under an agreement specified in clause (d) above, (f) any
engineering, construction, procurement, construction management or similar
Contract, (g) any product warranty or repair Contract by or with a manufacturer
or vendor of equipment owned or leased by the Company or the Subsidiary, (h) any
Contract for the sale or purchase of any Entity, or of business assets, (i) any
settlement agreement, (j) any Contract between Mowood, any Affiliate thereof
(other than the Company or the Subsidiary), or any Related Party and either the
Company or the Subsidiary, (k) any agreement regarding the sharing or allocation
of Taxes, (l) any Contract with payments based on the net profits of the Company
or the Subsidiary (such as a royalty fee contract), and (n) any other Contract
that is expected to require payments by or to the Company or the Subsidiary of
more than $100,000 in any calendar year. 

     

         “Non-Foreign Certificate” shall have the meaning specified in
Section 1.5(d) of this Agreement.

     

         “Office Space” shall have the meaning specified in
Section 6.17 of this Agreement.

     

          “Order” shall mean any: (a) order, judgment,
injunction, edict, decree, ruling, pronouncement, determination, decision,
opinion, verdict, sentence, subpoena, writ or award that is or has been issued,
made, entered, rendered or otherwise put into effect by or under the authority
of any court, administrative agency or other Governmental Body or any arbitrator
or arbitration panel; or (b) Contract with any Governmental Body that is or has
been entered into in connection with any Proceeding. 

     

         “Operating Projects” shall mean the projects described on
Exhibit B attached hereto as the “Operating Projects.”

     

         “Ordinary Course of Business” means the normal and ordinary conduct of the
Business, pursuant to and in accordance with prudent industry practices, all
applicable Contracts, Legal Requirements and consistent with the applicable
provisions of this Agreement.

     

         “Payoff Amount” shall mean the amount required to fully
repay and discharge all obligations of the Company and the Subsidiary with
respect to the Payoff Debt.

     

         “Payoff Debt” shall mean all outstanding Indebtedness of
the Company and the Subsidiary, which is listed on Schedule 3.10(a) and is to be repaid at or prior to the
Closing.

     

    A-8

     

    

    
    

         “Permitted Encumbrances” shall have the meaning specified in
Section 3.9(c) of this Agreement. 

     

         “Person” shall mean any individual, Entity or
Governmental Body. 

     

         “Pipelines” shall have the meaning specified in
Section 3.26(c) of this Agreement. 

     

         “Plan” shall mean any plan, program, policy,
practice, Contract, agreement or other arrangement providing for compensation,
fees, commissions or bonuses; loans; severance or termination pay; pension
benefits; deferred compensation; performance awards; stock or stock-related
awards; fringe benefits; health, dental, vision, life, disability, sabbatical,
accidental death and dismemberment benefits; or other compensation, benefits or
remuneration of any kind, whether written, unwritten or otherwise, funded or
unfunded, including each “employee benefit plan,” within the meaning of Section
3(3) of ERISA (whether or not ERISA is applicable to such plan), that has ever
been sponsored, maintained, contributed to, or required to be contributed to, by
the Company, the Subsidiary or any ERISA Affiliate for the benefit of any
current or former employee, director, or officer, or any independent contractor
or under which the Company has or may have any Liability. 

     

         “Pre-Closing Period” shall mean the period commencing on the
execution and delivery of this Agreement on the Effective Date and ending upon
the consummation of the Closing. 

     

         “Pre-Closing Tax Period” shall have the meaning specified in
Section 3.16(b) of this Agreement. 

     

         “Proceeding” shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal proceeding), prosecution,
contest, hearing, inquiry, inquest, audit, examination or investigation that is
or has been commenced, brought, conducted or heard by or before, or that
otherwise has involved or may involve, any Governmental Body or any arbitrator
or arbitration panel. 

     

         “Projects” shall mean individually and collectively,
the Operating Projects, the Larimer Project and the Development Projects.

     

         “PUHCA” shall have the meaning specified in
Section 3.26(a) of this Agreement. 

     

         “Purchase Price” shall have the meaning specified in
Section 1.2 of this Agreement. 

     

         “Purchaser” shall have the meaning specified in the
introductory paragraph of this Agreement. 

     

         “Purchaser Indemnitees” shall mean the following Persons: (a) the
Purchaser and its Affiliates; (b) the respective Representatives of the Persons
described in clause (a); and (c) the respective successors and assigns of the
Persons referred to in clauses (a) and (b) above; provided, however, that the Seller shall not be deemed to be a
“Purchaser Indemnitee.” 

     

         “Real Property Leases” shall have the meaning specified in
Section 3.14(a) of this Agreement.

     

    A-9

     

    

    
    

         “Receivables” shall mean any receivable determined in
accordance with GAAP in a manner consistent with the Interim Balance Sheet.

     

         “Related Party” shall include each of the following (a) any
of the Seller, (b) each individual who is, or who has at any time been, an
officer, director or Employee of the Company or the Subsidiary, (c) each member
of the family of each of the individuals referred to in clauses (a) and (b) above, and (d) any Entity (other than the
Company) in which any one of the individuals referred to in clauses (a), (b) and (c) above holds (or in which more than one of
such individuals collectively hold), beneficially or otherwise, a material
voting, proprietary or equity interest. 

