EXHIBIT 10.07

SOLAR ENERGY PURCHASE POWER AGREEMENT

BETWEEN

NEW MEXICO SUNTOWER, LLC AND

EL PASO ELECTRIC COMPANY

OCTOBER 17, 2008

 

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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SOLAR ENERGY PURCHASE POWER AGREEMENT

BETWEEN

NEW MEXICO SUNTOWER, LLC AND

EL PASO ELECTRIC COMPANY

OCTOBER 17, 2008

TABLE OF CONTENTS

 

ARTICLE 1 -   RULES OF CONSTRUCTION, INTERPRETATION, AND DEFINITIONS    1

1.1

  Rules of Construction    1

1.2

  Interpretation with Interconnection Agreement    2

1.3

  Interpretation of Arrangements for Electric Supply to the Facility    2

1.4

  Definitions    3 ARTICLE 2 -   TERM    14

2.1

  Term    14 ARTICLE 3 -   FACILITY DESCRIPTION    14

3.1

  Summary Description    14

3.2

  General Design and Operation of the Facility    14

3.3

  Environmental Compliance    15 ARTICLE 4 -   PRE-COMMERCIAL OPERATION    15

4.1

  Construction of the Facility    15

4.2

  Monitoring and Inspection    15

4.3

  Construction Milestones    16

4.4

  Extension of Construction Milestones    16

4.5

  Progress Reports    16

4.6

  Commissioning Tests    16

4.7

  Site Report    17

4.8

  Facility Contracts    17

4.9

  Conditions to Commercial Operation    17

4.10

  Test Energy    18 ARTICLE 5 -   DELIVERY AND METERING    19

5.1

  Delivery Arrangements    19

5.2

  Metering    19

5.3

  Adjustment for Inaccurate Meters    20 ARTICLE 6 -   EPE CONDITIONS PRECEDENT
   21

6.1

  EPE Conditions Precedent    21

 

ii

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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ARTICLE 7 -   SALE AND PURCHASE OF SOLAR ENERGY    21

7.1

  Sale and Purchase    21

7.2

  Committed Solar Energy    22

7.3

  Title and Risk of Loss    22

7.4

  Temporary Disconnection of the Facility    22 ARTICLE 8 -   ENERGY PAYMENT
CALCULATIONS    22

8.1

  Energy Payments    22

8.2

  Non-Solar Energy    22

8.3

  Curtailed Energy Payment Rate    23

8.4

  Payment Support Requirement    23

8.5

  Survival on Termination    23 ARTICLE 9 -   BILLING AND PAYMENT    24

9.1

  Seller’s Invoices    24

9.2

  EPE’s Invoices    24

9.3

  Payments    24

9.4

  Billing Disputes    24

9.5

  Statement Errors    25

9.6

  Set-Off and Payment Adjustments    25

9.7

  Survival on Termination    25 ARTICLE 10 -   RENEWABLE ENERGY CERTIFICATES AND
LIMITED SALE OF ENVIRONMENTAL ATTRIBUTES    25

10.1

  Compliance with New Mexico Renewable Energy Act    25

10.2

  Monthly RECs    25

10.3

  Seller’s Failure to Provide Solar RECs    25

10.4

  Limited Sale of Environmental Attributes    27

10.5

  Administrative Compliance Cost Obligations    28 ARTICLE 11 -   SECURITY FOR
PERFORMANCE    28

11.1

  Security Fund    28 ARTICLE 12 -   DEFAULT AND REMEDIES    31

12.1

  Construction Events of Default    31

12.2

  Operational Events of Default    32

12.3

  Seller’s Abandonment of Construction or Operation of the Facility    32

12.4

  EPE Events of Default    33

12.5

  Actual Damages    33

12.6

  No Incidental, Consequential, or Indirect Damages    33

12.7

  Duty to Mitigate    34

12.8

  Dispute Resolution    34

12.9

  Mediation    34

12.10

  Other Dispute Processes    34

12.11

  Cost of Dispute Resolution    35

12.12

  Operation by EPE Following a Construction Event of Default, an Operational
Event of Default, or Seller’s Abandonment of Construction or Operation of the
Facility    35

 

iii

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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12.13

  Specific Performance    36

12.14

  Remedies Cumulative    37

12.15

  Payment of Amounts Due to EPE    37 ARTICLE 13 -   FACILITY OPERATION AND
CONTRACT ADMINISTRATION    37

13.1

  Facility Operation    37

13.2

  Operating Committee and Operating Procedures    37

13.3

  Scheduling    38

13.4

  Forced Outages    38

13.5

  Scheduled Maintenance    38

13.6

  Additional Maintenance Outages    39

13.7

  Access to and Inspection of Facility    40

13.8

  Operating Parameters    40

13.9

  Operating Records    40

13.10

  Operating Log    40

13.11

  Availability Reporting    41

13.12

  Examination and Retention of Records    41

13.13

  Facility Development Records and Data Submissions    41 ARTICLE 14 -   FORCE
MAJEURE    42

14.1

  Definition of a Force Majeure Event    42

14.2

  Applicability of Force Majeure    43

14.3

  Effect of Seller’s Force Majeure    43

14.4

  Effect of EPE’s Force Majeure    46

14.5

  Limitations on Effect of Force Majeure    47 ARTICLE 15 -   REPRESENTATIONS,
WARRANTIES AND COVENANTS    48

15.1

  Seller’s Representations, Warranties and Covenants    48

15.2

  EPE’s Representations, Warranties and Covenants    49 ARTICLE 16 -   INSURANCE
   50

16.1

  Evidence of Insurance    50

16.2

  Term and Modification of Insurance    51

16.3

  Endorsements to Fire and All-Perils and Machinery Breakdown Policies    51

16.4

  Insurance Reports    51 ARTICLE 17 -   INDEMNITY    51

17.1

  Indemnification    51

17.2

  Indemnification for Fines and Penalties    52

17.3

  Notice of Claim, Loss or Proceeding    52

17.4

  Defense of Claims    52

17.5

  Subrogation    53 ARTICLE 18 -   ASSIGNMENT AND OTHER TRANSFER RESTRICTIONS   
53

18.1

  No Assignment Without Consent    53

18.2

  Restriction on Transfers    54

18.3

  Permitted Transfers    54

18.4

  Collateral Assignment    54

18.5

  Change of Control    54

 

iv

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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18.6

  Transfer without Consent is Null and Void    54

18.7

  Prohibited Transfers    54

18.8

  Reimbursement for EPE’s Costs from Transfers or Assignments    54 ARTICLE 19 -
  MISCELLANEOUS    55

19.1

  Waiver    55

19.2

  Taxes    55

19.3

  Monetary Penalties    56

19.4

  Notices in Writing    56

19.5

  Exhibit Changes    56

19.6

  Other Changes    56

19.7

  Disclaimer of Third Party Beneficiary Rights    56

19.8

  Relationship of the Parties    57

19.9

  Equal Employment Opportunity Compliance Certification    57

19.10

  Survival of Obligations    57

19.11

  Severability    57

19.12

  Complete Agreement; Amendments    57

19.13

  Binding Effect    58

19.14

  Headings    58

19.15

  Counterparts    58

19.16

  Governing Law    58

19.17

  Confidentiality    58

19.18

  Compliance with Applicable Law    60

19.19

  Press Releases and Media Contact    60

19.20

  Due Authority    60

 

v

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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EXHIBIT A   CONSTRUCTION MILESTONES EXHIBIT B   FACILITY DESCRIPTION AND SITE
MAPS EXHIBIT C   NOTICE ADDRESSES EXHIBIT D   INSURANCE COVERAGE EXHIBIT E  
SELLER’S REQUIRED GOVERNMENTAL AUTHORITY PERMITS, CONSENTS, APPROVALS, LICENSES
AND AUTHORIZATIONS TO BE OBTAINED EXHIBIT F   COMMITTED SOLAR ENERGY AND SOLAR
ENERGY PAYMENT RATES EXHIBIT G   SELLER’S FORMAT FOR RENEWABLE ENERGY
CERTIFICATES

 

vi

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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SOLAR ENERGY PURCHASE POWER AGREEMENT

BETWEEN

NEW MEXICO SUNTOWER, LLC

AND

EL PASO ELECTRIC COMPANY

This Solar Energy Purchase Power Agreement (including all exhibits attached
hereto, this “Agreement”) is made this 17th day of October, 2008, (the
“Execution Date”) by and between New Mexico SunTower, LLC (“Seller”), a Delaware
corporation with a principal place of business at 130 W. Union Street, Pasadena,
CA 91103, and El Paso Electric Company (“EPE”), a Texas corporation with
headquarters in El Paso, Texas (EPE and Seller each being sometimes referred to
in this Agreement as a “Party” or, collectively, as the “Parties”).

WHEREAS, Seller desires to develop, design, construct, own or lease and operate
a solar electric generating facility with a Designed Maximum Output of
approximately 92 MW (the “Facility,” as more fully described and defined below);
and

WHEREAS, Seller intends to locate the Facility at the Site (as defined below)
and to interconnect the Facility with the Transmission Provider (as defined
below) as provided for in a separate Interconnection Agreement; and

WHEREAS, Seller desires to sell and deliver to EPE at the Point of Delivery (as
defined below) the Solar Energy (as defined below) produced by the Facility, and
EPE desires to buy the same from Seller; and

WHEREAS, Seller desires to provide EPE with the Solar Energy, which will be
documented by solar Renewable Energy Certificates, and it is the intention of
the Parties that all solar Renewable Energy Certificates documenting and
associated with the Solar Energy provided shall be transferred to and owned by
EPE at no additional cost; and

NOW THEREFORE, in consideration of the mutual covenants herein contained, the
sufficiency and adequacy of which are hereby acknowledged, the Parties agree to
the following:

ARTICLE 1 - RULES OF CONSTRUCTION, INTERPRETATION, AND

DEFINITIONS

1.1 Rules of Construction. Capitalized terms defined in this Article 1 shall
have the meanings set forth herein whenever the terms appear in this Agreement,
whether in the singular or the plural or in the present or past tense. Words not
otherwise defined herein that have well known and generally accepted technical
or trade meanings are used herein in accordance with such recognized meanings.
In addition, the following rules of construction shall apply:

(A) References to “Articles,” “Sections,” or “Exhibits” shall be to articles,
sections, or exhibits of this Agreement.

(B) The Exhibits attached hereto are incorporated in and are intended to be a
part of this Agreement; provided, that, in the event of a conflict between the
terms of any Exhibit and the terms of this Agreement, the terms of this
Agreement shall control.

 

1

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(C) This Agreement was negotiated and prepared by both Parties with the advice
and participation of counsel. The Parties have agreed to the wording of this
Agreement, and none of the provisions hereof shall be construed against one
Party on the ground that such Party is the author of this Agreement or any part
hereof.

