PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this “Agreement”) is made effective as of April 11, 2011, by
and among Zero Emission People, LLC, a Delaware limited liability company (“ZEP”) and Global
Winds Harvest, LLC, a Delaware limited liability company (“GWH”). (ZEP and GWH shall
individually be referred to as “Party” or jointly as “Parties”.)
RECITALS
WHEREAS, GWH owns one hundred percent (100%) of the membership interests (the “GWH
Interests”) in the company Thunder Spirit Wind, LLC, (“Thunder Spirit”);
WHEREAS, GWH is the owner of certain assets, rights and information related to the
development of a proposed wind turbine electrical generation facility of up to 150MW to be largely
located in Xxxxx County, North Dakota, as listed on Exhibit A attached hereto (the “Project”);
WHEREAS, GWH herewith assigns and transfers the Project to Thunder Spirit; and
WHEREAS, GWH desires to sell 75% of the GWH Interests to ZEP and ZEP desires to purchase
seventy five percent (75%) of the GWH Interests in Thunder Spirit.
NOW, THEREFORE, in consideration of the foregoing premises and the covenants,
representations and warranties contained herein, and for other good and valuable consideration, receipt
and sufficiency of which are hereby acknowledged, the Parties adopt the foregoing recitals and agree as
follows:
AGREEMENT
1.
Purchase and Sale of the GWH Interests; Closing.
1.1
Closing. The closing of the transactions contemplated by this Agreement (the
“Closing”) shall be held concurrently with the execution and delivery of this Agreement at a
location mutually acceptable to the Parties, or at such other time and place upon which the Parties
shall mutually agree (the “Closing Date”).
1.2
Purchase and Sale of GWH Interests. At the Closing, subject to the terms and
conditions of this Agreement, GWH shall sell, assign and transfer to ZEP, and put ZEP in
possession of, 75% of the GWH Interests, and ZEP shall purchase 75% of the GWH Interests
from GWH, such that upon the Closing, ZEP will be the 75% owner of the membership interests
relating to Thunder Spirit and GWH shall retain 25% of the said membership interests.
2.
Payment of Purchase Price and Further Obligations of ZEP.
2.1
Purchase Price. The aggregate purchase price to be paid by ZEP for the GWH
Interests upon Closing shall be $1,000.00, (the “Purchase Price”) .
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2.2
Further ZEP Obligations.
The Parties agree that subject to the Project
Development Budget attached hereto as Exhibit B, ZEP will from the Effective Date forward:
(a)
fund any and all project related cost incurred subsequent to the Closing
Date, especially but not limited to, development disbursements as per the
Project Development Budget attached hereto as Exhibit B: ZEP agrees to
provide the financing necessary for the full development of the Project in
a Timely Manner, as defined below, according to Exhibit B, sufficient to
develop the Project to have all permits and approvals necessary for
construction of the Project (excluding construction engineering and
closing a sale of power from the Project (“Power Purchase Agreement”
or “PPA”, which may require equity commitments, however including
PPA negotiations). Timely Manner shall mean that the Parties will
jointly agree on a schedule for a date upon which the Project shall
achieve commercial operation (the “COD”) with the understanding that
certain expenses will be incurred with certain flexibility as to the timing
of the expenses, (i.e. expenses with no hard deadlines where delays
would not competitively disadvantage the Project (the “Time Flexible
Expenses”, e.g. archaeological study), as opposed to expenses with
deadlines that, if missed, would competitively disadvantage the Project
(the “Time Critical Expenses”, e.g. deposit for interconnection studies,
which, if not paid could result in losing an interconnection queue
position, hurting the competitiveness of the Project). GWH shall notify
ZEP of any Time Critical Expenses with the respective deadline and
request the necessary funds. In the event ZEP fails to fund Time Critical
Expenses prior to the deadline communicated by GWH, the Project shall
immediately be deemed discontinued by ZEP (the “Discontinued
Project”);
(b)
obtain or assume any related expense associated with a letter of credit
which may be necessary to secure the Project’s interconnection;
(c)
pay any expenses related to securing a PPA for the Project, excluding
equity commitments;
(d)
reimburse GWH the recent Midwest ISO deposit made for the Project in
the amount of $260,000.00 The reimbursement shall be paid in two
installments. $120,000 shall be due within 45 days of the Closing Date
and $140,000 shall be due within 90 days of the Closing Date, both
subject to prior invoicing from GWH; and
(e)
enter into a an agreement with GWH whereby GWH is contracted to
carry out the Timely Development of the Project (the “Development
Service Agreement” or “DSA”) substantially similar to the one attached
as Exhibit D.