     

         “Release” means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Material through ambient air, soil, subsurface water,
groundwater, wetlands, lands, or subsurface strata. 

     

         “Representatives” shall mean officers, directors, members,
managers, partners, shareholders, employees, agents, attorneys, accountants,
advisors, agents and representatives. All Related Parties shall be deemed to be
“Representatives” of the Seller and the Company. 

     

         “Sarasota Contingent Payment” shall have the meaning specified in
Section 1.8(b)(i) of this Agreement. 

     

         “Sarasota Contingent Payment
Date” shall have the
meaning specified in Section 1.8(b)(ii) of this Agreement. 

     

         “Seller” shall have the meaning specified in the
introductory paragraph of this Agreement. 

     

         “Straddle Period” shall have the meaning specified in
Section 9.4(b)(iv) of this Agreement. 

     

         “Subsidiary” shall have the meaning specified in
Section 3.1 of this Agreement. 

     

         “Tangible Property” shall mean all equipment, leaselines,
materials, prototypes, tools, supplies, furniture, fixtures, improvements and
all other tangible Assets of the Company or the Subsidiary, as applicable.

     

         “Tax” shall mean any tax (including any income
tax, franchise tax, capital gains tax, estimated tax, gross receipts tax,
value-added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax,
sales tax, use tax, property tax, business tax, occupation tax, inventory tax,
occupancy tax, withholding tax or payroll tax), levy, assessment, tariff,
impost, imposition, toll, duty (including any customs duty), and any related
charge or amount (including any fine, penalty or interest), that is or has been
imposed, assessed or collected by or under the authority of any Governmental
Body. 

     

    A-10

     

    

    
    

         “Tax Return” shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that is, has been or may in the
future be filed with or submitted to, or required to be filed with or submitted
to, any Governmental Body in connection with the determination, assessment,
collection or payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Legal Requirement
relating to any Tax. 

     

         “Tilden” shall mean Greg Tilden, an
individual.

     

         “Tilden Receivable” shall have the meaning given in Section 9.9. 

     

         “Transaction Documents” shall mean all agreements and instruments
delivered in connection with the Transactions, including: (i) this Agreement,
(ii) the TTO Guaranty and the EIFREH Guaranty, (iii) the Management Services
Agreement, (iv) the Indemnity Escrow Agreement, (v) the LLC Interest Assignment
Agreement, (vi) the Environmental Attributes Agreement, and (vii) each other
agreement, instrument or certificate issued in connection with any of the
foregoing. 

     

         “Transactions” shall mean (a) the execution and delivery of
this Agreement and the respective Transaction Documents and (b) all of the
transactions contemplated by this Agreement and the respective Transaction
Documents, including, but not limited to: (i) the sale of the Interests by the
Seller to the Purchaser in accordance with this Agreement; (ii) the performance
by the Seller and the Purchaser of their respective obligations under this
Agreement and the Transaction Documents; and (iii) the exercise by the Seller
and the Purchaser of their respective rights under this Agreement and the
Transaction Documents. 

     

         “TTO” shall mean Tortoise Capital Resources
Corporation, a Maryland corporation. 

     

         “TTO Guaranty” shall mean the guaranty of the Seller’s
obligations under the Transaction Documents, substantially in the form attached
hereto as Exhibit G. 

     

         “Updating Information” shall have the meaning specified in
Section 9.7 of this Agreement. 

     

          “Working Cash” shall mean cash or cash equivalents held by
the Company or the Subsidiary but excluding cash or cash equivalents (a) that
are legally or contractually restricted from distribution or use and (b) to the
extent arising from a prepayment for which the Closing Financial Statements do
not show a corresponding Current Liability. 

     

    A-11

     

    

    
    

    Execution Version

     

    FIRST AMENDMENT
to
MEMBERSHIP INTEREST PURCHASE AGREEMENT

     

         This First Amendment to Membership Interest Purchase Agreement (the
“First Amendment”), dated as of February 9, 2010, is entered
into by and between Mowood, LLC, a Delaware limited liability company (the
“Seller”), and Landfill Energy Systems LLC, a
Delaware limited liability company (the “Purchaser”).

     

    RECITALS

     

         A. The Seller and the Purchaser have
entered into a Membership Interest Purchase Agreement, dated as of December 31,
2009 (the “Purchase Agreement”), whereby the Purchaser agreed to purchase
from the Seller all of the issued and outstanding membership interests of
Timberline Energy, LLC, a Delaware limited liability company (the “Company”) on the terms and conditions set forth in
the Purchase Agreement.

     

         B. The parties desire to amend the
Purchase Agreement in order to reflect certain changes in the agreements between
them. 

     

    AGREEMENT

     

         NOW, THEREFORE, in consideration of the
foregoing premises and for other good and valuable consideration, and pursuant
to Section 11.11 of the Purchase Agreement, the Seller and the Purchaser,
intending to be legally bound, hereby agree as follows: 

     

         1. Definitions. Initially capitalized terms used herein and
not otherwise defined herein shall have the meanings given such terms in the
Purchase Agreement, and the rules of interpretation set forth therein shall
apply hereto. 

     

         2. Section 1.5(c). Section 1.5(c) of the Purchase Agreement is
hereby deleted in its entirety and replaced with the phrase “Intentionally
omitted.” 

