Document:

ex_117834.htm

Exhibit 4.12

 

Execution version

 

 

 

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

by and among

 

VIVOPOWER US-NC-31 LLC

 

and

 

VIVOPOWER US-NC-47 LLC

 

 

as Sellers

 

and

 

NES US NC-31 LLC

 

and

 

NES US NC-47 LLC

 

 

as Buyers

 

 

 

dated as of

 

 

 

May 25, 2018

 

 

 

 

 

 

Table of Contents

 

Page

	Article I DEFINITIONS	1
	 	 	 
	
			Section 1.1

				
			Terms Defined

				1
	 	 	 
	
			Article II PURCHASE AND SALE

				8
	 	 	 
	
			Section 2.1

				
			Purchase and Sale

				8
	 	 	 
	
			Section 2.2

				
			Purchase Price

				8
	 	 	 
	
			Section 2.3

				
			Closing

				8
	 	 	 
	
			Section 2.4

				
			Earn-Out

				9
	 	 	 
	
			Section 2.5

				
			Holdback Amount

				10
	 	 	 
	
			Section 2.6

				
			Distribution True-Up.

				11
	 	 	 
	
			Article III REPRESENTATIONS AND WARRANTIES OF SELLERS

				11
	 	 	 
	
			Section 3.1

				
			Organization and Authority of Sellers

				11
	 	 	 
	
			Section 3.2

				
			Capitalization.

				12
	 	 	 
	
			Section 3.3

				
			No Conflicts; Consents

				12
	 	 	 
	
			Section 3.4

				
			Financial Statements

				12
	 	 	 
	
			Section 3.5

				
			Undisclosed Liabilities

				13
	 	 	 
	
			Section 3.6

				
			Absence of Certain Changes, Events and Conditions; Compliance.

				13
	 	 	 
	
			Section 3.7

				
			Legal Proceedings

				13
	 	 	 
	
			Section 3.8

				
			Brokers

				13
	 	 	 
	
			Section 3.9

				
			Parent Guarantee

				13
	 	 	 
	
			Section 3.10

				
			Books and Records

				13
	 	 	 
	
			Section 3.11

				
			Accuracy of Information

				14
	 	 	 
	
			Section 3.12

				
			No Other Representations and Warranties

				14
	 	 	 
	
			Article IV REPRESENTATIONS AND WARRANTIES OF BUYERS

				14
	 	 	 
	
			Section 4.1

				
			Organization and Authority of Buyers

				14
	 	 	 
	
			Section 4.2

				
			No Conflicts; Consents

				14
	 	 	 
	
			Section 4.3

				
			Brokers

				15
	 	 	 
	
			Section 4.4

				
			Legal Proceedings

				15
	 	 	 
	
			Section 4.5

				
			Investment Intent; Unregistered Securities

				15
	 	 	 
	
			Section 4.6

				
			Accredited Buyer

				15

 

-i-

 

 

Table of Contents

(continued)

 

Page

	
			Section 4.7

				
			Regulation D Compliance

				15
	 	 	 
	
			Article V COVENANTS

				16
	 	 	 
	
			Section 5.1

				
			Conduct of Business Prior to the Closing

				16
	 	 	 
	
			Section 5.2

				
			Supplement to Disclosure Schedules

				16
	 	 	 
	
			Section 5.3

				
			[Intentionally Omitted]

				16
	 	 	 
	
			Section 5.4

				
			Confidentiality

				16
	 	 	 
	
			Section 5.5

				
			Governmental Approvals and Other Third-Party Consents.

				16
	 	 	 
	
			Section 5.6

				
			Closing Conditions

				17
	 	 	 
	
			Section 5.7

				
			Public Announcements

				17
	 	 	 
	
			Section 5.8

				
			Further Assurances

				18
	 	 	 
	
			Section 5.9

				
			Transfer Taxes

				18
	 	 	 
	
			Section 5.10

				
			Post-Closing Reports

				18
	 	 	 
	
			Section 5.11

				
			UTP Guarantees; UTP LLCAs.

				18
	 	 	 
	
			Article VI CONDITIONS TO CLOSING

				18
	 	 	 
	
			Section 6.1

				
			Conditions to Obligations of All Parties

				18
	 	 	 
	
			Section 6.2

				
			Conditions to Obligations of Buyers

				19
	 	 	 
	
			Section 6.3

				
			Conditions to Obligations of Sellers

				20
	 	 	 
	
			Article VII INDEMNIFICATION

				21
	 	 	 
	
			Section 7.1

				
			Survival

				21
	 	 	 
	
			Section 7.2

				
			Indemnification By Sellers

				21
	 	 	 
	
			Section 7.3

				
			Indemnification by Buyers

				22
	 	 	 
	
			Section 7.4

				
			Certain Limitations

				22
	 	 	 
	
			Section 7.5

				
			Indemnification Procedures.

				24
	 	 	 
	
			Section 7.6

				
			Tax Treatment of Indemnification Payments

				25
	 	 	 
	
			Section 7.7

				
			Exclusive Remedies

				25
	 	 	 
	
			Article VIII TERMINATION

				25
	 	 	 
	
			Section 8.1

				
			Termination

				25
	 	 	 
	
			Section 8.2

				
			Effect of Termination

				26
	 	 	 
	
			Article IX MISCELLANEOUS

				26
	 	 	 
	
			Section 9.1

				
			Expenses

				26

 

-ii-

 

 

Table of Contents

(continued)

 

Page

	
			Section 9.2

				
			Notices

				27
	 	 	 
	
			Section 9.3

				
			Interpretation

				27
	 	 	 
	
			Section 9.4

				
			Headings

				27
	 	 	 
	
			Section 9.5

				
			Severability

				28
	 	 	 
	
			Section 9.6

				
			Entire Agreement

				28
	 	 	 
	
			Section 9.7

				
			Successors and Assigns

				28
	 	 	 
	
			Section 9.8

				
			No Third-Party Beneficiaries

				28
	 	 	 
	
			Section 9.9

				
			Amendment and Modification; Waiver

				28
	 	 	 
	
			Section 9.10

				
			Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

				29
	 	 	 
	
			Section 9.11

				
			Specific Performance

				29
	 	 	 
	
			Section 9.12

				
			Counterparts

				29
	 	 	 
	
			Section 9.13

				
			Non-recourse

				29

 

EXHIBITS

 

	
			Exhibit A

				
			Form of Parent Guarantee

			

	
			Exhibit B

				
			Base Case Revenue

			

	
			Exhibit C

				
			Form of Assignment and Conveyance

			

	
			Exhibit D-1

				
			Form of Replacement-NES Tax Equity Guaranty (NC-31)

			

	
			Exhibit D-2

				
			Form of Replacement-NES Tax Equity Guaranty (NC-47)

			

	
			Exhibit E-1

				
			Form of Replacement-Vivo Tax Equity Guaranty (NC-31)

			

	
			Exhibit E-2

				
			Form of Replacement-Vivo Tax Equity Guaranty (NC-47)

			
	Exhibit 5.10	Post-Closing Reports

     

-iii-

 

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT, dated as of May 25, 2018 (this “Agreement”), is made and entered into by and among NES US NC-31 LLC, a Delaware limited liability company (“NC-31 Buyer”), NES US NC-47 LLC, a Delaware limited liability company (“NC-47 Buyer,” and together with NC-31 Buyer, “Buyers”), VivoPower US-NC-31 LLC, a Delaware limited liability company (“NC-31 Seller”) and VivoPower US-NC-47 LLC, a Delaware limited liability company (“NC-47 Seller,” and together with NC-31 Seller, “Sellers”). Each of NC-31 Buyer, NC-47 Buyer, NC-31 Seller and NC-47 Seller is referred to individually as a “Party,” and collectively as the “Parties.”

 

RECITALS

 

A.     Each Seller is a direct, wholly-owned subsidiary of VivoPower USA LLC, a Delaware limited liability company (“Parent”).

 

B.     NC-31 Seller owns all of the outstanding Class B Membership Interests of US-NC-31 Sponsor Partner, LLC (“NC-31 UTP”) and NC-47 Seller owns all of the outstanding Class B Membership Interests of US-NC-47 Sponsor Partner, LLC (“NC-47 UTP,” and together with NC-31 UTP, the “UTPs”).

 

C.     NC-31 Seller desires to sell to NC-31 Buyer, and NC-31 Buyer desires to acquire from NC-31 Seller, all of the Class B Membership Interests of NC-31 UTP held by NC-31 Seller (collectively, the “NC-31 Acquired Membership Interests”), subject to the terms and conditions set forth herein.

 

D.     NC-47 Seller desires to sell to NC-47 Buyer, and NC-47 Buyer desires to acquire from NC-47 Seller, all of the Class B Membership Interests of NC-47 UTP held by NC-47 Seller (collectively, the “NC-47 Acquired Membership Interests,” and together with the NC-31 Acquired Membership Interests, the “Acquired Membership Interests”), subject to the terms and conditions set forth herein.

 

E.     As a material inducement to Buyers to enter into this Agreement, concurrently with the execution of this Agreement, Parent has issued and delivered a guarantee, in the form attached hereto as Exhibit A (the “Parent Guarantee”), in favor of Buyers with respect to the obligations of Sellers arising under, or in connection with, this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

Article I

DEFINITIONS

 

Section 1.1     Terms Defined. Except as otherwise expressly provided in this Agreement, the following terms have the meanings specified or referred to in this Section 1.1:

 

“Acquired Companies” means NC-31 UTP, US-NC-31 Sponsor, LLC, a Delaware limited liability company, IS-31 Holdco, NC-31 Project Company, NC-47 UTP, US-NC-47 Sponsor, LLC, a Delaware limited liability company, IS-47 Holdco and NC-47 Project Company.

 

 

 

 

“Acquired Membership Interests” has the meaning set forth in the Recitals hereto.

 

“Actual Revenue” means revenue in United States dollars ($US) received by the Project Companies for the selling of Product.  

 

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; with the term “control” (including the related term “controlled”) meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning set forth in the preamble and includes the Disclosure Schedules and the other Schedules and Exhibits hereto, all as may be amended from time to time in accordance with the provisions hereof.

 

“Balance Sheet” has the meaning set forth in Section 3.4.

 

“Balance Sheet Date” has the meaning set forth in Section 3.4.

 

“Base Case Revenue” means the expected revenue for any particular Earnout Year set forth on Exhibit B.

 

“Books and Records” means all files, documents, instruments, papers, books, reports, records, drawings, tapes, microfilms, photographs, letters, budgets, ledgers, journals, title policies, supplier lists, regulatory filings, compliance records, engineering design plans, blueprints and as built plans, operating data and plans, technical documentation (design specifications, functional requirements, operating instructions, logic manuals, flow charts, etc.), user documentation (installation guides, user manuals, training materials, release notes, working papers, etc.), financial statements, tax returns and related work papers and letters from accountants, budgets, ledgers, journals, minute books, membership interest certificates and books, membership interest transfer ledgers, Contracts, permits, orders, governmental approvals, internal and external correspondence and other documents relating to the operation of the Facilities (including correspondence with contractors, customers, suppliers, vendors and the like), and other similar materials that, in all such cases, are related to the business and the assets and the operations of the Acquired Companies, in whatever form (including electronic).

 

“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New York or North Carolina are authorized or required by Law to be closed for business.

 

“Buyers” has the meaning set forth in the preamble.

 

“Buyer Indemnified Party” has the meaning set forth in Section 7.2.

 

“Buyer Fundamental Representations” means the representations and warranties set forth in Section 4.1, Section 4.2 and Section 4.3.

 

“Claim” means any demand, claim, action, legal proceeding (whether at law or in equity), investigation or arbitration.

 

“Closing” has the meaning set forth in Section 2.3.

 

2

 

 

“Closing Date” has the meaning set forth in Section 2.3.

 

“Closing Payment” means the aggregate of the NC-31 Closing Purchase Price and the NC-47 Closing Purchase Price.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Confidentiality Agreement” means the Mutual Confidentiality Agreement, dated as of May 11, 2018, between New Energy Solar US Corp. and Parent.

 

“Contract” means any written or oral contract, agreement, binding arrangement, bond, deed of trust, note, credit or loan agreement, lease, license, evidence of indebtedness, mortgage, indenture, purchase order, binding bid, letter of credit, security agreement, binding undertaking or other agreement that is legally binding of any kind (whether written or oral and whether express or implied).

 

“Deductible” has the meaning set forth in Section 7.4(a).

 

“Direct Claim” has the meaning set forth in Section 7.5(c).

 

“Disclosure Schedules” means the Disclosure Schedules delivered by Sellers and Buyers concurrently with the execution and delivery of this Agreement.

 

“Disputed Amounts” has the meaning set forth in Section 2.5.

 

“Disputed Earnout Amounts” has the meaning set forth in Section 2.4(d).

 

“Distribution True-Up” has the meaning set forth in Section 2.6.

 

“Dollars” or “$” means the lawful currency of the United States.

 

“Drop Dead Date” means September 30, 2018.

 

“Earnout Payment” has the meaning set forth in Section 2.4.

 

“Earnout Resolution Period” has the meaning set forth in Section 2.4(c).

 

“Earnout Review Period” has the meaning set forth in Section 2.4(b).

 

“Earnout Statement” has the meaning set forth in Section 2.4(b).

 

“Earnout Year” means each calendar year between 2027 and 2052.

 

“Effective Time” means 11:59 p.m. (New York time) on the Closing Date.

 

“Encumbrance” means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, imposition, encroachment, option, right of others, deed of trust, hypothecation, restriction (whether on voting, sale, transfer, disposition, or otherwise), charge, easement, covenant, right-of-way, reservation, title defect, adverse title matter or other encumbrance or restriction of any kind, or the interest of a vendor, lessor or other similar party under any conditional sale agreement, capital lease or other title retention agreement relating to any asset or any other contract to give any of the foregoing.

 

3

 

 

“Facilities” means the NC-31 Facility and the NC-47 Facility.

 

“Financial Statements” means the financial statements of each UTP and its consolidated subsidiaries required to have been delivered to the applicable Buyer under each UTP LLCA.

 

“GAAP” means United States generally accepted accounting principles as in effect from time to time consistently applied.

 

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority including securities exchanges (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

 

“Holdback Amount” means the sum of the NC-31 Holdback Amount and the NC-47 Holdback Amount.

 

“Indemnified Party” has the meaning set forth in Section 7.4.

 

“Indemnifying Party” has the meaning set forth in Section 7.4.

 

“Independent Accountants” means Whitley Penn LLP or such other qualified accounting firm mutually agreed by the Parties.

 

“IS-31 Holdco” means IS-31 Holdings, LLC, a Delaware limited liability company.

 

“IS-47 Holdco” means IS-47 Holdings, LLC, a Delaware limited liability company.

 

“Knowledge of Sellers” or “Sellers’ Knowledge” or any other similar knowledge qualification, means the knowledge of those Persons listed in Section 1.1(a) of the Disclosure Schedules after reasonable and due inquiry and investigation.

 

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, binding administrative interpretation, injunction, other requirement or rule of law of any Governmental Authority.

 

“Losses” means all claims, injuries, lawsuits, liabilities, losses, damages, judgments, causes of action, deficiencies, Taxes, obligations, fines, penalties, costs and expenses, including the reasonable documented fees and disbursements of counsel (including fees of attorneys and paralegals, whether at the pre-trial, trial, or appellate level, or in arbitration) and all amounts reasonably paid in investigation, remediation, defense, or settlement of any of the foregoing.

 

“Managing Member” has the meaning set forth in each UTP LLCA.

 

4

 

 

“Material Adverse Effect” means any event, occurrence, fact, condition or change that is materially adverse to (a) the business, results of operations, financial condition or assets of the Acquired Companies, individually or in the aggregate, or (b) the ability of Sellers to consummate the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Acquired Companies operate; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof other than any of the foregoing involving physical damage or destruction to or rendering unusable facilities or properties of the Acquired Companies; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of Buyers; (vi) any matter set forth in the Disclosure Schedules; (vii) any change in applicable Laws or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof; (viii) the announcement or pendency of the transactions contemplated by this Agreement; (ix) any natural or man-made disaster or act of God other than any of the foregoing involving physical damage or destruction to or rendering unusable facilities or properties of the Acquired Companies; or (x) any failure by the Acquired Companies to meet any internal or published projections, forecasts or revenue or earnings predictions (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded) except, in the case of clauses (i), (ii), (iii), (iv), (vii) or (ix) above, to the extent that any such change, event or effect has a disproportionate effect on the business, assets, properties, financial condition or results of operations of the Acquired Companies, relative to other similarly situated companies.

 

“Membership Interest Assignment” means an Assignment and Conveyance in the form of Exhibit C.

 

“Membership Interests” has the meaning set forth in each UTP LLCA.

 

“Modification Agreement” has the meaning set forth in Section 2.4(c).

 

“NC-31 Acquired Membership Interests” has the meaning set forth in the Recitals hereto.

 

“NC-31 Buyer” has the meaning set forth in the preamble.

 

“NC-31 Closing Purchase Price” means an amount equal to $6,695,000.00 minus the NC-31 Major Maintenance Reserve Adjustment Amount, as adjusted pursuant to Section 6.2(j).

 

“NC-31 Earnout Payment” means the aggregate amount of the Earnout Payment attributable to the NC-31 UTP.

 

“NC-31 Facility” means that certain 34MWac solar facility located in Bladenboro, North Carolina, owned by NC-31 Project Company.

 

“NC-31 Holdback Amount” means an amount equal to $831,281.00.

 

“NC-31 Major Maintenance Reserve Adjustment Amount” means an amount equal to $546,450.63.

 

5

 

 

“NC-31 Project Company” means Innovative Solar 31, LLC, a North Carolina limited liability company.

 

“NC-31 Purchase Price” means the NC-31 Closing Purchase Price plus the NC-31 Earnout Payment.