(D) The Parties shall act in a commercially reasonable manner and in accordance
with the principles of good faith and fair dealing in the performance of this
Agreement. Unless expressly provided otherwise in this Agreement, where this
Agreement requires the consent, approval, or similar action by a Party, such
consent or approval shall not be unreasonably withheld, conditioned or delayed.
Wherever this Agreement gives a Party a right to determine, require, specify or
take similar action with respect to a matter, such determination, requirement,
specification or similar action shall be commercially reasonable.

(E) Use of the words “include” or “including” or similar words shall be
interpreted as “include without limitation” or “including, without limitation.”

(F) Use of the words “tax” or “taxes” shall be interpreted to include taxes,
fees, surcharges, and the like.

1.2 Interpretation with Interconnection Agreement. Each Party represents that it
conducts its operations in a manner intended to comply with FERC Order No. 2004,
“Standards of Conduct for Transmission Providers,” requiring the separation of
its transmission and merchant functions. Moreover, the Parties acknowledge that
EPE’s transmission function offers transmission service on its system in a
manner intended to comply with FERC policies and requirements relating to the
provision of open-access transmission service. The Parties recognize that Seller
will enter into a separate Interconnection Agreement with the Transmission
Provider.

(A) The Parties acknowledge and agree that the Interconnection Agreement shall
be a separate and free-standing contract and that the terms of this Agreement
are not binding upon the Transmission Provider. However, to avoid confusion
between the two agreements, this Agreement may define certain terms by
referencing their definition in the Interconnection Agreement.

(B) Notwithstanding any other provision in this Agreement, nothing in the
Interconnection Agreement shall alter or modify Seller’s or EPE’s rights, duties
and obligations under this Agreement. This Agreement shall not be construed to
create any rights between Seller and the Transmission Provider.

(C) Seller expressly recognizes that, for purposes of this Agreement, the
Transmission Provider shall be deemed to be a separate entity and separate
contracting party whether or not the Interconnection Agreement is entered into
with EPE or an Affiliate of EPE, if any.

1.3 Interpretation of Arrangements for Electric Supply to the Facility. The
Parties recognize that this Agreement does not provide for the supply of any
retail electric service by EPE to Seller or to the Facility, and Seller must
enter into separate arrangements for the supply of retail electric services to
the Facility.

 

2

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(A) The Parties acknowledge and agree that the arrangements for the supply of
electric services to the Facility shall be separate and free-standing
arrangements and that the terms of this Agreement are not binding upon the
supplier of such electric services.

(B) Notwithstanding any other provision in this Agreement, nothing in the
arrangements for the supply of retail electric services to the Facility shall
alter or modify Seller’s or EPE’s rights, duties and obligations under this
Agreement. This Agreement shall not be construed to create any rights between
Seller and the supplier of such retail electric services.

(C) Seller expressly recognizes that, for purposes of this Agreement, the
supplier of retail electric services to the Facility shall be deemed to be a
separate entity and a separate contracting party whether or not the arrangement
for the supply of retail electric services to the Facility is entered into with
EPE or an Affiliate of EPE, if any.

1.4 Definitions. Unless defined elsewhere herein, capitalized terms used in this
Agreement will have the following scope and meaning:

1.4.1 “Abandonment” means (i) the relinquishment of all possession and control
of the Facility by Seller, other than a transfer or sale permitted under this
Agreement, or (ii) if prior to the Commercial Operation Date, the cessation of
the design, construction, testing and inspection of the Facility for ninety
(90) consecutive Days by Seller, or Seller’s contractors, unless such
relinquishment or cessation is (x) pursuant to Section 4.4(i) or 4.4(ii), (y) at
EPE’s express request, or (z) caused by or attributable to a Force Majeure
Event.

1.4.2 “Account” has the meaning set forth in Section 11.1(C)(2) of this
Agreement.

1.4.3 “Additional Consents” means the approvals, consents, authorizations or
other requirements not listed in the definition of Governmental Approvals in
this Agreement that are required from any Government Authority with respect to
the Facility.

1.4.4 “Additional Maintenance Outages” has the meaning assigned to it in
Section 13.6 hereof.

1.4.5 “Affiliate” of any named person or entity means any other person or entity
that controls, is under the control of, or is under common control with, the
named entity. The term “control” (including the terms “controls,” “under the
control of” and “under common control with”) means the possession, directly or
indirectly, of the power to direct or cause the direction of the management of
the policies of a person or entity, whether through ownership interest, by
contract or otherwise.

1.4.6 “Agreement Approval” has the meaning set forth in Section 6.1 of this
Agreement.

1.4.7 “Agreement Approval Date” means the date that, following full execution of
this Agreement, the NMPRC issues a final order approving EPE’s 2008

 

3

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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Procurement Plan and all periods for appeal of a final NMPRC order as described
in Section 6.1 of this Agreement have expired under NMPRC requirements.

1.4.8 “Applicable Law” means all applicable laws, statutes, treaties, codes,
ordinances, regulations, certificates, orders, licenses and permits of any
Governmental Authority, now in effect or hereafter enacted, amendments to any of
the foregoing, interpretations of any of the foregoing by a Governmental
Authority having jurisdiction, and all applicable judicial, administrative,
arbitration and regulatory decrees, judgments, injunctions, writs, orders,
awards or like actions (including those relating to human health, safety, the
natural environment, or otherwise).

1.4.9 “As-Available Solar Energy” means Solar Energy that Seller is obligated to
deliver and sell and that EPE is obligated to purchase and receive whenever such
energy is capable of being generated by the Facility.

1.4.10 “Back-Up Metering” means redundant Electric Metering Devices installed by
either Party pursuant to Section 5.2(B) of this Agreement.

1.4.11 “Business Day” means any calendar day that is not a Saturday, a Sunday,
or a NERC recognized holiday.

1.4.12 “CAMD” has the meaning set forth in Section 10.4(B) of this Agreement.

1.4.13 “Close of the Business Day” means 5:00 PM prevailing time in El Paso,
Texas, on a Business Day.

1.4.14 “Commercial Operation” means the period beginning on the Commercial
Operation Date and continuing through the Term of this Agreement.

1.4.15 “Commercial Operation Date” means the date designated by Seller to begin
delivering Solar Energy to EPE pursuant to the terms of this Agreement, which
shall take effect no sooner than thirty (30) Days after Seller provides
notification to EPE, pursuant to Section 4.9 of this Agreement, that all of the
Conditions specified in Section 4.9 have occurred or otherwise been satisfied.

1.4.16 “Commercial Operation Milestone” means the Construction Milestone for the
Commercial Operation Date as specified in Exhibit A to this Agreement.

1.4.17 “Commercial Operation Year” means any twelve (12) consecutive month
period during the Term of this Agreement, commencing with the first day of the
Month following the Commercial Operation Date or any of its anniversaries.

1.4.18 “Commissioning” means, with respect to the Facility, the commencement of
the period during which the Facility has begun Commissioning Testing and ending
when the Facility has been approved for the production of Solar Energy and
authorized to commence delivery of Solar Energy.

 

4

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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1.4.19 “Commissioning Tests” or “Commissioning Testing” has the meaning assigned
to it in Section 4.6 of this Agreement.

1.4.20 “Committed Solar Energy” has the meaning set forth in Section 7.2 of this
Agreement.

1.4.21 “Compliance Obligations” has the meaning ascribed to it in Section 4.9(E)
of this Agreement.

1.4.22 “Conditions” has the meaning set forth in Section 4.9 of this Agreement.

1.4.23 “Confidential Information” has the meaning set forth in Section 19.17(D)
of this Agreement.

1.4.24 “Construction Event(s) of Default” has the meaning set forth in
Section 12.1 of this Agreement.

1.4.25 “Construction Milestone(s)” means the date(s) set forth in Exhibit A to
this Agreement by which Seller agrees to achieve the corresponding result(s)
specified for such date(s), including, but not limited to, the Commercial
Operation Milestone.

1.4.26 “Curtailed Energy” has the meaning set forth in Section 8.3(A)(2) of this
Agreement.

1.4.27 “Day” means a calendar day.

1.4.28 “Delivery Excuse” means an event solely due to actions or omissions by
EPE that prevents or delays delivery of Solar Energy hereunder.

1.4.29 “Designed Maximum Output” means the maximum output of the Facility in kW
as designated by Seller.

1.4.30 “Disclosing Party” has the meaning set forth in Section 19.17(A) of this
Agreement.

1.4.31 “Dispute” has the meaning assigned to it in Section 12.8 of this
Agreement.

1.4.32 “Dispute Notice” has the meaning assigned to it in Section 12.8 of this
Agreement.

1.4.33 “Electric Metering Device(s)” means metering equipment, and data
processing equipment used to measure, record, or transmit data relating to the
Solar Energy output from the Facility and that are specified in the
Interconnection Agreement. Electric Metering Devices include the metering
current transformers (“CTs”) and the metering voltage transformers (“VTs”).

 

5

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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1.4.34 “Emergency Condition” means a condition or situation that presents an
imminent physical threat of danger to life, health or property, or could
reasonably be expected, in the opinion of the Interconnection Provider, to cause
a significant disruption to the Interconnection Provider’s system or otherwise
be required in accordance with the requirements of the NMPRC or any system
condition not consistent with Good Utility Practices.

1.4.35 “Environmental Attributes” has the meaning assigned to it in
Section 10.4(B) of this Agreement.

1.4.36 “Environmental Contamination” means the introduction or presence of
Hazardous Materials at such levels, quantities or location, or of such form or
character, as to constitute a violation of federal, state or local laws or
regulations, and present a material risk under federal, state or local laws and
regulations that the Site will not be available or usable for the purposes
contemplated by this Agreement.

1.4.37 “EPC Contract” means the Construction Contract entered into between
Seller and the Contractor in relation to construction of the Facility.

1.4.38 “EPC Contractor” means the Contractor as identified to EPE once selected
by Seller.

1.4.39 “EPE Event(s) of Default” has the meaning set forth in Section 12.4 of
this Agreement.

1.4.40 “EPE Procurement Plan” has the meaning set forth in Section 6.1 of this
Agreement.

1.4.41 “EPE System Operations Center” or “EPE SOC” means EPE’s organization
responsible for dispatch of generating units, including the Facility.

1.4.42 “Event of Default” has the meaning set forth in Section 12.5 of this
Agreement.

1.4.43 “Execution Date” has the meaning set forth in the first paragraph of this
Agreement.