     

         3. Section 1.8(b). Section 1.8(b) of the Purchase Agreement is
hereby deleted in its entirety and replaced with the phrase “Intentionally
omitted.” 

     

         4. Section 6. Section 6 of the Purchase Agreement is
hereby amended as follows:

     

              4.1 Section 6.4(a)(v). Section 6.4(a)(v) is hereby amended and
restated in its entirety as follows: 

     

    “(v) pay-off letters and UCC termination statements showing the release
of all Encumbrances affecting the Interests, the Company or the Subsidiary or
any of their Assets, except for those Encumbrances affecting the Assets of the
Company specified on Schedule I hereto.”

     

    

    
    

              4.2
Section 6.7. Section 6.7 of the Purchase Agreement is
hereby deleted in its entirety and replaced with the phrase “Intentionally
omitted.” 

     

              4.3
Section 6.8. Section 6.8 is hereby amended and restated
in its entirety as follows: 

     

    “Section 6.8. ESTOPPEL CERTIFICATES. The Seller shall use good faith efforts to
obtain written estoppel and non-disturbance certificates from those Persons
listed on Schedule 6.8 under any Material Contract; except that (a)
it shall not be a condition to Closing that an estoppel certificate be obtained
from any affiliate of Waste Connections, Inc.; and (b) the Purchaser agrees to
waive this condition to the extent that, notwithstanding the Seller’s good faith
efforts, the Seller has not obtained an estoppel certificate from any Person
listed in Schedule 6.8 at the
time that all of the other conditions in this Section 6 have been met.” 

     

              4.4
Section 6.12. Section 6.12 of the Purchase Agreement is
hereby amended and restated in its entirety as follows: 

     

    “Section 6.12. MANAGEMENT SERVICES AGREEMENT. Each of the Company and an entity controlled
by Tilden, Joseph Hopper and Joseph Pirozzoli (“New Management Co.”) shall have entered into a management
services agreement for the provision by New Management Co. of certain management
services to the Company (the “Management Services
Agreement”) in form and
substance satisfactory to the Purchaser.”

     

         5.
Section 7.2. Section 7.2(c) of the Purchase Agreement is
hereby amended and restated in its entirety as follows: 

     

    “(c) Each of the Company and New Management Co. have entered into the
Management Services Agreement in form and substance satisfactory to the Seller;”

     

         6.
Section 9.2(c). The Purchaser acknowledges and agrees that
the Seller has amended or entered into the following contracts since the
Effective Date, that the entry by the Seller into such contracts does not
constitute a violation of Section 9.2(b) or (c) of the Purchase Agreement, and that pursuant
to Section 9.7, the addition of such agreements to the
appropriate Disclosure Schedule shall for all purposes be deemed to have been
approved by the Purchaser: 

     

              6.1
Small Generator Interconnection
Agreement, dated February 12, 2010, between the Company and Florida Power &
Light Company. 

     

              6.2
Confirmation Letter #2, dated
February 4, 2010, with reference to the Carbon Offsets Purchase and Sale
Agreement, dated January 14, 2009, between the Company and Bonneville
Environmental Foundation. 

     

              6.3
Confirmation Letter #2, dated
February 4, 2010, with respect to the Renewable Energy Certificate Purchase and
Sale Agreement, dated July 21, 2008, between the Company and Bonneville
Environmental Foundation. 

     

    2

     

    

    
    

              6.4
Pledge and Control Agreement,
dated February 4, 2010, between the Company and Regions Bank with respect to
Certificate of Deposit Account No. 0114406918. 

     

              6.5
Pledge and Control Agreement,
dated February 4, 2010, between the Company and Regions Bank with respect to
Certificate of Deposit Account No. 0089467299. 

     

         7. Section 11.16. A new Section 11.16 is hereby added to read
as follows: 

     

    “Section 11.16. SELLER CLOSING PAYMENT. At the Closing, the Seller shall pay
$200,000 to the Purchaser in immediately available funds pursuant to the wire
instructions for Purchaser set forth in Schedule 1.3.” 

     

         8. Exhibit A. Exhibit A of the Purchase Agreement is
hereby amended as follows: 

     

              8.1
The definition of “Contingent
Payments” is hereby amended and restated in its entirety as follows:

     

    “ ‘Contingent Payments’ shall mean, collectively, the Butler Contingent
Payment and the Erie Contingent Payment.”

     

              8.2
A new definition “New Management
Co.” is inserted after the definition of “Material Contracts” as follows:

     

         “ ‘New Management Co.’ shall have the meaning given in Section 6.12.” 

     

              8.3
The definition of “Sarasota
Contingent Payment” is deleted in its entirety and replaced with the phrase
“Intentionally omitted.” 

     

              8.4
The definition of “Sarasota
Contingent Payment Date” is deleted in its entirety and replaced with the phrase
“Intentionally omitted.” 

     

              8.5
The definition of “Transaction
Documents” is hereby amended and restated in its entirety as follows:

     

    “ ‘Transaction Documents’ shall mean all agreements and instruments
delivered in connection with the Transactions, including: (i) this Agreement,
(ii) the TTO Guaranty and the
EIFREH Guaranty, (iii) the Management Services Agreement, (iv) the Indemnity
Escrow Agreement, (v) the LLC Interest Assignment and Assumption Agreement, (vi)
the Environmental Attributes Agreement, (vii) the Sublease, dated as of February
9, 2010, between the Seller and the Company; and (viii) each other agreement,
instrument or certificate issued in connection with any of the foregoing.”