 

“NC-31 Seller” has the meaning set forth in the preamble.

 

“NC-31 UTP” has the meaning set forth in the Recitals hereto.

 

“NC-47 Acquired Membership Interests” has the meaning set forth in the Recitals hereto.

 

“NC-47 Buyer” has the meaning set forth in the preamble.

 

“NC-47 Closing Purchase Price” means an amount equal to $4,941,000.00 minus the NC-47 Major Maintenance Reserve Adjustment Amount, as adjusted pursuant to Section 6.2(j).

 

“NC-47 Earnout Payment” means the aggregate amount of the Earnout Payment attributable to the NC-47 UTP.

 

“NC-47 Facility” means that certain 34MWac solar facility located in Maxton, North Carolina, owned by NC-47 Project Company.

 

“NC-47 Holdback Amount” means an amount equal to $192,891.00.

 

“NC-47 Major Maintenance Reserve Adjustment Amount” means an amount equal to $574,875.00.

 

“NC-47 Project Company” means Innovative Solar 47, LLC, a North Carolina limited liability company.

 

“NC-47 Purchase Price” means the NC-47 Closing Purchase Price plus the NC-47 Earnout Payment.

 

“NC-47 Seller” has the meaning set forth in the preamble.

 

“NC-47 UTP” has the meaning set forth in the Recitals hereto.

 

“NES Guarantor” means New Energy Solar US Corp., a Delaware corporation.

 

“Organizational Documents” means (a) in the case of a Person that is a corporation, its articles or certificate of incorporation and its bylaws, regulations or similar governing instruments required by the laws of its jurisdiction of formation or organization; (b) in the case of a Person that is a partnership, its articles or certificate of partnership, formation or association, and its partnership agreement (in each case, limited, limited liability, general or otherwise); (c) in the case of a Person that is a limited liability company, its articles or certificate of formation or organization, and its limited liability company agreement or operating agreement; and (d) in the case of a Person that is none of a corporation, partnership (limited, limited liability, general or otherwise), limited liability company or natural person, its governing instruments as required or contemplated by the laws of its jurisdiction of organization.

 

6

 

 

“Ownership Share” means 14.45% with respect to NC-31 Seller and NC-31 UTP and 10.00% with respect to NC-47 Seller and NC-47 UTP.

 

“Parent” has the meaning set forth in the Recitals hereto.

 

“Permitted Encumbrances” means (a) restrictions on transfer imposed by applicable securities Laws, (b) restrictions on transfer set forth in the Organizational Documents of the Acquired Companies, and (c) any Encumbrances created by or through Buyers.

 

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

“Product” means the electrical energy and renewable energy certificates which are or can be produced by the Facilities. 

 

“Project Companies” means NC-31 Project Company and NC-47 Project Company.

 

“Purchase Price” has the meaning set forth in Section 2.2.

 

“Replacement-NES Tax Equity Guaranty” means (i) with respect to NC-31 UTP, that certain Amended and Restated Guaranty and Indemnification Agreement to be made by NES Guarantor, for the benefit of the Tax Equity Investor, in the form attached as Exhibit D-1, and (ii) with respect to NC-47 UTP, that certain Amended and Restated Guaranty and Indemnification Agreement to be made by NES Guarantor, for the benefit of the Tax Equity Investor, in the form attached as Exhibit D-2.

 

“Replacement-Vivo Tax Equity Guaranty” means (i) with respect to NC-31 UTP, that certain Amended and Restated Guaranty Agreement to be made by Parent, for the benefit of the Tax Equity Investor, in the form attached as Exhibit E-1, and (ii) with respect to NC-47 UTP, that certain Second Amended and Restated Guaranty Agreement to be made by Parent, for the benefit of the Tax Equity Investor, in the form attached as Exhibit E-2.

 

“Replacement Tax Equity Guaranties” means, collectively, the Replacement-NES Tax Equity Guaranty and the Replacement-Vivo Tax Equity Guaranty.

 

“Representative” means, with respect to any Person, any and all managers, directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

 

“Sellers” has the meaning set forth in the preamble.

 

“Seller Indemnified Party” has the meaning set forth in Section 7.3.

 

“Seller Fundamental Representations” means the representations and warranties set forth in Section 3.1, Section 3.2, Section 3.3, Section 3.6(b) and Section 3.8.

 

“Statement of Earnout Objections” has the meaning set forth in Section 2.4(c).

 

“Tax Equity Investor” means Firstar Development, LLC, a Delaware limited liability company and, as applicable with respect to IS-47 Holdco, USB RETC FUND 2017-1, LLC, a Delaware limited liability company.

 

7

 

 

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, together with any interest, additions or penalties with respect thereto.

 

“Third-Party Claim” has the meaning set forth in Section 7.5(a).

 

“Transaction Documents” means the Membership Interest Assignment, the Parent Guarantee and the other agreements and instruments to be executed and delivered at Closing in accordance with the provisions of this Agreement.

 

“UTP LLCA” means (i) with respect to NC-31 UTP, that certain Amended and Restated Operating Agreement, dated as of July 29, 2016, by and between NC-31 Buyer and NC-31 Seller, and (ii) with respect to NC-47 UTP, that certain Amended and Restated Operating Agreement, dated as of October 25, 2016, by and between NC-47 Buyer and NC-47 Seller.

 

“UTPs” has the meaning set forth in the Recitals hereto.

 

Article II

PURCHASE AND SALE

 

Section 2.1     Purchase and Sale. Subject to the terms and conditions set forth herein, at the Closing, (a) NC-31 Seller shall sell to NC-31 Buyer, and NC-31 Buyer shall purchase from NC-31 Seller, free and clear of all Encumbrances (other than Permitted Encumbrances), all right, title and interest in and to the NC-31 Acquired Membership Interests for the NC-31 Purchase Price, and (b) NC-47 Seller shall sell to NC-47 Buyer, and NC-47 Buyer shall purchase from NC-47 Seller, free and clear of all Encumbrances (other than Permitted Encumbrances), all right, title and interest in and to the NC-47 Acquired Membership Interests for the NC-47 Purchase Price. 

 

Section 2.2     Purchase Price. The aggregate purchase price for the Acquired Membership Interests (the “Purchase Price”) shall be the sum of (a) the Closing Payment plus (b) any Earnout Payments payable pursuant to Section 2.4.

 

Section 2.3     Closing. Subject to the terms and conditions of this Agreement, the purchase and sale of the Acquired Membership Interests contemplated hereby shall take place at a closing (the “Closing”) to be held at 10:00 a.m., New York time, on the third (3rd) Business Day after the last of the conditions to Closing set forth in Article VI has been satisfied or waived (other than any condition which, by its nature, is to be satisfied on the Closing Date) (provided that if the last such condition to Closing has been satisfied or waived within five (5) Business Days of the last day of a calendar month and the Parties are able to effectuate the Closing on the last Business Day of such calendar month, then the Closing shall occur on the last Business Day of such calendar month) at the offices of Buyers in New York, New York, or at such other time or on such other date or at such other place as Sellers and Buyers may mutually agree upon in writing (the day on which the Closing takes place being the “Closing Date”).

 

8

 

 

Section 2.4     Earn-Out. Subject to the provisions of this Section 2.4, following the Closing, each Seller shall be entitled to receive additional payments (each, an “Earnout Payment”) from the applicable UTP based on the Actual Revenue received in any Earnout Year in excess of the applicable Base Case Revenue for such Earnout Year. Any such Earnout Payment shall be determined and paid in accordance with this Section 2.4.

 

(a)     Earnout Payment Calculation. For each Earnout Year, the Earnout Payment from the applicable UTP shall equal:

 

(A – B) x O

 

Where:

 

A     =     Actual Revenue received for such Earnout Year

 

B     =     Base Case Revenue for such Earnout Year

 

O     =      The applicable Ownership Share

 

If such calculation produces a positive amount, such amount shall be the amount of the Earnout Payment for such Earnout Year. If such calculation produces a negative amount, then no Earnout Payment shall be owing for such Earnout Year for such UTP.

 

(b)     Initial Determination and Review. No later than ninety (90) days after the end of each Earnout Year, Buyers shall deliver to Sellers a copy Buyers’ calculation of (i) the Actual Revenue for such Earnout Year and (ii) any Earnout Payment due to Sellers for such Earnout Year (collectively, the “Earnout Statement”). Sellers shall have thirty (30) days (the “Earnout Review Period”) from the date of their receipt of the Earnout Statement to review the Earnout Statement. During the Earnout Review Period, Sellers shall have reasonable access to the books and records of the Acquired Companies, in each case solely to the extent that such books and records relate to the Earnout Statement, and Buyers shall respond promptly to reasonable requests by Sellers for documents or information to the extent such documents and information are relevant to Sellers’ review of the Earnout Statement; provided, however, that such access and requests by Sellers shall be during normal business hours and in a manner that does not unreasonably interfere with the normal business operations of any Acquired Company or either Buyer.

 

(c)     Objection and Negotiated Resolution. On or prior to the last day of the Earnout Review Period, Sellers may object to the Earnout Statement, or any part thereof, by delivering to Buyers a written statement setting forth Sellers’ objections in reasonable detail, indicating each disputed item or amount and the basis for Sellers’ disagreement therewith (the “Statement of Earnout Objections”). If Sellers fail to deliver the Statement of Earnout Objections to Buyers before the expiration of the Earnout Review Period, the Earnout Statement and the associated determination of the Earnout Amount, or the determination that no Earnout Amount is due, shall be deemed to have been accepted by Sellers and shall be final and binding upon the Parties. If Sellers deliver the Statement of Earnout Objections to Buyers before the expiration of the Earnout Review Period, Buyers and Sellers shall negotiate in good faith to resolve Sellers’ objections within thirty (30) days after the delivery of the Statement of Earnout Objections (the “Earnout Resolution Period”), and, if the same are so resolved within the Earnout Resolution Period, the Earnout Statement, as modified by the written agreement of Sellers and Buyers (“Modification Agreement”), and the associated determination of the Earnout Amount (if any) shall be final and binding upon the Parties.

 

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(d)     Dispute Resolution Process. If Sellers and Buyers fail to reach an agreement with respect to all of the matters set forth in the Statement of Earnout Objections before the expiration of the Earnout Resolution Period, then any amount remaining in dispute (“Disputed Earnout Amounts”) shall be submitted for resolution to the Independent Accountants who, acting as experts and not arbitrators, shall resolve the Disputed Earnout Amounts only and make any related adjustments to the Earnout Statement. The Independent Accountants shall only decide the specific items under dispute by the Parties and their decision for each Disputed Earnout Amount must be within the range of values assigned to each such item in the Earnout Statement and the Statement of Earnout Objections, respectively. The fees and expenses of the Independent Accountants shall be paid by Sellers, on the one hand, and by Buyers, on the other hand, based upon the percentage that the amount actually contested but not awarded to Sellers or Buyers, respectively, bears to the aggregate amount actually contested by Sellers and Buyers. The Independent Accountants shall make a determination as soon as practicable within thirty (30) days (or such other time as the Parties shall agree in writing) after their engagement, and their resolution of the Disputed Earnout Amounts and their adjustments, if any, to the Earnout Statement shall be conclusive and binding upon the Parties. For the sake of clarity, any amounts not disputed by Sellers pursuant to a timely delivered Statement of Earnout Objections and any amounts that were timely disputed by Sellers but resolved by Buyers and Sellers pursuant to Section 2.4(c) shall not be subject to review by the Independent Accountants.

 

(e)     Payment. Buyers shall pay any Earnout Payment due to Sellers within thirty (30) days after the earliest of (i) the end of the Earnout Review Period if Seller does not deliver a Statement of Earnout Objections during the Earnout Review Period under Section 2.4(b), (ii) mutual execution of the Modification Agreement under Section 2.4(c), or (iii) issuance of the determination by the Independent Accountants under Section 2.4(d), such payment to be made by wire transfer of immediately available funds to such bank account as is directed by Sellers by written notice to Buyers.

 

(f)     Limitations. Each Buyer’s obligations under this Section 2.4 assumes there have been no changes to the Facilities, including any repowering, unplanned capital expenditures, addition of storage equipment or capabilities, or expansion or reduction in capacity. In the event of any such changes to the Facilities following the Closing Date, Buyers and Sellers shall negotiate in good faith to modify the calculation of the Earnout Payment to eliminate any increase in Actual Revenue attributable solely to capital expenditures and other improvements to the Facilities funded by Buyers.

 

Section 2.5     Holdback Amount. In the event that the disputed amounts owed to Duke Energy with respect to the NC-31 Facility interconnection agreement and NC-47 Facility interconnection agreement (as such disputes are set forth on Section 3.5 of the Disclosure Schedules, the “Disputed Amounts”) are resolved with Duke Energy for an amount less than the NC-31 Holdback Amount and NC-47 Holdback Amount, respectively, Buyers shall, within sixty (60) days of such resolution, pay to Sellers the portion of the Holdback Amount in excess of the amounts actually paid to Duke Energy in resolution of the disputes set forth on Section 3.5 of the Disclosure Schedules. In the event that the Disputed Amounts with respect to the NC-31 Facility and/or the NC-47 Facility are not claimed by Duke Energy by the two year anniversary of the date hereof, Buyers shall promptly pay such unclaimed amounts to Sellers; provided that if, following such two year anniversary and repayment to Sellers, Duke Energy claims any portion of the Disputed Amounts, Sellers agree to pay the amount of such Disputed Amounts as resolved with Duke Energy.

 

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Section 2.6     Distribution True-Up. As soon as practicable following the Closing Date, the Parties will cooperate in good faith to determine the amount of unpaid cash distributions to which the Class B Members (as defined in the UTP LLCAs) were entitled pursuant to the UTP LLCAs during the period from the most recent distribution date by each UTP through the Closing Date (the “Distribution True-Up”). Promptly following the mutual agreement as to the amount of the Distribution True-Up (but no later than the next occurring cash distribution by the UTPs), Buyers shall pay to Sellers the Distribution True-Up. In furtherance of the foregoing, Buyers agree to cause the UTPs to reserve twenty percent (20%) from any cash distributions to Sellers following the Closing Date until the payment of the Distribution True-Up in accordance with this Section 2.6.

 

Article III

REPRESENTATIONS AND WARRANTIES OF SELLERs

 

Each Seller, as of the date hereof and of the Closing Date, jointly and severally represents and warrants to Buyers as follows:

 

Section 3.1     Organization and Authority of Sellers and Parent. (a) Each Seller is a limited liability company duly organized, validly existing and in good standing under the Laws of the state of Delaware. Each Seller has all necessary limited liability company power and authority to enter into this Agreement and the Transaction Documents to which it is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by each Seller of this Agreement and the Transaction Documents to which it is a party, the performance by each Seller of its obligations hereunder and thereunder and the consummation by each Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite limited liability company action on the part of such Seller. This Agreement has been duly executed and delivered by each Seller, and (assuming due authorization, execution and delivery by Buyers) this Agreement constitutes a legal, valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). When each Transaction Document to which a Seller is a party has been duly executed and delivered by such Seller (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document shall constitute a legal and binding obligation of such Seller enforceable against such Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

(b)     Parent is a limited liability company duly organized, validly existing and in good standing under the Laws of the state of Delaware. Parent has all necessary limited liability company power and authority to enter into the Transaction Documents to which it is a party, to carry out its obligations thereunder and to consummate the transactions contemplated thereby. When each Transaction Document to which Parent is a party has been duly executed and delivered by Parent, (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document shall constitute a legal and binding obligation of Parent enforceable against Parent in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

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Section 3.2     Capitalization.

 

(a)     NC-31 Seller is the record owner of, and has good and valid title to, the NC-31 Acquired Membership Interests, free and clear of all Encumbrances (other than Permitted Encumbrances), and NC-47 Seller is the record owner of, and has good and valid title to, the NC-47 Acquired Membership Interests, free and clear of all Encumbrances (other than Permitted Encumbrances). All of the Acquired Membership Interests have been duly authorized and are validly issued, fully paid and non-assessable and were not issued in violation of, and are not subject to, the preemptive rights of any Person or other similar rights in respect thereto other than Permitted Encumbrances.

 

(b)     There are no outstanding or authorized options, warrants, convertible securities or other similar rights, agreements, arrangements or commitments of any character relating to the Acquired Membership Interests or obligating either Seller to issue or sell any membership interest or any other interest in either UTP or pursuant to which either Seller or either UTP is or may become obligated to issue, sell, transfer, otherwise dispose of, register, purchase, return or redeem any equity interest in or other securities of either UTP or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase any equity interest in or other securities of either UTP, in each case, other than Permitted Encumbrances, and no equity interests or other securities of either UTP are reserved for such purpose. Other than the UTP LLCAs, there are no voting trusts, member agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Acquired Membership Interests.

 

Section 3.3     No Conflicts; Consents. The execution, delivery and performance by each Seller of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not: (a) result in a violation or breach of any provision of the Organizational Documents of such Seller or of the Acquired Companies; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to such Seller or the Acquired Companies; or (c) except as set forth in Section 3.3 of the Disclosure Schedules, require the consent of, notice to or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under, or result in the acceleration of, any Contract, except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to give notice would not be material. No consent, approval, permit, Governmental Order, declaration or filing with, or notice to, any Person is required by or with respect to either Seller or any Acquired Company in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, except (i) as set forth in Section 3.3 of the Disclosure Schedules and (ii) such consents, approvals, permits, Governmental Orders, declarations, filings or notices the absence of which, in the aggregate, would not be material.

 

Section 3.4     Financial Statements. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved. The Financial Statements have been prepared in good faith from the books and records of each Acquired Company and fairly present in all material respects the financial condition of the applicable UTP and its consolidated subsidiaries as of the respective dates they were prepared and the results of the operations of such UTP and its consolidated subsidiaries for the periods indicated. The audited balance sheets of each UTP and its consolidated subsidiaries as of October 1, 2017 and December 31, 2017, as applicable, are referred to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet Date”. Neither Seller owns or holds any assets, including cash, of, used by or required by any Acquired Company or otherwise relating to the ownership or operation of either Facility.