1.4.44 “Expected Solar Energy” means the number of kilowatt hours (kWh) of Solar
Energy that Seller expects the Facility to generate for delivery to the Point of
Delivery and sale to EPE during each Commercial Operation Year. The Expected
Solar Energy level shall be the value calculated in accordance with the
following formula:

 

6

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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Expected Solar Energy level, in kWh = ****

Where:

****

****

****

1.4.45 “Facility” means Seller’s electric generating facility and Seller’s
Interconnection Facilities, as identified and described in Article 3 and Exhibit
B to this Agreement, including, but not limited to, all of the following, the
purpose of which is to produce electricity from Solar Energy and deliver such
electricity to the Point of Delivery: the Site, Seller’s equipment, buildings,
all of Seller’s generation facilities, including generators, step up
transformers, output breakers, Seller’s facilities necessary to connect to the
Point of Interconnection, protective and associated equipment, improvements, and
other tangible assets or contract rights reasonably necessary for the
construction, operation, and maintenance of the electric generating facility
that produces the Solar Energy subject to this Agreement. The address of the
Facility is as described in Exhibit B. A scaled map that identifies the Site,
the location of the Facility at the Site, the location of the Point of
Interconnection and the location of the important ancillary facilities and
Interconnection Facilities, is included in Exhibit B to this Agreement.

1.4.46 “Facility Debt” means the obligations of Seller to any lender pursuant to
the Financing Documents, including without limitation, principal of, premium and
interest on indebtedness, fees, expenses or penalties, amounts due upon
acceleration, payment or restructuring, swap or interest rate hedging breakage
costs and any claims or interest due with respect to any of the foregoing.

1.4.47 “Facility Lender” means, collectively, any lender(s) providing any
Facility Debt and any successor(s) or assigns thereto.

1.4.48 “FERC” means the Federal Energy Regulatory Commission or any successor
agency.

1.4.49 “Financing Documents” means the loan and credit agreements, notes, bonds,
indentures, security agreements, lease financing agreements, mortgages, deeds of
trust, interest rate exchanges, swap agreements and other documents relating to
the development, bridge, construction or permanent debt or equity financing for
the Facility, including any credit enhancement, credit support, working capital
financing, or refinancing documents, and any and all amendments, modifications,
or supplements to the foregoing that may be entered into from time to time at
the discretion of Seller subject to any required approvals, whether in this
Agreement, or otherwise, in connection with development, construction,
ownership, leasing, operation or maintenance of the Facility.

 

7

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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1.4.50 “Firm Transmission Service” means, as applicable, firm or network
transmission service from the Point of Delivery provided by the Transmission
Provider in accordance with its Open Access Transmission Tariff.

1.4.51 “Force Majeure Event” has the meaning set forth in Article 14 of this
Agreement.

1.4.52 “Forced Outage” means a reduction of, or cessation in the delivery of, or
inability to deliver, Solar Energy that is not the result of (i) a Scheduled
Maintenance Outage, (ii) a Force Majeure Event, (iii) a Delivery Excuse, or
(iv) an Emergency Condition.

1.4.53 “Good Utility Practice(s)” means any of the practices, methods and acts
engaged in or approved by a significant portion of the electric industry during
the relevant time period, or any of the practices, methods and acts which, in
the exercise of reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the desired result at
a reasonable cost consistent with good business practices, reliability, safety
and expedition. Good Utility Practice is not intended to be limited to the
optimum practice, method, or act to the exclusion of all others, but rather to
be practices, methods, or acts generally accepted in the region. With respect to
the Facility, Good Utility Practice(s) includes, without limitation, reasonable
steps to ensure that: (i) equipment, materials, resources, and supplies,
including spare parts inventories, are available to meet the Facility’s needs;
(ii) sufficient operating personnel are available at all times and are
adequately experienced and trained and licensed as necessary to operate the
Facility properly, efficiently, and in coordination with EPE and are capable of
responding to reasonably foreseeable emergency conditions whether caused by
events on or off the Site; (iii) preventive, routine, and non-routine
maintenance and repairs are performed on a basis that ensures reliable,
long-term and safe operation, and are performed by knowledgeable, trained, and
experienced personnel utilizing proper equipment and tools; (iv) appropriate
monitoring and testing are performed to ensure equipment is functioning as
designed; (v) equipment is not operated in a reckless manner, in violation of
manufacturer’s guidelines or in a manner unsafe to workers, the general public,
or the interconnected system or contrary to environmental laws, permits or
regulations or without regard to defined limitations such as flood conditions,
safety inspection requirements, operating voltage, current, volt-ampere reactive
loading, frequency, rotational speed, polarity, synchronization, and control
system limits; (vi) equipment and components meet or exceed the standard of
durability that is generally used for electric generation operations in the
region and will function properly over the full range of ambient temperature and
weather conditions reasonably expected to occur at the Site and under both
normal and emergency conditions; and (vii) equipment, components, and processes
are appropriately permitted with any local, state, or federal Governmental
Authority and are operated and maintained in accordance with applicable permit
and regulatory requirements.

1.4.54 “Governmental Approval” means any authorization, consent, permission,
approval, license, ruling, permit, exemption, variance, order, judgment,
instruction, condition, direction, directive, decree, declaration of or
regulation by any Governmental Authority relating to the construction,
development, ownership,

 

8

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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occupation, start-up, testing, operation or maintenance of the Facility or to
the execution, delivery or performance of this Agreement or the procurement
pursuant to this Agreement of Solar Energy and solar Renewable Energy
Certificates for inclusion in EPE’s renewable energy portfolio pursuant to the
New Mexico Renewable Energy Act and recovery of the related costs, and shall
also mean, where and as applicable and the context so dictates, any and all
authorization, consent, permission, approval, license, ruling, permit,
exemption, variance, order, judgment, instruction, condition, direction,
directive, decree, declaration of or regulation with regard to any Compliance
Obligations.

1.4.55 “Governmental Authority” means any federal, state, local or other
governmental regulatory or administrative agency, court, commission, department,
board, or other governmental subdivision, legislature, rulemaking board,
tribunal, or other governmental authority having jurisdiction over the Parties,
their respective facilities, or the respective services they provide, and
exercising or entitled to exercise any administrative, executive, police, or
taxing authority or power.

1.4.56 “Guaranty” shall have the meaning set forth in Section 11.1(C)(3) of this
Agreement.

1.4.57 “Hazardous Materials” means any substance, material, gas, or particulate
matter that is regulated by any Governmental Authority as an environmental
pollutant or dangerous to public health, public welfare, or the natural
environment including, without limitation, protection of non-human forms of
life, land, water, groundwater, and air, including, without limitation, any
material or substance that is: (i) defined as “toxic,” “polluting,” “hazardous
waste,” “hazardous material,” “hazardous substance,” “extremely hazardous
waste,” “solid waste” or “restricted hazardous waste” under any provision of
local, state, or federal law; (ii) petroleum, including any fraction, derivative
or additive; (iii) asbestos; (iv) polychlorinated biphenyls; (v) radioactive
material; (vi) designated as a “hazardous substance” pursuant to the Clean Water
Act, 33 U.S.C. §1251 et seq. (33 U.S.C. §1251); (vii) defined as a “hazardous
waste” pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. §6901
et seq. (42 U.S.C. §6901); (viii) defined as a “hazardous substance” pursuant to
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. §9601 et seq. (42 U.S.C. §9601); (ix) defined as a “chemical substance”
under the Toxic Substances Control Act, 15 U.S.C. §2601 et seq. (15 U.S.C.
§2601); or (x) defined as a pesticide under the Federal Insecticide, Fungicide,
and Rodenticide Act, 7 U.S.C. §136 et seq. (7 U.S.C. §136).

1.4.58 “Indemnified Party” has the meaning set forth in Section 17.1 of this
Agreement.

1.4.59 “Indemnifying Party” has the meaning set forth in Section 17.1 of this
Agreement.

1.4.60 “Interconnection Agreement” means the separate agreement between Seller
and the Transmission Provider, as such agreement may be amended from time to
time, for interconnection of the Facility to the Transmission System.

 

9

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

1.4.61 “Interconnection Facilities” has the same meaning as that same term is
defined in the Interconnection Agreement.

1.4.62 “Interest Rate” has the meaning assigned to it in Section 5.3(C) of this
Agreement.

1.4.63 “Interests” has the meaning set forth in Section 18.2 of this Agreement.

1.4.64 “Interim Period” means a period of less than three hundred sixty-five
Days during which time EPE, upon Seller’s Construction Event of Default,
Operational Event of Default or Abandonment of Construction or Operation of the
Facility, shall have the right but not the obligation to possess, assume control
of, and operate the Facility in accordance with Seller’s rights, obligations and
interest under this Agreement.

1.4.65 “Issuer” has the meaning set forth in Section 11.1(C) of this Agreement.

1.4.66 “kW” means kilowatt.

1.4.67 “kWh” means kilowatt hour.

1.4.68 “Letter of Credit” shall have the meaning set forth in Section 11.1(C)(1)
of this Agreement.

1.4.69 “Month” means a calendar month.

1.4.70 “Mountain Prevailing Time” or “MPT” means the time in effect in the
Mountain Time Zone of the United States of America, whether Mountain Standard
Time or Mountain Daylight Saving Time.

1.4.71 “MW” means megawatt or one thousand kW.

1.4.72 “MWh” means megawatt hours.

1.4.73 “NERC” means the North American Electric Reliability Council or any
successor organization.

1.4.74 “NMPRC” means the New Mexico Public Regulation Commission and any
predecessor or successor organization.

1.4.75 “Non-Conforming Order” has the meaning set forth in Section 6.1 of this
Agreement.

1.4.76 “Non-Scheduled Maintenance Period” has the meaning set forth in
Section 13.5(A) of this Agreement.

1.4.77 “Operating Committee” means one representative each from EPE and Seller
pursuant to Section 13.2(A) of this Agreement.

 

10

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

1.4.78 “Operating Procedures” means those procedures developed pursuant to
Section 13.2(B) of this Agreement.

1.4.79 “Operation and Maintenance Agreement” means that certain operation and
maintenance agreement between Seller and the Operation and Maintenance
Contractor with respect to the Facility, if applicable.

1.4.80 “Operation and Maintenance Contractor” means an operation and maintenance
contractor as identified to EPE, if used by Seller.

1.4.81 “Operational Events of Default” has the meaning set forth in Section 12.2
of this Agreement.

1.4.82 “Parent” has the meaning set forth in Section 18.2 of this Agreement.

1.4.83 “Party Representative” or “Parties’ Representatives” has the meaning set
forth in Section 12.8 of this Agreement.

1.4.84 “Permitted Transfer” has the meaning set forth in Section 18.3 of this
Agreement.

1.4.85 “Person” means any natural person, corporation, limited liability
company, general partnership, limited partnership, proprietorship, other
business organization, trust, union, association or Governmental Authority.

1.4.86 “Point of Delivery” means the point at which electricity generated by
Seller’s Facility is delivered to EPE, adjusted for any applicable metering
losses. In general, the Point of Interconnection shall be the same as the Point
of Delivery. Any differences between the Point of Interconnection and Point of
Delivery shall be identified in Exhibit B to this Agreement.

