Exhibit 10.1

RESTATEMENT OF

DEMAND PURCHASE AGREEMENT

This RESTATEMENT OF DEMAND PURCHASE AGREEMENT (this “Restatement”) is dated as
of November 20, 2009 and is between and among Microgy Holdings LLC (the
“Company”), Environmental Power Corporation (“EPC”), Wells Fargo Bank, National
Association (as defined below, the “Trustee”), and the beneficial holders,
described more fully at their signatures below, of the CA Bonds and TX Bonds
described below (collectively, the “Bondholders;” and collectively with the
Company, EPC and the Trustee, the “Parties”); and, as to Section 15A below and
all matters herein pertaining to the Guarantee Agreement (as defined in
Section 15A below), the Subsidiary Guarantors signatory to the Guarantee
Agreement and listed on pages 34 and 35 hereof; and is consented to by the
California Statewide Communities Development Authority (“CSCDA”) and the Gulf
Coast Industrial Development Authority (“GCIDA”).

This Restatement restates in full and amends that Demand Purchase Agreement,
dated September 3, 2008, between and among the Company, EPC, the CA Trustee (as
defined below), and holders of the CA Bonds (the “Original DPA”), and amended by
that First Amendment to Demand Purchase Agreement dated as of July 31, 2009 (the
“First Amendment”), by that Second Amendment to Demand Purchase Agreement dated
as of September 15, 2009 (the “Second Amendment”), by that Third Amendment to
Demand Purchase Agreement dated as of September 30, 2009 (the “Third
Amendment”), by that Fourth Amendment to Demand Purchase Agreement dated as of
October 12, 2009 (the “Fourth Amendment”), by that Fifth Amendment to Demand
Purchase Agreement dated as of October 23, 2009 (the “Fifth Amendment”), by that
Sixth Amendment to Demand Purchase Agreement dated as of October 30, 2009 (the
“Sixth Amendment”), by that Seventh Amendment to Demand Purchase Agreement dated
as of November 6, 2009 (the “Seventh Amendment”), and by that Eighth Amendment
to Demand Purchase Agreement dated as of November 13, 2009 (the “Eighth
Amendment”), all of the foregoing amendments being between and among the
Company, EPC, the CA Trustee, and the CA Bondholders (as defined below).

RECITALS

A. Those certain California Statewide Communities Development Authority
Environmental Facilities Revenue Bonds (Microgy Holdings Project) Series 2008A,
in the original principal amount of $62,425,000 (collectively, the “CA Bonds”),
were issued pursuant to that certain Trust Indenture dated as of August 1, 2008
(the “CA Indenture”), between CSCDA and Wells Fargo Bank, National Association,
as Trustee (the “CA Trustee”).

B. All of the CA Bonds are beneficially owned by certain of the Bondholders
(collectively, the “CA Bondholders”). Each of the CA Bondholders certifies that
it beneficially owns the principal amount of CA Bonds indicated at its signature
below.

C. The proceeds of the CA Bonds were loaned to the Company pursuant to, among
other things, that Loan Agreement dated as of August 1, 2008 (the “CA Loan
Agreement”), between the CSCDA and the Company. The CA Loan Agreement provides
in its Section 3.03

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 2

 

 

that funds may not be drawn from the Construction Fund held by the CA Trustee
under the CA Indenture (the “CA Construction Fund”) unless certain conditions
are met on or before June 30, 2009.

D. The Original DPA was entered into in conjunction with the issuance of the
CA Bonds and the loan of the proceeds of the CA Bonds. Pursuant to each of the
First Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, and
the Eighth Amendment, among other things, the Parties agreed to extend certain
dates stated in the Original DPA. “DPA” means, in this Restatement, the Original
DPA as amended by all of the First Amendment, the Second Amendment, the Third
Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the
Seventh Amendment, and the Eighth Amendment.

E. As more fully stated in the DPA, if the CA Bondholders and the CA Trustee did
not receive, on or before June 30, 2009, a certificate of the Company that the
conditions in Subsections 3.03(g)(ii), (iv) and (v) of the CA Loan Agreement had
been satisfied (the “Certificate”), then the CA Bondholders holding a majority
in principal amount of the CA Bonds (the “CA Majority Bondholders”) may require
the Company to purchase all of the CA Bonds at a price of par plus accrued
interest to the purchase date (the “DPA Demand Purchase”) by providing written
notice on or before November 20, 2009 to the Company, EPC, the CA Trustee, and
the other CA Bondholders demanding such DPA Demand Purchase, and, if demand for
the DPA Demand Purchase is made, the Company shall purchase the CA Bonds on the
date selected by the CA Majority Bondholders.

F. The Company did not provide the CA Bondholders and the CA Trustee with the
Certificate.

G. Accordingly, and without limitation, the CA Majority Bondholders currently
have the outstanding right under the DPA to demand the DPA Demand Purchase and
to select the date of the DPA Demand Purchase, and the Company has the
obligation under the DPA to purchase all of the CA Bonds at a price of par plus
accrued interest to such purchase date.

H. Those certain Gulf Coast Industrial Development Authority Environmental
Facilities Revenue Bonds (Microgy Holdings Project) Series 2006, in the original
principal amount of $60,000,000 (collectively, the “TX Bonds”), were issued
pursuant to that certain Trust Indenture dated as of October 1, 2006 (the
“TX Indenture”), between GCIDA and Wells Fargo Bank, National Association, as
Trustee (the “TX Trustee”).

I. “Trustee” means, in this Restatement, Wells Fargo Bank, National Association,
as either or both the CA Trustee and the TX Trustee.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 3

 

 

J. All of the TX Bonds are beneficially owned by certain of the Bondholders
(collectively, the “TX Bondholders”). Each of the TX Bondholders certifies that
it beneficially owns the principal amount of TX Bonds indicated at its signature
below.

K. The proceeds of the TX Bonds were loaned to the Company pursuant to, among
other things, that Loan Agreement dated as of October 1, 2006 (the “TX Loan
Agreement”), between the GCIDA and the Company. The TX Loan Agreement provides
in its Section 3.03 that funds may not be drawn from the Construction Fund held
by the TX Trustee under the TX Indenture (the “TX Construction Fund”) unless
certain conditions are met.

L. All as more fully stated in the following documents, the payment obligations
ultimately evidenced by the CA Bonds and the TX Bonds are cross-guaranteed and
cross-collateralized pursuant to, among other things, that Guarantee Agreement
dated as of October 1, 2006 and Supplemental Guarantee Agreement dated as of
August 1, 2008, to which the Company and the Trustee, among others, are parties,
and that Collateral Trust Agreement dated as of October 1, 2006 and Joinder to
Collateral Trust Agreement dated as of August 1, 2008, to which the Company and
Wells Fargo Bank, National Association, as collateral trustee, among others, are
parties. (The CA Bonds, the CA Indenture, the CA Loan Agreement, the Guarantee
Agreement as supplemented and the Collateral Trust Agreement as joined (both as
described above), the DPA, and all other documents and instruments related to
the CA Bonds or to the issuance of the CA Bonds are collectively referred to
herein as the “CA Bond Documents.” The TX Bonds, the TX Indenture, the TX Loan
Agreement, the Guarantee Agreement as supplemented and the Collateral Trust
Agreement as joined (both as described above), and all other documents and
instruments related to the TX Bonds or to the issuance of the TX Bonds are
collectively referred to herein as the “TX Bond Documents.”)

M. To facilitate capital raising activities by the Company and EPC and
discussions among the Company, EPC and the Bondholders, the Company and EPC have
requested that the Bondholders grant, and direct the Trustee to grant, certain
concessions and forbearance with regard to the provisions of the DPA.

N. EPC has caused the Trustee to receive opinions of bond counsel that, among
other things, (i) the terms and provisions of this Restatement, including
without limitation the California Redemption (defined below), will not in and of
themselves cause interest on the CA Bonds to be includable in gross income for
federal income tax purposes, and (ii) the terms and provisions of this
Restatement, including without limitation the Texas Purchase (defined below),
will not in and of themselves cause interest on the TX Bonds to be includable in
gross income for federal income tax purposes.

O. The Bondholders have agreed, and have agreed to direct the Trustee to agree,
to the concessions and forbearance set forth in this Restatement, but only upon
and subject to the terms and conditions expressly set forth herein, and subject
to the conditions that the Borrower execute, deliver, and at all times comply
with the terms and conditions of, this Restatement.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 4

 

 

P. The CSCDA has consented to the terms and provisions of this Restatement
pertaining to the CA Bonds. The GCIDA has consented to the terms and provisions
of this Restatement pertaining to the TX Bonds.

NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

1. Recitals. Each of the Company and EPC hereby confirms, represents and
warrants to the Trustee and to each of the Bondholders, upon which warranties
and representations the Trustee and the Bondholders have relied in entering into
this Restatement, the truth of the recitals set forth above. The recitals of
this Restatement set forth above are incorporated herein as an integral part of
this Restatement. The Parties acknowledge that the Bondholders have relied upon
the truth of such recitals in directing the Trustee to enter into this
Restatement.

2. Redemption and Cancellation of 50% of the CA Bonds.

(a) The Company has determined and hereby agrees that it shall abandon either
the Hanford Facility or the Riverdale Facility (as those facilities are defined
in the CA Loan Agreement) (such abandoned facility, the “Abandoned CA
Facility”). For purposes of the CA Bond Documents, including without limitation
Section 3.05 of the CA Loan Agreement, this Restatement shall be deemed by each
of the Company, EPC, CSCDA, the CA Trustee and the CA Bondholders to constitute
an Abandonment Certificate (as defined in the CA Loan Agreement) with regard to
the Abandoned CA Facility. On or before December 18, 2009, the Company shall
provide the Parties and CSCDA with a “Supplemental Abandonment Certificate,” in
a form acceptable to the CA Trustee and the CA Bondholders, that shall
supplement this Restatement, insofar as this Restatement is deemed to constitute
an Abandonment Certificate, and shall designate which of the Hanford Facility or
the Riverdale Facility is the Abandoned CA Facility. In connection with the
execution of this Restatement, the Company or EPC has provided to bond counsel,
i.e., counsel providing the opinion as to the CA Bonds described in Recital N
above, information requested by such counsel concerning the use of the proceeds
of the CA Bonds to the date hereof and the expected use of such proceeds in the
future.