 

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Section 3.5     Undisclosed Liabilities. The UTPs and their consolidated subsidiaries do not have any liabilities, obligations or commitments of a type required to be reflected on a balance sheet prepared in accordance with GAAP, except those which (a) are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date; (b) have been incurred in the ordinary course of business since the Balance Sheet Date and which are not material in amount (and which do not relate to any Claim); or (c) are set forth on Section 3.5 of the Disclosure Schedules.

 

Section 3.6     Absence of Certain Changes, Events and Conditions; Compliance.

 

(a)     Except as expressly contemplated by this Agreement or as set forth on Section 3.6(a) of the Disclosure Schedules, from the Balance Sheet Date until the date of this Agreement, no Material Adverse Effect has occurred with respect to any Acquired Company.

 

(b)     Each Seller has complied in all material respects with its obligations under the Organizational Documents of each Acquired Company, including its obligations as the Managing Member of each UTP, has timely delivered all reports required to be delivered by it under the Organizational Documents of each Acquired Company (or has cured any failure to deliver such reports), and, except as set forth on Section 3.6(b) of the Disclosure Schedules, has timely filed all tax returns and other filings relating to the taxes of each Acquired Company required to be filed by it (or has cured any failure to conduct such timely filings). Neither Seller is in material breach or default of (i) any material terms and conditions of the Organizational Documents of each Acquired Company or (ii) any other Contract related to the Acquired Companies.

 

Section 3.7     Legal Proceedings. There are no actions, suits, claims, investigations or other legal proceedings pending or, to Sellers’ Knowledge, threatened against or by either Seller or any Affiliate of either Seller that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

 

Section 3.8     Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of either Seller, any of the Acquired Companies or any Affiliate thereof.

 

Section 3.9     Parent Guarantee. Concurrently with the execution and delivery of this Agreement, Parent has delivered to Buyers the Parent Guarantee, dated as of the date hereof, in favor of Buyers. The Parent Guarantee is in full force and effect and constitutes (assuming the due execution of this Agreement by the Parties) a valid and legally binding obligation of Parent, enforceable against Parent in accordance with its terms. No event has occurred which, with or without notice, lapse of time or both, would constitute a default on the part of Parent under the Parent Guarantee.

 

Section 3.10     Books and Records. The Books and Records have been kept and maintained in all material respects as required by applicable Laws, and contain true, correct and complete copies of the governing documents, material meetings and consents in lieu of meetings of the members or managers of each Acquired Company, and such records accurately reflect in all material respects all transactions referred to in such minutes and consents.

 

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Section 3.11     Accuracy of Information. The representations and warranties given by Sellers in this Agreement or any certificate, document or other instrument delivered by either Seller hereunder, do not contain any untrue statement of material fact, nor to the Knowledge of Sellers, do they omit to state a material fact necessary to make the statements or facts contained herein or therein, in light of the circumstances under which they were made, not misleading, taken as a whole.

 

Section 3.12     No Other Representations and Warranties. Except for the representations and warranties contained in this Article III (including the related portions of the Disclosure Schedules), neither Seller has made or makes any other express or implied representation or warranty, either written or oral, including any representation or warranty as to the accuracy or completeness of any information regarding the Acquired Membership Interests furnished or made available to Buyers and their Representatives (including any information, documents or material made available to Buyers or furnished to Buyers in management presentations or in any other form in expectation of the transactions contemplated hereby).

 

Article IV

REPRESENTATIONS AND WARRANTIES OF BUYERS

 

Each Buyer, as of the date hereof and of the Closing Date, jointly and severally represents and warrants to Sellers as follows:

 

Section 4.1     Organization and Authority of Buyers. Each Buyer is a Delaware limited liability company duly organized, validly existing and in good standing under the Laws of the state of Delaware. Each Buyer has all necessary limited liability company power and authority to enter into this Agreement and the Transaction Documents to which it is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by each Buyer of this Agreement and the Transaction Documents to which it is a party, the performance by such Buyer of its obligations hereunder and thereunder, and the consummation by such Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite limited liability company action on the part of such Buyer. This Agreement has been duly executed and delivered by each Buyer, and (assuming due authorization, execution and delivery by Sellers) this Agreement constitutes a legal, valid and binding obligation of such Buyer, enforceable against such Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). When each Transaction Document to which a Buyer is a party has been duly executed and delivered by such Buyer (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document shall constitute a legal and binding obligation of such Buyer enforceable against such Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

Section 4.2     No Conflicts; Consents. The execution, delivery and performance by each Buyer of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not: (a) result in a violation or breach of any provision of the Organizational Documents of such Buyer; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to such Buyer; or (c) except as set forth in Section 4.2 of the Disclosure Schedules, require the consent of, notice to or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any agreement to which such Buyer is a party, except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to give notice would not have a material adverse effect on such Buyer’s ability to consummate the transactions contemplated hereby. No consent, approval, permit, Governmental Order, declaration or filing with, or notice to, any Person is required by or with respect to such Buyer in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, except (i) as set forth in Section 4.2 of the Disclosure Schedules, and (ii) such consents, approvals, permits, Governmental Orders, declarations, filings or notices the absence of which would not have a material adverse effect on such Buyer’s ability to consummate the transactions contemplated hereby.

 

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Section 4.3     Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of either Buyer or any Affiliate thereof.

 

Section 4.4    Legal Proceedings. There are no actions, suits, claims, investigations or other legal proceedings pending or, to either Buyer’s knowledge, threatened against or by either Buyer or any Affiliate of either Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

 

Section 4.5     Investment Intent; Unregistered Securities. The Acquired Membership Interests to be held by the Buyer will be acquired for investment for its own account and not with a view to the distribution of any part thereof, without in any way affecting its right to dispose of its Membership Interests as permitted by the applicable UTP LLCA, and the Buyer has no present intention of selling, granting any participation in, or otherwise distributing, the same. It understands that the Acquired Membership Interests are characterized as a “restricted security” under federal and state securities laws inasmuch as such securities are being acquired in a transaction not involving a public offering and that under such laws and applicable regulations such securities may not be resold in the absence of an effective registration statement covering such Membership Interests or an exemption from registration under federal and state securities laws.

 

Section 4.6     Accredited Buyer. The Buyer is an “accredited Buyer” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended. It has such knowledge and experience in financial and business matters that it is capable of independently evaluating the risks and merits of purchasing the Acquired Membership Interests; it has independently evaluated the risks and merits of purchasing the Acquired Membership Interests and has independently determined that the Acquired Membership Interests is a suitable investment for it; and it has sufficient financial resources to bear the loss of its entire investment in the Acquired Membership Interests. It has received all the information it considers necessary or appropriate for deciding whether to acquire its respective Acquired Membership Interests and further represents that it has had an opportunity to ask questions and receive answers from the Seller regarding the terms and conditions of the offering of the Acquired Membership Interests.

 

Section 4.7     Regulation D Compliance. Neither the Buyer nor anyone acting on its behalf has offered any or all of the Acquired Membership Interests or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than the Buyer and not more than thirty-five (35) non-accredited Buyers, each of which has been offered the Acquired Membership Interests in a private sale for investment purposes only. Neither the Buyer nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of any or all of the Acquired Membership Interests or any similar securities to the registration requirements of Section 5 of the Securities Act of 1933, as amended.

 

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Article V

COVENANTS

 

Section 5.1     Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyers (which consent shall not be unreasonably withheld or delayed), Sellers shall, and shall cause each Acquired Company to (a) conduct its business in the ordinary course of business consistent with past practice, and (b) use commercially reasonable efforts to maintain and preserve intact the current organization, business and franchise of the Acquired Companies and to preserve the rights, franchises, goodwill and relationships of its personnel, customers, lenders, suppliers, regulators and others having business relationships with the Acquired Companies. From the date hereof until the Closing Date, except for the actions set forth in Section 5.1 of the Disclosure Schedules, and except as otherwise consented to in writing by Buyers (which consent shall not be unreasonably withheld or delayed), Sellers shall not cause or permit any Acquired Company to take any action that would cause any of the changes, events or conditions described in Section 3.6 to occur.

 

Section 5.2     Supplement to Disclosure Schedules. From time to time prior to the Closing, Sellers shall supplement or amend the Disclosure Schedules with respect to any matter hereafter arising or of which it becomes aware after the date hereof. Any disclosure in any such supplement to the Disclosure Schedules shall not be deemed to have cured any inaccuracy in or breach of any representation or warranty contained in this Agreement, including for purposes of the indemnification or termination rights contained in this Agreement or of determining whether or not the conditions set forth in Section 6.2 have been satisfied.

 

Section 5.3     [Intentionally Omitted].

 

Section 5.4     Confidentiality. Each Buyer acknowledges and agrees that the Confidentiality Agreement remains in full force and effect and, in addition, covenants and agrees to keep confidential, in accordance with the provisions of Confidentiality Agreement, information provided to such Buyer pursuant to this Agreement. Effective upon, and only upon, the Closing, the Confidentiality Agreement shall terminate with respect to confidential information relating solely to the Acquired Companies; provided, however, from and after the Closing each Seller will hold, and will cause its Affiliates and Representatives to hold, in strict confidence from any other Person all information and documents relating to the Facilities and the Acquired Companies, except any information or document (i) that is publicly available other than as a result of such Seller’s breach of this Section 5.4, (ii) that is required to be disclosed pursuant to applicable Law or Governmental Order, or (iii) whose disclosure is reasonably necessary for such Seller to exercise its rights or perform its covenants and obligations under this Agreement or any other Transaction Document. If this Agreement is, for any reason, terminated prior to the Closing, the Confidentiality Agreement and the provisions of the first sentence of this Section 5.4 shall nonetheless continue in full force and effect.

 

Section 5.5     Governmental Approvals and Other Third-Party Consents.

 

(a)     Each Party shall, as promptly as possible, use its commercially reasonable efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement. Each Party shall cooperate fully with each other Party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. The Parties shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals.

 

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(b)     Notwithstanding anything in this Section 5.5 or elsewhere in this Agreement to the contrary, neither of the Buyers nor any of its Affiliates shall be required to (i) (A) sell, lease, license, transfer, dispose of, divest or otherwise encumber, or to hold separate, or (B) proffer, propose, negotiate, offer to effect or consent, commit or agree to any sale, divestiture, lease, licensing, transfer, disposal, divestment or other encumbrance of, or to hold separate, in each case before or after the Closing, any assets, licenses, operations, rights, businesses or interests of either Buyer or any of its Affiliates or of the Acquired Companies, or (ii) take or agree to take any other action, or agree or consent to any limitations or restrictions on the freedom of action with respect to, or its ability to own, retain or make changes in, any assets, licenses, operations, rights, businesses or interests of either Buyer or any of its Affiliates or of the Acquired Companies.

 

(c)     All analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of any Party before any Governmental Authority or the staff or regulators of any Governmental Authority, in connection with the transactions contemplated hereunder (but, for the avoidance of doubt, not including any interactions between Sellers or the Acquired Companies with Governmental Authorities in the ordinary course of business consistent with past practice, any disclosure which is not permitted by Law or any disclosure containing confidential information) shall be disclosed to the other Party or Parties hereunder in advance of any filing, submission or attendance, it being the intent that the Parties will consult and cooperate with one another, and consider in good faith the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each Party shall give reasonable advance notice, to the extent practicable, to each other Party with respect to any meeting, discussion, appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide the other Party with the opportunity to attend and participate in such meeting, discussion, appearance or contact.

 

(d)     Sellers and Buyers shall use commercially reasonable efforts to give all notices to, and obtain all consents from, all third parties that are described in Section 3.3 and Section 4.2 of the Disclosure Schedules; provided, however, that Sellers shall not be obligated to pay any material consideration therefor to any third party from whom consent or approval is requested.

 

Section 5.6     Closing Conditions. From the date hereof until the Closing, each Party shall, and Sellers shall cause each Acquired Company to, use commercially reasonable efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VI.

 

Section 5.7     Public Announcements. Unless otherwise required by applicable Law including rules of any securities exchange (based upon the reasonable advice of counsel), no Party to this Agreement shall, nor shall it cause or permit any Affiliate to, make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of each Party (which consent shall not be unreasonably withheld or delayed), and the Parties shall cooperate as to the timing and contents of any such announcement.

 

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Section 5.8     Further Assurances. Following the Closing, each of the Parties shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances, and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

 

Section 5.9     Transfer Taxes. All transfer, documentary, sales, use, excise, stamp, registration, value added and other such Taxes, assessments, duties, fees, and other similar types of charges, including any penalties and interest (collectively, the “Transfer Taxes”), incurred in connection with this Agreement or any prior transaction (including any real property Transfer Tax, controlling interest Transfer Tax or other similar Tax) shall be borne fifty percent (50%) by Sellers on a joint and several basis and fifty percent (50%) by Buyers on a joint and several basis. Sellers shall timely file any tax return or other document with respect to such Transfer Taxes (and the other Parties shall cooperate with respect thereto as reasonably necessary).

 

Section 5.10     Post-Closing Reports. Notwithstanding the transactions contemplated hereby, each Seller agrees to provide (or arrange for Parent to provide) the reports and financial statements set forth on Exhibit 5.10 for the period set forth therein.

 

Section 5.11     UTP Guarantees; UTP LLCAs.     Buyers acknowledge and agree, for the benefit of Parent, that the obligations of Parent under the Guaranty by Parent in favor of NC-31 Buyer, dated as of July 29, 2016, and the Guaranty by Parent in favor of NC-47 Buyer, dated as of October 25, 2016 (together, the “UTP Guarantees”) terminate in full except with respect to any acts or omissions on the part of Sellers prior to the Closing Date, and Buyers hereby waive any claims under the UTP Guarantees (pursuant to Section 6 of the UTP Guarantees) with respect to any other matters so terminated. Sellers and Buyers acknowledge and agree that each Seller’s indemnification obligations under Article 11 of the applicable UTP LLCAs shall survive the Closing but only with respect to any acts or omissions on the part of Sellers prior to the Closing Date.

 

Article VI

CONDITIONS TO CLOSING

 

Section 6.1     Conditions to Obligations of All Parties. The obligations of each Party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

 

(a)     No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

 

(b)     Sellers shall have received all consents, authorizations, orders and approvals from the Governmental Authorities and other Persons referred to in Section 5.5(d) and Buyers shall have received all consents, authorizations, orders and approvals from the Governmental Authorities and other Persons referred to in Section 5.5(d), in each case, in form and substance reasonably satisfactory to Buyers and Sellers, and no such consent, authorization, order and approval shall have been revoked.

 

(c)     The Replacement Tax Equity Guaranties shall have been delivered.

 

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Section 6.2     Conditions to Obligations of Buyers. The obligations of each Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or such Buyer’s waiver, at or prior to the Closing, of each of the following conditions:

 

(a)     The representations and warranties of Sellers contained in Article III that are not qualified by “material”, “materially”, “Material Adverse Effect”, “material adverse effect” or similar qualification or standard shall be true and correct in all material respects at and as of the Closing Date as of made on the Closing Date (except to the extent expressly made as of another date, in which case as of such other date).

 

(b)     The representations and warranties of Sellers contained in Articles III of this Agreement that are qualified by “material”, “materially”, “Material Adverse Effect”, “material adverse effect” or similar qualification or standard shall be true and correct in all respects at and as of the Closing Date as if made on the Closing Date (except to the extent expressly made as of another date, in which case as of such other date).

 

(c)     Each Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date.

 

(d)     Buyer shall have received a certificate, dated as of the Closing Date and signed by a duly authorized officer of each Seller, that each of the conditions set forth in Section 6.2(a), Section 6.2(b) and Section 6.2(c) has been satisfied.

 

(e)     Buyers shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of each Seller certifying that attached thereto are true and complete copies of all resolutions adopted by the managers and members of such Seller authorizing the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby.

 

(f)     Buyers shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of each Seller certifying the names and signatures of the officers of such Seller authorized to sign this Agreement and the other documents to be delivered hereunder.

 

(g)     Each Seller shall have delivered, or caused to be delivered, to Buyer, a Membership Interest Assignment, duly executed by such Seller.

 

(h)     No Material Adverse Effect shall have occurred.

 

(i)     Each Seller shall have delivered to Buyer written resignations in form and substance reasonably satisfactory to Buyer, effective as of the Closing Date, of all of the officers, directors and managers of each Acquired Company appointed by such Seller, if any.

 

(j)     The Parties shall have agreed on an adjustment to the NC-31 Closing Purchase Price and the NC-47 Closing Purchase Price, in each case to the extent necessary to reflect certain operational and management costs, including those related to vegetative management, drainage control and reconciliation of accounts.

 

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Section 6.3     Conditions to Obligations of Sellers. The obligations of each Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or such Seller’s waiver, at or prior to the Closing, of each of the following conditions:

 

(a)     The representations and warranties of Buyers contained in Article IV that are not qualified by “material”, “materially”, “Material Adverse Effect”, “material adverse effect” or similar qualification or standard shall be true and correct in all material respects at and as of the Closing Date as of made on the Closing Date (except to the extent expressly made as of another date, in which case as of such other date).

 

(b)     The representations and warranties of Buyers contained in Article IV of this Agreement that are qualified by “material”, “materially”, “Material Adverse Effect”, “material adverse effect” or similar qualification or standard shall be true and correct in all respects at and as of the Closing Date as if made on the Closing Date (except to the extent expressly made as of another date, in which case as of such other date).

 

(c)     Each Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date.

 

(d)     Sellers shall have received a certificate, dated as of the Closing Date and signed by a duly authorized officer of each Buyer, that each of the conditions set forth in Section 6.3(a), Section 6.3(b) and Section 6.3(c) has been satisfied.