3.
Transfer of Assets.
Concurrent with the execution of this Agreement, GWH herewith transfers all Project-related
assets as per Exhibit A into Thunder Spirit.
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4.
Conditions Precedent to Duties by ZEP.
The duties, obligations and requirements of ZEP under the terms of this Agreement (the “ZEP
Duties”) are subject to satisfactory due diligence of ZEP at its sole discretion.
5.
Representations and Warranties.
The representations and warranties of GWH set forth in this Agreement will be true, correct and
complete in all respects as of the Closing Date, as though made on and as of the Closing Date and
GWH will have delivered to ZEP a certificate dated as of the Closing Date, to the effect that the
representations and warranties made by GWH in this Agreement are true and correct.
6.
Third Party Consents and Project Substitution.
6.1
Third-Party Consents. Within 90 days of the Closing Date, ZEP will receive
from GWH duly executed copies of any required third-party consents, permits, authorizations and
approvals of any public, regulatory or governmental body or authority or person or entity
contemplated by this Agreement (if any), in the form and substance reasonably satisfactory to
ZEP.
6.2
Substitution. In the event GWH is unable to obtain the consents described in 6.1
or the consents are not obtained within 90 days of the Closing Date, GWH shall be permitted to
substitute for the GWH Interests with the same percentage of membership interests for the same
conditions as set out herein in another project company that GWH owns, subject to acceptance by
ZEP, not to be unreasonably withheld (the “Substitution”). In the event of the Substitution, the
Parties shall execute an amendment to this Agreement restating the name of the substituted
project company, the substituted project description of assets under Exhibit A and project
development budget under Exhibit B, as well as any other restatements necessary for this
Agreement to remain in full force and effect.
7.
No Action.
GWH warrants that no suit, action, or proceeding is pending or threatened which would prevent
the consummation of any of the transactions contemplated by this Agreement or cause this
Agreement to be rescinded following the Closing Date.
8.
Due Diligence Generally.
ZEP and its duly authorized representatives will be reasonably satisfied with their due diligence
investigation of Thunder Spirit and its assets that are reasonable and customary in a transaction of
a similar nature to that contemplated by this Agreement, including:
(a)
materials, documents and information in the possession and control of
Thunder Spirit Wind, LLC and its assets which are reasonably germane
to the type of transaction;
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(b)
a physical inspection of the assets of Thunder Spirit by ZEP or its
representatives; and
(c)
title to the material assets of Thunder Spirit.
9. Default.
Default will occur upon material breach of this Agreement by either Party. Default shall include,
but not be limited to, ZEP’s failure to fund the Project Development Budget. In the event of a
default, the non-defaulting Party shall notify the defaulting Party of a default in writing, and the
defaulting Party shall have 60 days to cure or longer if mutually agreed to by both Parties.
10.
Repurchase and Right of First Refusal.
10.1
Repurchase by GWH. In the event that ZEP chooses to discontinue the
development of the Project or in case of a Discontinued Project, or in case any default by ZEP is
not cured by ZEP, GWH shall have the right, but not the requirement, to repurchase the Project
under the same payment terms as this Agreement, with the amount due and payable to ZEP only
upon start of construction of the Project (the “Repurchase”). In the event of a Repurchase, ZEP
agrees to execute all documents necessary to complete and evidence the Repurchase in a timely
manner.
10.2
Right of First Refusal. If, after the Closing Date, GWH chooses to sell or assign
its remaining 25% of the GWH Interests to any entity other than an affiliate, ZEP shall have a
right of first refusal to match any market offer that GWH receives for the remaining GWH
Interests (the “Right of First Refusal”). The Right of First Refusal shall be executed by ZEP
within 30 days of receiving notice from GWH that it has received an arm’s length market offer
for the remaining GWH interests. In the event ZEP exercises the Right of First Refusal and
matches the market offer, GWH shall be required to accept the offer and sell its remaining GWH
Interests to ZEP. In the event ZEP fails to exercise its Right of First Refusal, GWH shall be free
to accept any market offer for the remaining GWH Interests.
11.
Assignment.
Each Party may assign, sell, transfer or convey its rights and obligations under this Agreement to
any of its affiliates upon providing written notice to the other Party. Neither Party shall assign,
sell, transfer or convey this Agreement, or any right, interest or obligation hereunder without the
prior written consent of the other Party.
12.
Governing Laws.