(b) The CA Trustee shall cause fifty percent (50%) of the CA Bonds to be
redeemed and cancelled pursuant to, and in accordance with, Section 9.1(c)(ii)
of the CA Indenture, in a manner such that fifty percent of the CA Bonds held by
each CA Bondholder shall be redeemed

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 5

 

 

and cancelled (the “California Redemption”) at a price of par plus accrued
interest to the date of redemption (the “CA Redemption Price”). Such date of
redemption shall be November 24, 2009, or as soon thereafter as is reasonably
practicable in the discretion of the Trustee. The CA Redemption Price shall be
funded from the funds and accounts held by the CA Trustee under the
CA Indenture, as follows: first, from the Debt Service Reserve Fund, fifty
percent of the balance thereof; second, from the Capitalized Interest Account,
the amount of the accrued interest included in the CA Redemption Price; and
third, from the CA Construction Fund, the remainder of the CA Redemption Price.
The CA Trustee is hereby directed to immediately make the aforementioned
transfers, and to hold such amounts in the Bond Fund established under the CA
Indenture for the sole and exclusive benefit of the CA Bondholders pending the
California Redemption. If the ultimate CA Redemption Price is greater than the
amount in such account, then the CA Trustee shall fund the difference from the
CA Construction Fund. If the ultimate CA Redemption Price is less than the
amount in such account, then the CA Trustee shall refund the balance of such
account to the CA Construction Fund.

(c) To the extent, if any, that written direction to the CA Trustee may be
required to effectuate the California Redemption pursuant to, without
limitation, the provisions of Section 5.02 of the CA Loan Agreement and
Section 9.1(c)(ii) of the CA Indenture, this Restatement shall constitute such
written direction and the CA Trustee hereby acknowledges receipt thereof.

(d) The Company shall promptly deliver such documents and take such further
actions as may be requested by the CA Trustee or the CA Bondholders to
effectuate the California Redemption and the abandonment of the Abandoned CA
Facility.

3. Redemption and Cancellation of 25% of the TX Bonds.

(a) The TX Bondholders and the Company hereby direct the TX Trustee to purchase
and cancel twenty-five percent (25%) of the TX Bonds held by each TX Bondholder
(the “Texas Purchase”) at a price of par plus accrued interest to the date of
purchase (the “TX Purchase Price”). Such date of purchase shall be November 24,
2009, or as soon thereafter as is reasonably practicable in the discretion of
the Trustee. The TX Purchase Price shall be funded from the funds and accounts
held by the TX Trustee under the TX Indenture, as follows: first, from the Debt
Service Reserve Fund, twenty-five percent of the balance thereof; and second,
from the TX Construction Fund, the remainder of the TX Purchase Price. The TX
Trustee is hereby directed to immediately make the aforementioned transfers, and
to hold such amounts in the Bond Fund established under the TX Indenture for the
sole and exclusive benefit of the TX Bondholders pending the Texas Purchase. If
the ultimate TX Purchase Price is greater than the amount in such account, then
the TX Trustee shall fund the difference from the TX Construction Fund. If the
ultimate TX Purchase Price is less than the amount in such account, then the
TX Trustee shall refund the balance of such account to the TX Construction Fund.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 6

 

 

(b) The Texas Purchase shall be deemed by each of the Company, EPC, the TX
Trustee, and the TX Bondholders to constitute an abandonment of the Mission
Dairy Facility described in the TX Bond Documents (the “Abandoned TX Facility”).

(c) The Company shall promptly deliver such documents and take such actions as
may be requested by the TX Trustee or the TX Bondholders to effectuate the Texas
Purchase and the abandonment of the Abandoned TX Facility.

4. Fees and Expenses of the Trustee and Bondholders. On or before November 24,
2009, the Company and/or EPC shall cause payment to be made in full by wire
transfer (i) to the Trustee for its outstanding fees and expenses, including
without limitation the fees of its counsel, (ii) to Greenberg Traurig, P.A. for
its outstanding fees and expenses related to the CA Bonds, the TX Bonds, and/or
this Restatement, (iii) to CSCDA for its outstanding fees and expenses related
to the CA Bonds or this Restatement, including without limitation the fees of
its counsel, and to (iv) to GCIDA for its outstanding fees and expenses related
to the TX Bonds or this Restatement, including without limitation the fees of
its counsel. Each of the Trustee, Greenberg Traurig, P.A., CSCDA and GCIDA shall
provide such amounts and wire transfer instructions to the Company and EPC for
this purpose no later than November 23, 2009.

5. Material Information. The Company and EPC shall provide copies of each and
all of the following, with the sole exceptions of documents or information that
the Company and EPC are explicitly bound to hold confidential from Bondholders,
to all Bondholders within two business days of receipt: all equity proposals;
updates and amendments thereto; material correspondence; and all material
information and documentation pertaining to raising capital or otherwise to
meeting the Benchmarks (defined below). The Company and EPC shall provide
notification to all Bondholders within two business days of receipt of any
engineering reports and like reports or studies performed in furtherance of
equity proposals, with the sole exceptions of such reports or studies that the
Company and EPC are explicitly bound to hold confidential from Bondholders, and,
upon the request of any Bondholder, shall provide such reports or studies to
that Bondholder within one business day. This Section 5 shall be interpreted in
light of its purpose, which is that Bondholders shall be fully and timely
informed both as to the capital raising activities of the Company and EPC and as
to the projects and facilities financed or to be financed by the CA Bonds, the
TX Bonds, or the capital otherwise raised by the Company or EPC. The Company and
EPC shall make good faith efforts to meet such purpose. As necessary, EPC may
provide such information and documentation subject to the terms of those
Confidentiality Agreements dated as of September 4, 2009, and each between EPC
and a Bondholder or Bondholders or representative thereof. Each such
Confidentiality Agreement is hereby amended as follows, and, as so amended, is
hereby acknowledged by the respective signatories thereto to be in full force
and effect: in Section 2, the defined term “Conclusion Date” is amended from
September 30, 2009, to March 31, 2010; and in Section 4, the forms and reports
shall also refer to those forms and reports for the quarters (or year) ending
December 31, 2009 and March 31, 2010, as appropriate.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 7

 

 

6. Benchmarks to be met on or before March 31, 2010. On or before noon Eastern
time on March 31, 2010, the Company shall have met, in full and on time, each
and every condition listed under this Section 6 (each a “Benchmark,” and
collectively, the “Benchmarks”); shall have certified to the Bondholders and the
Trustee that each of the Benchmarks has been met; and shall have promptly
provided the Bondholders and the Trustee with such further information or
evidence regarding each of the Benchmarks as any of the Bondholders or the
Trustee may have requested. If EPC and the Company do not comply with the
preceding sentence, then the CA Majority Bondholders and the TX Majority
Bondholders (defined below), may immediately exercise, without limitation, their
rights to the CA Demand Redemption and the TX Demand Purchase (both defined
below), respectively.

Capital (whether in the form of equity, debt, or a combination thereof) shall
have been raised by the Company, EPC, or their respective subsidiaries after the
date of this Restatement and shall be in at least the aggregate amount of
thirty-two million five hundred thousand dollars ($32,500,000.00).
Notwithstanding anything else in this Restatement, any and all debt incurred by
the Company shall be fully subordinated to the CA Bonds and the TX Bonds and to
any and all obligations under or related to the CA Bond Documents and the TX
Bond Documents and shall not be otherwise prohibited by the terms of the CA Bond
Documents or the TX Bond Documents. From such amount of $32,500,000.00, the
following sums shall be applied and deposited as follows:

 

  (a) at least $19,473,179.00, to include the equity component of total costs
for constructing the remaining CA Facility and the equity component of total
costs for constructing the remaining two TX Facilities as certified to by Beck,
shall be deposited into the Company’s operating account;

 

  (b) $3,745,500.00, as capitalized interest through March 31, 2011 for the
CA Bonds remaining outstanding after the California Redemption, shall be
transferred to the CA Trustee for deposit in the Capitalized Interest Account of
the CA Bonds; and

 

  (c) $2,800,000.00, as capitalized interest through March 31, 2011 for the
TX Bonds related to as yet unconstructed Texas facilities, shall be transferred
to the TX Trustee for deposit in the Capitalized Interest Account of the TX
Bonds.

Each of the Company and EPC hereby warrants and covenants to all of the Parties
that all amounts designated in Subsection 6(a) above shall not be used other
than for the CA Facility, for the TX Facilities, or for payment to the
CA Trustee or the TX Trustee for the benefit of the CA Bondholders or the
TX Bondholders, respectively.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 8

 

 

The Trustee shall have no obligation to notify the Bondholders of any failure by
the Company or EPC to meet the conditions listed under this Section 6, except
that the Trustee shall notify the Bondholders by 2:00 p.m. Eastern time on
March 31, 2010, as to whether the transfers described in Subsections 6(b) and
6(c) above were made.

7. California Demand Redemption. If all requirements of Section 6 above are not
met in full and on time, including meeting each Benchmark in full and on time,
all to the satisfaction of the Bondholders and the Trustee, or if an Event of
Default (as defined in Section 12) occurs, then the CA Majority Bondholders
(i.e., the CA Bondholders then holding a majority in principal amount of the
CA Bonds) may require the redemption and cancellation of all of the CA Bonds
then outstanding at the CA Redemption Price (i.e., par plus accrued interest to
the date of redemption) on the date selected by the CA Majority Bondholders (the
“CA Demand Redemption”). (The CA Majority Bondholders understand that such date
will be selected in consultation with the CA Trustee, and the CA Trustee
understands that such date will occur as soon as possible.) The Company and EPC
shall promptly deliver such documents and take such actions as may be requested
by the CA Trustee or the CA Bondholders to effectuate the CA Demand Redemption.