 

(e)     Sellers shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of each Buyer certifying that attached thereto are true and complete copies of all resolutions adopted by the managers and members of such Buyer authorizing the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby.

 

(f)     Sellers shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of each Buyer certifying the names and signatures of the officers of such Buyer authorized to sign this Agreement and the other documents to be delivered hereunder.

 

(g)     NC-31 Buyer shall have delivered to NC-31 Seller cash in an amount equal to the sum of (x) the NC-31 Closing Payment less (y) the NC-31 Holdback Amount, by wire transfer in immediately available funds, to an account or accounts designated at least two (2) Business Days prior to the Closing Date by NC-31 Seller in a written notice to NC-31 Buyer.

 

(h)     NC-47 Buyer shall have delivered to NC-47 Seller cash in an amount equal to the sum of (x) the NC-47 Closing Payment less (y) the NC-47 Holdback Amount, by wire transfer in immediately available funds, to an account or accounts designated at least two (2) Business Days prior to the Closing Date by NC-47 Seller in a written notice to NC-47 Buyer.

 

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Article VII

INDEMNIFICATION

 

Section 7.1     Survival. Subject to the limitations and other provisions of this Agreement and except for fraud, intentional misrepresentation or willful misconduct, the representations and warranties of (a) Sellers contained in Article III and all Claims with respect thereto shall terminate on the date that is eighteen (18) months from the Closing Date and (b) Buyers contained in Article IV and all Claims with respect thereto shall terminate on the date that is eighteen (18) months from the Closing Date, except that (i) the Seller Fundamental Representations, (ii) the Buyer Fundamental Representations and (iii) all Claims with respect to clauses (i) and (ii) above shall survive Closing until the date that is sixty (60) days after the expiration of the applicable statute of limitation giving effect to any extensions thereof. All of the covenants and agreements of the Parties contained in this Agreement, which, by their terms, are to be performed or complied with in their entirety at or prior to the Closing, and all Claims with respect thereto, shall survive Closing until fully performed. All of the covenants and agreements of the Parties contained in this Agreement which, by their terms, are to be performed or complied with in whole or in part following the Closing, and all Claims with respect thereto, shall survive Closing for the period (A) provided in such covenants and agreements, if any, or until fully performed in accordance with their respective terms plus (B) an additional sixty (60) days. All liability of Sellers and Buyers, as applicable, with respect to representations, warranties, covenants and agreements shall terminate at the end of the survival period corresponding thereto as set forth in this Section 7.1. Notwithstanding the foregoing, any Claims asserted in writing by notice from the non-breaching Party to the breaching Party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of such survival period and such Claims shall survive until finally resolved.

 

Section 7.2     Indemnification By Sellers. Subject to the other terms and conditions of this Article VII, each Seller, jointly and severally, shall indemnify each Buyer and its Affiliates (including, after the Closing, the Acquired Companies) and Representatives, and all heirs, executors, personal representatives, successors and assigns of the foregoing (collectively, the “Buyer Indemnified Parties”) against, and shall hold the Buyer Indemnified Parties harmless from and against, any and all Losses incurred or sustained by, or imposed upon, any Buyer Indemnified Party based upon, arising out of, with respect to or by reason of:

 

(a)     any inaccuracy in or breach of any of the representations or warranties of either Seller contained in this Agreement;

 

(b)     any breach or non-fulfillment of any covenant, agreement or obligation to be performed by either Seller pursuant to this Agreement; or

 

(c)     each Seller’s respective Ownership Share of any amounts required to be contributed by the members of each UTP to the UTP pursuant to the terms of the applicable UTP LLCA with respect to the period relating prior to the Effective Time, whether or not due prior to or after the Effective Time.

 

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Section 7.3     Indemnification by Buyers. Subject to the other terms and conditions of this Article VII, each Buyer, jointly and severally, shall indemnify each Seller and its Affiliates and Representatives, and all heirs, executors, personal representatives, successors and assigns of the foregoing (collectively, the “Seller Indemnified Parties”) against, and shall hold the Seller Indemnified Parties harmless from and against, any and all Losses incurred or sustained by, or imposed upon, any Seller Indemnified Party based upon, arising out of, with respect to or by reason of:

 

(a)     any inaccuracy in or breach of any of the representations or warranties of either Buyer contained in this Agreement; or

 

(b)     any breach or non-fulfillment of any covenant, agreement or obligation to be performed by either Buyer pursuant to this Agreement.

 

Section 7.4     Certain Limitations. The Buyer Indemnified Party or Seller Indemnified Party making a claim under this Article VII is referred to as the “Indemnified Party,” and the Party against whom such claims are asserted under this Article VII is referred to as the “Indemnifying Party”. The indemnification provided for in Section 7.2 and Section 7.3 shall be subject to the following limitations:

 

(a)     The Indemnifying Party shall not be liable to the Indemnified Party for indemnification under Section 7.2(a) or Section 7.3(a), as the case may be, (i) until the aggregate amount of all Losses for which indemnification is sought under Section 7.2(a) or Section 7.3(a) exceeds an amount equal to two percent (2%) of the Closing Payment (the “Deductible”), at which time the Indemnifying Party shall only be liable for indemnification under Section 7.2(a) or Section 7.3(a) for Losses in excess of the Deductible. Notwithstanding the foregoing, the Deductible shall not apply to any claim for indemnification under Section 7.2(a) or Section 7.3(a) with respect to fraud, intentional misrepresentation or willful misconduct, and to any inaccuracy in or breach of any representation or warranty contained in the Seller Fundamental Representations or the Buyer Fundamental Representations, as applicable or breach of any covenants or agreements.

 

(b)     The aggregate amount of all Losses for which an Indemnifying Party shall be liable pursuant to Section 7.2(a) or Section 7.3(a) as the case may be, shall not exceed an amount equal to fifty percent (50%) of the Closing Payment; provided, however, that (x) the aggregate amount for all Losses for which any Indemnifying Party shall be liable pursuant to Section 7.2(a) or Section 7.3(a) as the case may be, with respect to any inaccuracy in or breach of any representation or warranty contained in the Seller Fundamental Representations or the Buyer Fundamental Representations, as applicable, shall not exceed any amount equal to one hundred percent (100%) of the Purchase Price, and (y) such limitation shall not apply to any claim (i) hereunder with respect to fraud, intentional misrepresentation or willful misconduct or (ii) for breach of any covenants or agreements.

 

(c)     Payments by an Indemnifying Party pursuant to Section 7.2 or Section 7.3 in respect of any Losses shall be limited to the net amount of any Losses that remains after deducting therefrom any insurance proceeds (net of any costs of collection, deductible, retroactive premium adjustment, reasonably foreseeable premium increases, reimbursement obligation or other out-of-pocket costs directly related to the insurance claim in respect of Losses) and/or any indemnity, contribution or other similar payment (net of any costs or expenses) actually received by the Indemnified Party or any of its Affiliates from any Person other than the Indemnifying Party with respect to the matter in respect of which the indemnification claim under Section 7.2 or Section 7.3 was made. Each Indemnified Party shall use commercially reasonable efforts to mitigate any Losses that any Indemnified Party asserts under this Article VII.

 

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(d)     Anything to the contrary in this Agreement notwithstanding, (i) neither Seller shall have any right to seek contribution from any Acquired Company with respect to all or any part of any of such Seller’s indemnification obligations under this Article VII, and (ii) for the exclusive purpose of determining the amount of the Losses resulting from a breach or inaccuracy of a representation, warranty, or covenant of either Buyer or either Seller, any “materiality” or “Material Adverse Effect” qualifiers or words of similar import contained in such representation, warranty or covenant giving rise to the claim of indemnity hereunder shall in each case be disregarded and without effect (as if such standard or qualification were deleted from such representation or warranty).

 

(e)     The representations, warranties, covenants and agreements made herein, together with the indemnification provisions herein, are intended among other things to allocate the economic cost and the risks inherent in the transactions contemplated hereby between the Parties and, accordingly, a Party shall, subject to the terms and conditions of this Agreement, be entitled to the indemnification or other remedies provided in this Agreement by reason of any breach of any such representation, warranty, covenant or agreement by another Party notwithstanding whether any employee, representative or agent of the Party seeking to enforce a remedy knew or had reason to know of such breach, provided that “representation” and “warranty” in this clause (e) shall mean, for avoidance of doubt, representations and warranties as modified by the Disclosure Schedule.

 

(f)     Payments due to Buyer Indemnified Parties under this Article VII may be accomplished in whole or in part, at the option of the Buyer Indemnified Parties, by the Buyer Indemnified Parties setting off a corresponding amount owed to either Seller or its Affiliates by either Buyer or its Affiliates (including the Acquired Companies) under this Agreement, provided that written notice of such intent to set off is delivered to Seller reasonably in advance of the exercise of such set off.

 

(g)     Except for any Third-Party claims under Section 7.5(a) and any damages or lost profits that are reasonably foreseeable, no Party to this Agreement shall be liable to the other Party for special, punitive, exemplary, incidental, consequential or indirect damages, or lost profits, loss of opportunity, increased financing costs, or Losses calculated by reference to any multiple of earnings or earnings before interest, Tax, depreciation or amortization (or any other valuation methodology), whether based on contract, tort, strict liability or otherwise, and whether or not arising from the other Party’s sole, joint or concurrent negligence, strict liability or other fault for any matter relating to this Agreement or the transactions contemplated hereby.

 

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Section 7.5     Indemnification Procedures.

 

(a)     Third-Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any action, suit, claim or other legal proceeding made or brought by any Person who is not a Party or an Affiliate of a Party or a Representative of the foregoing (a “Third-Party Claim”) against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice by the Indemnified Party shall, to the extent practicable, describe the Third-Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third-Party Claim at the Indemnifying Party’s cost and expense and by the Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided that such Claim does not involve (i) a conflict of interest between the Indemnifying Party or its selected counsel, on the one hand, and the Indemnified Party, on the other hand, (ii) any defenses that the Indemnified Party could make in good faith that the Indemnifying Party could not make in good faith or otherwise under applicable Law or rules of professional conduct, (iii) any request by the Third Party for an injunction (whether temporary or permanent) or other remedy in equity which if successful could reasonably be expected to adversely affect the business, assets or operations of either Buyer or its Affiliates (including the Acquired Companies). In the event that the Indemnifying Party is permitted to assume the defense of any Third-Party Claim, subject to Section 7.5(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right, at its own cost and expense, to participate in the defense of any Third-Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. If the Indemnifying Party elects not to compromise or defend such Third-Party Claim or fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, the Indemnified Party may, subject to Section 7.5(b), pay, compromise, defend such Third-Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third-Party Claim. Sellers and Buyers shall cooperate with each other in all reasonable respects in connection with the defense of any Third-Party Claim, including making available (subject to the provisions of Section 5.4) records relating to such Third-Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket costs and expenses) to the defending Party, management employees of the non-defending Party as may be reasonably necessary for the preparation of the defense of such Third-Party Claim.

 

(b)     Settlement of Third-Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third-Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed), except as provided in this Section 7.5(b). If a firm offer is made to settle a Third-Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third-Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten (10) days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third-Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third-Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third-Party Claim, the Indemnifying Party may settle the Third-Party Claim upon the terms set forth in such firm offer to settle such Third-Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 7.5(a), it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).

 

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(c)     Direct Claims. Any claim by an Indemnified Party on account of a Loss which does not result from a Third-Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim. If the Indemnifying Party does not so respond within such thirty-day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

 

Section 7.6     Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall be treated by the Parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

 

Section 7.7     Exclusive Remedies. Subject to Section 9.11 and except for fraud, intentional misrepresentation or willful misconduct, the Parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation set forth herein, and any and all claims relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VII. In furtherance of the foregoing and except for fraud, intentional misrepresentation or willful misconduct, each Party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein, and any and all claims relating to the subject matter of this Agreement it may have against the other Parties and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article VII. Nothing in this Section 7.7 shall limit any Person’s right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to Section 9.11.

 

Article VIII

TERMINATION

 

Section 8.1     Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a)     by the mutual written consent of Sellers and Buyers;

 

(b)     by Buyers by written notice to Sellers if:

 

(i)     Buyers are not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by either Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VI and such breach, inaccuracy or failure cannot be cured by the Drop Dead Date; or

 

(ii)     any of the conditions set forth in Section 6.1 or Section 6.2 shall not have been fulfilled by the Drop Dead Date, unless such failure shall be due to the failure of either Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;

 

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(c)     by Sellers by written notice to Buyers if:

 

(i)     Sellers are not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by either Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VI and such breach, inaccuracy or failure cannot be cured by such Buyer by the Drop Dead Date; or

 

(ii)     any of the conditions set forth in Section 6.1 or Section 6.3 shall not have been fulfilled by the Drop Dead Date, unless such failure shall be due to the failure of either Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or

 

(d)     by Buyers or Sellers by written notice to the other in the event that:

 

(i)     there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited; or

 

(ii)     any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable.

 

Section 8.2     Effect of Termination. In the event of the termination of this Agreement in accordance with Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of any Party except:

 

(a)     as set forth in Section 5.4, this Article VIII and Article IX; and

 

(b)     that nothing herein shall relieve any Party from liability for any intentional, willful and material breach of any provision hereof.

 

Article IX

MISCELLANEOUS

 

Section 9.1     Expenses. Except as otherwise expressly provided herein (including Section 5.9), all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses, whether or not the Closing shall have occurred.

 

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Section 9.2     Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third (3rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.2):

 

	If to Sellers:	c/o VivoPower USA LLC
	 	140 Broadway, 28th Floor
	 	New York, NY 10005
	 	E-mail:           notice@vivopower.com
	 	Attention:      Director of Finance
	 	 
	with a copy to:	c/o VivoPower USA LLC
	 	140 Broadway, 28th Floor
	 	New York, NY 10005
	 	E-mail:           nicholas.olmsted@vivopower.com
	 	Attention:      Nicholas Olmsted
	 	 
	If to Buyers:	New Energy Solar US Corp.
	 	140 Broadway, 28th Floor
	 	New York, New York 10005
	 	E-mail:             assetmanager@newenergysolar.com.au
	 	Attention:      Asset Manager
	 	 
	with a copy to:	Foley & Lardner LLP
	 	777 E. Wisconsin Avenue
	 	Milwaukee, Wisconsin 53202
	 	E-mail:            dwclark@foley.com
	 	Attention:      David W. Clark

 

Section 9.3     Interpretation. For purposes of this Agreement: (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

 

Section 9.4     Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

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Section 9.5     Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

Section 9.6     Entire Agreement. This Agreement constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous representations, warranties, understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

 

Section 9.7     Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign any of its rights or delegate or cause to be assumed any of its obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. No permitted assignment, delegation or assumption shall relieve the Party effectuating the same of any of its obligations hereunder. Notwithstanding the foregoing, (i) each Buyer may assign all of its rights and obligations hereunder to any of its Affiliates; provided, that no such assignment will release such Buyer from any liabilities or obligations hereunder, and (ii) each Buyer or its permitted assignee may assign, transfer, pledge or otherwise dispose of its rights and interests hereunder to a trustee or lending institution(s) for the purposes of financing or refinancing, or by way of assignments, transfers, conveyances or dispositions in lieu thereof; provided, however, that no such assignment or disposition shall relieve or in any way discharge such Buyer or such assignee from the performance of its duties and obligations under this Agreement. Each Seller agrees to execute and deliver such documents as may be reasonably necessary to accomplish any such assignment, transfer, conveyance, pledge or disposition of rights hereunder so long as such Seller’s rights under this Agreement are not thereby altered, amended, diminished or otherwise impaired.

 

Section 9.8     No Third-Party Beneficiaries. Except as provided in Article VII, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 9.9     Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each Party. No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No waiver by any Party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

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Section 9.10     Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

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

 

(b)     ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c)     EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 9.10(c).

 

Section 9.11     Specific Performance. The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

 

Section 9.12     Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

Section 9.13     Non-recourse. This Agreement and the Transaction Documents may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the entities that are expressly named as parties and then only with respect to the specific obligations set forth herein with respect to such party. No past, present or future director, officer, employee, incorporator, manager, member, partner, stockholder, Affiliate, agent, attorney or other Representative of any Party or of any Affiliate of any Party, or any of their successors or permitted assigns, shall have any liability for any obligations or liabilities of any Party under this Agreement or for any claim or action based on, in respect of or by reason of the transactions contemplated hereby.

 

[SIGNATURE PAGE FOLLOWS]

 

29

 

 

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

 

 

	 	Sellers:
	 	 	 
	 	VIVOPOWER US-NC-31 LLC
	 	 	 
	 	By:	/s/Carl Weatherley-White
	 	Name:	Carl Weatherley-White
	 	Title:	Chief Financial Officer and Secretary
	 	 	 
	 	 	 
	 	VIVOPOWER US-NC-47 LLC
	 	 	 
	 	By:	/s/Carl Weatherley-White
	 	Name:	Carl Weatherley-White
	 	Title:	Chief Financial Officer and Secretary

 

 

 

[Signature Page to Membership Interest Purchase Agreement]

 

 

 

	 	Buyers:
	 	 	 
	 	NES US NC-31 LLC
	 	 	 
	 	By:	Tom Kline
	 	Name:	Thomas Oliver Kline
	 	Title:	Vice President 
	 	 	 
	 	 	 
	 	NES US NC-47 LLC
	 	 	 
	 	By:	Tom Kline
	 	Name:	Thomas Oliver Kline
	 	Title:	Vice President 

 

 

 

[Signature Page to Membership Interest Purchase Agreement]ex_117830.htm

Exhibit 4.13

 

Execution Version 

 

 

 

 

 

 

BRIDGE LOAN AGREEMENT

 

 

by and between

 

 

VIVOPOWER USA LLC

a Delaware limited liability company

(“Borrower”)

 

 

and

 

 

NEW ENERGY SOLAR US CORP.

a Delaware corporation

(“Lender”)

 

 

 

 

Dated as of May 25, 2018

 

 

 

 

_______________________________________________

 

 

 

 

Table of Contents

 

Page

 

	
			Section 1.