This Agreement shall be governed by the laws of the State of New York without regard to its
conflict of law principles.
13.
Miscellaneous.
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13.1
Effectiveness of Representations; Survival. Each Party is entitled to rely on the
representations, warranties and agreements of the other Party and all such representations,
warranties and agreements will be effective regardless of any investigation that any Party has
undertaken or failed to undertake. Unless otherwise stated in this Agreement, and except for
instances of fraud, the representations, warranties and agreements will continue in full force and
effect until three (3) years after the Closing Date.
13.2
Further Assurances. Each of the Parties hereto will cooperate to execute and
deliver to the other such other instruments and documents and take other actions as may be
reasonably requested from time to time by any other Party hereto as necessary to carry out,
evidence, and confirm the intended purposes of this Agreement.
13.3
Amendment. This Agreement may not be amended except by an instrument in
writing signed by each of the Parties.
13.4
Expenses. ZEP will bear all costs incurred in connection with the preparation,
execution and performance of this Agreement and the transaction contemplated hereby, including
all fees and expenses of agents, representatives and accountants; provided that GWH will bear its
respective legal and accounting costs incurred in connection with the preparation, execution and
performance of this Agreement and the transaction contemplated hereby.
13.5
Entire Agreement. This Agreement, the exhibits attached hereto and the other
documents in connection with this transaction, contain the entire agreement between the Parties
with respect to the subject matter hereof and supersede all prior arrangements and understandings,
both written and oral, expressed or implied, with respect thereto. Any preceding correspondence
or offers or agreements with respect to Thunder Spirit are expressly superseded and terminated by
this Agreement.
13.6
Notices. All notices and other communications required or permitted under this
Agreement must be in writing and will be deemed given if sent by personal delivery, faxed with
electronic confirmation of delivery, internationally-recognized express courier or registered or
certified mail (return receipt requested), postage prepaid, to the parties at the following addresses
(or at such other address for a party as will be specified by like notice):
If to GWH:
000 Xxxxx Xx
Xxxxxxxxxxx, XX 00000
If to ZEP:
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Xxxxxx
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All such notices and other communications will be deemed to have been received in the case of
personal delivery, on the date of such delivery; in the case of a fax or electronic mail, on the date
of such delivery; in the case of delivery by internationally-recognized express courier, on the
business day following dispatch; and in the case of mailing, on the fifth business day following
mailing.
13.7
Business Days. If the last or appointed day for the taking of any action required
or the expiration of any rights granted herein shall be a Saturday, Sunday or a legal holiday in the
State of Nevada, then such action may be taken or right may be exercised on the next succeeding
day which is not a Saturday, Sunday or such a legal holiday.
13.8
Counterparts. This Agreement may be executed in one or more counterparts, all
of which will be considered one and the same agreement and will become effective when one or
more counterparts have been signed by each of the Parties and delivered to the other Party, it
being understood that all parties need not sign the same counterpart.
13.9
Fax Execution. This Agreement may be executed by delivery of executed
signature pages by fax and such fax execution will be effective for all purposes.
13.10 Schedules and Exhibits. The schedules and exhibits are attached to this
Agreement and incorporated herein.
(Signature page to follow)
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Signed this date of April 11th, 2011
By: GLOBAL WINDS HARVEST, LLC
Name: Xxxxxx Xxxxxxxxx
Title: Managing Member
By: Wind Works Power Corporation
Name: Xxxx Xxxxxxxxx
Title: CEO
Exhibit A: Project / Asset Schedule
Exhibit B: Project Development Budget
Exhibit C: Substitution Project / Asset Schedule
Exhibit D: Development Services Agreement
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Exhibit A: Project /Asset Schedule
Approx. 6,000 acres of land in Xxxxx Co., North Dakota secured by land lease option
Midwest ISO Queue position, G752 for 150 MW
Project qualified and entered the Midwest ISO Definitive Planning Phase (“DPP”); interconnection
currently expected available 2012/13.
(Note: Assignment of Project assets to Thunder Spirit Wind, LLC attached)
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Exhibit B: Project Development Budget
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Exhibit C: Substitution Project / Asset Schedule
To be agreed to.
Exhibit D: Development Services Agreement (“DSA”)
Services under the DSA shall be paid at cost with no significant markup. The DSA shall contain a
provision upon which a success fee is payable to the developer at the earlier of financial closure of
construction financing or start of construction of the Project (the “Success Fee”). The Success fee shall be
equivalent to a 3% carried interest in the Project or any other definition agreed to by both parties.
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