     

         9.
Exhibit I. Exhibit I of the Purchase Agreement is
hereby deleted in its entirety and replaced with the phrase “Intentionally
omitted.” 

     

         10.
Exhibit J. Exhibit J of the Purchase Agreement is
hereby deleted in its entirety and replaced with the phrase “Intentionally
omitted.” 

     

    3

     

    

    
    

         11. Schedule 1.3. Schedule 1.3 of the Purchase Agreement (Wire
Instructions) is hereby amended and restated in its entirety as attached in
Schedule II. 

     

         12. Benefit of Agreement. This First Amendment is solely for the
benefit of the signatories hereto (and their respective successors and assigns),
and no other Person shall have any rights under, or because of the existence of,
this First Amendment. 

     

         13. Governing Law. This First Amendment shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to conflict of laws rules (other than Section 5-1401 of the New York
General Obligations Law). 

     

         14. Captions. The headings of the several sections and
subsections of this First Amendment are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this First
Amendment. 

     

         15. Reference to the Purchase
Agreement. Any and all
notices, requests, certificates and other documents or instruments executed and
delivered concurrently with or after the execution and delivery of this First
Amendment may refer to the Purchase Agreement without making specific reference
to this First Amendment, but all such references shall be deemed to include this
First Amendment, unless the context shall otherwise require. 

     

         16. Effectiveness of the Purchase
Agreement. This First
Amendment shall be effective upon the execution and delivery hereof by the
Seller and the Purchaser. Except as expressly provided herein, nothing in this
First Amendment shall be deemed to waive or modify any of the provisions of the
Purchase Agreement and the parties hereby ratify and confirm the provisions of
the Purchase Agreement, except as amended hereby. In the event of any conflict
between the Purchase Agreement and this First Amendment, this First Amendment
shall prevail.

     

         17. Entire Agreement. This First Amendment sets forth the entire
understanding of the parties in connection with the subject matter hereof. There
are no agreements between the parties related to the Purchase Agreement other
than those set forth in writing and signed by the parties. Neither party hereto
has relied on any understanding, representation or warranty not set forth
herein, either oral or written, as an inducement to enter into this First
Amendment.

     

         18. Counterparts. This First Amendment may be executed in
several counterparts (including via facsimile or similar electronic
transmission), each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.

     

    [Signature Page Follows]

     

    4

     

    

    
    

         IN WITNESS WHEREOF, the parties have caused this First Amendment to be
duly executed and delivered as of the date first written above. 

     

    
      	Purchaser:	Landfill Energy Systems LLC,
	
            	a
      Delaware limited liability company
	 
	 
	
            	By:  	/s/ Scott C.
Parkes
	
            	
            	Name:	Scott C.
      Parkes
	
            	
            	Title:	Vice
      President
	 
	 
	Seller:	Mowood, LLC,
	
            	a
      Delaware limited liability company
	 
	 
	
            	By:	/s/ Ed Russell
	
            	
            	Name:  	Ed
      Russell
	
            	
            	Title:	Managerex10_1.htm

Exhibit 10.1

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

This Amended and Restated Registration Rights Agreement (this “Agreement”), dated as of April 7, 2010, is made and entered into by and among The Talbots Inc., a Delaware corporation (the “Company”), BPW Acquisition Corp., a Delaware corporation, (“BPW”), Perella Weinberg Partners Acquisition LP, a Delaware limited partnership, and BNYH BPW Holdings LLC, a Delaware limited liability company (each a “Sponsor” and together the “Sponsors”), the other parties listed under “Holders” on the signature page hereto and any person or entity who hereafter becomes a party to this Agreement as contemplated by Section 4.02 of this Agreement (each such party, and each of the Sponsors, a “Holder” and collectively the “Holders”).

 

RECITALS

 

 

WHEREAS, the Holders and BPW are parties to that certain Registration Rights Agreement, dated as of February 26, 2008 (the “Registration Rights Agreement”);

 

WHEREAS, the Company, Tailor Acquisition, Inc. (“Merger Sub”) and BPW entered into that certain Agreement and Plan of Merger, dated as of December 8, 2009, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of February 16, 2010 (the “Merger Agreement”), which contemplates the merger of Merger Sub with and into BPW (the “Merger”);

 

WHEREAS, as contemplated by the Merger Agreement, the Company has made an offer to exchange (the “Offer”) warrants to acquire shares of common stock of BPW, par value $0.0001 per share (the “BPW Warrants”), in exchange for shares of common stock of the Company, par value $0.01 per share (the “Company Shares”), or warrants to acquire Company Shares;

 

WHEREAS, in connection with the Merger Agreement and the transactions contemplated thereby, including the Merger and the Offer, the Company, the Sponsors and BPW entered into that certain Sponsors’ Agreement, dated as of December 8, 2009 (the “Sponsors’ Agreement”);

 

WHEREAS, pursuant to Section 6 of the Sponsors’ Agreement, the Company agreed that the definition of “Registrable Security” included in Section 1.01 of the Registration Rights Agreement would be amended to include the Company Shares to be received by the Sponsors upon consummation of the Merger and the Offer;

 

WHEREAS, Section 4.05 of the Registration Rights Agreement provides that upon the written consent of BPW and the Holders who hold at least sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities, compliance with any of the provisions, covenants and conditions set forth in the Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; and

 

WHEREAS, in connection with the Offer and the Merger, and pursuant to the Sponsors’ Agreement, the Holders and BPW desire to add the Company as a party to the Registration Rights Agreement, among other things, and enter into this Agreement, pursuant to which the Company will grant the Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.