1.4.87 “Point of Interconnection” has the same meaning as that same term is
defined in the Interconnection Agreement.

1.4.88 “Project Contracts” means this Agreement, the EPC Contract, the
Interconnection Agreement, and the Operation and Maintenance Agreement.

1.4.89 “Projected Schedule” has the meaning assigned to it in Section 13.3(A) of
this Agreement.

1.4.90 “Rate Schedule No. 16 Rate” means the time-of-use energy rates in EPE’s
twenty-sixth revised Rate No. 16, or its successor, as filed with the NMPRC that
are in effect at the time.

1.4.91 “Receiving Party” has the meaning set forth in Section 19.17(A) of this
Agreement.

1.4.92 “Renewable Energy Certificate(s)” or “REC(s)” means a certificate(s) that
complies in all respects with the New Mexico Renewable Energy Act, the NMPRC’s

 

11

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

Renewable Rule 572, and any applicable NMPRC Final Orders, each in effect as of
the Execution Date, which documents that the energy delivered under this
Agreement is Solar Energy as defined by the New Mexico Renewable Energy Act and
is provided with the associated energy from Seller at no additional cost to EPE,
except as set forth in Section 10.1 of this Agreement. RECs are the
documentation required by the NMPRC to document that the associated energy is,
in fact, Solar Energy. Compliance with EPE’s Renewable Portfolio Standard under
the New Mexico Renewable Energy Act is documented by solar RECs.

1.4.93 “Replacement Energy Costs” means those damages suffered by EPE as a
direct result of Seller’s failure to perform its obligations under this
Agreement, including (i) all incremental costs suffered by EPE to replace the
Solar Energy or the RECs that Seller fails to deliver to EPE under this
Agreement with alternative Solar Energy that meets the requirements of the
NMPRC, (ii) any replacement solar capacity necessary to make up for any
shortfall in the capacity to be provided under this Agreement (to comply with
the NMPRC’s Renewable Energy Standard) which shortfall was caused by Seller or
the Facility, (iii) costs and penalties imposed by the NMPRC, or by any other
Governmental Authority, paid or required to be paid by EPE as a result of
Seller’s failure to perform under this Agreement and absence of fault or
responsibility of EPE, and (iv) EPE’s expenses including reasonable attorneys’
fees suffered as a result of Seller’s failure to perform under this Agreement.

1.4.94 “Representative” has the meaning set forth in Section 19.17(B) of this
Agreement.

1.4.95 “Required Commercial Operation Date” is July 31, 2011, except as
otherwise provided in this Agreement.

1.4.96 “Restoration” and “Restoration Schedule” have the meanings set forth in
Section 14.3(E)(2) of this Agreement.

1.4.97 “Restoration Report” has the meaning set forth in Section 14.3(E) of this
Agreement.

1.4.98 “Revised Commercial Operation Milestone” means a date specified by Seller
pursuant to Section 12.1(F) of this Agreement.

1.4.99 “Scheduled Maintenance Outage” means a time period during which the
Facility is shut down or its output reduced to undergo scheduled maintenance in
accordance with this Agreement, or as otherwise agreed by Seller and EPE.

1.4.100 “Security Fund” has the meaning set forth in Section 11.1 of this
Agreement.

1.4.101 “Seller’s Interconnection Facilities” means the facilities owned and
operated by the Seller as identified in the Interconnection Agreement.
Arrangements for the installation and operation of the Seller’s Interconnection
Facilities shall be governed by the Interconnection Agreement.

 

12

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

1.4.102 “Site” means real estate on which the Facility will be constructed and
located, including any interests, easements, water rights, and access rights
reasonably necessary for the construction, operation and maintenance of the
Facility. The Site is more specifically described in Exhibit B to this
Agreement.

1.4.103 “Solar Energy” means the net electrical energy generated in MWh using
solar generation technologies and delivered to EPE at nominal voltage to the
Point of Delivery as measured by Electric Metering Devices installed pursuant to
Section 5.2 of this Agreement. Solar Energy should be of a power quality of 60
cycle, three-phase alternating current that is compliant with the
Interconnection Agreement.

1.4.104 “Solar Energy Payment Rate” means the rate paid for Solar Energy by EPE
to Seller as specified in Exhibit F to this Agreement.

1.4.105 “Tariff” has the same meaning as that same term is defined in the
Interconnection Agreement.

1.4.106 “Tax Credits” means investment tax credits under Section 48 of the
Internal Revenue Code as in effect on the Execution Date or any successor or
other provision providing for a federal tax credit determined by reference to
renewable electric energy produced from Solar Energy resources, or any federal,
state or local investment tax credit or federal, state or local production tax
credit determined by reference to renewable electric energy produced from Solar
Energy resources in effect in the state of New Mexico.

1.4.107 “Term” means the period of time during which this Agreement shall remain
in full force and effect, and which is further defined in Article 2 of this
Agreement.

1.4.108 “Test Date” means the date on which Seller shall commence Commissioning
of the Facility and shall be the date falling no later than forty-five (45) Days
prior to the Commercial Operation Date or such other date as Seller and EPE may
agree in writing.

1.4.109 “Test Energy” means that Solar Energy produced by the Facility in order
to perform testing of the Facility prior to Commercial Operation.

1.4.110 “Transmission Owner” has the same meaning as that same term is defined
in the Interconnection Agreement.

1.4.111 “Transmission Provider” has the same meaning as that same term is
defined in the Interconnection Agreement.

1.4.112 “Transmission Provider’s Interconnection Facilities” means the
facilities owned and operated by the Transmission Provider as identified in the
Interconnection Agreement. Arrangements for the installation and operation of
the Transmission Provider’s Interconnection Facilities shall be governed by the
Interconnection Agreement.

 

13

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

1.4.113 “Transmission System” has the same meaning as that same term is defined
in the Interconnection Agreement.

1.4.114 “WECC” means the Western Electricity Coordinating Council, a NERC
regional electric reliability council, or any successor organization.

1.4.115 “Year” means a calendar year consisting of 365 Days.

ARTICLE 2 - TERM

2.1 Term. This Agreement shall be in full force and effect from the date shown
in the first paragraph hereof and shall remain in effect until the last Day of
the twentieth (20th) Commercial Operation Year, subject to any early termination
or extension provisions set forth herein.

ARTICLE 3 - FACILITY DESCRIPTION

3.1 Summary Description. Seller shall construct, own or lease, operate, and
maintain the Facility, which shall consist of devices for generating electricity
and associated equipment having a Designed Maximum Output of approximately 92 MW
which shall qualify as Solar Energy and which shall be located in New Mexico. As
of the Execution Date, there are two prospective sites for the Facility, which
are identified in Exhibit B. Prior to the Financial Commitment Milestone, Seller
shall revise Exhibit B and provide notice to EPE of Seller’s determination, made
in its sole discretion, of its final selection of the site for the Facility,
such selection to be made from the two sites shown in Exhibit B. Exhibit B to
this Agreement provides a detailed description of the Facility, including
identification of the major equipment and components that comprise the Facility.
The Expected Solar Energy generated from the Facility shall be ****. Seller may,
in its sole discretion, but upon notice to EPE no later than ninety (90) Days
prior to the Commercial Operation Date, make a one-time adjustment to increase
or decrease the Expected Solar Energy generated from the Facility, such
adjustment not to exceed **** of the Expected Solar Energy. In order to make
this adjustment, Seller must also provide a revised Exhibit B to this Agreement
describing the Facility and Site, including any increase or decrease not to
exceed **** of the Expected Solar Energy.

(A) Sale/Leaseback. Subject to and conditioned upon the prior written consent of
EPE, which consent shall not be unreasonably withheld, Seller may sell the
Facility to a third party and lease-back and operate the Facility in accordance
with the terms of this Agreement, provided that, (i) a copy of the applicable
section of any such sale/leaseback agreement is provided to EPE at least thirty
(30) Days prior to its execution, and (ii) any such sale and lease-back of the
Facility by Seller shall fully preserve EPE’s right to assume the position of
the Seller if EPE would have the right to purchase or lease the Facility as
provided in Sections 12.12(A) or 14.3 of this Agreement.

3.2 General Design and Operation of the Facility. Seller shall construct and
operate the Facility according to Good Utility Practice(s) and the
Interconnection Agreement. During Commercial Operation, Seller shall maintain
the Facility according to Good Utility Practice(s)

 

14

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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and the Interconnection Agreement, and in accordance with manufacturers’
recommendations. In addition to the requirements of the Interconnection
Agreement, the Facility shall at all times:

(A) have the required panel space and 125VDC battery supplied voltage to
accommodate metering, generator telemetering equipment and communications
equipment; and

(B) use communication circuits from the Facility to EPE’s SOC for the purpose of
telemetering, supervisory control/data acquisition, and voice communications as
required by EPE.

3.3 Environmental Compliance. Seller must obtain and pay for all applicable
environmental permits from any Governmental Authority needed for construction,
operation, maintenance, and decommissioning of the Facility, copies of which
will be provided by Seller to EPE within ten (10) Business Days of the issuance
of such permits. Seller shall promptly notify EPE of any and all violations and
any and all investigations, actions, claims, suits, notices of violation, fines,
penalties, orders, revocations, and other proceedings related to violations or
alleged violations of environmental laws, including, but not limited to, permits
issued thereunder, which are asserted against Seller or any of Seller’s
personnel in connection with the Facility or their activities on, along,
adjacent to or near the Site by any Governmental Authority. Seller will keep EPE
informed on a regular basis of the progress made and resolution of such events.

ARTICLE 4 - PRE-COMMERCIAL OPERATION

4.1 Construction of the Facility.

(A) Seller shall use commercially reasonable efforts to obtain any land rights
necessary for the Facility.

(B) Other than the rights and obligations of EPE specified in this Agreement and
any documents ancillary hereto, neither this Agreement nor any such ancillary
document shall be interpreted to create in favor of EPE, and EPE specifically
disclaims, any present right, title or interest in any part of the Facility.

(C) In the event Seller should determine that the expected Commercial Operation
Date is not feasible or is impossible to achieve, Seller shall promptly notify
EPE and shall advise EPE of the new expected Commercial Operation Date;
provided, however, such new expected Commercial Operation Date shall not exceed
the Required Commercial Operation Date.

4.2 Monitoring and Inspection. EPE shall have the right to monitor the
construction, start-up and testing of the Facility, and Seller shall comply with
all reasonable requests of EPE with respect to the monitoring of these events.
Seller shall cooperate in such physical inspections of the Facility as may be
reasonably requested by EPE during and after completion of construction. EPE’s
technical review and inspection of the Facility shall neither be construed as
endorsing the design thereof nor as any warranty of safety, durability, or
reliability of the Facility. Persons visiting the Facility on behalf of EPE
shall comply with Seller’s applicable safety and health rules and requirements.