				
			Definitions; Rules of Construction

				2
	
			1.1.

				
			Definitions

				2
	
			1.2.

				
			Rules of Interpretation.

				9
	 	 	 
	
			Section 2.

				
			The Loan.

				10
	
			2.1.

				
			The Loan

				10
	
			2.2.

				
			Interest.

				10
	
			2.3.

				
			Conditions Precedent to Initial Disbursement of Loan Proceeds

				11
	
			2.4.

				
			Conditions Precedent to Final Disbursements of Loan Proceeds.

				12
	
			2.5.

				
			Waivers of Conditions Precedent

				12
	
			2.6.

				
			The Loan Ledger

				12
	
			2.7.

				
			Disbursement Procedure.

				12
	
			2.8.

				
			Prepayments

				13
	
			2.9.

				
			Loan Payments

				13
	
			2.10.

				
			Taxes

				13
	 	 	 
	
			Section 3.

				
			Representations and Warranties

				13
	
			3.1.

				
			Existence; Compliance With Laws

				13
	
			3.2.

				
			Power; Authorization; Enforceability

				14
	
			3.3.

				
			No Contravention

				14
	
			3.4.

				
			Financial Statements

				14
	
			3.5.

				
			Solvency

				15
	
			3.6.

				
			No Event of Default

				15
	
			3.7.

				
			Sole Business; No Employees.

				15
	
			3.8.

				
			Litigation

				15
	
			3.9.

				
			Equity Interests/Subsidiaries

				15
	
			3.10.

				
			Accounts

				15
	
			3.11.

				
			Labor Disputes and Acts of God

				15
	 	 	 
	
			Section 4.

				
			Affirmative Covenants

				16
	
			4.1.

				
			Conduct of Business and Maintenance of Existence

				16
	
			4.2.

				
			Compliance with Laws

				16
	
			4.3.

				
			Payment of Liabilities and Taxes

				16
	
			4.4.

				
			Contractual Obligations

				17
	
			4.5.

				
			Use of Loan Proceeds

				17
	
			4.6.

				
			Enforcement of Project Documents and Tax Equity Documents

				17
	
			4.7.

				
			Deposits into Controlled Account

				17
	
			4.8.

				
			Inspection

				17
	
			4.9.

				
			Further Assurances

				18
	 	 	 
	
			Section 5.

				
			Negative Covenants

				18
	
			5.1.

				
			Indebtedness

				18
	
			5.2.

				
			Liens

				18
	
			5.3.

				
			Distributions

				19
	
			5.4.

				
			Limitations on Restrictive Agreements

				19

 

 

 

 

	
			5.5.

				
			Sale of Assets

				19
	
			5.6.

				
			Transfer of Interests

				19
	
			5.7.

				
			Loans; Investments; Etc.

				19
	
			5.8.

				
			Fundamental Changes

				19
	
			5.9.

				
			Change of Business; Use of Site

				20
	
			5.10.

				
			Modification of Organizational Documents; Material Consents

				20
	
			5.11.

				
			Affiliates

				20
	
			5.12.

				
			Accounts

				20
	
			5.13.

				
			Loan Proceeds

				20
	
			5.14.

				
			Contingent Liabilities

				20
	
			5.15.

				
			Name and Location; Fiscal Year

				20
	 	 	 
	
			Section 6.

				
			Events of Default

				20
	
			6.1.

				
			Payment of Obligations

				20
	
			6.2.

				
			Failure to Perform Provisions of Loan Documents

				21
	
			6.3.

				
			Representations and Warranties

				21
	
			6.4.

				
			Default under Other Indebtedness

				21
	
			6.5.

				
			Liquidation, Termination, Dissolution, Etc.

				22
	
			6.6.

				
			Bankruptcy

				22
	
			6.7.

				
			Judgments

				22
	
			6.8.

				
			Material Adverse Effect

				22
	 	 	 
	
			Section 7.

				
			Rights and Remedies

				22
	
			7.1.

				
			Rights and Remedies

				22
	
			7.2.

				
			Remedies Under Loan Documents.

				22
	
			7.3.

				
			Interest on Late Payments

				23
	
			7.4.

				
			Liens, Set-Off

				23
	
			7.5.

				
			Enforcement Costs

				23
	
			7.6.

				
			Application of Proceeds

				23
	
			7.7.

				
			Remedies, Etc.; Cumulative

				24
	 	 	 
	
			Section 8.

				
			Miscellaneous

				24
	
			8.1.

				
			Course of Dealing; Amendment

				24
	
			8.2.

				
			Waiver

				24
	
			8.3.

				
			Notices

				25
	
			8.4.

				
			Costs and Expenses

				26
	
			8.5.

				
			Applicable Law; Consent to Jurisdiction

				26
	
			8.6.

				
			Waiver of Jury Trial

				26
	
			8.7.

				
			Assignment

				27
	
			8.8.

				
			Limitation on Liability

				27
	
			8.9.

				
			Indemnification.

				27
	
			8.10.

				
			Entire Agreement

				28
	
			8.11.

				
			No Advisory or Fiduciary Responsibility; No Partnership, Etc.

				28
	
			8.12.

				
			Severability

				28
	
			8.13.

				
			Survival

				28
	
			8.14.

				
			Binding Effect; Assignment

				28
	
			8.15.

				
			Time of Essence

				28
	
			8.16.

				
			Duplicate Originals and Counterparts

				28

 

ii

 

 

	
			8.17.

				
			No Third Party Beneficiary

				29
	
			8.18.

				
			Non-Usurious Interest

				29
	
			8.19.

				
			Publicity

				29
	
			8.20.

				
			Headings

				29

 

Schedule 1.1 – EPC Matters

Schedule 3.10 – Borrower Accounts

 

iii

 

 

BRIDGE LOAN AGREEMENT

 

THIS BRIDGE LOAN AGREEMENT (this “Agreement”), is made as of May 25, 2018 (the “Effective Date”) by and between VIVOPOWER USA LLC, a Delaware limited liability company (the “Borrower”) and NEW ENERGY SOLAR US CORP., a Delaware corporation (the “Lender”).

 

RECITALS

 

WHEREAS, certain of the terms used in these Recitals are defined in Section 1.1 of the Agreement;

 

WHEREAS, Borrower is in the business of developing and owning solar photovoltaic facilities throughout the United States through its subsidiaries;

 

WHEREAS, two (2) of Borrower’s wholly-owned subsidiaries VivoPower US-NC-31 LLC, a Delaware limited liability company (“Vivo NC-31”) and VivoPower US-NC-47 LLC, a Delaware limited liability company (“Vivo NC-47”) hold interests in, respectively, a 34.2 MW (AC) solar photovoltaic facility in Maxton County, North Carolina (the “NC-31 Solar Project”) and a 33.8 MW (AC) solar photovoltaic facility in Robeson County, North Carolina (the “NC-47 Solar Project” and together with the NC-31 Solar Project, the “Solar Projects”);

 

WHEREAS, (i) Vivo NC-31 owns 100% of the Class B Membership Interests in US-NC-31 Sponsor Partner, LLC, a Delaware limited liability company (“NC-31 Sponsor Partner”), (ii) which owns one hundred percent (100%) of the issued and outstanding membership interests of US-NC-31 Sponsor, LLC, a Delaware limited liability company (“NC-31 Sponsor”), (iii) which in turn owns, together with Firstar Development, LLC, as tax equity investor, one hundred percent (100%) of the issued and outstanding membership interests of IS-31 Holdings, LLC, a Delaware limited liability company (“NC-31 TE Partnership”), (iv) which in turn owns one hundred percent (100%) of the issued and outstanding membership interests of Innovative Solar 31, LLC, a North Carolina limited liability company (“NC-31 Project Company”), which has developed and owns the NC-31 Solar Project;

 

WHEREAS, (i) Vivo NC-47 owns 100% of the Class B Membership Interests in US-NC-47 Sponsor Partner, LLC, a Delaware limited liability company (“NC-47 Sponsor Partner”), (ii) which owns one hundred percent (100%) of the issued and outstanding membership interests of US-NC-47 Sponsor, LLC, a Delaware limited liability company (“NC-47 Sponsor”), (iii) which in turn owns, together with Firstar Development, LLC and USB RETC Fund 2017-1, LLC, a Delaware limited liability company, as tax equity investors, one hundred percent (100%) of the issued and outstanding membership interests of IS-47 Holdings, LLC, a Delaware limited liability company (“NC-47 TE Partnership”), (iv) which in turn owns one hundred percent (100%) of the issued and outstanding membership interests of Innovative Solar 47, LLC, a North Carolina limited liability company (“NC-47 Project Company” and together with NC-31 Project Company, the “Project Companies”), which has developed and owns the NC-47 Solar Project;

 

WHEREAS, subsidiaries of Lender NES US NC-31 LLC and NES US NC-47 LLC (“NES Buyers”) intend to enter into a Membership Interest Purchase Agreement (the “MIPA”) with Vivo NC-31 and Vivo NC-47 for the purchase by NES Buyers of Vivo NC-31’s and Vivo NC-47’s Class B Membership Interests in NC-31 Sponsor Partner and NC-47 Sponsor Partner, respectively (the “Class B Acquisition”);

 

 

 

 

WHEREAS, Borrower has requested that Lender make loans to Borrower, subject to the terms and conditions of this Agreement; and

 

WHEREAS, Lender is willing to make such loans upon the terms and conditions of this Agreement.

 

AGREEMENTS

 

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

 

Section 1.     Definitions; Rules of Construction.

 

1.1.     Definitions. The following terms, when used in this Agreement, shall have the following meanings unless otherwise indicated:

 

“Affiliate” of a specified Person means any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified, or who holds or beneficially owns fifty percent (50%) or more of the equity interests in the Person specified or fifty percent (50%) or more of any class of voting securities of the Person specified.

 

“Agreement” has the meaning provided in the introductory paragraph hereto.

 

“Applicable Laws” means, with respect to any Person, all laws, statutes, rules, regulations, ordinances, judgments, settlements, orders, decrees, injunctions, permits and writs of any Governmental Authority having jurisdiction over such Person or the Solar Projects, as applicable.

 

“Bankruptcy Event” shall mean with respect to any Person,

 

(i)     such Person shall commence any case, proceeding or other action (x) under any existing or future Applicable Laws relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (y) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or such Person shall make a general assignment for the benefit of its creditors;

 

(ii)     there shall be commenced against such Person any case, proceeding or other action of a nature referred to in clause (i) above which (x) results in the entry of an order for relief or any such adjudication or appointment, (y) remains undismissed, undischarged or unbonded for a period of sixty (60) days or (z) the petition commencing the involuntary case is not timely controverted;

 

2

 

 

(iii)     there shall be commenced against such Person any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within thirty (30) days from the entry thereof;

 

(iv)     such Person shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or

 

(v)     such Person shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due.

 

“Borrower” has the meaning set forth in the preamble to this Agreement.

 

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required to close.

 

“Casualty Insurance Proceeds” means any and all proceeds of any insurance, indemnity, warranty or guaranty payment from time to time with respect with any damage to, or destruction in whole or in part of, the Solar Projects or any Collateral.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means all property which is subject or is intended to become subject to the security interests or liens granted in favor of the Lender by the Borrower or any other Person under any of the Loan Documents.

 

“Contractual Obligation” of any Person, means any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound, other than the Obligations.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

 

“Default” is defined in the introductory paragraph of Section 6.

 

“Deposit Account Control Agreement” means, if requested by Lender pursuant to Section 4.7, a Deposit Account Control Agreement, by and among, Borrower, Lender and the applicable depositary bank, together with all Supplements thereto.

 

“Disbursement” means the Initial Disbursement or Final Disbursement.

 

3

 

 

“Distributions” means, collectively, with respect to the Borrower, all dividends, cash, options, warrants, rights, instruments, distributions, returns of capital or principal, fees, income, payments, interest, profits and other property, interests (debt or equity) or proceeds, including as a result of a split, revision, reclassification or other like change of its Equity Interests in any or on account of any Project Entity, from time to time received or receivable by, or otherwise distributed to, the Borrower in respect of or in exchange for any or all of such Equity Interests.

 

“ECCA” means that certain (i) Equity Capital Contribution Agreement, dated July 29, 2016 among NES US NC-31 LLC, Vivo NC-31 and NC-31 Sponsor Partner and (ii) Equity Capital Contribution Agreement, dated October 25, 2016 among NES UC NC-47 LLC, Vivo NC-47 and NC-47 Sponsor Partner.

 

“Effective Date” has the meaning set forth in the preamble to this Agreement.

 

“Enforcement Costs” is defined in Section 7.5.

 

“Equity Interest” means with respect to a Person, any (a) stock, partnership interest, membership interest or other equity interest in such Person or (b) any option, warrant or other direct or indirect right to acquire, convert into or exchange for an equity interest in such Person.

 

“Event of Default” is defined in the introductory paragraph of Section 6.

 

“Final Disbursement” is defined in Section 2.4.

 

“GAAP” means generally accepted accounting principles in the United States of America consistently applied.

 

“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state, territorial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions.

 

“Holding Company Operating Agreement” has the meaning defined in the ECCA.

 

“IFRS” means the International Financial Reporting Standards.

 

4

 

 

“Indebtedness” of any Person at any date means, 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 similar instrument, (g) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person or is non-recourse to such Person, (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, (i) all net ordinary course settlement or other obligations of such Person under any Hedging Agreement or (j) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement are limited to repossession or sale of such property).

 

“Initial Disbursement” is defined in Section 2.3.

 

“Investments” has the meaning set forth in Section 5.7.

 

“Lender” has the meaning provided in the introductory paragraph hereto.

 

“Lien” means, with respect to an asset, any mortgage, pledge, hypothecation, assignment (as security), deposit arrangement, encumbrance, lien (statutory or other), charge, warrant, deed of trust, claim, restriction (whether on voting, sale, transfer, disposition or otherwise), assessment, variance, purchase right, right of first refusal, reservation, encroachment, irregularity, deficiency, default, defect, adverse claim, interest, restrictive covenant, easement or other security interest, or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever having substantially the same economic effect as any of the foregoing (including any conditional sale or other title retention agreement and any capital lease), and the authorized filing of, or any agreement to give, any financing statement relating to any such asset or property under the Uniform Commercial Code of any jurisdiction or any interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement.

 

“LLCA” means that certain (i) Amended and Restated Operating Agreement, dated July 29, 2016 of NC-31 Sponsor Partner, between NES US NC-31 LLC and Vivo NC-31 and (ii) Amended and Restated Operating Agreement, dated October 25, 2016 of NC-47 Sponsor Partner, between NES US NC-47 LLC and Vivo NC-47.

 

“Loan” has the meaning set forth in Section 2.1.

 

“Loan Documents” means this Agreement, the Security Documents, any financing statements or other similar documents filed, recorded or delivered in connection with the foregoing, and any other instrument, document or agreement both now and hereafter executed, delivered or furnished by Borrower evidencing, guaranteeing, securing, or in connection with this Agreement or all or any part of the Obligations, together with all Supplements thereto.

 

“Loan Ledger” is defined in Section 2.6.

 

5

 

 

“Loan Proceeds” means all amounts disbursed as part of the Loan, whether disbursed directly to Borrower or otherwise.

 

“Material Adverse Effect” means (i) any change, circumstance, occurrence, or effect that is materially adverse to (A) the operations, business, properties, condition (financial or otherwise), of the Borrower and the Project Entities; (B) the Borrower’s ability to perform the Obligations; (C) the legality, validity, binding effect or enforceability of this Agreement or any other Loan Document; or (D) the rights of Borrower under any Material Project Document; or (ii) any change, circumstance, occurrence, or effect that is, or could reasonably be expected to be, materially adverse to (x) the rights of the Lender under this Agreement, (y) title to or value of the Solar Projects and the Collateral, or (z) the validity or priority of the security interest in the Collateral created and granted by the Loan Documents.

 

“Material Project Counterparty” means a party to a Material Project Document other than a Loan Party.

 

“Material Project Document” means the Principal Project Documents (as defined in each of the ECCAs), together with all permitted Supplements thereto.

 

“Maturity Date” means the earlier of (i) the closing of the Class B Acquisition and (ii) June 30, 2018, which date shall be subject to one 30-day automatic extension if approval from Federal Energy Regulatory Commission has not been received for the Class B Acquisition, sufficient to permit the closing of the Class B Acquisition by such date, with any further extensions subject to the sole discretion of Lender.

 

“Maximum Loan Amount” means the amount of Four Million Dollars ($4,000,000).

 

“Obligations” means all present and future Indebtedness, loans, advances, debts, liabilities (including any indemnification or other obligations that survive the termination of this Agreement and other Loan Documents) and obligations of any kind and nature whatsoever (including guarantee obligations) of the Borrower to the Lender of any kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, both now existing and hereafter arising under, as a result of, on account of, or in connection with, the Loan, this Agreement and any and all Supplements thereto, or any of the other Loan Documents, including, without limitation, future disbursements, principal, interest, indemnities, fees, late charges, Enforcement Costs, and other costs and costs and expenses, whether direct, contingent, joint, several, matured or unmatured, whether from time to time reduced and thereafter increased, or entirely extinguished and thereafter reincurred, together with all extensions, renewals and replacements thereof.

 

“Operative Documents” means, collectively, the Organizational Documents (including the Tax Equity Documents), the ECCA, the Project Documents and the LLCA.

 

6

 

 

“Organizational Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Permit” means all permits, licenses, approvals and authorizations of any Governmental Authority.