(a) To exercise the CA Demand Redemption, the CA Majority Bondholders, by
written notice given on or before April 15, 2010 to EPC, the Company, the CA
Trustee, and the other CA Bondholders, shall demand redemption and cancellation
of all of the outstanding CA Bonds and shall state the date of such redemption
(the “CA Demand Redemption Notice” and the “CA Demand Redemption Date,” as
appropriate).

(b) Upon the CA Majority Bondholders giving the CA Demand Redemption Notice, the
Company will be deemed to have abandoned the remaining California Facility and
the CA Demand Redemption Notice shall be deemed by each of the Company, EPC,
CSCDA, the CA Trustee and the CA Bondholders to constitute an Abandonment
Certificate (as defined in the CA Loan Agreement) with regard to such facility,
under, without limitation, Section 3.05 of the CA Loan Agreement and Section 5.4
of the CA Indenture.

(c) Upon receipt of the CA Demand Redemption Notice, and at the direction of the
CA Majority Bondholders, the CA Trustee shall (i) call the CA Bonds and cause
them to be redeemed pursuant to Section 9.1(c)(ii) of the CA Indenture, and
(ii) immediately take all amounts from the funds and accounts held by the CA
Trustee under the CA Indenture (the “California Trust Funds”), and cause such
funds to be transferred to the CA Bondholders, or to any account that the CA
Bondholders designate in writing to the CA Trustee, and cause a redemption of
the CA Bonds in an amount equal to the maximum redeemable with such California
Trust Funds at a price of par plus accrued interest through the CA Demand
Redemption Date (the “Initial CA Redemption Amount”). Such transaction shall be
done in such a manner that CA Bonds are redeemed from and funds are transferred
to CA Bondholders pro rata.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 9

 

 

(d) On the third Business Day (as defined in the CA Indenture) after receipt of
the CA Demand Redemption Notice, the CA Trustee shall notify EPC, the Company,
and the CA Bondholders of the shortfall between the Initial CA Redemption Amount
and the amount necessary to permit redemption of all of the CA Bonds outstanding
at the CA Redemption Price on the CA Demand Redemption Date as well as the
payment of any other amounts outstanding with regard to the CA Bonds or under
the CA Indenture, including without limitation any fees and expenses of the CA
Trustee or the Bondholders incurred with regard to the CA Bonds, this
Restatement, or the CA Bond Documents (such total amount, the “CA Shortfall”).

(e) The CA Trustee shall, by written notice to the Company and EPC, demand
immediate payment of the CA Shortfall to the Trustee.

(f) Any CA Bonds remaining outstanding as a result of the CA Shortfall (the
“Unredeemed CA Bonds”) shall retain all of the benefits and security of all of
the CA Bond Documents and shall continue to accrue interest at their stated
coupon rates until such time as all amounts referenced in Subsection 8(g) are
paid and the Unredeemed CA Bonds are redeemed and cancelled.

(g) The Company and EPC hereby jointly and severally agree that they shall pay
to the CA Trustee no later than April 30, 2010 (i) the CA Shortfall inclusive of
the amount required to cause any Unredeemed CA Bonds to be redeemed at a price
of par plus accrued interest to their date of redemption, which shall be no
later than May 17, 2010, and (ii) any other amounts outstanding with regard to
the CA Bonds or under the CA Indenture, including without limitation any fees
and expenses of the CA Trustee or the Bondholders incurred with regard to the CA
Bonds, this Restatement, or the CA Bond Documents. The obligations stated in the
preceding sentence are direct obligations of EPC.

8. TX Demand Purchase and Cancellation. If all requirements of Section 6 above
are not met in full and on time, including meeting each Benchmark in full and on
time, all to the satisfaction of the Bondholders and the Trustee, or if an Event
of Default (as defined in Section 12) occurs, then the TX Bondholders then
holding a majority in principal amount of the TX Bonds (the “TX Majority
Bondholders”) may require the mandatory purchase and cancellation of all of the
TX Bonds then outstanding except for the 25% of the original issuance of the TX
Bonds allocable to the Huckabay Ridge Facility (the “TX Demand Purchase Bonds”)
at the TX Purchase Price (i.e., par plus accrued interest to the date of
purchase) (the “TX Demand Purchase”). To the extent that direction or
authorization from the Company and/or the TX Bondholders to the TX Trustee to
make the TX Demand Purchase may be required by any of the TX Bond Documents,
this Restatement and the TX Demand Purchase Notice (defined below)

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 10

 

 

together shall be deemed by each of the Company, EPC, GCIDA, the TX Trustee and
the TX Bondholders to constitute written direction and authorization from the
Company and/or the TX Bondholders to the TX Trustee to make the TX Demand
Purchase in accordance with this Section 8. The Company and EPC shall promptly
deliver such documents and take such actions as may be requested by the TX
Trustee or the TX Bondholders to effectuate the TX Demand Purchase.

(a) To exercise the TX Demand Purchase, the TX Majority Bondholders, by written
notice given on or before April 15, 2010 to EPC, the Company, the TX Trustee,
and the other TX Bondholders, shall demand the purchase and cancellation of the
TX Demand Purchase Bonds (the “TX Demand Purchase Notice”). The TX Demand
Purchase Notice shall include (i) the principal amount of all of the TX Demand
Purchase Bonds, (ii) the principal amount of the TX Demand Purchase Bonds to be
purchased and cancelled as part of the Initial TX Demand Purchase made pursuant
to Subsection 8(b) below, which shall be no greater than the principal amount
which may be purchased at the TX Purchase Price from amounts held in the funds
and accounts held by the TX Trustee under the TX Indenture except for one-third
of the balance of the Debt Service Reserve Fund and any amounts in the Rebate
Fund (such funds as described in the TX Indenture), and (iii) the purchase date
of the Initial TX Demand Purchase.

(b) Upon receipt of the TX Demand Purchase Notice, and at the direction of the
TX Majority Bondholders, the TX Trustee shall make the “Initial TX Demand
Purchase,” as follows: (i) the TX Trustee shall as soon as possible purchase the
amount of TX Bonds described in Subsection 8(a)(ii) above, such purchase to be
pro rata among the TX Bondholders, and such purchase to be funded by amounts
held in the funds and accounts held by the TX Trustee under the TX Indenture
except for one-third of the balance of the Debt Service Reserve Fund and any
amounts in the Rebate Fund; (ii) the TX Trustee shall cause the amount
representing the purchase price of such TX Bonds to be transferred to the TX
Bondholders or to any account that the TX Bondholders designate in writing to
the TX Trustee; and (iii) the TX Trustee shall cause such purchased TX Bonds to
be cancelled.

(c) On the third Business Day (as defined in the TX Indenture) after receipt of
the TX Demand Purchase Notice, the TX Trustee shall notify the Company, EPC, and
the TX Bondholders of the par amount of the TX Demand Purchase Bonds remaining
(or that will remain) outstanding after the Initial TX Demand Purchase (the
“Unpurchased TX Bonds”), i.e., the par amount of TX Bonds not purchased by the
Initial TX Demand Purchase and not corresponding to the Huckabay Ridge Facility.

(d) The Company and EPC hereby jointly and severally agree that they shall pay
to the TX Trustee no later than April 30, 2010 (i) the amount required to fund
the purchase of the Unpurchased TX Bonds by the TX Trustee at a price of par
plus accrued interest to their date of purchase, which shall be no later than
May 17, 2010 (the “Second TX Demand Purchase”), and

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

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(ii) any other amounts outstanding with regard to the TX Bonds or under the
TX Indenture, including without limitation any fees and expenses of the TX
Trustee or the TX Bondholders incurred with regard to the TX Bonds, this
Restatement, or the TX Bond Documents. The obligations stated in the preceding
sentence are direct obligations of EPC.

(e) Until such time as the Second TX Demand Purchase takes place and all other
amounts referenced in the preceding Subsection 8(d) are paid, the Unpurchased TX
Bonds shall retain all of the benefits and security of all of the TX Bond
Documents and shall continue to accrue interest at their stated coupon rates.

9. Payments. Any payments made by the Company or EPC hereunder shall be in
immediately available funds.

10. No Contingent Interest.

(a) By their execution of this Restatement, each of the Company and EPC
acknowledges that the funds and accounts held by the CA Trustee under the CA
Indenture are held in trust for the benefit of the CA Bondholders. While the
CA Construction Fund may be accessed for construction of Facilities pursuant to
the CA Bond Documents, as modified by this Restatement, so long as no Events of
Default exist hereunder or under the CA Bond Documents, it is acknowledged and
agreed that the CA Construction Fund will be used to repay the CA Bonds in the
event that Events of Default exist hereunder or under the CA Bond Documents,
with regard to the California Redemption, or in the event that the CA Demand
Redemption is required. Additionally, each of EPC and the Company acknowledge
and agree that the Debt Service Reserve Fund held under the CA Indenture is
security for the CA Bondholders and that the only right the Company or EPC could
have to amounts in such Debt Service Reserve Fund would arise from payment in
full of the CA Bonds from amounts outside such Debt Service Reserve Fund;
accordingly, each of the Company and EPC acknowledges that it has no contingent
interest in any of the funds and accounts held by the CA Trustee under the
CA Indenture, each and all of which are ultimately and solely the property of
the CA Bondholders.