 

  

  

  

STATEMENT OF AGREEMENT

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.01 Definitions.  The terms defined in this Article I shall have for all purposes of this Agreement the respective meanings set forth below:

 

 

“Adverse Disclosure” means public disclosure of material non-public information, which disclosure, in the good faith judgment of the chief executive officer or principal financial officer of the Company after consultation with counsel to the Company, (a) would be required to be made in any Registration Statement or prospectus in order for the applicable Registration Statement or prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) the Company has a bona fide business purpose for not publicly making it.

 

“Board” shall mean the Board of Directors of the Company.

 

“Common Stock” shall have the meaning given in the Recitals hereto.

 

“Demand Registration” shall mean a demand registration described in Section 2.01.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time, and the rules and regulations of the SEC promulgated thereunder.

 

“Lock-up Period” shall mean the restrictions on transfer of Registrable Securities set forth in Section 4 of the Sponsors’ Agreement, to the extent such restrictions apply to the Holder of such Registrable Securities.

“Long-Form Registration” shall mean a Registration effected through the filing with the SEC of a Form S-1 or any successor form or similar form for registration under the Securities Act.

 

“Maximum Number of Shares” shall have the meaning given in Section 2.03(a).

 

  

2

  

 

“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus or necessary to make the statements in a Registration Statement or Prospectus not misleading.

 

“Person” shall mean a natural person, partnership, corporation, business trust, association, joint venture or other entity or a government or agency or political subdivision thereof.

 

“Piggyback Registration” shall mean a piggyback registration described in Section 2.02.

 

“Pro Rata” shall have the meaning given in Section 2.03(a).

 

“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

 

“Registrable Security” shall mean any Company Shares, received by the Sponsors upon consummation of Offer and the Merger, pursuant to the Merger Agreement, and any security of the Company issued or issuable with respect to any such Company Shares by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, as to any particular Registrable Security, such security shall be deemed to be a Registrable Security only if and so long as it is also deemed to be a Transfer Restricted Security.

 

“Registration” shall mean a Demand Registration, whether such Demand Registration is effected as a Long-Form Registration or a Short-Form Registration, and a Piggyback Registration.

 

“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:

 

(a) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority) and any securities exchange on which the Common Stock is then listed;

 

(b) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities);

 

(c) printing, messenger, telephone and delivery expenses;

 

(d) reasonable fees and disbursements of counsel for the Company;

 

(e) reasonable fees and disbursements of all independent certified public accountants of the Company incurred specifically in connection with such Registration; and

 

  

3

  

 

(f) reasonable fees and disbursements of one (1) counsel for the Requesting Holders, which counsel shall be selected by the Requesting Holders holding a majority of the Registrable Securities to be registered for offer and sale in the applicable Registration.

 

“Registration Statement” shall mean any registration statement which covers Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

 

“Requesting Holders” shall have the meaning given in Section 2.01.

 

“SEC” shall mean the Securities and Exchange Commission.

 

“Securities Act” shall mean the Securities Act of 1933, as amended from time to time, and rules and regulations of the Commission promulgated thereunder.

 

“Short-Form Registration” shall mean a Registration effected through the filing with the SEC of a Form S-3 or any successor form or similar form for registration under the Securities Act.

 

“Sponsor” and “Sponsors” shall have the meaning given in the Recitals hereto.

 

“Transfer Restricted Security” shall mean an issued and outstanding security that has not been sold to or through a broker, dealer or underwriter in a public distribution or other public securities transaction or sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Rule 144 promulgated thereunder (or any successor rule) other than Rule 144A.

 

“Underwritten Registration” or “Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an underwriter in a firm commitment underwriting for distribution to the public.

 

ARTICLE II

REGISTRATIONS

 

2.01 Demand Registration.  Subject to the restrictions set forth below, if at any time after the consummation of the Merger, the Company shall receive from the Holders (the “Requesting Holders”) owning at least twenty-five percent (25%) of the then outstanding shares of Registrable Securities as of the date of the request, a written request to register at least fifteen percent (15%) of the aggregate number of Registrable Securities owned by all of the Requesting Holders as of the date of such request, then the Company will give notice of such request to all Holders within ten (10) days of receiving such request and shall effect as soon thereafter as practicable, and in any event within forty-five (45) days of the receipt of such request, the Registration under the Securities Act of all Registrable Securities which any Holder requests to be registered, except as provided in Section 2.03 below.  The Company shall not be obligated to effect, or to take any action to effect, any such Registration pursuant to this Section 2.01:

 

  

4

  

 