 

“Permitted Equity Encumbrance” means, with respect to any entity (a) those restrictions on transfer or ownership imposed by applicable securities laws and (b) restrictions imposed on transfer or ownership set forth in the applicable governing documents of such entity.

 

“Permitted Liens” means (a) the rights and interests of the Lender created by this Agreement and the other Loan Documents; (b) Liens for any Tax, assessment or other governmental charge not yet due or that are being contested in good faith by appropriate proceedings, so long as reserves have been established in accordance with GAAP, as the jurisdiction requires, in an amount sufficient so that any Taxes, assessments, accrued interest thereon or other charges or fees determined to be due may be promptly paid in full when such contest is determined, or other adequate provision for payment thereof shall have been made, and such amounts are promptly paid when due after resolution of such contest if required by such resolution; (c) materialmen’s, mechanics’, workers’, repairmen’s, employees’ or other like Liens, arising in the ordinary course of business for amounts not yet due or for amounts being contested in good faith and by appropriate proceedings so long as a bond or other security reasonably satisfactory to the Lender has been posted or provided in such manner and amount reasonably satisfactory to the Lender so as to ensure that any amount determined to be due will be promptly paid in full when such contest is determined, and such amounts are promptly paid when due after resolution of such contest if required by such resolution; (d) exceptions to title with respect to any real property interest of a Project Company that does not interfere in any material respect, in the Lender’s reasonable judgment (for the avoidance of doubt, any such exception included in a title commitment approved by the Lender shall be considered approved), with Borrower’s ability to own and operate the Solar Projects in the ordinary course of business; (e) Liens, deposits or pledges to secure statutory obligations or performance of bids, tenders, contracts (other than for the repayment of Indebtedness or as covered under clause (c) of this definition) or leases, incurred in the ordinary course of business, not to exceed Fifty Thousand Dollars ($50,000) in the aggregate at any time; (f) Liens arising out of judgments or awards so long as an appeal or proceeding for review is being prosecuted in good faith and for the payment of which cash reserves, bonds or other security (in the case of any such other security, in form and substance reasonably acceptable to the Lender) have been provided or are fully covered by insurance; (g) involuntary liens created by the Project Documents which are junior to the Lien of the Loan Documents, in an aggregate sum of less than Twenty Five Thousand Dollars ($25,000), and which the Borrower is contesting in good faith by appropriate proceedings; (h) any other Lien not described in clauses (a) through (g) above so long as any such Liens (1) shall not have been voluntarily granted by the Borrower, (2) shall be for an amount not to exceed Twenty Five Thousand Dollars ($25,000) in the aggregate at any time, and (3) are being contested in good faith and are vacated, discharged, stayed or bonded pending appeal within thirty (30) days after the creation thereof; (i) Liens on the Class B Membership Interests in NC-31 Sponsor Partner and NC-47 Sponsor Partner created pursuant to the MIPA and (j) Liens on the membership interests in VivoPower (USA) Development LLC, a Delaware limited liability company as described on Schedule 1.1. With respect to assets consisting of Equity Interests, only the items included in clause (a) and, if applicable, clause (i) and (j) shall be Permitted Liens.

 

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“Person” means any individual, trustee, corporation, general partnership, limited partnership, limited liability company, limited liability limited partnership, joint stock company, trust, unincorporated organization, bank, business association, firm, joint venture or Governmental Authority.

 

“Pledge Agreement” the Pledge Agreement dated of even date herewith, executed by and between Borrower and the Lender, together with all Supplements thereto.

 

“Proceeds” means collectively, Casualty Insurance Proceeds, any refunded interconnection deposits or other refunds of deposits under any Project Document, any termination payments received under the Project Documents, and any payments received from permitted sales pursuant to Section 5.5.

 

“Project Companies” has the meaning given to such term in the Recitals to this Agreement.

 

“Project Documents” means, collectively, each Material Project Document and any Additional Project Document executed after the Effective Date, together with any and all other material contracts to which the Borrower is a party or of which the Borrower is a beneficiary, relating to the development, design, construction, installation, maintenance, ownership, operation sale or delivery of the Solar Projects, together with all Supplements thereto.

 

“Project Entities” means Vivo NC-31, NC-31 Sponsor Partner, NC-31 Sponsor, NC-31 TE Partnership, NC-31 Project Company, Vivo NC-47, NC-47 Sponsor Partner, NC-47 Sponsor, NC-47 TE Partnership, and NC-47 Project Company.

 

“Security Agreement” means the Security Agreements dated of even date herewith, executed by each of Vivo NC-31 and Vivo-NC-47 and the Lender, together with all Supplements thereto.

 

“Security Documents” means the Pledge Agreement, Security Agreements, the Deposit Account Control Agreement (if applicable), any financing statements or other similar documents filed, recorded or delivered in connection with the foregoing, and any other instrument, document or agreement granting or otherwise relating to a security interest in the Collateral.

 

“Solar Projects” has the meaning given to such term in the Recitals to this Agreement.

 

“Solvent” with respect to any Person as of any date of determination, means that on such date (a) the present fair salable value of the property and assets of such Person exceeds the debts and liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the property and assets of such Person is greater than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities, including contingent liabilities, as such debts and other liabilities become absolute and matured, (c) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts and liabilities, including contingent liabilities, beyond its ability to pay such debts and liabilities as they become absolute and matured, and (d) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

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“Subsidiary” as to any Person, means any corporation, partnership, limited liability company, joint venture, trust or estate in which more than 10% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class of such corporation may have voting power upon the happening of a contingency), (b) the interest in the capital or profits of such partnership, limited liability company, or joint venture or (c) the beneficial interest in such trust or estate, in each case, is at the time directly or indirectly owned or controlled through one or more intermediaries, or both, by such Person.

 

“Supplement” or “Supplements” means any and all extensions, renewals, modifications, amendments, restatements, consents, supplements and substitutions.

 

“Tax Equity Documents” has the meaning defined in the ECCA.

 

“Taxes” means any and all present or future income, stamp or other taxes, levies, imposts, duties, charges, fees or withholdings (including backup withholding), in each case in the nature of a tax, imposed by any Governmental Authority, together with any interest, additions to tax or penalties imposed thereon and with respect thereto.

 

“Uniform Commercial Code” or “UCC” means, as applicable, the Uniform Commercial Code of the jurisdiction the law of which governs the document in which such term is used or which governs the creation or perfection of the Liens granted thereunder.

 

1.2.     Rules of Interpretation.

 

(a)     The singular includes the plural and the plural includes the singular.

 

(b)     The word “or” is not exclusive.

 

(c)     A reference to any Applicable Law includes any amendment or modification to such Applicable Law, and all regulations, rulings and other Applicable Laws promulgated under such Applicable Law.

 

(d)     A reference to a Person includes its successors and permitted assigns.

 

(e)     Accounting terms have the meanings assigned to them by GAAP, as applied by the accounting entity to which they refer.

 

(f)     The words “include,” “includes” and “including” are not limiting.

 

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(g)    A reference in a document to an Article, Section, Exhibit, Schedule, Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex or Appendix of such document unless otherwise indicated. Exhibits, Schedules, Annexes or Appendices to any document shall be deemed incorporated by reference in such document.

 

(h)    References to or definitions of any document, instrument or agreement (i) shall include all exhibits, schedules and other attachments thereto, (ii) shall include all documents, instruments or agreements issued or executed in replacement thereof, and (iii) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time (to the extent permitted under the Loan Documents) and in effect at any given time.

 

(i)     The words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document.

 

(j)     References to “days” shall mean calendar days, unless the term “Business Days” shall be used. References to a time of day shall mean such time in New York, New York, unless otherwise specified.

 

(k)    The Loan Documents are the result of negotiations between, and have been reviewed by Borrower, Lender and their respective counsel. Accordingly, the Loan Documents shall be deemed to be the product of all parties thereto, and no ambiguity shall be construed in favor of or against Borrower or Lender.

 

(l)     The words “will” and “shall” shall be construed to have the same meaning and effect.

 

(m)    The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

Section 2.     The Loan.

 

2.1.     The Loan. Subject to the terms and conditions of this Agreement and relying upon the representations and warranties herein set forth, the Lender agrees to make a loan (the “Loan”) to the Borrower in the principal amount of up to the Maximum Loan Amount pursuant to the Initial Disbursement and the Final Disbursement as requested by the Borrower in writing in accordance with Section 2.7; provided that the Lender shall not be required to make any Disbursement on or after the Maturity Date. The Loan Proceeds, after paying legal and other closing costs associated with the Loan, will be disbursed to Borrower according to Borrower’s wire instructions provided to Lender.

 

2.2.     Interest. The outstanding principal balance of the Loan shall bear interest at a fixed rate of twelve percent (12%) per annum applied on a pro rata monthly basis to the principal amount of the Loan, payable no later than the Maturity Date.

 

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2.3.     Conditions Precedent to Initial Disbursement of Loan Proceeds. The obligation of Lender to disburse the initial Loan Proceeds in an amount equal to the sum of (x) Two Million Four Hundred Thousand Dollars ($2,400,000) plus (y) the costs and expenses to be paid pursuant to Section 2.3(j) as set forth on the agreed funds flow (such sum, the “Initial Disbursement”) is subject to the satisfaction (or waiver by Lender) of the following conditions in a manner acceptable to the Lender on or before June 30, 2018:

 

(a)     Loan Documents. The Lender shall have received fully executed and, if applicable, properly notarized original copies of the Loan Documents in form and substance acceptable to the Lender in its sole discretion.

 

(b)     Representations and Warranties. All representations and warranties made in this Agreement and the other Loan Documents are true, correct and complete in all material respects on and as of the date of the Disbursement.

 

(c)     Default or Event of Default. No Event of Default or Default shall have occurred and be continuing under any of the Loan Documents.

 

(d)    Material Adverse Effect. No event or circumstance having a Material Adverse Effect shall have occurred since the date of the financial statements delivered to the Lender.

 

(e)     Liens, Searches. The Lender shall have received lien, litigation and bankruptcy searches which evidence that all Collateral is free and clear of all Liens other than Permitted Liens and Liens evidencing the Indebtedness referred to in Section 2.3(i) , and that the Borrower and the Project Entities and all assets of the Borrower and Project Entities are not subject to any bankruptcy or insolvency proceeding or any litigation.

 

(f)     Financial Statements. The Lender shall have received and approved unaudited financial statements of the Borrower for the year ended December 31, 2017 and the quarter ended March 31, 2018 establishing that there has been no material adverse change in the financial condition of such parties since the date of the most recent financial statements provided to the Lender.

 

(g)    Delivery of Collateral. The Lender shall have received the original certificated Equity Interests for all applicable Collateral.

 

(h)    UCC Filings. All applicable UCC-1 Financing Statements necessary to perfect the Collateral shall be in appropriate form for recording by the Lender in the appropriate recording offices.

 

(i)    Payment of Debt to SolarTide, LLC. Borrower shall have paid all outstanding Indebtedness to SolarTide, LLC (which payment may be made from proceeds of the Initial Disbursement), evidenced by a payoff letter from SolarTide, LLC and a UCC-3 termination statement in form and substance reasonably acceptable to Lender.

 

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(j)       Payment of Loan Expenses. Borrower shall have paid to the Lender the amount of all invoiced legal and other closing costs and expenses associated with the Loan (which payment may be made from proceeds of the Initial Disbursement).

 

(k)     Closing Certificate. The Lender shall have received, in form and substance satisfactory to it, a certificate of Borrower, certified by an authorized representative of Borrower, including (i) the Organizational Documents of Borrower, (ii) resolutions of the board of directors (or other relevant governing body) of Borrower approving the transaction and each Loan Document, (iii) an incumbency certification, and (iv) a good standing certificate from the Secretary of State of Delaware with respect to the Borrower. The Closing Certificate for the Borrower shall also include all Organizational Documents for Vivo NC-31 and Vivo NC-47.

 

2.4.     Conditions Precedent to Final Disbursements of Loan Proceeds. The obligation of Lender to disburse the final Loan Proceeds in an amount equal to the sum of (x) the Maximum Loan Amount less (y) the amount of the Initial Disbursement (the “Final Disbursement”) is subject to the satisfaction (or waiver by Lender) of the following conditions in a manner acceptable to Lender on or before June 30, 2018 (unless the condition to Section 2.4(b) has not been satisfied, in which case such outside date shall be extended day-for-day until the satisfaction of Section 2.4(b)):

 

(a)     The conditions precedent to the Initial Disbursement as set forth in Section 2.3 shall remain satisfied (including, without limitation, those identified in paragraphs (a) through (d) thereof).

 

(b)     Lender, or an Affiliate thereof, shall have closed on its corporate credit facility from KeyBank National Association.

 

2.5.     Waivers of Conditions Precedent. The failure of the Lender to insist upon strict performance of the requirements for any disbursement shall not be deemed a waiver of the Lender’s right to later insist upon strict compliance with such requirements for any subsequent disbursement.

 

2.6.     The Loan Ledger. The Lender will maintain on its books a loan ledger (the “Loan Ledger”) with respect to payments of the Loan, the accrual and payment of interest on the Loan and all other amounts and charges owing to the Lender in connection with the Loan. Except for manifest error, the Loan Ledger shall be conclusive as to all amounts owing by the Borrower to the Lender in connection with and on account of the Loan; provided that neither the failure to make any such notation nor any error in such notation shall affect the validity of Borrower’s obligations to repay the full unpaid principal amount of the Loan or the other obligations of Borrower hereunder.

 

2.7.     Disbursement Procedure.    

 

(a)     Subject to the terms and conditions set forth herein (including the satisfaction of the applicable conditions precedent set forth in Sections ☒2.3 and 2.4 and any additional conditions set forth in this Agreement or any of the other Loan Documents, the Borrower may request a Disbursement of the Loan (in the amounts of the Initial Disbursement or Final Disbursement, as applicable) by delivering to the Lender up to five (5) Business Days (or such shorter period as Lender may agree) prior to the proposed date of Disbursement, a Disbursement request in form and substance satisfactory to the Lender; provided, that the Initial Disbursement may be disbursed on the date of this Agreement without the requirement for such notice.

 

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(b)     Provided that all of the conditions precedent set forth in Section 2.3 and 2.4 have been satisfied as well as and any additional conditions set forth in this Agreement or any of the other Loan Documents (as applicable), the Lender shall make the Final Disbursement not later than the fifth (5th) Business Day following the Lender’s receipt of the Disbursement request (or such shorter period as Lender may agree).

 

(c)     If at any time after the delivery of the Disbursement request, the Lender becomes aware that any condition to the Disbursement was not satisfied or has ceased to be satisfied, then the Lender may, by notice to the Borrower, cancel the Disbursement.

 

2.8.     Prepayments. The Borrower shall have the right to prepay the Loan in whole only, without premium or penalty, which such prepayment will require the payment by the Borrower to the Lender of the total outstanding principal of the Loan in full.

 

2.9.     Loan Payments. Whenever any payment to be made by the Borrower under the provisions of this Agreement is due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, in the case of any payment which bears interest, such extension of time shall be included in computing interest on such payment. All payments of principal, interest, fees or other amounts to be made by the Borrower under the provisions of this Agreement shall be paid without deduction, set-off or counterclaim to the Lender at the Lender’s office specified in Section 8.3 hereof or at such other place as the Lender may designate in writing to the Borrower, in lawful money of the United States of America in immediately available funds. Except as otherwise expressly provided herein or in the other Loan Documents, payments made by Borrower under this Agreement or the other Loan Documents shall first be applied to any expenses and Enforcement Costs, next to any accrued but unpaid interest then due and owing, and then to outstanding principal then due and owing or otherwise to be prepaid.

 

2.10.     Taxes. Except to the extent otherwise provided in this Agreement, any and all payments to or for the benefit of the Lender by Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction, setoff or counterclaim of any kind whatsoever on account of any present or future taxes, levies, imposts, deductions, charges or withholdings imposed by the United States of America or any political subdivision thereof arising from or relating to the Loans made under this Agreement and all liabilities with respect thereto.

 

Section 3.     Representations and Warranties. The Borrower represents and warrants to the Lender that the following statements are true, correct and complete as of the Effective Date and the date of any Disbursement of Loan Proceeds hereunder:

 

3.1.     Existence; Compliance With Laws. Borrower and each Project Entity (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (b) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification and (c) is in compliance with all Applicable Laws excepting non-compliance that could not reasonably be expected to result in a Material Adverse Effect.

 

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3.2.     Power; Authorization; Enforceability.

 

(a)     Borrower has the power and authority, and the legal right, to own or lease and operate its property, to carry on its business as now conducted and as proposed to be conducted, and to execute, deliver and perform the Loan Documents to which it is a party and to obtain the Loan hereunder. Borrower has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and to authorize the borrowing of Loan on the terms and conditions contained herein. No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in connection with the extensions of credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan Documents, except corporate and other organizational approvals, which approvals have been obtained and are in full force and effect and true and correct copies of which have provided to Lender. Each Loan Document has been duly executed and delivered by Borrower or each Project Entity which is a party thereto.

 

(b)     Each Loan Document to which Borrower is a party when delivered hereunder will constitute, a legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

 

3.3.     No Contravention. The execution, delivery and performance of this Agreement and the other Loan Documents by the Borrower, the borrowing of the Loan hereunder and the use of the Loan Proceeds thereof will not violate any Applicable Law or any Organizational Document or Contractual Obligation of Borrower or any Project Entity and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or assets pursuant to any Applicable Law or any such Organizational Document or Contractual Obligation (other than the Liens created by the Loan Documents). No Applicable Law, Organizational Document or Contractual Obligation applicable to any Loan Party or any Project Entity could reasonably be expected to have a Material Adverse Effect.