 

15

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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4.3 Construction Milestones. In order to achieve the Commercial Operation Date
by the Commercial Operation Milestone, Seller agrees to meet the Construction
Milestones set forth in Exhibit A to this Agreement.

4.4 Extension of Construction Milestones. After executing this Agreement and
subject to Section 14.3(E)(5) herein, Seller may extend any Construction
Milestone as a result of the occurrence of one or more Force Majeure Events;
provided, however, that such extension for reasons of Force Majeure Events may
not delay achievement of any Construction Milestone beyond December 31, 2011.
Delays that are due to (i) failure of the EPE Procurement Plan to be approved or
deemed approved by the NMPRC by December 30, 2008 or (ii) failure of the
Transmission Provider for any reason to complete the construction of the
Transmission Provider’s Interconnection Facilities, to the extent such delay
causes a delay in the Construction Milestone, shall extend each Construction
Milestone day-for-day and the December 31, 2011, limitation on extensions shall
not apply. Changes in a Construction Milestone for any other reason are not
allowed.

4.5 Progress Reports. Commencing upon the Agreement Approval Date, Seller shall
submit to EPE, on the first Business Day of each calendar quarter until
construction of the Facility begins, progress reports in a form reasonably
satisfactory to EPE. Once construction of the Facility begins, Seller shall
submit such Progress Reports to EPE on the first Business Day of each Month.
These progress reports shall notify EPE of the current status of each
Construction Milestone and an updated completion schedule for the Facility. Such
Monthly reports shall provide a schedule showing items completed and to be
completed and a best estimate time-frame within which Seller expects the EPC
Contractor to complete such non-completed works. Seller shall, from time to
time, upon reasonable advance request from EPE, meet with EPE to discuss the
progress of the construction of the Facility. None of the foregoing shall be
deemed to be in lieu of, or in substitution for, the general record and
reporting obligations of Seller in accordance with Article 13 of this Agreement.

4.6 Commissioning Tests.

(A) Seller shall give EPE at least three (3) Months prior notice of the
approximate Test Date and of the proposed tests scheduled relating to the
Commissioning of the Facility (“Commissioning Tests”). Representatives of EPE
shall have the right to be present at all such testing. Seller shall promptly
notify EPE of any changes to the Test Date or the date of any Commissioning
Tests relating to the Facility in order that EPE may arrange for its respective
representatives to attend.

(B) The results of Commissioning Tests shall determine the Facility’s Designed
Maximum Output in MW.

(C) Nothing herein shall prevent or limit Seller or EPE, upon their mutual
written agreement to same, subject to any required Governmental Approval, from
establishing a new Committed Solar Energy at any level that they mutually agree
is appropriate and desirable under this Agreement.

 

16

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(D) Solar Energy produced during any Commissioning Tests shall be delivered by
Seller for EPE at the Point of Delivery, and EPE shall purchase such Solar
Energy at the rate described in Section 8.1(A).

(E) EPE shall have the right to require that Seller, not more than once in any
twelve (12) Month period beginning with the Commercial Operation Date,
re-demonstrate the Designed Maximum Output in MW of the Facility within sixty
(60) Days of the demand; provided, however, that such demand shall be
coordinated among EPE and Seller so that the sixty (60) Day period for
re-demonstration avoids, if practical, previously notified periods of Scheduled
Maintenance Outages and Additional Maintenance Outages pursuant to this Article
4.

4.7 Site Report. Seller shall conduct, at its sole expense, a Phase I
environmental investigation of the Site and shall provide EPE, prior to the
Financial Commitment Milestone, with a copy of the report summarizing such
investigation, together with any data or information generated pursuant to such
investigation. Seller shall provide to EPE confirmation from an environmental
engineer that (i) the Site has been inspected for Environmental Contamination
and (ii) a Phase I environmental assessment has been completed. Such report, or
other written confirmation provided by Seller, shall include a confirmation
that, based upon such investigation and to the best of Seller’s knowledge, no
conditions involving Environmental Contamination exist at or under the Site that
would prevent or materially delay construction and operation of the Facility at
the Site.

4.8 Facility Contracts. Upon reasonable notice and request by EPE, Seller shall
provide EPE with copies of (or, in the case of agreements and contracts subject
to non-disclosure covenants or similar provisions, summaries of): (i) contracts
for the manufacture, delivery and installation of the generator and step-up
transformer; (ii) engineering, procurement and construction, or other general
contractor agreements; (iii) applicable operating agreements; and (iv) the
applicable electric Transmission Agreement and Interconnection Agreement. Upon
request, Seller shall also provide EPE with reasonable evidence that it has or
will have the capability to finance construction of the Facility. Seller shall
provide sufficient information for EPE to be reasonably assured that Seller has
contracted with financially responsible vendors as part of the Facility
construction process.

4.9 Conditions to Commercial Operation. Seller will (i) notify EPE when the
Facility has achieved all of the conditions set forth in this Section 4.9
(“Conditions”), (ii) provide evidence reasonably acceptable to EPE of the
satisfaction or occurrence of such Conditions, and (iii) designate the
Commercial Operation Date for the Facility to occur no sooner than thirty
(30) Days from the date that Seller provides such notification to EPE
(“Notification Date”). EPE must accept or challenge Seller’s declaration that
all Conditions have been satisfied or occurred within thirty (30) Days of the
Notification Date, and any Condition that EPE does not challenge within thirty
(30) Days of the Notification Date will be deemed satisfied. The Parties shall
attempt to resolve any dispute that may arise regarding the satisfaction or
occurrence of any Condition(s) through direct discussion or mediation, as set
forth below in Sections 12.8 and 12.9 of this Agreement. Review and approval of
the Conditions may occur on an ongoing and incremental basis, pending resolution
of any dispute, as such Conditions are satisfied or occur. All costs and
expenses necessary to meet the Conditions shall be borne solely by Seller. The
Conditions, which must be met after the Agreement Approval Date has occurred,
are:

 

17

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(A) Seller has satisfied all the requirements of the Interconnection Agreement
and commenced interconnected parallel operation with the Transmission Provider;

(B) Seller has made all arrangements and executed all agreements required to
deliver the Solar Energy from the Facility to the Point of Delivery in
accordance with the provisions of this Agreement;

(C) Seller has provided EPE with copies of certificates of insurance evidencing
that the coverage required by Article 16 of this Agreement has been obtained and
submitted to EPE;

(D) Seller has submitted to EPE a certificate of an officer of Seller
specifically familiar with the Facility stating, after due inquiry, that all
permits, consents, licenses, approvals, and authorizations required to be
obtained by Seller from any Governmental Authority to operate the Facility in
compliance with applicable law and this Agreement have been obtained and are in
full force and effect, and to the knowledge of that officer, Seller is in
compliance with the terms and conditions of this Agreement in all material
respects;

(E) As applicable, Seller has made all necessary governmental filings and
applications for RECs and other accreditation or registration with the Western
Renewable Energy Generation Information System (WREGIS). Additionally, Seller
shall be in compliance with all applicable and required existing national and
regional reliability standards, including standards set by WECC, NERC, FERC, and
the NMPRC, or any successor agencies setting reliability standards for the
operation of solar generation facilities in the location of the Facility. Prior
to Commercial Operation Date, Seller shall register and provide documentation to
EPE showing that it has registered with the appropriate Regional Reliability
Organization (“RRO”) as a generator owner and has registered the generator
operator to the extent required by NERC and the RRO. Except for FERC
regulations, all of the foregoing requirements shall constitute the “Compliance
Obligations” under this Agreement;

(F) An officer of Seller specifically familiar with the Facility has certified
that the Designed Maximum Output of the entire Facility complies with the
description of the Facility provided in Exhibit B to this Agreement on the date
of certification, as such exhibit may be revised pursuant to Section 3.1 of this
Agreement; and

(G) The Facility has achieved initial synchronization with the Transmission
System and has demonstrated the reliability of its communications systems and
communications with the EPE SOC.

None of the foregoing Conditions shall be deemed to be in lieu of, or in
substitution for, the obligations of Seller in accordance with Section 13.13 of
this Agreement.

4.10 Test Energy. Seller shall coordinate the production and delivery of Test
Energy with EPE. EPE shall cooperate with Seller to facilitate Seller’s testing
of the Facility necessary to satisfy the Conditions set forth in Section 4.9
above.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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ARTICLE 5 - DELIVERY AND METERING

5.1 Delivery Arrangements.

(A) Seller shall be responsible for negotiating, entering into, and performing
the Interconnection Agreement with the Transmission Provider and any other
necessary entities for the design, installation and operation of the
Interconnection Facilities.

(B) Seller shall request that the Transmission Provider design the
Interconnection Facilities such that Seller’s Facility shall qualify as a
Network Resource for EPE (as that term is defined in the Tariff) that uses firm
or network transmission service.

(C) Within thirty (30) Days after the completion of any transmission studies by
the Transmission Provider, Seller shall provide WECC, the Transmission Provider,
and any applicable transmission owners with written permission to release such
transmission study results to EPE. Alternatively, Seller may provide a copy of
such study results to EPE.

(D) Seller shall be responsible for all interconnection, electric losses, and
costs required to deliver the Solar Energy and Test Energy from the Facility to
EPE up to the Point of Delivery.

(E) EPE shall be responsible for all electric losses, transmission and ancillary
service arrangements and costs required to receive the Solar Energy at the Point
of Delivery and to deliver such energy to points beyond the Point of Delivery.

5.2 Metering.

(A) All Electric Metering Devices used to measure the Solar Energy made
available to EPE by Seller under this Agreement and to monitor and coordinate
operation of the Facility shall be owned, installed, and maintained in
accordance with the Interconnection Agreement at no cost to EPE under this
Agreement. Such Electric Metering Devices shall be capable of measuring the
energy output of the Facility on an hourly basis for all hours in a Month.
Seller, at its own expense, shall inspect and test such Electric Metering
Devices upon installation and at least annually thereafter. Upon request from
EPE, Seller also shall perform additional inspections or tests of such Electric
Metering Devices. Seller shall provide EPE with reasonable advance notice of,
and permit a representative of EPE to witness and verify, all such inspections
and tests, provided, however, that any such representative of EPE shall not
unreasonably interfere with or disrupt Seller’s operation of the Facility and
shall comply with all applicable safety standards as in effect and established
by Seller from time to time. The actual expense of any EPE requested additional
inspections or tests shall be borne by EPE, unless, upon such inspection or
test, such Electric Metering Devices are found to register inaccurately by more
than the allowable limits established in this Article 5, in which event the
expense of the requested additional inspection or test shall be borne by Seller.
If requested in writing, Seller shall provide copies of any inspection or test
reports to EPE.