(b) By their execution of this Restatement, each of the Company and EPC
acknowledges that the funds and accounts held by the TX Trustee under the TX
Indenture are held in trust for the benefit of the TX Bondholders. While the
TX Construction Fund may be accessed for construction of Facilities pursuant to
the TX Bond Documents, as modified by this Restatement, so long as no Events of
Default exist hereunder or under the TX Bond Documents, it is acknowledged and
agreed that the TX Construction Fund will be used to repay the TX Bonds in the
event that Events of Default exist hereunder or under the TX Bond Documents,
with regard to the Texas Purchase, or in the event that the TX Demand Redemption
is required. Additionally, each of EPC and the Company

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

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acknowledge and agree that the Debt Service Reserve Fund held under the TX
Indenture is security for the TX Bondholders and that the only right the Company
or EPC could have to amounts in such Debt Service Reserve Fund would arise from
payment in full of the TX Bonds from amounts outside such Debt Service Reserve
Fund; accordingly, each of the Company and EPC acknowledges that it has no
contingent interest in any of the funds and accounts held by the TX Trustee
under the TX Indenture, each and all of which are ultimately and solely the
property of the TX Bondholders.

11. Waiver of Notice. By their execution of this Restatement, with regard to the
California Redemption and the CA Demand Redemption, the CA Bondholders waive any
redemption notice requirements of the CA Indenture. By their execution of this
Restatement, with regard to the Texas Purchase, and the TX Demand Redemption,
the TX Bondholders waive any purchase or redemption notice requirements of the
TX Indenture.

12. Events of Default. Each of the following constitutes an “Event of Default,”
upon the occurrence of which the Trustee and/or the Bondholders may proceed with
any and all rights and remedies afforded by law, under this Restatement, under
the CA Bond Documents, and/or under the TX Bond Documents, and/or otherwise
available to the Trustee and/or Bondholders:

(a) the occurrence of any default, any Event of Default, or any event that with
the passage of time or the giving of notice would ripen into an Event of Default
under any of the CA Bond Documents (without giving effect to the passage of time
or giving of notice);

(b) the occurrence of any default, any Event of Default, or any event that with
the passage of time or the giving of notice would ripen into an Event of Default
under any of the TX Bond Documents (without giving effect to the passage of time
or giving of notice);

(c) without any limitation to (a) above, if, with regard to the payments due to
Bondholders on account of the CA Bonds on December 1, 2009, the amount in the
Bond Fund is insufficient for such purpose such that the CA Trustee draws upon
the Debt Service Reserve Fund (“Bond Fund” and “Debt Service Reserve Fund” both
as defined in the CA Indenture);

(d) without any limitation to (b) above, if, with regard to the payments due to
holders of the TX Bonds on account of the TX Bonds on December 1, 2009, the
amount in the Bond Fund is insufficient for such purpose such that the TX
Trustee draws upon the Debt Service Reserve Fund (“Bond Fund” and “Debt Service
Reserve Fund” both as defined in the TX Indenture);

(e) without any limitation to (a) or (b) above, if EPC, the Company, or any
guarantor of any obligations of the Company, the CA Bonds, or the TX Bonds
(i) petitions for relief, or has a petition for relief filed against it, under
the United States Bankruptcy Code, (ii) petitions for

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

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relief, or has a petition for relief filed against it, pertaining to any
reorganization, composition, readjustment, liquidation of assets, or similar
relief under any present or future law or regulation, or (iii) seeks, or fails
to prevent, the appointment of any trustee, receiver or liquidator of it or of
substantially all of its assets, or (iv) shall make a general assignment for the
benefit of creditors, or (v) shall be unable, or admit in writing, its inability
to pay its debts generally as they become due;

(f) noncompliance by the Company or EPC with any term or provision of this
Restatement or the occurrence of any default or event of default under this
Restatement; and

(g) if any of the representations or warranties made hereunder by or on behalf
of the Company or EPC (including the Recitals hereto) shall not have been true,
accurate or complete in any material respect when made.

13. Indemnification.

(a) Indemnification of Trustee. The Company, EPC and the Bondholders hereby
agree to indemnify and hold the Trustee and its directors, officers, agents, and
employees (collectively, the “Trustee Indemnitees”) harmless from and against
any and all claims, liabilities, losses, damages, fines, penalties, and
expenses, including out of pocket, incidental expenses, legal fees and expenses,
and the allocated costs and expenses of in-house counsel and legal staff that
may be imposed on, incurred by, or asserted against, the Trustee Indemnitees or
any of them in connection with or arising out of the Trustee’s performance under
this Restatement; provided, however, that (i) the terms of Bondholders’ several
agreements regarding indemnity are set forth in Exhibit A hereto and (ii) the
indemnity provided for in this Section 13 shall be first the joint and several
obligation of the Company and EPC, and then, if not promptly met by the Company
and EPC, shall be the obligation of the Bondholders for which the Bondholders
shall hold a subrogated claim against the Company and EPC and shall have the
right to pursue the Company and EPC for any and all amounts spent as to the
indemnity provided for in this Section 13 as well as fees and expenses incurred
in pursuing such subrogated claim.

(b) Indemnification of CSCDA. The Company and EPC hereby agree to indemnify and
hold CSCDA and its directors, officers, agents, and employees (collectively, the
“CSCDA Indemnitees”) harmless from and against any and all claims, liabilities,
losses, damages, fines, penalties, and expenses, including out of pocket,
incidental expenses, legal fees and expenses, and the allocated costs and
expenses of in-house counsel and legal staff that may be imposed on, incurred
by, or asserted against, the CSCDA Indemnitees or any of them in connection with
or arising out of the CSCDA’s consent and agreement to the terms and provisions
of this Restatement.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

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(b) Indemnification of GCIDA. The Company and EPC hereby agree to indemnify and
hold GCIDA and its directors, officers, agents, and employees (collectively, the
“GCIDA Indemnitees”) harmless from and against any and all claims, liabilities,
losses, damages, fines, penalties, and expenses, including out of pocket,
incidental expenses, legal fees and expenses, and the allocated costs and
expenses of in-house counsel and legal staff that may be imposed on, incurred
by, or asserted against, the GCIDA Indemnitees or any of them in connection with
or arising out of the GCIDA’s consent and agreement to the terms and provisions
of this Restatement.

14. Agreements regarding CA Bond Documents.

(a) No funds shall be released from the CA Construction Fund, or from any other
fund or account held by the CA Trustee under the CA Indenture, except for
purposes of redemption of CA Bonds described herein and the payment of any other
amounts outstanding with regard to the CA Bonds or under the CA Indenture,
unless and until (a) all requirements of Section 6 above are irrevocably met in
full and on time, including meeting each Benchmark in full and on time, all to
the satisfaction of the Bondholders and the Trustee, and (b) the Bondholders
provide written direction to the CA Trustee stating that such requirements have
been met such that funds may be released from the CA Construction Fund in
accordance with the CA Bond Documents, as provided in the following sentence. If
all requirements of Section 6 above are irrevocably met in full and on time,
including meeting each Benchmark in full and on time, all to the satisfaction of
the Bondholders and the Trustee, then the CA Indenture, including without
limitation Article V thereof, the CA Loan Agreement, including without
limitation Section 3.03 thereof, and any other of the CA Bond Documents with
provisions related to the CA Construction Fund, shall be deemed amended and
modified such that monies in the CA Construction Fund shall be used only with
regard to the Facility, as that term is amended by Section 14(b) below.

(b) The terms “Facility” and “Facilities” are defined in the CA Indenture and
the CA Loan Agreement to mean one or more of the solid waste disposal facilities
indentified on Exhibit A of the CA Loan Agreement, and, as more fully stated in
such exhibit, those solid waste disposal facilities include the Hanford
Facility, the Riverdale Facility, and the Bar 20 Facility. Effective the date
hereof, Exhibit A of the CA Loan Agreement shall be deemed amended and modified
to remove the reference to the Bar 20 Facility. Upon all requirements of
Section 6 above being irrevocably met in full and on time, including meeting
each Benchmark in full and on time, all to the satisfaction of the Bondholders
and the Trustee, Exhibit A of the CA Loan Agreement shall be deemed amended and
modified to include only the Facility remaining after the Abandoned CA Facility
has been determined by the filing of the Supplemental Abandonment Certificate,
all references in the CA Bond Documents to Exhibit A of the CA Loan Agreement
or, more generally, to the Facility or Facilities pertaining to the CA Bonds,
shall be deemed amended and modified accordingly, and all liens relating
exclusively to the Abandoned CA Facility shall be released.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

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(c) The term “Debt Service Reserve Requirement” is defined in the CA Indenture
to mean, with respect to the CA Bonds, $6,242,500. Upon the California
Redemption, such definition shall be deemed amended to $3,121,250.

The term “Authorized Denominations” is defined in the CA Indenture as follows:
“ “Authorized Denominations” means denominations of $100,000 or any integral
multiple of $5,000 in excess thereof, unless changed as provided hereof.” Such
definition is hereby amended to read as follows: “ “Authorized Denominations”
means denominations of $50,000 or any integral multiple of $5,000 in excess
thereof, unless changed as provided hereof.”

(d) Solely to the limited extent that any actions taken pursuant to Sections 2
or 7 of this Restatement may not be in technical compliance with the CA
Indenture or the CA Loan Agreement, each and all of CSCDA, the Company, EPC, the
CA Trustee, and the CA Bondholders consent to treating this Restatement as an
amendment of those documents solely to the limited extent necessary to
accomplish the results described in those sections. Solely to the limited extent
that any actions taken pursuant to any other Sections of this Restatement may be
inconsistent with any provision of the CA Bond Documents, each and all of CSCDA,
the Company, EPC, the CA Trustee, and the CA Bondholders waive any irregularity
or default under the CA Bond Documents arising out of such action.
Notwithstanding anything else in this Section 14, nothing in this Section 14
shall supersede or revise any indemnification of the CA Trustee and/or the CSCDA
under any of the CA Bond Documents and all such indemnification shall continue
to apply.