 

3.4.     Financial Statements.

 

(a)     All financial statements of Borrower delivered to the Lender were prepared in accordance with GAAP or IFRS, as the jurisdiction requires, and fairly present in all material respects the financial condition of Borrower as of the respective dates thereof, subject in the case of the unaudited financial statements to changes resulting from audit and normal-year adjustments and except that the unaudited financial statements may not contain all footnotes required by generally accepted accounting principles.

 

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(b)     Neither the Borrower nor any Project Entity has any Indebtedness or material liabilities other than (i) as reflected on or disclosed in such financial statements, (ii) obligations to fund major maintenance reserves with respect to the Solar Projects as agreed between Borrower and Lender, (iii) as described on Schedule 1.1 and (iv) those incurred pursuant to any of the Operative Documents or otherwise expressly permitted by the provisions of this Agreement.

 

3.5.     Solvency. The Borrower is, and after giving effect to the incurrence of all Indebtedness and Obligations incurred in connection herewith will be, Solvent.

 

3.6.     No Event of Default. No default or event of default has occurred and is continuing and no default has occurred and is continuing under or with respect to any Contractual Obligation of the Borrower or any Project Entity that could reasonably be expected to have a Material Adverse Effect.

 

3.7.    Sole Business; No Employees. The ownership, development, construction and operation of the Solar Projects is and has always been the Project Entities’ sole business. The ownership, development, construction and operation of solar photovoltaic facilities in the United States is and has always been the Borrower’s solar business. No Project Entity is a party to or bound by any material Contractual Obligation other than the Operative Documents to which it is a party. No Project Entity has any employees.

 

3.8.    Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the Borrower's knowledge after reasonable investigation, threatened in writing, at law, in equity, in arbitration or before any Governmental Authority, by or against Borrower, or against any of its properties or revenues that (a) as of the Effective Date, purport to affect or pertain to the Solar Projects or any Project Document, or (b) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby or thereby, or (c) either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect.

 

3.9.     Equity Interests/Subsidiaries. The Borrower is the beneficial owner, directly or indirectly, of all of the outstanding Equity Interests of Vivo NC-31 and Vivo NC-47 free and clear of all Liens other than Permitted Liens and Permitted Equity Encumbrances. All of the outstanding Equity Interests in Vivo NC-31 and Vivo NC-47 have been validly issued, are fully paid and non-assessable.

 

3.10.    Accounts. Schedule 3.10 sets forth Borrower’s accounts.

 

3.11.    Labor Disputes and Acts of God. Neither the business nor the properties of Borrower (or, to the knowledge of the Borrower, any Material Project Counterparty) is affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, volcano, earthquake, embargo, act of God, or of the public enemy, or other casualty or force majeure event (whether or not covered by insurance), which could reasonably be expected to have a Material Adverse Effect.

 

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3.12.     Security Documents. The Security Documents create in favor of the Lender legal, valid, continuing and enforceable security interests in the Collateral, the enforceability of which is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. Upon the proper filing of financing statements in appropriate form in the applicable offices in accordance with the Security Agreements and Pledge Agreement and/or the obtaining of “control” (as defined in the Uniform Commercial Code), the Lender will have a perfected Lien on, and security interest in, to and under all right, title and interest of the grantors thereunder in all Collateral that may be perfected by filing, recording or registering a financing statement or analogous document (including without limitation the proceeds of such Collateral subject to the limitations relating to such proceeds in the Uniform Commercial Code) or by obtaining control, under the Uniform Commercial Code (in effect on the date this representation is made) in each case prior and superior in right to any other Person, except for Liens permitted under Section 5.2.

 

3.13.      Operative Documents. Any representations and warranties made by Borrower and the Project Entities in the ECCA and LLCA are true, correct and complete (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

 

Section 4.     Affirmative Covenants. The Borrower covenants and agrees that so long as any of the Obligations (other than indemnity obligations that survive the termination of the Agreement) remain outstanding, the Borrower shall (subject to the consent rights of the applicable equity holders pursuant to the LLCA and the Holding Company Operating Agreement), and shall cause each of the Project Entities to:

 

4.1.     Conduct of Business and Maintenance of Existence. Continue to engage in business of the same general type as now being conducted by it and now proposed to be conducted by it, and do and cause to be done all things necessary to maintain and keep in full force and effect its existence in good standing in its jurisdiction of formation and qualified to do business in each jurisdiction in which the conduct of its business requires such qualification and at all times hold itself out to the public as a legal entity separate and distinct from any other entity (including any Affiliate of Borrower). The Project Entities shall engage only in the business contemplated by the Operative Documents.

 

4.2.     Compliance with Laws. Comply in all material respects with all Applicable Laws and Permits to which Borrower, any Project Entity or any Solar Project are subject.

 

4.3.     Payment of Liabilities and Taxes. Pay, when due, all of its material Indebtedness and liabilities, all utility and other charges incurred in the construction, operation, maintenance, use, occupancy and upkeep of the Solar Projects, and all assessments and charges lawfully made by any Governmental Authority for public improvements that may be secured by a Lien on the properties of the Borrower, any Project Entity or the Solar Projects, and timely file all Tax returns and pay and discharge promptly all material Taxes imposed upon the Borrower or any Project Entity or upon such party’s income, profits or property, except to the extent the amount or validity thereof is contested in good faith by appropriate proceedings so long as adequate cash reserves have been set aside therefor.

 

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4.4.     Contractual Obligations. Comply in all material respects with each Operative Document and any other Contractual Obligation to which the Borrower or any Project Entity is a party.

 

4.5.     Use of Loan Proceeds. Except as otherwise expressly required or permitted by this Agreement, the Loan Proceeds shall only be used to fund costs and expenses incurred in connection with the Loan, to repay existing Indebtedness and for general corporate and working capital purposes of VivoPower International PLC and its subsidiaries.

 

4.6.     Enforcement of Project Documents and Tax Equity Documents. Enforce its material rights under each Project Document and Tax Equity Document to which Borrower or any Project Entity is a party in accordance with its terms and, upon such request of the Lender, make to each other party to each Project Document and Tax Equity Document such demands and requests for information and reports or for action as the Borrower or Project Entity is entitled to make under such Project Document and Tax Equity Document.

 

4.7.     Deposits into Controlled Account. In the event that Federal Energy Regulatory Commission approval has not been received for the Class B Acquisition within sixty (60) days of the Initial Disbursement or if an Event of Default has occurred and is continuing, Borrower shall, within five (5) Business Days of a request by Lender, provide Lender with evidence that Borrower has a dedicated bank account for all Distributions, and Borrower shall further provide Lender with a Deposit Account Control Agreement for such account in form and substance reasonably acceptable to Lender. Thereafter, Borrower shall cause all Distributions to be deposited into such controlled account.

 

4.8.     Inspection. Permit the Lender, by its representatives and agents, to inspect the Solar Projects and any of the properties, books and financial records of Borrower (to the extent relating to the Project Entities and the Loan) and any Project Entity, to examine and make copies of the books of accounts and other financial records of Borrower (to the extent relating to the Project Entities and the Loan) and any Project Entity, and to discuss the affairs, finances and accounts of Borrower and any Project Entity, and to be advised as to the same by Borrower and any Project Entity (or its representatives) at such reasonable times and intervals as the Lender may designate; provided, that so long as no Default or Event of Default shall have occurred and be continuing, such inspection shall occur during reasonable business hours and after providing advance notice to Borrower or such Project Entity, in each case subject to customary confidentiality procedures protecting against disclosure of the confidential information of Borrower and its Affiliates. In connection with the foregoing, the Lender and its representatives and agents, at the expense of the Borrower, shall have the right to (a) enter any premises where the Collateral and the records relating thereto may be located and to audit, appraise, examine and inspect the Collateral and all records related thereto and to make extracts therefrom and copies thereof, and (b) verify under reasonable procedures the validity, amount, quality, quantity, value and condition of, and any other matter relating to, the Collateral, including contacting account debtors or any Person possessing any of the Collateral.

 

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4.9.     Further Assurances. Promptly upon the request of the Lender:

 

(a)     Correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgement, filing or recordation thereof; and

 

(b)     Do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, assignments, financing statements and continuations thereof, termination statements, notices of assignments, transfers, certificates, assurances and other instruments as the Lender may reasonably require from time to time in order to:

 

(i)     carry out more effectively the purposes of the Loan Documents;

 

(ii)     to the fullest extent permitted by Applicable Law, subject any Collateral to the Liens now or hereafter intended to be created under the Security Documents;

 

(iii)     perfect and maintain the validity, effectiveness and priority of the Liens intended to be created under the Security Documents; and

 

(iv)     assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively to the Lender, the rights granted or now or hereafter intended to be granted to the Lender under any Loan Document or under any other instruments executed in connection with any Loan Document to which Borrower is or is to be a party.

 

Section 5.     Negative Covenants. The Borrower covenants and agrees that so long as any of the Obligations (other than indemnity obligations that survive termination of this Agreement) remain outstanding, the Borrower shall not, and shall cause (subject to the consent rights of the applicable equity holders pursuant to the LLCA and the Holding Company Operating Agreement) each of the Project Entities to not directly or indirectly:

 

5.1.     Indebtedness. Create, incur, assume or permit to exist any Indebtedness except (a) the Obligations and any Indebtedness to the Lender, (b) trade or other similar Indebtedness incurred in the ordinary course of operating the Solar Projects or the Business of Borrower in accordance with the terms of this Agreement and not more than ninety (90) days past due, (c) Indebtedness incurred by the endorsement of negotiable instruments for deposit or collection in the ordinary course of business, (d) any Indebtedness which is immediately used to repay the Obligations in full, (e) vehicle financing leases not in excess of $25,000 and (f) any Indebtedness, other than what will be paid with the Loan proceeds, reflected on the financial statements of the Borrower as of the date of this Agreement, so long as such unsecured Indebtedness is subordinated to the Loans and any secured Indebtedness is subordinated to the Loans on terms reasonably acceptable to the Lender.

 

5.2.    Liens. Create, incur, assume or permit to exist any Lien on any of its property or assets, both now owned and hereafter acquired and including, without limitation, the Collateral, except for Permitted Liens, Permitted Equity Encumbrances or Liens arising out of the Operative Documents.

 

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5.3.     Distributions. Except for (a) distributions made as required under the LLCA and the Holding Company Operating Agreement, (b) distributions and dividends made to the Borrower or any Project Entity, or (c) distributions of the Loan Proceeds for use in accordance with Section 4.5, declare or pay any dividend or distribution (whether in cash, securities or other property) with respect to any Equity Interests in, or subordinated Indebtedness of, the Borrower or any Project Entity, or make any payment (whether in cash, securities or other property) including any sinking fund or similar deposit, on account of the purchase, redemption, defeasance, retirement, acquisition, cancellation or termination of any such Equity Interest in, or subordinated Indebtedness of, the Borrower or any Project Entity or of any option, warrant or other right to acquire any such Equity Interest in, or subordinated Indebtedness of, the Borrower or any Project Entity, or make any tax distributions.

 

5.4.     Limitations on Restrictive Agreements. Except with respect to the LLCA and the Holding Company Operating Agreement, enter into or permit to exist or become effective any consensual encumbrance or restriction on the ability of the Borrower or any Project Entity to declare or pay any dividend or distribution (whether in cash, securities or other property) with respect to any Equity Interests of the Borrower or such Project Entity, or make any payment (whether in cash, securities or other property) for the redemption, acquisition, or cancellation of any such Equity Interest.

 

5.5.     Sale of Assets. Sell, convey, license, transfer, assign, lease, abandon or otherwise dispose of (including in a sale and leaseback transaction) any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible including, without limitation, the Collateral, except for (a) sales or dispositions by the Borrower at fair market value the proceeds of which are used repay the Loan and (b) sales or dispositions by the Project Entities in the ordinary course of business at fair market value.

 

5.6.     Transfer of Interests. Cause, make, suffer, permit or consent to any creation, sale, assignment or transfer of any ownership interest or other interest in the Borrower or any Project Entity, except as required under the LLCA and the Holding Company Operating Agreement, or as expressly permitted under this Agreement or otherwise permitted by the Lender.

 

5.7.     Loans; Investments; Etc. Other than (x) existing investments in and ownership of the Project Entities and the other Persons in which Borrower holds a direct or indirect interest on the Effective Date and the application of working capital of the Borrower (including cash received from equity owners of the Borrower and distributions received from Subsidiaries of the Borrower) to fund such investments and such Persons, (y) as required by Operative Documents and (z) use of the Loan Proceeds in accordance with Section 4.5, make or permit to remain outstanding any loan, advance, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase or own any Equity Interests, bonds, notes, debentures or other debt securities of or make any other investment in, any Person or enter into any partnership, limited liability company or joint venture in any other Person (all of the foregoing, “Investments”).

 

5.8.     Fundamental Changes. Merge, consolidate, or combine with any other Person or wind-up, dissolve, liquidate or change its legal form, sell or lease or otherwise transfer or dispose of all or any substantial part of the property, assets or business of or purchase or otherwise acquire substantially all of the assets of any Person.

 

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5.9.     Change of Business; Use of Site. (a) Change the nature of its business or expand its business beyond the business described herein or contemplated in the Operative Documents, (b) with respect to the Project Entities only, acquire, own, lease or license any assets other than the Solar Projects and assets necessary or incidental to the operation of the Solar Projects as contemplated by the Operative Documents, or (c) use the site of the Solar Projects for any purpose other than as necessary for or incidental to the development, construction, use, ownership, maintenance or operation of the Solar Projects as contemplated by the Operative Documents.

 

5.10.     Modification of Organizational Documents; Material Consents. Without the prior written consent of the Lender, enter into any Supplement to or terminate any of its Organizational Documents, or waive any material provisions thereof or grant any material consents thereunder.

 

5.11.     Affiliates. Without the prior written consent of the Lender, make any payment to or enter into or participate in any transaction with an Affiliate, unless such transaction is (a) pursuant to an Operative Document or (b) otherwise permitted by the terms of this Agreement and the Operative Documents.

 

5.12.     Accounts. Maintain any deposit accounts, securities accounts or similar accounts, other than those set forth on Schedule 3.10.

 

5.13.     Loan Proceeds. Directly or indirectly use, pay, transfer, distribute or dispose of any Loan Proceeds in any manner or for any purposes except as provided in Section 4.5 hereof.

 

5.14.     Contingent Liabilities. Except as permitted under in this Agreement, become liable as a surety, guarantor, accommodation endorser or otherwise, for or upon the obligation of any other Person or otherwise create, incur, assume or suffer to exist any contingent obligation; provided, however, that this Section 5.14 shall not be deemed to prohibit (a) the acquisition of goods, supplies or merchandise in the normal course of developing, constructing and operating the Solar Projects or the business of Borrower on normal trade credit; (b) the endorsement of negotiable instruments received in the normal course of developing, constructing and operating the Solar Projects; (c) contingent liabilities required under any Permit or Operative Document; or (d) Indebtedness permitted pursuant to Section 5.1.

 

5.15.     Name and Location; Fiscal Year. (a) Unless thirty (30) days’ notice in writing is delivered to the Lender, change its name, its jurisdiction of organization, its organization identification number, federal identification number, the location of its chief executive office, or its principal place of business, or (b) change its fiscal year without the written consent of the Lender which consent shall not be unreasonably withheld.

 

Section 6.     Events of Default. The term “Event of Default” shall mean, whenever it is used in this Agreement, any one or more of the following events (and the term “Default” whenever it is used herein, means any one or more of the following events, whether or not any requirement for the giving of notice, the lapse of time, or both has been satisfied):

 

6.1.     Payment of Obligations. The failure of Borrower to pay, in accordance with the terms of this Agreement, (i) any principal on the Loan on the date that such sum is due; (ii) any interest or fee due and owing to Lender within five (5) days after the date that such sum is due; or (iii) any other amount, cost, charge or other sum due under this Agreement or any other Loan Document within ten (10) days after the date that such sum is due.

 

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6.2.     Failure to Perform Provisions of Loan Documents.

 

(a)     The failure of the Borrower to perform, observe or comply with Section 4.1 (Conduct of Business and Maintenance of Existence), Section 4.5 (Use of Loan Proceeds) and Section 4.7 (Deposits into Controlled Account) and Section 5 (Negative Covenants) of this Agreement.

 

(b)     The failure of the Borrower to perform, observe or comply with any of the provisions of this Agreement or the Loan Documents, other than those covered by Sections 6.1 and 6.2(a) above, and such failure is not cured to the satisfaction of the Lender within a period of thirty (30) days after (x) the date of written notice thereof by the Lender to the Borrower or (y) the date the Borrower becomes aware thereof, unless the nature of such failure is such that (i) it can be cured, but cannot be cured within the thirty (30) day period, (ii) the Borrower institutes corrective action within the thirty (30) day period, (iii) the Borrower diligently pursues such action, (iv) the existence of such failure has not had a Material Adverse Effect and could not, after considering the nature of the cure, be reasonably expected to have any Material Adverse Effect as determined by the Lender in its sole discretion, and (v) such failure is cured to the satisfaction of the Lender within a period of sixty (60) days after the date of such written notice or the date the Borrower becomes aware thereof.

 

(c)     Borrower shall have failed, or shall have permitted any of its Affiliates to fail, to pursue its rights and remedies under a Material Project Document with an Affiliate of Borrower upon a breach by the applicable Affiliate of the terms thereof, and such failure shall continue un-remedied for a period of ten (10) Business Days.

 

6.3.    Representations and Warranties. If any representation or warranty of Borrower contained herein or in any other Loan Document or any statement or representation made in any certificate by Borrower pursuant to this Agreement or any of the other Loan Documents shall prove to be false, incorrect or misleading in any material respect on the date as of which made.