(a) During the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days after the effective date of, a Company-initiated Registration (provided that such effective date occurs after the date hereof); provided that the Company has delivered notice of such Company-initiated Registration to the Holders prior to its receipt of the Holders’ written request for a Demand Registration and it continues to actively employ in good faith all reasonable efforts to cause such Registration Statement to become effective; or

 

(b) if the Holders have requested an Underwritten Registration, the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or

 

(c) if in the good faith judgment of the Board, such Registration would be seriously detrimental to the Company and the Board concludes, as a result, that it is essential to defer the filing of such Registration Statement at such time, and the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company for such Registration Statement to be filed in the near future and that it is, therefore, essential to defer the filing of such Registration Statement.  In such event, the Company shall have the right to defer such filing (except as provided in subparagraph (a) above) for a period of not more than one hundred eighty (180) days after receipt of the request of the Holders; provided, however, that the Company shall not defer its obligation in this manner more than once in any 12-month period.

 

Notwithstanding the foregoing, the Company shall ensure that no such Registration shall become effective with respect to any Registrable Securities subject to an applicable Lock-up Period until after the expiration of the applicable Lock-up Period.  Furthermore, the Company shall not be required to effect more than three (3) Registrations, which may be either Long-Form Registrations or Short-Form Registrations, under this Section 2.01 on behalf of the Holders; provided, however, that a Registration shall not be counted for such purposes unless such Long-Form Registration has become effective and all of the Registrable Securities requested by the Requesting Holders to be registered on behalf of the Requesting Holders in such Long-Form Registration have been sold, in accordance with Section 3.01(a) of this Agreement; and provided, further, however, that the Company will not be obligated to effect any such Short-Form Registration:

 

(a) if Form S-3 is not available for such offering;

 

(b) if in the good faith judgment of the Board, such Registration would be seriously detrimental to the Company and the Board concludes, as a result, that it is essential to defer the filing of such Registration Statement at such time, and the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company for such Registration Statement to be filed in the near future and that it is, therefore, essential to defer the filing of such Registration Statement.  In such event, the Company shall have the right to defer such filing (except as provided in subparagraph (a) above) for a period of not more than one hundred eighty (180) days after receipt of the request of the Holders; provided, however, that the Company shall not defer its obligation in this manner more than once in any 12-month period;

 

  

5

  

 

(c) if the Company has effected one (1) Short-Form Registration within the six (6) month period prior to the current request for Short-Form Registration; or

 

(d) if the Registrable Securities to be covered by such registration statement do not, in the aggregate, exceed $500,000.

 

2.02 Piggyback Registration.  Each time the Company decides to file a Registration Statement under the Securities Act (other than on Forms S-4 or S-8 or any successor form for the registration of securities issued or to be issued in connection with a merger or acquisition or employee benefit plan), the Company shall give written notice thereof to the Holders as soon as practicable but in no event less than ten (10) business days before the intended filing date, which notice shall disclose the amount and type of securities to be included in such Registration Statement, the intended method(s) of distribution and the name of the proposed managing underwriter or underwriters, if any.  The Company shall include in such Registration Statement such Registrable Securities for which it has received written requests for registration within ten (10) business days after such written notice has been given, except as provided in Section 2.03 below.  Notwithstanding the foregoing, the Company shall not include in such Registration Statement any Registrable Securities that are subject to an applicable Lock-up Period.

 

2.03 Registration Cutback.

 

(a) Demand Registration Cutback.  If the managing underwriter or underwriters for a Demand Registration that is to be an Underwritten Offering advises the Company and the Requesting Holders in writing that the dollar amount or number of shares of Registrable Securities which the Requesting Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other stockholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “Maximum Number of Shares”), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Requesting Holders (pro rata among the Requesting Holders based, for each such holder, on the percentage derived by dividing (x) the number of Registrable Securities which such holder has requested to include in such Demand Registration by (y) the aggregate number of Registrable Securities which all such holders have requested to include) (such proportion is referred to herein as “Pro Rata”) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (iii) third, to the extent that the Maximum Number of Shares have not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other securities for the account of other Persons that the Company is obligated to register pursuant to written contractual arrangements with such Persons, Pro Rata, and that can be sold without exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that the Maximum Number of Shares have not been reached under the foregoing clauses (i), (ii), and (iii), securities that other security holders of the Company desire to sell, Pro Rata, that can be sold without exceeding the Maximum Number of Shares.

 

  

6

  

 

(b) Piggy-Back Registration Cutback.  If the managing underwriter or underwriters for a Piggy-Back Registration that is to be an Underwritten Offering advises the Company and the holders of Registrable Securities in writing that the dollar amount or number of shares of Common Stock which the Company desires to sell, taken together with shares of Common Stock, if any, as to which registration has been demanded pursuant to written contractual arrangements with Persons other than the holders of Registrable Securities hereunder, the Registrable Securities as to which registration has been requested under Section 2.02, and the shares of Common Stock, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Shares, then the Company shall include in any such registration:

 

(i) If the registration is undertaken for the Company’s account: (A) first, the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock or other securities, if any, comprised of Registrable Securities, Pro Rata, as to which registration has been requested pursuant to Section 2.02, that can be sold without exceeding the Maximum Number of Shares; and (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other securities for the account of other Persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such Persons, pro rata, and that can be sold without exceeding the Maximum Number of Shares; and

 

(ii) If the registration is a “demand” registration undertaken at the demand of Persons other than the holders of Registrable Securities, (A) first, the shares of Common Stock or other securities for the account of the demanding Persons that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other securities, if any, comprised of Registrable Securities, Pro Rata, as to which registration has been requested pursuant to this Section 2.02, that can be sold without exceeding the Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other securities for the account of other Persons that the Company is obligated to register pursuant to written contractual arrangements with such Persons, pro rata, that can be sold without exceeding the Maximum Number of Shares.