15. Agreements regarding TX Bond Documents.

(a) Unless and until all requirements of Section 6 above are irrevocably met in
full and on time, including meeting each Benchmark in full and on time, all to
the satisfaction of the Bondholders and the Trustee, no funds shall be released
from the TX Construction Fund, or from any other fund or account held by the TX
Trustee under the TX Indenture, with the sole exceptions of the following:

 

  (i) amounts may be released for purposes of redemption of TX Bonds described
herein and the payment of any other amounts outstanding with regard to the
TX Bonds or under the TX Indenture; and

 

  (ii)

During the period from October 1, 2009 through December 31, 2009, and provided
that all applicable conditions under the TX Bond Documents for withdrawals from
the TX Construction Fund are met, an amount not to

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

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exceed $500,000.00 may be released from the TX Construction Fund with regard to
the Rio Leche Facility and the Cnossen Dairy Facility, such that the total
amount released from the TX Construction Fund during such period shall not
exceed $500,000.00; however, such monies may be used solely for engineering and
design work related to the respective facility, and shall not be used for
equipment purchase, site construction, or any other purpose, and neither the
Company, nor EPC, nor any entity related to the Company or EPC shall assume any
liabilities or obligations outside the strict limitations of this
Subsection 15(a)(ii). No amounts shall be released from the TX Construction Fund
after December 31, 2009, except pursuant to written direction from the TX
Bondholders to the TX Trustee, and the TX Bondholders have no obligation to
agree to the release of any amounts from the TX Construction Fund after
December 31, 2009.

If all requirements of Section 6 above are irrevocably met in full and on time,
including meeting each Benchmark in full and on time, all to the satisfaction of
the Bondholders and the Trustee, then the TX Indenture, including without
limitation Article V thereof, the TX Loan Agreement, including without
limitation Section 3.03 thereof, and any other of the TX Bond Documents with
provisions related to the TX Construction Fund, shall be deemed amended and
modified such that monies in the TX Construction Fund shall be used only with
regard to the Facility or Facilities, as those terms are amended by
Section 15(b) below.

(b) The terms “Facility” and “Facilities” are defined in the TX Indenture and
the TX Loan Agreement to mean one or more of the solid waste disposal facilities
indentified on Exhibit A of the TX Loan Agreement, and, as more fully stated in
such exhibit, those solid waste disposal facilities include the Huckabay Ridge
Facility, the Rio Leche Facility, the Mission Dairy Facility and the Cnossen
Dairy Facility. Upon all requirements of Section 6 above being irrevocably met
in full and on time, including meeting each Benchmark in full and on time, all
to the satisfaction of the Bondholders and the Trustee, Exhibit A of the TX Loan
Agreement shall be deemed amended and modified to include only the Huckabay
Ridge Facility, the Cnossen Facility, and the Rio Leche Facility, all references
in the TX Bond Documents to Exhibit A of the TX Loan Agreement or, more
generally, to the Facility or Facilities pertaining to the TX Bonds, shall be
deemed amended and modified accordingly, and all liens relating exclusively to
the Abandoned TX Facility shall be released.

(c) The term “Debt Service Reserve Requirement” is defined in the TX Indenture
to mean $5,151,500. Upon the Texas Purchase, such definition shall be deemed
amended to $3,863,625. Upon the TX Demand Redemption, such definition shall be
deemed amended to $1,287,875.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
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(Microgy Holdings Project) Series 2006

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Section 2.2 of the TX Indenture includes the sentence: “All Bonds shall be
issued in denominations of $100,000 and integral multiples of $5,000 in excess
thereof.” Such sentence is hereby amended to read as follows: “All Bonds shall
be issued in denominations of $50,000 and integral multiples of $5,000 in excess
thereof.”

(d) Solely to the limited extent that any actions taken pursuant to Sections 3
or 8 of this Restatement may not be in technical compliance with the TX
Indenture or the TX Loan Agreement, each and all of GCIDA, the Company, EPC, the
TX Trustee, and the TX Bondholders consent to treating this Restatement as an
amendment of those documents solely to the limited extent necessary to
accomplish the results described in those sections. Solely to the limited extent
that any actions taken pursuant to any other Sections of this Restatement may be
inconsistent with any provision of the TX Bond Documents, each and all of GCIDA,
the Company, EPC, the TX Trustee, and the TX Bondholders waive any irregularity
or default under the TX Bond Documents arising out of such action.
Notwithstanding anything else in this Section 15, nothing in this Section 15
shall supersede or revise any indemnification of the TX Trustee and/or the GCIDA
under any of the TX Bond Documents and all such indemnification shall continue
to apply.

15A. Guarantee Agreement. The Guarantee Agreement, dated as of October 1, 2006,
as amended and supplemented by the Supplemental Guarantee Agreement, dated as of
August 1, 2008, among the Company, the Subsidiary Guarantors named therein and
the Trustee (as so amended and supplemented, the “Guarantee Agreement”) shall
hereby be further amended and supplemented as follows:

(a) Effective only upon full consummation of the Texas Purchase and of the
California Redemption, Sections 3.05(a)(i), (a)(ii) and (b) of the Guarantee
Agreement shall hereby be amended to change all references to “$5,000,000” set
forth therein to “$3,750,000”.

(b) Effective only upon full consummation of the Texas Purchase and of the
California Redemption, Sections 3.05B(a)(i), (a)(ii) and (b) of the Guarantee
Agreement shall hereby be amended to change all references to “$5,000,000” set
forth therein to “$2,500,000”.

(c) Contingent upon and effective only upon full consummation of the TX Demand
Purchase (including both the Initial TX Demand Purchase and the Second TX Demand
Purchase) and the California Demand Redemption (including redemption in full of
100% of the CA Bonds), as well as upon full consummation of the Texas Purchase
and of the California Redemption, Sections 3.05(a)(i), (a)(ii) and (b) of the
Guarantee Agreement shall hereby be amended to change all references to
“$3,750,000” set forth therein to “$1,250,000”.

16. Acknowledgments and Affirmations. Each of the Company and EPC hereby
acknowledges, agrees and represents to the Bondholder and the Trustee, upon
which

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
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(Microgy Holdings Project) Series 2006

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acknowledgments, agreements and representations the Bondholder and the Trustee
have relied in entering into this Restatement and the Bondholder has relied in
directing the Trustee to enter into this Restatement, that (i) the CA Bond
Documents to which the Borrower is a party constitute the valid and binding
obligations of the Borrower, (ii) the CA Bond Documents to which EPC is a party
constitute the valid and binding obligations of EPC, (iii) the TX Bond Documents
to which the Borrower is a party constitute the valid and binding obligations of
the Borrower, (iv) the TX Bond Documents to which EPC is a party constitute the
valid and binding obligations of EPC, (v) if any of the Benchmarks are not met,
the Trustee and the Bondholders shall immediately be entitled to exercise any
and all of their rights and remedies hereunder, including without limitation the
CA Demand Redemption and the TX Demand Redemption, and under the CA Bond
Documents and the TX Bond Documents, (vi) the amounts from time to time on
deposit in the funds and accounts held by the CA Trustee under the CA Indenture
(collectively, the “CA Bond Funds”) are held by the CA Trustee for the benefit
of the CA Bonds and the Bondholders according to the terms of the CA Indenture
and are not property of the Company or of EPC now or following any Event of
Default, (vii) the amounts from time to time on deposit in the funds and
accounts held by the TX Trustee under the TX Indenture (collectively, the “TX
Bond Funds”) are held by the TX Trustee for the benefit of the TX Bonds and the
holders of the TX Bonds according to the terms of the TX Indenture and are not
property of the Company or of EPC now or following any Event of Default,
(viii) in the event of any proceeding described in, or similar to those
described in, Section 12(e) hereof, each of the Company and EPC shall
acknowledge and agree that neither the CA Bond Funds nor the TX Bond Funds
constitute property of its estate, and that, without limitation, it has no
rights, title or interest in the CA Debt Service Reserve Fund, the CA
Construction Fund, the TX Debt Service Reserve Fund, or the TX Construction
Fund.

17. Ratification of Liens and Pledges. By their execution hereof, each of the
Company and EPC hereby ratifies and reconfirms that pursuant to the CA Bond
Documents the CA Trustee enjoys a first priority lien against, without
limitation, the Facilities (as defined in the CA Indenture, as amended or
modified by Section 14 above), a pledge of the Company’s ownership interest in
the “Subsidiary Guarantors” (as defined in CA Indenture) and a lien on
substantially all property of the Subsidiary Guarantors, and that all funds and
accounts held by the Trustee under the CA Indenture remain pledged solely to the
CA Trustee for the benefit of the Bondholders. By their execution hereof, each
of the Company and EPC hereby ratifies and reconfirms that pursuant to the TX
Bond Documents the TX Trustee enjoys a first priority lien against, without
limitation, the Facilities (as defined in the TX Indenture, as amended or
modified by Section 15 above), a pledge of the Company’s ownership interest in
the Subsidiary Guarantors and a lien on substantially all property of the
Subsidiary Guarantors, and that all funds and accounts held by the TX Trustee
under the TX Indenture remain pledged solely to the TX Trustee for the benefit
of the holders of the TX Bonds.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

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18. No Preferential Treatment. Neither the Company nor EPC has entered into this
Restatement to provide any preferential treatment to the Trustee, any Bondholder
or any other creditor of the Borrower, and no action contemplated herein
provides the Trustee or any Bondholder with any preferential treatment under the
documents governing the CA Bonds or the TX Bonds. Neither the Company nor EPC
intends to file for protection or seek relief under the United States Bankruptcy
Code or any similar federal or state law providing for the relief of borrowers.