 

6.4.     Default under Other Indebtedness. If Borrower or any Project Entity shall default (a) in any payment of any Indebtedness owing to any Person (other than the Lender with respect to the Obligations under the Loan Documents) in an aggregate principal amount in excess of Fifty Thousand Dollars ($50,000), in each case, beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created, or (b) in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur the effect of which default or other event is to cause or to permit the holder of such Indebtedness to cause, with the giving of notice, if required, such Indebtedness to become due prior to its stated maturity, except to the extent the amount or validity of any such Indebtedness owing to any Person other than the Lender is contested in good faith by appropriate proceedings, so long as adequate reserves have been set aside therefor.

 

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6.5.     Liquidation, Termination, Dissolution, Etc. Borrower or any Project Entity shall liquidate, dissolve or terminate its existence.

 

6.6.     Bankruptcy. A Bankruptcy Event shall occur with respect to Borrower or any Project Entity (a “Bankruptcy Event of Default”).

 

6.7.     Judgments. One or more judgments or decrees (i) shall be entered against any Borrower or any Project Entity involving in the aggregate a liability in excess of Fifty Thousand Dollars ($50,000), and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within thirty (30) days after the entry thereof, or (ii) such judgment or decree would reasonably be expected to materially impair or inhibit the construction of the Solar Projects or the Project Company’s use of the Solar Projects for the purpose for which the Solar Projects were intended (other than (x) a judgment or decree which is fully covered by insurance, bond or other security or satisfied in full or (y) a judgment or decree the execution of which is effectively stayed).

 

6.8.     Material Adverse Effect. The occurrence of any Material Adverse Effect.

 

Section 7.     Rights and Remedies.

 

7.1.     Rights and Remedies. If any Event of Default shall occur and be continuing, the Lender may refuse to make any additional disbursements of Loan Proceeds, and may declare the unpaid principal amount of the Loan together with accrued and unpaid interest thereon and any other Obligations then outstanding to be immediately due and payable, whereupon the same shall become and be forthwith due and payable by the Borrower to the Lender, without presentment, demand, protest or further notice of any kind, all of which are expressly waived by the Borrower; provided, that, in the case of any Bankruptcy Event of Default, the unpaid principal amount of the Loan, together with accrued and unpaid interest thereon and all other Obligations then outstanding shall be automatically and immediately due and payable by the Borrower to the Lender without notice, presentment, demand, protest or other action of any kind, all of which are expressly waived by the Borrower. Upon the occurrence and during the continuation of any Event of Default, then in each and every case, the Lender shall be entitled to exercise in any jurisdiction in which enforcement thereof is sought, all rights and remedies available to the Lender under the other provisions of this Agreement and the other Loan Documents, the rights and remedies of a secured party under the Uniform Commercial Code with respect to the Collateral and all other rights and remedies available to the Lender under Applicable Law, all such rights and remedies being cumulative and enforceable alternatively, successively or concurrently.

 

7.2.     Remedies Under Loan Documents.

 

(a)     If any Event of Default shall occur and be continuing, without being limited by any of the foregoing, Lender may exercise any and all rights and remedies available to it under any of the Loan Documents, including judicial or non-judicial foreclosure or public or private sale of any of the Collateral, and including the right to enforce the rights and remedies of any Project Entity pursuant to any Material Project Document.

 

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(b)     If any Default shall occur and be continuing, without being limited by any of the foregoing, Lender may exercise exclusive control over a controlled account created by any Deposit Account Control Agreement, and shall be and hereby is authorized to take all steps reasonably necessary and incidental to the exercise of such controlled account.

 

7.3.     Interest on Late Payments. Any amounts owing under this Agreement, including the outstanding principal amount of the Loan and interest owing thereon, that are not paid when due hereunder shall bear interest from the date of such Event of Default until such Event of Default has been cured to the satisfaction of the Lender, at a per annum rate equal to the lesser of (a) eighteen percent (18%), (which amount shall increase by three percent (3%) every three calendar months until such amount is paid in full) or (b) the highest rate permitted under Applicable Law, irrespective of whether or not as a result thereof, any of the Obligations have been declared due and payable or the maturity thereof accelerated. The Borrower shall on demand from time to time pay such interest to the Lender and the same shall be a part of the Obligations hereunder.

 

7.4.     Liens, Set-Off. As security for the payment and performance of the Obligations, the Borrower hereby grants to the Lender a continuing security interest and lien on, in and upon all indebtedness owing to, and all deposits (general or special), credits, balances, monies, securities and other property of, the Borrower and all proceeds thereof, both now and hereafter held or received by, in transit to, or due by, the Lender. In addition to, and without limitation of, any rights of the Lender under Applicable Laws, if any Event of Default occurs, the Lender may, to the fullest extent permitted by Applicable Law, at any time and from time to time thereafter, without notice to the Borrower, set-off, hold, segregate, appropriate and apply at any time and from time to time thereafter all such indebtedness, deposits, credits, balances (whether provisional or final and whether or not collected or available), monies, securities and other property toward the payment of all or any part of the Obligations in such order and manner as the Lender in its sole discretion may determine and whether or not the Obligations or any part thereof shall then be due or demand for payment thereof made by the Lender.

 

7.5.     Enforcement Costs. The Borrower agrees to pay to the Lender on demand all Enforcement Costs paid, incurred or advanced by or on behalf of the Lender. As used herein, the term “Enforcement Costs” shall mean and include collectively all out of pocket expenses, charges, recordation or other Taxes, costs and fees (including all reasonable fees, charges and expenses of internal or external counsel) of any nature whatsoever advanced, paid or incurred by or on behalf of the Lender in connection with the enforcement of this Agreement or the other Loan Documents, including without limitation, (i) the collection of the Obligations, (ii) the enforcement of this Agreement or any of the other Loan Documents, (iii) the creation, perfection, maintenance, preservation, defense, protection, realization upon, disposition, collection, sale or enforcement of all or any part of the Collateral, and (iv) the exercise by the Lender of any rights or remedies available to it under the provisions of this Agreement, or any of the other Loan Documents. All Enforcement Costs shall be a part of the Obligations hereunder.

 

7.6.     Application of Proceeds. Any proceeds of the collection of the Obligations and/or the sale or other disposition of the Collateral (including any Proceeds received by the Lender) will be applied by the Lender to the payment of Enforcement Costs, and any balance of such proceeds (if any) will be applied by the Lender to the payment of the remaining Obligations (whether then due or not), at such time or times and in such order and manner of application as the Lender may from time to time in its sole discretion determine. If the sale or other disposition of the Collateral fails to satisfy all of the Obligations, the Borrower shall remain liable to the Lender for any deficiency.

 

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7.7.     Remedies, Etc.; Cumulative. Each right, power and remedy of the Lender as provided for in this Agreement or in the other Loan Documents or now or hereafter existing under Applicable Laws or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or in the other Loan Documents or now or hereafter existing under Applicable Laws or otherwise, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies.

 

7.8.     No Waiver, Etc. No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of the other Loan Documents, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Lender from exercising any such right, power or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Agreement or under any of the other Loan Documents, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any of the other Loan Documents, or to declare an Event of Default for failure to effect such prompt payment of any such other amount. The payment by the Borrower or any other Person and the acceptance by the Lender of any amount due and payable under the provisions of this Agreement or the other Loan Documents at any time during which an Event of Default exists shall not in any way or manner be construed as a waiver of such Event of Default by the Lender or preclude the Lender from exercising any right of power or remedy consequent upon such Event of Default

 

Section 8.     Miscellaneous.

 

8.1.     Course of Dealing; Amendment. No course of dealing between the Lender and the Borrower shall be effective to amend, modify or change any provision of this Agreement or the other Loan Documents. The Lender shall have the right at all times to enforce the provisions of this Agreement and the other Loan Documents in strict accordance with the provisions hereof and thereof, notwithstanding any conduct or custom on the part of the Lender in refraining from so doing at any time or times. The failure of the Lender at any time or times to enforce its respective rights under such provisions, strictly in accordance with the same, shall not be construed as having created a custom in any way or manner contrary to specific provisions of this Agreement or the other Loan Documents or as having in any way or manner modified or waived the same. This Agreement and the other Loan Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Borrower.

 

8.2.     Waiver. The Lender may, at any time and from time to time, execute and deliver to the Borrower a written instrument waiving, on such terms and conditions as the Lender may specify in such written instrument, any of the requirements of this Agreement or of the other Loan Documents or any Event of Default or Default and its consequences, provided, that any such waiver shall be for such period and subject to such conditions as shall be specified in any such instrument. In the case of any such waiver, the Borrower and the Lender shall be restored to their former positions prior to such Event of Default or Default and shall have the same rights as they had hereunder. No such waiver shall extend to any subsequent or other Event of Default or Default, or impair any right consequent thereto and shall be effective only in the specific instance and for the specific purpose for which given.

 

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8.3.     Notices. All notices, requests, demands and other communications to or upon the parties to this Agreement, required or permitted hereunder, shall be in writing and given by delivery to a nationally recognized overnight express courier service which provides a receipt for delivery, or by certified mail, postage prepaid, return receipt requested, or by electronic mail transmission, addressed to the Person to whom such communication is to be given, at the following addresses:

 

	 	If to the Lender:	New Energy Solar US Corp.
	 	 	
			140 Broadway, 28th Floor

			New York, NY 10005

			Attention: Treasury Manager

			Tel: (646) 860-9900

			Email: treasury@newenergysolar.com.au

			
	 	 	 
	 	With a copy to (which shall not constitute notice):
	 	 	
			Foley & Lardner LLP

			777 East Wisconsin Avenue

			Milwaukee, WI 53202

			Attention: David W. Clark, Esq.

			Tel: (414) 297-5616

			Email: dwclark@foley.com

			
	 	 	 
	 	If to the Borrower:	
			VivoPower USA LLC

			140 Broadway, 28th Floor

			New York, NY 10005

			Attention: Director of Finance

			Email: notice@vivopower.com

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

			140 Broadway, 28th Floor

			New York, NY 10005

			Attention: Nicholas Olmsted

			E-mail: nicholas.olmsted@vivopower.com

			

 

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Notices shall be deemed given on the next Business Day, if by recognized overnight express courier or electronic mail, or on the third Business Day after deposit with the United States postal service, if by certified mail, postage prepaid, return receipt requested. Any of the persons listed above may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent, such further or different address to be effective at the later of three (3) days after notice of such further or different address is sent or the date designated in such notice.

 

8.4.     Costs and Expenses. The Borrower agrees to pay to the Lender on demand all fees, recordation and other similar Taxes, costs and expenses of whatever kind and nature, including attorneys’ fees and disbursements, which the Lender may incur or which are payable in connection with the closing and the administration of the Loan, including, without limitation, the due diligence review, preparation and administration of this Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof, whether or not the transactions contemplated hereby or thereby shall be consummated, the recording or filing of any and all of the Loan Documents and obtaining lien searches. All such fees, costs, recordation and other similar Taxes shall be a part of the Obligations hereunder.

 

8.5.     Applicable Law; Consent to Jurisdiction. This Agreement and the other Loan Documents have been delivered to and accepted by the Lender and will be deemed to be made in the State of New York. This Agreement and any other Loan Document (unless otherwise expressly provided for therein), and the rights and obligations of the parties hereunder shall be governed by and determined in accordance with the laws of the State of New York, without reference to conflicts of laws principles. Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against Lender in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against Borrower or its properties in the courts of any jurisdiction. Borrower irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

8.6.     Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE LENDER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THE LOAN, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE LENDER OR THE BORROWER. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BORROWER AND THE LENDER TO ENTER INTO THIS AGREEMENT.

 

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8.7.     Assignment. No party hereto shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the other party hereto.

 

8.8.     Limitation on Liability. No claim shall be made by the Borrower against the Lender or any of its Affiliates, directors, employees, attorneys, or agents, on the one hand, or by the Lender against the Borrower or any of its Affiliates, directors, employees, attorneys or agents, on the other hand, for any loss of profits, business or anticipated savings, special or punitive damages or any indirect or consequential loss whatsoever in respect of any breach or wrongful conduct (whether or not the claim therefor is based on contract, tort or duty imposed by law), in connection with, arising out of or in any way related to the transactions contemplated by this Agreement or the other Operative Documents or any act or omission or event occurring in connection therewith, and the Borrower and the Lender each hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

8.9.     Indemnification.

 

(a)     The Borrower hereby agrees to indemnify, defend and hold harmless the Lender, each legal entity, if any, who controls, is controlled by or is under common control with, the Lender (including its Affiliates), and each of their respective directors, officers, employees, attorneys, advisors and agents (each an “Indemnified Party”), against, all liabilities, losses, damages (including all fees and charges of internal or external counsel with whom any Indemnified Party may consult and all expenses of litigation and preparation therefor), causes of action, suits, claims, costs and expenses, demands and judgments of any nature incurred by, imposed upon or asserted against any Indemnified Party, arising out of, in connection with, or by reason of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated by any Loan Document, the performance (or failure to perform) by the parties thereto of their respective obligations under any Loan Document or the consummation of the transactions contemplated by the Loan Documents, (ii) the Loan or the use or proposed use of the proceeds therefrom, or (iii) any actual or prospective claim, investigation, litigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of its Affiliates, and regardless of whether any Indemnified Party is a party thereto, provided that such indemnity shall not be available to any Indemnified Party to the extent that such claims, damages, losses, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of an Indemnified Party or its material breach of this Agreement. This Section 8.9 shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.

 

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(b)     Borrower shall pay all amounts due under this Section 8.9 promptly after demand therefor.

 

(c)     The provisions of this Section 8.9 shall survive the termination of this Agreement, the payment in full of the Obligations and the assignment of any rights hereunder by the Lender.

 

8.10.     Entire Agreement. This Agreement, the other Loan Documents and any agreement, document or instrument referred to herein to which the Lender, the Borrower or other Loan Parties are parties integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings with respect to the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Agreement and any such agreement, document or instrument, the terms, conditions and provisions of this Agreement shall control.

 

8.11.     No Advisory or Fiduciary Responsibility; No Partnership, Etc. Lender and Borrower intend that the relationship between them pursuant to and with respect to the Loan Documents shall be solely that of creditor and debtor. Nothing contained in this Agreement or in any of the other Loan Documents shall be deemed or construed to create a partnership, tenancy-in-common, joint tenancy, joint venture or co-ownership by or between Lender and Borrower or any other Person. Lender shall not be in any way responsible or liable for the debts, losses, obligations or duties of Borrower or any Affiliate of Borrower, or any other Person with respect to the Material Project Documents, the Solar Projects or otherwise as a result of the Loan Documents.

 

8.12.     Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision.

 

8.13.     Survival. All representations, warranties and covenants contained among the provisions of this Agreement and the other Loan Documents shall survive the execution and delivery of this Agreement and all other Loan Documents.

 

8.14.     Binding Effect; Assignment. The provisions of this Agreement and all other Loan Documents shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective permitted successors and assigns.

 

8.15.     Time of Essence. Time is of the essence in connection with all obligations of the Borrower hereunder and under any of the other Loan Documents.

 

8.16.     Duplicate Originals and Counterparts. This Agreement and any Supplements hereto or in connection herewith may be executed in any number of duplicate counterparts, each of which shall be deemed to be an original, and all taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart.

 

28

 

 

8.17.    No Third Party Beneficiary. This Agreement is made solely and specifically by and for the benefit of the parties hereto, and their respective permitted successors and assigns, and no other Person will have any rights, interest, or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.

 

8.18.     Non-Usurious Interest. Notwithstanding any provision of this Agreement to the contrary, in no event shall the interest contracted for, charged or received in connection with the Loan (including any other costs or considerations that constitute interest under Applicable Law which are contracted for, charged or received pursuant to this Agreement) exceed the maximum rate of interest allowed under Applicable Law.

 

8.19.     Publicity. Any publicity and press releases that Borrower may wish to publish mentioning the Lender shall be subject to the Lender’s prior written approval; provided that no such approval shall be required to the extent that such disclosure is required by Applicable Law, a subpoena or any other applicable legal process or by a Governmental Authority or rules or regulations of a securities exchange having jurisdiction over Borrower or its Affiliates.

 

8.20.     Headings. Paragraph headings and a table of contents have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement.

 

(Signatures appear on the following page)

 

29

 

 

IN WITNESS WHEREOF, intending to be legally bound hereby, the Borrower and the Lender have each caused this Agreement to be executed and delivered as of the day and year first written above.

 

	
			 

				
			BORROWER:

			 

			 

			VIVOPOWER USA LLC,

			a Delaware limited liability company

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				/s/Carl Weatherley-White	
			 

			
	
			 

				
			Name:

				
			Carl Weatherley-White

				
			 

			
	
			 

				
			Title:

				
			Chief Financial Officer and Secretary

				
			 

			

 

 

 

[Signature Page to Bridge Loan Agreement]

 

 

 

IN WITNESS WHEREOF, intending to be legally bound hereby, the Borrower and the Lender have each caused this Agreement to be executed and delivered as of the day and year first written above.

 

 

	
			 

				
			LENDER:

			 

			NEW ENERGY SOLAR US CORP.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				/s/ Tom Kline 	
			 

			
	
			 

				
			Name:

				Thomas Oliver Kline 	
			 

			
	
			 

				
			Title:

				Vice President	
			 

			

 

 

 

[Signature Page to Bridge Loan Agreement]

 

 

 

SCHEDULE 1.1

EPC MATTERS

 

VivoPower USA LLC is party to an agreement with DEPCOM Power or its affiliate (“DEPCOM”) relating to selection of EPC contracts for certain of Vivo’s development projects (other than the Solar Projects). Vivo anticipates amending the agreement to include an escrow and payment obligation in favor of DEPCOM with respect to certain cash amounts and a lien on the membership interests in VivoPower (USA) Development LLC, a Delaware limited liability company (which are owned by VivoPower USA LLC) to secure such payment obligation.

 

SCHEDULE 3.10

BORROWER ACCOUNTS

 

Deposit Accounts

Deposit account in the name of VivoPower USA LLC at Bank of America

 

Securities Accounts

None

 

S-1

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