 

  

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2.04   Cancellation of Registration.  A majority of the Requesting Holders shall have the right to cancel a proposed Registration of Registrable Securities pursuant to Section 2.01 when, (i) in their discretion, market conditions are so unfavorable as to be seriously detrimental to an offering pursuant to such Registration or (ii) the request for cancellation is based upon material adverse information relating to the Company that is different from the information known to the Requesting Holders at the time of their written request for a Demand Registration.  Such cancellation of a Registration shall not be counted as one of the three (3) Registrations provided for in Section 2.01 above.

 

2.05   Suspension of Registration. If the filing, initial effectiveness or continued use of a Registration Statement in respect of a Demand Registration at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest possible period of time determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the prospectus relating to the Demand Registration in connection with any sale or offer to sell Registrable Securities. The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 2.05.

ARTICLE III

COMPANY PROCEDURES

 

3.01 General Procedures.  If and whenever the Company is required to register Registrable Securities, the Company will use its best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company will as expeditiously as possible:

 

(a) prepare and file with the SEC as soon as practicable a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective until the Registrable Securities covered by such Registration Statement have been sold;

 

(b) prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be requested by the Holders or any underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;

 

  

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(c) deliver to the Holders and the underwriters, if any, without charge, as many copies of each Prospectus (and each preliminary prospectus) as such Persons may reasonably request (the Company hereby consenting to the use of each such Prospectus (or preliminary prospectus) by the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus (or preliminary prospectus)), and a reasonable number of copies of the then-effective Registration Statement and any post-effective amendments thereto and any supplements to the Prospectus, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);

 

(d) prior to any public offering of Registrable Securities, register or qualify or cooperate with the Holders, the underwriters, if any, and their respective counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions as such selling Holders or underwriters may designate in writing and do anything else necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject;

 

(e) cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed;

 

(f) provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities not later than the effective date of such Registration Statement;

 

(g) advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

 

(h) at least three (3) days prior to the filing of any Registration Statement or prospectus or any amendment or supplement to such Registration Statement or prospectus or any document that is to be incorporated by reference into such Registration Statement or prospectus, furnish a copy thereof to each seller of such Registrable Securities or its counsel;

 

(i) notify the Holders at any time when a prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus (or preliminary prospectus) included in such Registration Statement, as then in effect, includes a Misstatement, and then correct such Misstatement as set forth in Section 3.04;

 

  

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(j) permit a representative of the Holders, the underwriters, if any, and any attorney or accountant retained by such Holders or underwriter to participate, at each such Person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;

 

(k) obtain a “cold comfort” letter from the Company’s independent public accountants in the event of an Underwritten Registration, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing underwriter may reasonably request, and reasonably satisfactory to a majority in interest of the participating Holders;

 

(l) on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or underwriter may reasonably request and as are customarily included in such opinions, and reasonably satisfactory to a majority in interest of the participating Holders;

 

(m) in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

 

(n) make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

 

(o) if the Registration involves the registration of Registrable Securities involving gross proceeds in excess of $100,000,000, use its reasonable efforts to make available senior executives of the Company and its subsidiaries to participate in customary “road show” presentations that may be reasonably requested by the underwriter in any Underwritten Offering; and

 

(p) otherwise cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.

 

3.02 Registration Expenses.  The Registration Expenses of all Registrations shall be borne by the Company.  It is acknowledged by the Holders that the Holders will bear all incremental selling expenses relating to the sale of the Registrable Securities, such as underwriters’ commissions and discounts, brokerage fees, underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all fees and expenses of any legal counsel representing the Holders.

 

  

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3.03 Requirements for Participation in Underwritten Offerings.  No Person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Company and (b) completes and executes all questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

3.04 Suspension of Sales.  Upon receipt of written notice from the Company that a Registration Statement or Prospectus (or preliminary prospectus) contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus (or preliminary prospectus) correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus (or preliminary prospectus) may be resumed.

 

3.05 Reporting Obligations; Rule 144.  As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be reporting under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings; provided, however, that any such reports filed with the SEC on EDGAR may be considered furnished for the purposes of this Section 3.05.  The Company further covenants that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (“Rule 144”).  Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

 

3.06 Indemnification.

 

(a) The Company agrees to indemnify, to the extent permitted by law, the Holder of Registrable Securities, its officers and directors and each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information or affidavit furnished in writing to the Company by or on behalf of such Holder expressly for use therein.  The Company will indemnify the underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Holder.