19. Automatic Stay. In consideration of the agreements contained in this
Restatement, each of the Company and EPC agrees that, in the event that any of
them, or any guarantor of the obligations as to the CA Bonds or the TX Bonds, or
any of the persons or parties constituting any of the foregoing, shall:

(a) file with any bankruptcy court of competent jurisdiction or be the subject
of a petition under Title 11 of the United States Code, as amended (the
“Bankruptcy Code”);

(b) be the subject of any order for relief under the Bankruptcy Code;

(c) file or be the subject of any petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency, or other relief for borrowers;

(d) have sought or consented to or acquiesced in the appointment of any trustee,
receiver, conservator or liquidator; or

(e) be the subject of any order, judgment, or decree entered by any court of
competent jurisdiction approving a petition filed against such party for any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency, or other relief for borrowers;

the Trustee shall thereupon be entitled and each of the Company and EPC
irrevocably consents to immediate and unconditional relief from any automatic
stay imposed by Section 362 of the Bankruptcy Code, any similar provision under
any other federal or state law, statute, rule, regulation or ordinance, or
otherwise, on or against the exercise of the rights and remedies otherwise
available to the Trustee and the Bondholder herein or in the other CA Bond
Documents or the TX Bond Documents, or any other documents or instruments
executed and delivered in connection therewith and as otherwise provided by law,
and each of the Company and EPC irrevocably waives any right to object to such
relief and will not contest any motion by the Trustee and the Bondholder seeking
relief from the automatic stay. Each of the Company and EPC shall be liable for
any damages caused by any violation of this covenant.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
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(Microgy Holdings Project) Series 2006

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20. No Waiver; No Amendment.

(a) Each of CSCDA, the Company, EPC, the CA Trustee, and the CA Bondholders
agrees, acknowledges and represents that (i) nothing in this Restatement works
as a permanent waiver of the CA Bondholders’ and CA Trustee’s rights to payment
of all amounts due with regard to the CA Bonds; (ii) except as expressly set
forth herein, nothing in this Restatement or the performance by the Parties of
their respective obligations hereunder constitutes or shall be deemed to
constitute a waiver of any of the Parties’ rights or remedies under the terms of
any of the CA Bond Documents or applicable law, all of which are hereby
reserved; and (iii) except as explicitly stated in Sections 14 and 15A of this
Restatement, this Restatement does not represent an amendment to any of the
CA Bond Documents, and all terms of the CA Bond Documents remain in full force
and effect.

(b) Each of GCIDA, the Company, EPC, the TX Trustee, and the TX Bondholders
agrees, acknowledges and represents that (i) nothing in this Restatement works
as a permanent waiver of the TX Bondholders’ and TX Trustee’s rights to payment
of all amounts due with regard to the TX Bonds; (ii) except as expressly set
forth herein, nothing in this Restatement or the performance by the Parties of
their respective obligations hereunder constitutes or shall be deemed to
constitute a waiver of any of the Parties’ rights or remedies under the terms of
any of the TX Bond Documents or applicable law, all of which are hereby
reserved; and (iii) except as explicitly stated in Section 15 and 15A of this
Restatement, this Restatement does not represent an amendment to any of the TX
Bond Documents, and all terms of the TX Bond Documents remain in full force and
effect.

21. Representations and Warranties. Each of the Parties hereby represents and
warrants that each of the following statements is true, accurate and complete as
to such Party as of the date hereof.

(a) Such Party has carefully read and fully understood all of the terms and
conditions of this Restatement; has consulted with, or had a full and fair
opportunity to consult with, independent legal counsel regarding this
Restatement; and has entered into and executed this Restatement as a voluntary
action and without coercion or duress of any kind.

(b) In entering into this Restatement, such Party has not relied upon any
representation, warranty, covenant or agreement not expressly set forth herein.

(c) This Restatement has been duly authorized and validly executed and delivered
by such Party and constitutes each such Party’s legal, valid and binding
obligation, enforceable in accordance with its terms.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 21

 

 

(d) Such Party is duly organized, validly existing and in good standing under
the laws of its state of formation, or, with regard to the Trustee, the laws of
the United States of America, and has the full power and legal authority to
execute this Restatement, consummate the transactions contemplated hereby, and
perform its obligations hereunder.

22. Direction to Trustee. The Bondholders’ signatures below shall constitute not
only agreement to the terms and provisions of this Restatement but also
direction to the Trustee to agree to and execute this Restatement. Such
direction is agreed by each of the Parties to satisfy any and all conditions or
requirements of the CA Indenture regarding direction to the CA Trustee by the
CA Bondholders, and any and all conditions or requirements of the TX Indenture
regarding direction to the TX Trustee by the TX Bondholders.

23. WAIVER OF JURY TRIAL. THE PARTIES KNOWINGLY WAIVE ANY RIGHT TO TRIAL BY JURY
THEY MAY HAVE RELATED TO CLAIMS ARISING FROM THE TERMS OF THIS RESTATEMENT, THE
CA BOND DOCUMENTS, THE CA BONDS, THE TX BOND DOCUMENTS, THE TX BONDS, OR ANY
INSTRUMENT DELIVERED PURSUANT TO ANY OF THEM OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.

24. Time is of the Essence. Time shall be of the essence with respect to each
and every of the various undertakings and obligations set forth in this
Restatement.

25. Miscellaneous.

(a) Notices hereunder shall be given in writing; shall be addressed to the
attention of Parties as indicated below at their signature below (or such other
address as a Party may provide by notice to all other Parties); and shall be
deemed to have been properly given or served on the date of receipt if sent by
overnight delivery, or on the date sent if delivered by facsimile or electronic
mail, receipt confirmed.

(b) This Restatement shall be governed by Delaware law without regard to its law
of conflicts of law.

(c) This Restatement is the sole agreement among the Parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings or
negotiations, whether oral or written, of the parties, with respect to the
subject matter hereof.

(d) This Restatement may be modified only by an instrument in writing signed by
the party against which enforcement is sought.

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 22

 

 

(e) This Restatement is binding on the Parties and the successors and assigns of
the Trustee and each of the Bondholders. This Restatement may not be assigned by
the Company or EPC except by operation of law or with the consent of the CA
Majority Bondholders and the TX Majority Bondholders.

(f) If any provisions of this Restatement shall be held or deemed to be or
shall, in fact, be illegal, inoperative or unenforceable, the same shall not
affect any other provision or provisions herein contained or render the same
invalid, inoperative or unenforceable to any extent whatever.

(g) This Restatement may be executed in any number of counterparts, each of
which shall be considered an original for all purposes, provided, however, that
all such counterparts shall together constitute one and the same instrument.

(h) A faxed or e-mailed (as a pdf document) signature of this Restatement shall
be deemed an original for all purposes.

[SIGNATURE PAGES TO FOLLOW]

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 23

 

 

IN WITNESS WHEREOF, the Parties have executed this Restatement of Demand
Purchase Agreement on the date first above written.

 

MICROGY HOLDINGS LLC By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President and Manager Address for Notices:

Microgy Holdings, LLC

c/o Environmental Power Corporation

120 White Plains Road, 6th Floor Tarrytown, New York 10591 Attention: Richard E.
Kessel Fax #: (914) 631-1436 x10 E-mail: rkessel@environmentalpower.com
ENVIRONMENTAL POWER CORPORATION By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President and Chief Executive Officer Address
for Notices: Environmental Power Corporation 120 White Plains Road, 6th Floor
Tarrytown, New York 10591 Attention: Richard E. Kessel Fax #: (914) 631-1436 x10

E-mail: rkessel@environmentalpower.com

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 24

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE By:  

/s/ Marvin Kierstead

Name:   Marvin Kierstead Its:   Vice President Address for Notices: Wells Fargo
Bank, National Association 4 Penn Center, Suite 810 1600 JFK Boulevard
Philadelphia, Pennsylvania 19103 Attention: Corporate Trust Services Group Fax
#: (215) 861-9440

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 25

 

 

MFS HIGH YIELD MUNICIPAL TRUST (CMU),* holding $400,000 in principal amount of
the CA Bonds By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually

MFS HIGH INCOME MUNICIPAL TRUST (CXE),*

holding $500,000 in principal amount of the CA Bonds

By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually

MFS INVESTMENT GRADE MUNICIPAL TRUST (CXH),*

holding $200,000 in principal amount of the CA Bonds

By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually

MFS MUNICIPAL INCOME TRUST (MFM),*

holding $100,000 in principal amount of the CA Bonds

By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 26

 

 

MFS SERIES TRUST III on behalf of one of its Series, MFS Municipal High Income
Fund (MMH),* holding $800,000 in principal amount of the CA Bonds By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually

MFS MUNICIPAL SERIES TRUST on behalf of one of its Series, MFS Municipal Income
Fund (MMI),*

holding $1,000,000 in principal amount of the CA Bonds

By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually

MFS MUNICIPAL SERIES TRUST on behalf of one of its Series, MFS Municipal Income
Fund (MMI),*

holding $320,000 in principal amount of the TX Bonds

By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually

MFS MUNICIPAL INCOME TRUST (MFM),*

holding $620,000 in principal amount of the TX Bonds

By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 27

 

 

MFS SERIES TRUST III on behalf of one of its Series, MFS Municipal High Income
Fund (MMH),* holding $2,060,000 in principal amount of the TX Bonds By:  

/s/ Gregory Heller

  Gregory Heller   As authorized representative and not individually Address for
Notices:

500 Boylston Street

Boston, MA 02116-3741

Contact Name: Paul Devine Telephone: 617-954-5938; 800-343-2829 E-mail:
PDevine@MFS.com

 

 

* A copy of the Declaration of Trust of the undersigned (the “Trust”) is on file
with the Secretary of State of The Commonwealth of Massachusetts. You
acknowledge that the obligations of or arising out of this instrument are not
binding upon any of the Trust’s trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and property
of the Trust in accordance with its proportionate interest hereunder. If this
instrument is executed by the Trust on behalf of one or more series of the
Trust, you further acknowledge that the assets and liabilities of each series of
the Trust are separate and distinct and that the obligations of or arising out
of this instrument are binding solely upon the assets or property of the series
on whose behalf the Trust has executed this instrument. If the Trust has
executed this instrument on behalf of more than one series of the Trust, you
also agree that the obligations of each series hereunder shall be several and
not joint, in accordance with its proportionate interest hereunder, and you
agree not to proceed against any series for the obligations of another series.