(B) Either EPE or Seller may elect to install and maintain, at its own expense,
Back-up Metering devices in addition to the Electric Metering Devices, which
installation and maintenance shall be performed in a manner acceptable to EPE.
The installing Party, at its own

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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expense, shall inspect and test Back-Up Metering upon installation and at least
annually thereafter. The installing Party shall provide the other Party with
reasonable advance notice of, and permit a representative of such other Party to
witness and verify, such inspections and tests, provided, however, that such
other Party shall not unreasonably interfere with or disrupt the activities of
the installing Party and shall comply with all applicable safety standards. Upon
request, the installing Party shall perform additional inspections or tests of
Back-Up Metering and shall permit a qualified representative of the other Party
to inspect or witness the testing of Back-Up Metering; provided, however, that
such other Party shall not unreasonably interfere with or disrupt the activities
of the installing Party and shall comply with all applicable safety standards as
in effect and established by the installing Party from time to time. The actual
expense of any such requested additional inspection or testing shall be borne by
the Party requesting the test, unless, upon such inspection or testing, Back-Up
Metering is found to register inaccurately by more than the allowable limits
established in this Article 5, in which event the expense of the requested
additional inspection or testing shall be borne by the installing Party. If
requested in writing, the installing Party shall provide copies of any
inspection or testing reports to the requesting Party.

(C) If Electric Metering Devices or Back-Up Metering are not installed at the
Point of Delivery, meters or meter readings shall be adjusted to reflect losses
from the Electric Metering Devices or Back-Up Metering to the Point of Delivery.

(D) If any Electric Metering Device, or Back-Up Metering, is found to be
defective or inaccurate, it shall be adjusted, repaired, replaced and
recalibrated, as necessary, as near as practicable to a condition of zero error
by the Party owning such defective or inaccurate device and at that Party’s
expense.

5.3 Adjustment for Inaccurate Meters. If any Electric Metering Device, or
Back-Up Metering, fails to register, or if the measurement made by an Electric
Metering Device, or Back-Up Metering, is found upon testing to be inaccurate by
more than one percent (1.0%), an adjustment shall be made correcting all
measurements by the inaccurate or defective Electric Metering Device, or Back-Up
Metering, for both the amount of the inaccuracy and the period of the
inaccuracy, in the following manner:

(A) In the event that the Electric Metering Device is found to be defective or
inaccurate, the Parties shall use Back-up Metering, if installed, to determine
the amount of such inaccuracy, provided, however, that Back-Up Metering has been
tested and maintained in accordance with the provisions of this Article 5. In
the event that either Party did not install Back-Up metering, or Back-Up
Metering is also found to be inaccurate by more than one percent (1.0%), the
Parties shall estimate the amount of the necessary adjustment on the basis of
deliveries of Solar Energy from the Facility and to the Point of Delivery during
periods of similar operating conditions when the Electric Metering Device was
registering accurately. The adjustment shall be made for the period during which
inaccurate measurements were made.

(B) In the event that the Parties cannot agree on the actual period during which
the inaccurate measurements were made, the period during which the measurements
are to be adjusted shall be the shorter of (i) the last one-half of the period
from the last previous test of the Electric Metering Device to the test that
found the Electric Metering Device to be defective or

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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inaccurate, or (ii) the one hundred eighty (180) Days immediately preceding the
test that found the Electric Metering Device to be defective or inaccurate.

(C) To the extent that the adjustment period covers a period of deliveries for
which payment has already been made by EPE, EPE shall use the corrected
measurements as determined in accordance with this Article 5 to re-compute the
amount due for the period of the inaccuracy and shall subtract the previous
payments by EPE for this period from such re-computed amount. If the difference
is a positive number, the difference shall be paid by EPE to Seller; if the
difference is a negative number, that difference shall be paid by Seller to EPE.
In either case, the owing Party, at its discretion, may offset such payments due
the other Party against undisputed amounts owed by the other Party as specified
in Section 9.3(A) of this Agreement. The owing Party shall provide the other
Party with notice and supporting documentation of the amount due. Except for
offsets to payments, which may be offset immediately, payment of such difference
by the owing Party shall be made not later than thirty (30) Days after the owing
Party receives notice and supporting documentation of the amount due. Interest
shall be computed for any payments or offsets to payments made pursuant to this
Section 5.3(C) at a rate equal to one-twelfth (1/12) of the prime rate published
in the Wall Street Journal on the invoice due date (the “Interest Rate”).

ARTICLE 6 - EPE CONDITIONS PRECEDENT

6.1 EPE Conditions Precedent. This Agreement shall become effective upon
execution by the Parties, provided that the 2008 Procurement Plan filed by EPE
pursuant to the New Mexico Renewable Energy Act (the “EPE Procurement Plan”),
which includes a request for approval to procure renewable energy, or capacity,
or both, and RECs pursuant to this Agreement for use in meeting the renewable
portfolio standard of the New Mexico Renewable Energy Act and to recover the
cost of such procurement, is (i) approved without material change by the NMPRC
by final NMPRC order, and (ii) all periods for appeal of the order have expired
under NMPRC requirements (the “Agreement Approval”). The date for Agreement
Approval is anticipated to be no later than December 30, 2008 (the “Agreement
Approval Date”). Should the NMPRC issue an order approving the EPE Procurement
Plan with conditions or modifications that materially change this Agreement, or
rejecting this Agreement on the basis of reasons set forth in such order (in
either case a “Non-Conforming Order”), the Parties agree to use good faith
efforts to renegotiate this Agreement. If, within sixty (60) days of the
issuance of a Non-Conforming Order, no agreement is reached, either Party may
terminate this Agreement upon delivery of notice to the other Party, in which
case the Parties shall have no further liability to each other under this
Agreement.

ARTICLE 7 - SALE AND PURCHASE OF SOLAR ENERGY

7.1 Sale and Purchase. Beginning on the Commercial Operation Date, Seller shall
generate from the Facility, deliver to the Point of Delivery, and sell to EPE,
at the applicable prices set forth in Article 8 of this Agreement, all Solar
Energy generated by the Facility. Except as otherwise expressly provided for
herein, this Agreement shall not be construed to constitute a “take-or-pay”
contract, and EPE shall have no obligation to pay for any energy that has not
actually been generated by the Facility, measured by the Electric Metering
Device(s), and delivered to EPE at the Point of Delivery. As provided in Article
10 of this Agreement,

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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Renewable Energy Certificates associated with the Solar Energy generated by the
Facility shall be transferred to and owned by EPE at no additional cost.

7.2 Committed Solar Energy. Committed Solar Energy is set forth in Exhibit F to
this Agreement and is the number of megawatt hours (MWh) of Solar Energy
committed to be delivered by Seller to EPE in each Commercial Operation Year.
The Committed Solar Energy level is ****, and takes into account all factors,
including any expected Facility unavailability due to scheduled and forced
outages as well as degradation of equipment at the Facility.

7.3 Title and Risk of Loss. As between the Parties, Seller shall be deemed to be
in control of the Solar Energy output from the Facility up to and until delivery
and receipt at the Point of Delivery, and EPE shall be deemed to be in control
of such energy at and beyond delivery and receipt at the Point of Delivery.
Title and risk of loss related to the Solar Energy shall transfer from Seller to
EPE at the Point of Delivery.

7.4 Temporary Disconnection of the Facility. No payments shall be due Seller for
curtailments of delivery of Solar Energy resulting from a temporary
disconnection of the Facility by the Interconnection Provider pursuant to the
Interconnection Agreement.

ARTICLE 8 - ENERGY PAYMENT CALCULATIONS

8.1 Energy Payments. Energy payments to Seller shall be calculated as follows
for each Month:

(A) Prior to Commercial Operation. EPE shall pay Seller the Rate Schedule No. 16
Rate times the Test Energy delivered to EPE during the Month. If the Rate
Schedule No. 16 Rate no longer exists, EPE shall pay for such Test Energy at its
then-current avoided cost.

(B) During Commercial Operation. Provided that the cumulative deliveries in the
Commercial Operation Year do not exceed ****, EPE shall pay Seller ****. For all
Solar Energy delivered by Seller to EPE in a Commercial Operation Year that is
in excess of ****.

8.2 Non-Solar Energy.

(A) Except as provided by Section 8.3 of this Agreement, EPE shall not be
obligated to make any payment, regardless of reason or Force Majeure Event,
affecting either Party, for energy that (i) does not qualify as Solar Energy;
(ii) is not measured by the Electric Metering Device(s) installed pursuant to
Section 5.2 of this Agreement, as such measurement may be adjusted pursuant to
Section 5.3 of this Agreement; and (iii) is not delivered to EPE at the Point of
Delivery.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(B) For energy that does not qualify as Solar Energy, EPE shall have the option,
at its sole discretion, to purchase such non-Solar Energy from Seller and shall
pay Seller EPE’s then-current avoided cost. If EPE declines to purchase such
non-Solar Energy, then Seller may sell such non-Solar Energy to a third party.

8.3 Curtailed Energy Payment Rate.

(A) If delivery of Solar Energy is curtailed by EPE, then:

(1) Seller may sell the Solar Energy from the Facility to a third party;

(2) If Seller does not sell the Solar Energy to a third party, the Parties shall
determine the quantity of Solar Energy that would have been generated by the
Facility and delivered to the Point of Delivery had its generation not been so
curtailed (“Curtailed Energy”), and EPE shall pay to Seller for such Curtailed
Energy all amounts that Seller would have received from EPE under this Agreement
had generation not been so curtailed;

(3) The rate to be paid by EPE to Seller for Curtailed Energy is ****. However,
any Solar Energy sold by Seller to a third party pursuant to (1) above shall not
count toward the calculation of the rate payment as set forth in this subsection
(3) annual curtailment hour total.

(B) Notwithstanding anything in this Section 8.3 to the contrary, no payment
shall be due to Seller from EPE under paragraph (A) above for curtailments of
delivery of Solar Energy resulting from:

(1) an Emergency Condition, or Force Majeure Event,

(2) any action taken by the Interconnection Provider under the Interconnection
Agreement,

(3) any curtailment of Firm Transmission Service by the applicable Transmission
Provider, to provide transmission of Solar Energy from the Point of Delivery, or

(4) any notification from EPE’s SOC requiring Seller to curtail deliveries of
Solar Energy if Seller has failed to obtain or maintain in full force and effect
any Governmental Approval which has the effect of preventing delivery of Solar
Energy pursuant to this Agreement.

8.4 Payment Support Requirement. Neither Party shall initiate any action before
any Governmental Authority to deny recovery of payments under this Agreement.
Each Party shall use commercially reasonable efforts to defend all terms and
conditions of this Agreement consistent with Applicable Law.

8.5 Survival on Termination. The provisions of this Article 8 shall survive the
repudiation, termination or expiration of this Agreement for so long as may be
necessary to give

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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effect to any outstanding payment obligations of the Parties due and payable
prior to any such repudiation, termination or expiration.