 

  

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(b) In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder will furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement, Prospectus or preliminary prospectus or any amendment thereof or supplement thereto, and, to the extent permitted by law, will indemnify the Company, its directors and officers and agents and each Person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by or on behalf of such Holder expressly for use therein; provided, however, that the obligation to indemnify will be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities will be in proportion to and limited to the gross proceeds received by such Holder from the sale or Registrable Securities pursuant to such Registration Statement.  The Holders of Registrable Securities will indemnify the underwriters, their officers, directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to indemnification of the Company.

 

(c) Any Person entitled to indemnification herein will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any Person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party.  If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld).  An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.  No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

  

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(d) The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and will survive the transfer of securities.  The Company and each Holder of Registrable Securities participating in the offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.

 

(e) If the indemnification provided for in this Section 3.06 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this Section 3.06(e) shall be limited to the amount of the gross proceeds received by such Holder in the offering giving rise to such liability.  The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections (a) through (c) above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding.  The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 3.06(e) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 3.06(e).  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 3.06(e) from any Person who was not guilty of such fraudulent misrepresentation.

 

ARTICLE IV

MISCELLANEOUS

 

4.01 Notices.  Any notice or communication under this Agreement must be in writing and given by (a) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b) delivery in person or by courier service providing evidence of delivery, or (c) transmission by telecopy.  Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by hand, courier service, or telecopy, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation.  Any notice or communication under this Agreement must be addressed to the addressee at the address set forth below such Person’s signature on the signature pages to this Agreement.  Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address will become effective thirty (30) days after delivery of such notice as provided in this Section 4.01.

 

  

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4.02 Assignment; No Third Party Beneficiaries.

 

(a) This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned by the Company in whole or in part. Prior to the expiration of the Lock-up Period, this Agreement and the rights, duties and obligations of the Holders hereunder may be assigned by any Holder of Registrable Securities in conjunction with and to the extent of any valid transfer of such Registrable Securities by any such Holder. Following the expiration of the Lock-up Period, only the Sponsors may assign or delegate their rights, duties and obligations hereunder in conjunction with and to the extent of any valid transfer of the Registrable Securities held by the Sponsors.

 

(b) No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 4.01 hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 4.02 shall be null and void.

 

(c) This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective successors and the permitted assigns of the Holders or of any assignee of the Holders. This Agreement is not intended to confer any rights or benefits on any persons not a party hereto other than as expressly set forth in this Section 4.02.

 

4.03 Counterparts.  This Agreement may be executed in multiple counterparts (including facsimile counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.

 

4.04 Governing Law; Venue.  NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION.

 

  

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4.05 Amendments and Modifications.  Upon the written consent of the Company and the Holders who hold at least sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected.  No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company.  No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.

 

4.06 Other Registration Rights.  The Company will not grant to any Person the right to require the Company to register any equity securities of the Company, or any securities convertible or exchangeable into or exercisable for such securities, which conflicts with the registration rights granted hereunder.

 

4.07 Termination.  This Agreement shall terminate and the registration rights granted hereunder shall expire on the date that is five (5) years after the date hereof; provided that such termination and expiration shall not affect registration rights exercised prior to such date; provided, further that the provisions of Section 3.06 shall survive any such termination.

 

[SIGNATURE PAGES FOLLOW]

 

 

 

 

 

 

 

  

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

	 	COMPANY:	 
	 	 	 
	 	
THE TALBOTS, INC.

a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Richard T. O'Connell, Jr.	 
	 	 	Name: Richard T. O'Connell, Jr.	 
	 	 	Title: Executive Vice President	 
	 	 	
Address:    One Talbots Drive

	 
	 	 	

Hingham, MA 02043

	 

 

 

 

 

 

 

 

 

  

  

  

 

	 	
BPW ACQUISITION CORP.,

a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Richard T. O'Connell, Jr.	 
	 	 	Name: Richard T. O'Connell, Jr.	 
	 	 	Title: Vice President	 
	 	 	
Address:   c/o Talbots, Inc.

	 
	 	 	One Talbots Drive	 
	 	 	

Hingham, MA 02043

	 

 

 

  

 

 

 

 

 

 

  

  

  

 

	 	HOLDERS:	 
	 	 	 
	 	
PERELLA WEINBERG PARTNERS ACQUISITION LP,

a Delaware limited partnership

	 
	 	 	 	 
	
 

	
By: 

	PWP Acquisition GP LLC, its general partner	 
	 	 	 	 
	 	
By: 

	/s/ Gary S. Barancik	 
	 	 	
Name: Gary S. Barancik

	 
	 	 	Title: Authorized Person	 
	 	 	Address:	 
	 	 	 	 
	 	
BNYH BPW HOLDINGS LLC,

a Delaware limited liability company

	 
	 	 	 	 
	 	
By: 

	/s/ Gary S. Barancik	 
	 	 	
Name: Gary S. Barancik

	 
	 	 	Title: Authorized Person	 
	 	 	Address:	 
	 	 	 	 
	 	
By: 

	/s/ Roger W. Einiger	 
	 	 	Roger W. Einiger	 
	 	 	Address:	 
	 	 	 	 
	 	
By: 

	/s/ J. Richard Fredericks	 
	 	 	J. Richard Fredericks	 
	 	 	Address:	 
	 	 	 	 
	 	
By: 

	/s/ Wolfgang Schoellkopf	 
	 	 	Wolfgang Schoellkopf	 
	 	 	
Address:

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