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 28

 

 

PIONEER HIGH INCOME MUNICIPAL FUND, holding $2,500,000 in principal amount of
the CA Bonds By:   Pioneer Investment Management Inc., as Investment Advisor By:
 

/s/ Margaret C. Begley

  Margaret C. Begley   Assistant Secretary and Associate General Counsel PIONEER
MUNICIPAL HIGH INCOME ADVANTAGE TRUST, holding $6,000,000 in principal amount of
the CA Bonds By:   Pioneer Investment Management Inc., as Investment Advisor By:
 

/s/ Margaret C. Begley

  Margaret C. Begley   Assistant Secretary and Associate General Counsel

PIONEER MUNICIPAL HIGH INCOME TRUST,

holding $4,500,000 in principal amount of the CA Bonds

By:   Pioneer Investment Management Inc., as Investment Advisor By:  

/s/ Margaret C. Begley

  Margaret C. Begley   Assistant Secretary and Associate General Counsel

PIONEER HIGH INCOME MUNICIPAL FUND,

holding $650,000 in principal amount of the TX Bonds

By:   Pioneer Investment Management Inc., as Investment Advisor By:  

/s/ Margaret C. Begley

  Margaret C. Begley   Assistant Secretary and Associate General Counsel

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 29

 

 

PIONEER MUNICIPAL HIGH INCOME ADVANTAGE TRUST, holding $7,350,000 in principal
amount of the TX Bonds By:   Pioneer Investment Management Inc., as Investment
Advisor By:  

/s/ Margaret C. Begley

  Margaret C. Begley   Assistant Secretary and Associate General Counsel

PIONEER MUNICIPAL HIGH INCOME TRUST,

holding $2,000,000 in principal amount of the TX Bonds

By:   Pioneer Investment Management Inc., as Investment Advisor By:  

/s/ Margaret C. Begley

  Margaret C. Begley   Assistant Secretary and Associate General Counsel Address
for Notices: Pioneer Investment Management 60 State Street Boston, MA 02109
Contact Name: Timothy Pynchon Telephone: 617-422-4732 E-mail:
Timothy.pynchon@pioneerinvestments.com

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 30

 

 

DREYFUS MUNICIPAL OPPORTUNITY FUND, holding $3,500,000 in principal amount of
the CA Bonds By:   Standish Mellon Asset Management LLC By:  

/s/ Daniel A. Barton

  Daniel A. Barton   Vice President

DREYFUS STRATEGIC MUNICIPALS, INC. (LEO)

holding $3,000,000 in principal amount of the CA Bonds

By:   Standish Mellon Asset Management LLC By:  

/s/ Daniel A. Barton

  Daniel A. Barton   Vice President

DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC. (DSM)

holding $2,000,000 in principal amount of the CA Bonds

By:   Standish Mellon Asset Management LLC By:  

/s/ Daniel A. Barton

  Daniel A. Barton   Vice President

DREYFUS HIGH YIELD MUNICIPAL BOND FUND,

holding $1,500,000 in principal amount of the CA Bonds

By:   Standish Mellon Asset Management LLC By:  

/s/ Daniel A. Barton

  Daniel A. Barton   Vice President

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 31

 

 

DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC. (DSM) holding $5,000,000 in
principal amount of the TX Bonds By:   Standish Mellon Asset Management LLC By:
 

/s/ Daniel A. Barton

  Daniel A. Barton   Vice President

DREYFUS STRATEGIC MUNICIPALS, INC. (LEO)

holding $6,000,000 in principal amount of the TX Bonds

By:   Standish Mellon Asset Management LLC By:  

/s/ Daniel A. Barton

  Daniel A. Barton   Vice President

DREYFUS HIGH YIELD MUNICIPAL BOND FUND,

holding $5,000,000 in principal amount of the TX Bonds

By:   Standish Mellon Asset Management LLC By:  

/s/ Daniel A. Barton

  Daniel A. Barton   Vice President Address for Notices: One Boston Place, Suite
#3000 Boston, MA 02108-4408 Contact Name: Daniel A. Barton Telephone:
617-248-6362 E-mail: dbarton@standish.com

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 32

 

 

OPPENHEIMER CALIFORNIA MUNICIPAL FUND,

holding $16,000,000 in principal amount of the CA Bonds

By:  

/s/ Richard Stein

  Richard Stein   Vice President OPPENHEIMER ROCHESTER NATIONAL MUNICIPALS,
holding $16,000,000 in principal amount of the CA Bonds By:  

/s/ Richard Stein

  Richard Stein   Vice President OPPENHEIMER ROCHESTER NATIONAL MUNICIPALS,
holding $31,000,000 in principal amount of the TX Bonds By:  

/s/ Richard Stein

  Richard Stein   Vice President Address for Notices: 350 Linden Oaks Rochester,
NY 14625 Contact Name: Richard Stein Telephone: 585-419-7108 E-mail:
rstein@oppenheimerfunds.com

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 33

 

 

B.C. ZIEGLER AND COMPANY holding $4,425,000 in principal amount of the CA Bonds
By:   B.C. Ziegler and Company d/b/a Ziegler Capital Markets By:  

/s/ Edward Chapman

  Edward Chapman   Managing Director Address for Notices: Ziegler Capital
Markets 200 South Wacker Drive, Suite 2000 Chicago, IL 60606 Contact Name: Don
Carlson Telephone: 312-596-1516 Fax: 312-596-1616 E-mail: dcarlson@ziegler.com

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 34

 

 

Execution as to Section 15A of this Restatement and all matters in this
Restatement pertaining to the Guarantee Agreement (as defined in Section 15A):
SUBSIDIARY GUARANTORS: MICROGY HANFORD, LLC, as Guarantor By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President MICROGY RIVERDALE, LLC, as
Guarantor By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President MST PRODUCTION LTD., as Guarantor
By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President MST GP, LLC, as Guarantor By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President MST ESTATES, LLC, as Guarantor By:
 

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 35

 

 

RIO LECHE ESTATES, L.L.C., as Guarantor By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President MISSION BIOGAS, L.L.C., as
Guarantor By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President HEREFORD BIOGAS, L.L.C., as
Guarantor By:  

/s/ Richard E. Kessel

Name:   Richard E. Kessel Title:   President Address for Notices for each
Subsidiary Guarantor: c/0 Environmental Power Corporation 120 White Plains Road,
6th Floor Tarrytown, New York 10591 Attention: Richard E. Kessel Fax #:
(914) 631-1436 x10 E-mail: rkessel@environmentalpower.com

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RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 36

 

 

Consent to the terms and provisions of this Restatement pertaining to the CA
Bonds: CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY By:  

/s/ Kelli L. Osborne

Name:   Kelli L. Osborne Its:   Vice President Address for Notices:

 

 

Contact Name:  

 

Telephone:  

 

Fax:  

 

E-mail:  

 

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 37

 

 

Consent to the terms and provisions of this Restatement pertaining to the TX
Bonds: GULF COAST INDUSTRIAL DEVELOPMENT AUTHORITY By:  

/s/ Charles Ganze

Name:   Charles Ganze Its:   Vice President Address for Notices:

 

 

Contact Name:  

 

Telephone:  

 

Fax:  

 

E-mail:  

 

--------------------------------------------------------------------------------

RESTATEMENT OF DEMAND PURCHASE AGREEMENT

California Statewide Communities Development Authority Environmental Facilities
Revenue Bonds

(Microgy Holdings Project) Series 2008A

Gulf Coast Industrial Development Authority Environmental Facilities Revenue
Bonds

(Microgy Holdings Project) Series 2006

Page 38

 

 

EXHIBIT A

--------------------------------------------------------------------------------

EXHIBIT “A”

TERMS OF BONDHOLDER INDEMNITY RELATED TO

DEMAND PURCHASE AGREEMENT

 

  Re: $62,425,000 California Statewide Communities Development Authority
Environmental Facilities Revenue Bonds (Microgy Holdings Project) Series 2008A
(the “Bonds”)

Each of the undersigned (collectively, the “Bondholders’” or “us” or “we”) own
the principal amount of the Bonds set forth next to its respective signature in
that certain Demand Purchase Agreement, dated September 13, 2008 (“Demand
Purchase Agreement”), among Microgy Holdings LLC (“Microgy”), Environmental
Power Corporation, Wells Fargo Bank, National Association (the “Trustee” or
“you”) and the Bondholders. Capitalized terms not otherwise defined herein shall
have the meanings assigned to them in the Demand Purchase Agreement or that
certain Trust Indenture (the “Indenture”), dated as of August 1, 2008, between
the Trustee and California Statewide Communities Development Authority.

The Trustee has entered into the Demand Purchase Agreement at the direction of
the Bondholders (the “Direction”) and has requested that it be indemnified in
Section 12 of the Demand Purchase Agreement for the consequences of actions
taken by the Trustee thereunder. In the event that the Demand Purchase is
exercised by the Majority Bondholder, in order to expedite the funds transfer
that will need to take place, the Trustee has requested that the terms of the
indemnity be agreed to as of the date of the Demand Agreement and not at the
time of the Demand Purchase.

 

1. Definitions.

For purposes of this Exhibit “A” and the terms of the indemnity set forth
herein, the following definitions shall apply:

“Bond Documents” shall refer to the Indenture, the Demand Purchase Agreement,
the Loan Agreement, the Deeds of Trust, and all other such documents which
ultimately secure the payment source for the Bonds

“Direction” shall mean the meaning set forth above.

“Extraordinary Charges and Expenses” shall mean your charges and out-of-pocket
expenses (including reasonable attorneys’ and paralegals’ fees, expenses and
disbursements) reasonably and properly incurred by the Trustee in the course of
taking any actions pursuant to the Direction, but shall not include Ordinary
Fees and Expenses.

“Ordinary Fees and Expenses” shall mean regularly scheduled fees for services as
Trustee under the Indenture and the Trustee’s out-of-pocket expenses, incurred
in performing such regularly scheduled services as set forth in Section 12.4 of
the Indenture.