ARTICLE 9 - BILLING AND PAYMENT

9.1 Seller’s Invoices. The monthly billing period shall be the Month. No later
than five (5) Business Days after the end of each Month, Seller shall provide to
EPE, by electronic means or first-class mail, an invoice showing the invoice
date, the invoice due date and all billing parameters, rates, and any other data
reasonably pertinent to the invoice, including information required by
Section 10.2 of this Agreement, for the amount owed to Seller from EPE for Solar
Energy provided by Seller and purchased by EPE pursuant to Section 8.1 of this
Agreement during the previous Month billing period.

9.2 EPE’s Invoices. No later than five (5) Business Days after the end of a
Month in which Seller owes payments to EPE under this Agreement, EPE shall
provide the Seller, by electronic means or first-class mail, an invoice showing
the invoice date, the invoice due date and all billing parameters, rates, and
any other data reasonably pertinent to the invoice for any amount owed by Seller
to EPE under this Agreement.

9.3 Payments. Unless otherwise specified herein, payments owed under this
Agreement shall be due and payable by check or by electronic funds transfer, as
designated by the invoicing Party, on or before the twentieth (20th) Business
Day following the date of the billing invoice provided that such invoice was
rendered within the five-day period set forth in Sections 9.1 and 9.2 of this
Agreement and, if not so rendered, such payment shall be due on the 20th
Business Day of the following month. Remittances received by mail will be
considered to have been paid when due if the postmark indicates the payment was
mailed on or before the fifteenth (15th) Business Day following receipt of the
invoice.

(A) EPE may offset any amounts that it owes Seller against any undisputed
amounts that Seller owes EPE, including damages, interest payments, and other
payments. Seller may include in its invoices and offset any amounts that it owes
EPE against any undisputed amounts that EPE owes Seller for the purchase of
Solar Energy under this Agreement, including damages, interest payments, and
other payments. Any such offsets by either Party shall be clearly represented in
the invoices described in Sections 9.1 or 9.2 of this Agreement.

(B) Undisputed and non-offset portions of amounts invoiced under Sections 9.1 or
9.2 of this Agreement not paid on or before the invoice due date shall be
subject to the late payment interest charges calculated as set forth in this
Section 9.3(B). The late payment interest charge rate per month shall be at the
Interest Rate. The late payment interest charge shall equal this rate times the
unpaid balance of undisputed and non-offset portions of amounts invoiced. The
late payment interest charge shall be added and itemized in the next billing
invoice of either EPE or Seller, whichever is appropriate.

9.4 Billing Disputes. Either Party may dispute invoiced amounts but shall pay to
the other Party at least the undisputed portion of invoiced amounts on or before
the invoice due date pending resolution of the dispute. Full payment of an
invoice shall not waive a Party’s right to later dispute the invoice provided
that notice of a disputed invoice is presented by the disputing Party to the
other Party within twelve (12) months of an invoice due date, accompanied by an

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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explanation of the specifics of the dispute as well as a request for a refund or
an additional payment, whichever is appropriate. When a billing dispute is
resolved, EPE or Seller, as appropriate, shall invoice the other Party the
amount agreed to by the Parties no later than fifteen (15) Business Days after
the end of the Month in which the dispute is resolved. The amount owed shall
include any late payment interest charges calculated from the original invoice
due date in accordance with the provisions of Section 9.3(B) above. Either
Seller or EPE may elect to offset amounts owed to the other Party pursuant to
Section 9.3(A) above.

9.5 Statement Errors. If, within two (2) years of a Statement Date, either Party
becomes aware of any error in any statement, such Party shall, immediately upon
discovery of the error, notify in writing the other Party of such error and the
other Party shall rectify such error (whether such error was in the form of an
underpayment or overpayment) within thirty (30) Days of such notification.
Provided that the other Party is satisfied (in its sole and reasonable
discretion) that the aforementioned notification requirements have been complied
with in good faith by the Party who has made the error, interest shall be
payable in respect of any amount that was erroneously overpaid or underpaid at
the Interest Rate.

9.6 Set-Off and Payment Adjustments. Except as otherwise expressly provided for
in this Agreement, all payments between the Parties under this Agreement shall
be made free of any restriction or condition and without deduction or
withholding on account of any other amount, whether by way of set-off or
otherwise. Payments to be made under this Agreement shall, for a period of not
longer than two (2) years, remain subject to adjustment based on billing
adjustments due to error or omission by either Party, provided that such
adjustments have been agreed to between the Parties or resolved in accordance
with the provisions of Section 12.8 hereof.

9.7 Survival on Termination. The provisions of this Article 9 shall survive the
repudiation, termination or expiration of this Agreement for so long as may be
necessary to give effect to any outstanding payment obligations of the Parties
that became due and payable prior to any such repudiation, termination or
expiration.

ARTICLE 10 - RENEWABLE ENERGY CERTIFICATES AND LIMITED SALE OF

ENVIRONMENTAL ATTRIBUTES

10.1 Compliance with New Mexico Renewable Energy Act. Seller must comply with
the New Mexico Renewable Energy Act and provide associated solar RECs, in the
format to be provided by EPE and in compliance with NMPRC Rule 572. Seller shall
provide the solar RECs associated with the Solar Energy sold and delivered to
EPE under this Agreement at no additional cost.

10.2 Monthly RECs. Seller shall provide solar RECs monthly using the format in
Exhibit G to this Agreement and shall include the appropriate number of solar
RECs associated with the Solar Energy purchased during the month in each monthly
invoice.

10.3 Seller’s Failure to Provide Solar RECs. Except for Force Majeure Event(s)
and any curtailments pursuant to Sections 7.4 or 8.3 of this Agreement, if
Seller’s failure to provide the Committed Solar Energy causes EPE to need
additional solar RECs to meet its obligations under NMPRC Renewable Rule 572,
Seller shall first use commercially reasonable efforts to

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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obtain replacement solar RECs and deliver them to EPE for the quantity of solar
RECs EPE notifies Seller that it requires up to the quantity of solar RECs
associated with the Committed Solar Energy. EPE must notify Seller that it
requires such replacement solar RECs within ninety (90) Days of Seller’s failure
to provide the solar RECs associated with the Committed Solar Energy. Seller
must deliver replacement solar RECs within thirty (30) Days of EPE’s notice to
Seller of the required quantity of solar RECs. EPE will reimburse Seller for the
actual cost of the replacement RECs. However, should the total of the actual
cost of the replacement RECs that Seller purchases and the replacement energy
that EPE actually purchased to replace the Solar Energy not provided by Seller,
assuming that such replacement energy is an As Available energy product
excluding RECs, exceed the price of energy sold to EPE under this Agreement per
Exhibit F, such incremental costs may be deducted from the monies owed to Seller
for the replacement RECs. Notwithstanding the actual cost of replacement solar
RECs and the cost of replacement energy that EPE actually purchased, Seller’s
minimum liability to EPE shall be **** and maximum liability to EPE shall be
**** for each REC not delivered, such maximum liability to escalate at **** per
year after the first ten (10) years of this Agreement.

(A) If such replacement solar RECs are not obtained and delivered by Seller to
EPE, EPE may, at its discretion but no later than ninety (90) Days after
Seller’s failure to provide the solar RECs associated with the Committed Solar
Energy, attempt to obtain replacement solar RECs up to the quantity of solar
RECs associated with the Committed Solar Energy. EPE will be responsible for the
costs for these replacement RECs. However, should the total of the actual cost
of the replacement RECs that EPE purchases and the replacement energy that EPE
actually purchased to replace the Solar Energy not provided by Seller exceed the
price of energy sold to EPE under this Agreement per Exhibit F, such incremental
costs will be paid by Seller to EPE. EPE’s failure to obtain replacement solar
RECs associated with the Committed Solar Energy does not relieve Seller of the
obligation to obtain replacement solar RECs in an amount equal to the Committed
Solar Energy. Notwithstanding the actual cost of replacement solar RECs and the
cost of replacement energy that EPE actually purchased, Seller’s minimum
liability to EPE shall be **** and maximum liability to EPE shall be **** for
each REC not delivered, such maximum liability to escalate at **** per year
after the first ten (10) years of this Agreement.

(B) If sufficient replacement solar RECs are unavailable, Seller shall pay EPE
the cost of any NMPRC fines incurred by EPE as a result of EPE’s failure to meet
its obligations under NMPRC Renewable Rule 572 caused by Seller’s failure to
provide the Committed Solar Energy and associated solar RECs. EPE shall allocate
any applicable fines to Seller and other sellers of Solar Energy with whom EPE
has a contract and which failed to meet their obligations for delivery of RECs
to EPE on a prorata basis based upon contract commitments and shortfalls.

(C) Seller shall not be responsible for paying EPE for its purchase of
replacement solar RECs that are due to: (i) delays in the Commercial Operation
Milestone caused by events described in Section 4.4(i) and (ii) of this
Agreement, or (ii) a Force Majeure Event as described in Article 14 of this
Agreement.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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10.4 Limited Sale of Environmental Attributes.

(A) Effective from the Commercial Operation Date, EPE shall purchase all of the
Solar Energy associated with the Solar Energy delivered by Seller. EPE shall
also acquire, and retain ownership of, and the right to market and sell all of
the Environmental Attributes (defined below) associated with the generation of
Solar Energy associated with the Committed Solar Energy delivered by Seller;
provided, however, that nothing in this Section 10.4 shall have any effect upon
the monetary amounts for payments for energy, as the same may otherwise be
provided for herein.

(B) “Environmental Attributes” means all attributes, excluding Tax Credits, of
an environmental or other nature that are created or otherwise arise from the
Facility’s generation of electricity from solar energy in contrast with the
generation of electricity using nuclear or fossil fuels or other traditional
resources. Forms of such attributes include any and all environmental air
quality credits, green credits, carbon credits, emissions reduction credits,
certificates, tags, offsets, allowances, or similar products or rights,
howsoever entitled, (i) resulting from the avoidance of the emission of any gas,
chemical, or other substance, including mercury, nitrogen oxide, sulfur dioxide,
carbon dioxide, carbon monoxide, particulate matter or similar pollutants or
contaminants of air, water, or soil gas, chemical, or other substance, and
(ii) attributable to the generation, purchase, sale or use of solar energy
associated with the Committed Solar Energy delivered by Seller from or by the
Facility, or otherwise attributable to the Facility during the Term.
Environmental Attributes include those currently existing or arising during the
Term under local, state, regional, federal, or international legislation or
regulation relevant to the avoidance of any emission described in this
Section 10.4 under any governmental, regulatory or voluntary program, including
the United Nations Framework Convention on Climate Change and related Kyoto
Protocol or other programs, laws or regulations involving or administered by the
Clean Air Markets Division of the Environmental Protection Agency or successor
administrator (collectively with any local, state, regional, or federal entity
given jurisdiction over a program involving transferability of Environmental
Attributes, the “CAMD”). Seller and EPE shall execute all documents and
instruments necessary to effect retention of the Environmental Attributes by EPE
or its respective designees. Should the CAMD notify EPE that it will not
authorize the retention by EPE of any Environmental Attributes as contemplated
by this Agreement, Seller shall cooperate with the CAMD and take all reasonable
action to enable EPE to retain the Environmental Attributes as herein described.
Seller shall not submit to the CAMD, under §1605(b) of the Energy Policy Act of
1992 or any other applicable program, any reports describing any of the
Environmental Attributes as belonging to anyone other than EPE or its respective
designees. Seller and EPE will promptly give to one another copies of any
documents they submit to the CAMD.