“Proportionate Share” shall mean the principal amount of the Bonds beneficially
held by anyone of the Bondholders on the date of the Demand Purchase Agreement
as a portion of the

 

A-1

--------------------------------------------------------------------------------

aggregate principal amount of the Bonds beneficially held by all of the
undersigned, subject to adjustment as provided in Paragraph 7 hereof. In other
words, except as provided in Paragraph 7 hereof, each holders’ “Proportionate
Share” when added together shall equal 100% and consequently cover 100% of any
payments to be made hereunder.

“Reimbursement Claims” shall mean claims which the Trustee may have against
Microgy or others or against certain collateral pursuant to the Indenture or
other Bond Documents which provide a source of payment to the Trustee for
certain fees and expenses.

“Third-Party Liabilities” shall mean all costs, claims, liabilities, losses or
damages whatsoever (including reasonable fees, expenses and disbursements of the
Trustee’s counsel reasonably incurred by you in connection therewith) asserted
by third parties against you as a result of your acting pursuant to the
Direction, but shall not include Ordinary Fees and Expenses or Extraordinary
Charges and Expenses.

“Trustee Lien” shall mean the lien which the Trustee has on certain of the funds
and accounts held by the Trustee under the Indenture which provide a source of
payment to the Trustee for certain fees and expenses under the terms of the
Indenture.

 

2. Indemnity.

a. Subject to the terms, conditions and limitations set forth below, the
Bondholders hereby agree to indemnify the Trustee and save the Trustee harmless
from all Ordinary Fees, Extraordinary Charges and Expenses and Third Party
Liabilities incurred by the Trustee in relation to the Direction, at any time
from and after the date hereof during the period of your service as Trustee, in
the performance of its powers and duties as Trustee under the Indenture, except
for fees, charges, expenses, costs, claims, losses, liabilities or damages
incurred by the Trustee as a result of its own negligence or willful misconduct;
without limiting the foregoing, nothing herein shall be taken to indemnify and
save the Trustee harmless against any fees, charges, expenses, costs, claims,
losses, liabilities or damages based upon your acts or failures to act as
Trustee which constitute breaches of its fiduciary duties or failures to execute
properly its duties as Trustee. For the purposes of this paragraph, any
determination of whether or not the Trustee has engaged in willful misconduct or
have been negligent or has breached its fiduciary duties as Trustee (or any like
determination) shall be made by a court of competent jurisdiction on the basis
of the provisions contained in the Indenture (to the extent applicable).

b. The Bondholders’ Agreement to indemnify you as set forth in this letter is
also subject to the following limitations:

 

  i. The Trustee shall not be entitled to any indemnity from us for
Extraordinary Charges and Expenses or Third Party Liabilities arising from or in
connection with any action taken without the Bondholders’ prior direction or
consent (except any such action related to and reasonably necessary to implement
a Direction, as directed by the Bondholders); and

 

A-2

--------------------------------------------------------------------------------

  ii. The Trustee shall not be entitled to any indemnity from the Bondholders
for Extraordinary Charges and Expenses or Third Party Liabilities paid or
incurred by reason of the Trustee’s failure to have trust powers or otherwise to
be qualified or legally permitted to act as Trustee under the Indenture, unless
the Trustee has appointed a co-Trustee under the Indenture that is qualified or
legally permitted to act under the Indenture and has so acted at the Trustee’s
direction.

 

3. Termination of Obligation.

Except as provided in the following sentence and subject to paragraph 8 hereof,
it is understood and agreed that our obligation to indemnify you and save you
harmless as Trustee as provided in this Agreement will terminate on the date
upon which the Bonds have been paid in full or the date the Bonds are canceled,
whichever first occurs. Notwithstanding the foregoing sentence and subject to
paragraph 8 hereof, our obligation to indemnify you shall continue until
satisfied with respect to Extraordinary Charges and Expenses or Third Party
Liabilities accruing prior to the date on which the Bonds are paid in full or
the date the Bonds are canceled, whichever first occurs.

 

4. Notice of Claims; Control or Retention.

Promptly, upon your receipt of notice of any claim or of the commencement or
threatened commencement of any action against you, which may constitute a Third
Party Liability, you will cause notice to be given to us in writing of such
claim or such commencement or threatened commencement of an action, and will
provide a copy of any documents received by you in connection therewith. In the
event that any such claim or action shall be asserted against you, you hereby
agree that, at our request and at our sole discretion, you shall consent to our
intervention in any such suit in order to defend against said claim and/or shall
tender to us control of the defense and settlement of such clam or action, and
shall cooperate with us in such defense and settlement. We shall at all times
have the right to employ counsel to represent both you and us in any claim or
action described in this paragraph, whether or not we have requested
intervention or tender of control; provided that in the event such counsel
determines that there is a conflict of interest between you and us and that you
and we are not willing to waive such conflict or such counsel is unwilling to
serve notwithstanding such waiver, you shall be entitled to retain separate
counsel (reasonably acceptable to us) whose reasonable fees and expenses shall
constitute Extraordinary Charges and Expenses. Until we request the control of
the defense and settlement of such claim or action or unless we have otherwise
employed counsel to represent both you and us, you shall have the right to
employ your own counsel (reasonably acceptable to us) with respect to such claim
or action, whose reasonable fees and expenses shall be Extraordinary Charges and
Expenses. Your giving notice and, if requested, tendering defense of the claims
or actions required by this paragraph are conditions to our indemnification
obligations hereunder. Further, we shall have no liability for any settlement of
any claim or action for which we otherwise agree herein to indemnify you unless
notice of such proposed settlement shall have been furnished to us in accordance
with this Agreement and we shall have consented to such settlement.

 

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5. Payments.

a. We understand that as provided in the Indenture or other Bond Documents you
may have Reimbursement Claims and a Trustee Lien which provide sources of
payment of some or all amounts covered by the indemnification provided by this
Agreement. It is understood and agreed that your Reimbursement Claims and
Trustee Lien are the primary source of payment of such amounts and that our
indemnification provided by this Agreement is a secondary source of payment.
Therefore, prior to any payment by us under this Agreement, you shall first
assert your Reimbursement Claims and/or the Trustee’s Lien, until such time as
the Trust Estate is depleted, unless we direct you otherwise and the exercise of
the Trustee’s lien shall be a condition to the Trustee’s right to
indemnification hereunder. However, if funds are unavailable in the Trust Estate
to make payments to you in a timely fashion, we will make such payments to you
until such time as the Trust Estate is replenished. The Trustee shall timely
notify and consult with, and take direction from, the Bondholders regarding the
preservation of such Reimbursement Claim.

b. If, under the circumstances as described in then foregoing paragraphs, you
are entitled to an indemnification payment from us of an amount, we agree to pay
to you within sixty (60) days of our receipt of an invoice therefor, accompanied
by such documentation supporting your entitlement to such amount as we may
reasonably request. You agree to provide such invoices on a timely basis, and in
no event less frequently than monthly. We further agree that the then prevailing
standard hourly rates of our counsel and other advisors selected with reasonable
care and in accordance with the Bond Documents shall be deemed reasonable for
purposes of this Agreement. In the event that we fail to reimburse you in
accordance with the provisions hereof within sixty (60) days after the date on
which an invoice is received by us (unless and to the extent that payment of
such invoice is being contested by us in good faith), interest will accrue on
the amounts due at the rate of interest announced by you as your “federal funds
rate” in effect from time to time, from the sixty first (61st) day after such
invoice is sent to us until payment has actually been received.

c. If we make any payment to you hereunder we shall be automatically subrogated
to your Reimbursement Claims and Trustee Lien with respect to such payment, and,
thereafter you shall not exercise any Reimbursement Claim or Trustee Lien with
respect to such amount, except with our prior written consent. At our election,
you shall also assign to us (to the extent assignable) all such Reimbursement
Claims and Trustee Lien. You agree, as a condition to your right of
indemnification hereunder, to execute and deliver to us such assignments and
other instruments as we shall reasonably determine to be necessary or advisable
to evidence such subrogation or assignment, which execution and delivery are
conditions to your right of indemnification hereunder. In either event, however,
upon our written request, you will diligently pursue all Reimbursement Claims
and Trustee Liens for our account as subrogee or assignee. Your reasonable
out-of-pocket expenses and charges (including reasonable fees, expenses and
disbursements of your counsel) incurred in connection with all such efforts
shall constitute Extraordinary Charges and Expenses and shall be covered by the
indemnification hereunder. Such payments, if and when received by you, will be
repaid to us, with interest, to the extent to which you have theretofore
received payments or advances from us.

 

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6. Several Liability.

Notwithstanding any other provision of this Agreement, it is agreed that the
obligations of the undersigned are several and not joint, and that the
obligation of each of the undersigned to pay any amount due to you hereunder
shall not exceed its respective Proportionate Share of such amount provided,
however, that in no event shall the undersigned’s liability ever exceed the par
amount of the Bonds held by it as of the date hereof.

 

7. Transfer of Bonds.

In the event that any of the undersigned should sell or otherwise dispose of all
or a portion of their Bonds, our obligations to indemnify you hereunder shall
automatically terminate with respect to the Bonds sold or disposed of and the
transferring Bondholder’s Proportionate Share shall be reduced accordingly
(without increase of the Proportionate Share of the others). Such termination
shall be prospective only, in that we shall have no obligation to indemnify or
defend you for actions or events which occur subsequent to the time of transfer.
We shall remain obligated to indemnify, defend, and hold you harmless as set
forth herein for claims, actions or events which have occurred or accrued prior
to the date of the transfer of the Bonds, except to the extent that such
obligations are expressly assumed by the purchaser of such Bonds.

 

8. Miscellaneous.

a. All notices, demands and other communications hereunder shall be in writing
and addressed to the parties hereto as follows: (1) if to you, at the address
set forth in the Demand Purchase Agreement, and (2) if to us) at respective
addresses set forth on the signature pages to the Demand Purchase Agreement, or
in either case to such other person(s) and address(es) as a party shall have
specified in writing to the other. Notices, demands and other communications
hereunder shall be effective when received.

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