(C) Ownership by EPE of Environmental Attributes shall be for the entire Term of
this Agreement, including any Environmental Attributes that are reserved or
“banked” throughout the Term of this Agreement but not used, sold, assigned or
otherwise transferred during the Term of this Agreement. EPE may, to the extent
permitted by Applicable Law and this Agreement, assign its rights, title and
interest in and to any Environmental Attributes associated with the Facility to
one or more third parties under any transaction permitted by Applicable Law.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(D) Tax Credits in effect on the date of this Agreement or any successor or
other provision providing for a federal, state or local tax credit determined by
reference to renewable electric energy produced from Solar Energy resources
shall be owned by Seller.

(E) Environmental Attributes in the form of solar RECs associated with Solar
Energy purchased pursuant to this Agreement shall be owned by EPE, who shall
have the right to use such solar RECs to satisfy (i) any applicable legal
requirements, including a renewable portfolio standard, or (ii) the purchase
requirements of its retail customers.

10.5 Administrative Compliance Cost Obligations.

(A) Up to an annual amount of $25,000, Seller shall be solely responsible for
the cost of administrative compliance with all Compliance Obligations, as well
as all costs of complying with NMPRC Rule 572 and any NMPRC Rule(s) governing
the registration and accounting for RECs that may be enacted or amended after
the Execution Date.

(B) For any annual amount in excess of $25,000 for purposes described in
(A) above, EPE and Seller shall each pay half of such amount provided, however,
that Seller shall provide, within 30 days of the end of the year, an accounting
of all such administrative compliance costs incurred for the year.

(C) Administrative compliance cost obligations referenced in this Section 10.5
shall not include costs associated with Seller’s obligations pursuant to
Sections 3.3 and 4.7 of this Agreement or any fines or penalties assessed
against Seller.

ARTICLE 11 - SECURITY FOR PERFORMANCE

11.1 Security Fund.

(A) Seller shall establish, fund, and maintain a security fund, pursuant to the
provisions of this Article 11 (“Security Fund”), which shall be available to
(i) pay any amount due EPE pursuant to this Agreement, whether arising before,
on, or after the Commercial Operation Date or termination of this Agreement,
(ii) provide EPE security that Seller will construct the Facility to meet the
Construction Milestones, and (iii) provide security to EPE to cover damages,
including Replacement Energy Costs, should the Facility fail to achieve the
Commercial Operation Date or otherwise not operate in accordance with this
Agreement. Seller shall establish the Security Fund at a level of twenty dollars
per kilowatt ($20/kW) of Designed Maximum Output no later than thirty (30) Days
following the Execution Date. Seller shall increase the Security Fund by twenty
dollars per kilowatt ($20/kW) of Designed Maximum Output, to a total level of
forty dollars per kilowatt ($40/kW) within thirty (30) Days of the later of
(y) obtaining construction permits or (z) execution of the Interconnection
Agreement, but in no event later than June 1, 2010. Seller shall increase the
Security Fund by twenty dollars per kilowatt ($20/kW) of Designed Maximum
Output, to a total level of sixty dollars per kilowatt ($60/kW) of Designed
Maximum Output, at least thirty (30) days prior to the Commercial Operation
Date. Seller shall maintain the Security Fund at such required level throughout
the remainder of the Term. Seller shall replenish the Security Fund to the
applicable required level within ten (10) Business Days after any draw on the
Security Fund by EPE.

 

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exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(B) In addition to any other remedy available to it under this Agreement or at
law, EPE may, to the extent Seller fails to perform or abide by the terms of
this Agreement, or by order of a Governmental Authority of competent
jurisdiction, before, on, or after termination of this Agreement, draw from the
Security Fund such amounts as are necessary to recover amounts owing to EPE
pursuant to this Agreement. Such amounts include any damages due to EPE and any
amounts for which EPE is entitled to indemnification under this Agreement. EPE
must provide notice to Seller ten (10) Business Days prior to drawing such
amounts from the Security Fund. If Seller fails to deliver payment of such
amounts by check or electronic funds transfer to EPE within ten (10) Business
Days of such notification, EPE may, in its sole discretion, draw all or any part
of such amounts due to it from any form of security to the extent available
pursuant to this Section 11.1, and from all such forms, and in any sequence EPE
may select. Any failure to draw upon the Security Fund or other security for any
damages or other amounts due to EPE shall not prejudice EPE’s rights to recover
such damages or amounts in any other manner.

(C) The Security Fund shall be established in the amounts specified in
Section 11.1(A) above, shall be maintained at Seller’s sole expense, shall be
originated by or deposited in a financial institution or company acceptable to
EPE and meeting the requirements specified in Section 11.1(C)(1) below
(“Issuer”), and, prior to the Commercial Operation Date, shall be (i) in the
form of the instrument described in Section 11.1(C)(1) below, or (ii) at
Seller’s election and at EPE’s reasonable discretion, in the form described in
Section 11.1(C)(2) or 11.1(C)(3) below:

(1) An irrevocable standby letter of credit in a form and substance acceptable
to EPE, from an Issuer with an unsecured bond rating (not enhanced by
third-party support) equivalent to A- or better as determined by both Standard &
Poor’s and Moody’s, or, if either one or both are not available, equivalent
ratings from alternate rating sources acceptable to EPE (“Letter of Credit”). In
addition, if such unsecured bond rating of the Issuer is exactly equivalent to
A-, the Issuer must not be on credit watch or similar classification, or have a
negative outlook by a rating agency. Such Letter of Credit must be consistent
with this Agreement and shall include a provision for at least thirty (30) Days
advance notice to EPE of any expiration or earlier termination of the Letter of
Credit, so as to allow EPE sufficient time to exercise its rights under the
Letter of Credit should Seller fail to extend or replace the same. The form of
the Letter of Credit must meet EPE’s requirements to ensure that claims or
draw-downs can be made unilaterally by EPE in accordance with the terms of this
Agreement. Such security must be issued for a minimum term of three hundred and
sixty (360) Days. Seller shall cause the renewal or extension of the security
for additional consecutive terms of three hundred and sixty (360) Days or more
(or, if shorter, the remainder of the Term) no later than thirty (30) Days prior
to each expiration date of the Letter of Credit. If the Letter of Credit is not
renewed or extended as required herein, EPE shall have the right to draw
immediately upon the Letter of Credit and to place the amounts so drawn, at
Seller’s cost and with Seller’s funds, in an interest bearing escrow account in
accordance with Section 11.1(C)(2) below. The Letter of Credit shall be governed
by the Uniform Customs and Practice for Documentary Credits (2007 Revision),
International Chamber of Commerce Brochure No. 500 (the “UCP”), except to the
extent that the terms hereof are inconsistent with the

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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provisions of the UCP, in which case the terms of the Letter of Credit shall
govern.

(2) United States currency deposited with an Issuer, in which EPE holds a first
and exclusive security interest perfected by control, either: (i) in an account
under which EPE is designated as beneficiary with sole authority to draft from
the account or otherwise access the security; or (ii) in an account held by
Issuer as escrow agent with instructions to pay claims made by EPE pursuant to
this Agreement, such instructions to be in a form satisfactory to EPE (each an
“Account”). Security provided in this form shall include a requirement for
immediate notice to EPE from Issuer and Seller in the event that the sums held
as security in the account do not at any time meet the required level for the
Security Fund as set forth in this Section 11.1. Funds held in the account may
be deposited in a money-market fund, short-term treasury obligations,
investment-grade commercial paper and other liquid investment-grade investments
with maturities of three months or less, with all investment income thereon to
be taxable to, and to accrue for the benefit of, Seller. After the Commercial
Operation Date is achieved, annual account sweeps for recovery of interest
earned by the Security Fund shall be allowed by Seller. At such times as the
balance in the escrow account exceeds the amount of Seller’s obligation to
provide security under this Agreement, EPE shall remit to Seller on demand any
excess in the escrow account above Seller’s obligations.

(3) A guaranty in a form and substance acceptable to EPE, from an Issuer with a
senior unsecured credit rating (not enhanced by third-party support) equivalent
to BBB+ or better as determined by both Standard & Poor’s and Moody’s, or if
either one or both are not available, equivalent ratings from alternate rating
sources acceptable to EPE (“Guaranty”). In addition, if such senior unsecured
credit rating of the Issuer is exactly equivalent to BBB+, the Issuer must not
be on credit watch or similar classification, or have a negative outlook by a
rating agency. EPE may reevaluate from time to time the value of any Guaranty
posted by Seller for possible downgrade or for other negative circumstances. If
the credit rating of the Issuer is downgraded or EPE otherwise has commercially
reasonable grounds to believe that there has been a material adverse change in
the creditworthiness of the Issuer, then Seller shall be required to convert the
Guaranty provided by such Issuer (i) to a Letter of Credit meeting the criteria
set forth in Section 11.1(C)(1) above, or, (ii) at Seller’s election and at
EPE’s reasonable discretion, to an Account or a Guaranty meeting the criteria
set forth in Sections 11.1(C)(2) above and 11.1(C)(3), herein, respectively, no
later than thirty (30) Days after receiving notice from EPE that such conversion
is required pursuant to this Section 11.1(C)(3).

(D) Promptly following the end of the Term and the completion of all of Seller’s
obligations under this Agreement, EPE shall release the balance of the Security
Fund (including any accumulated interest, if applicable) to Seller.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(E) If there is an early termination of this Agreement that is not due to
default by Seller and no amounts remain outstanding and unpaid by Seller under
the Agreement, EPE shall refund the Security Fund to Seller.

(F) Seller shall reimburse EPE for the incremental direct expenses (including
the reasonable fees and expenses of counsel) incurred by EPE in connection with
the preparation, negotiation, execution or release of any security instruments,
and other related documents, used by Seller to establish and maintain the
Security Fund pursuant to Seller’s obligations under this Section 11.1.

ARTICLE 12 - DEFAULT AND REMEDIES

12.1 Construction Events of Default. Subject to the notice and cure provision
set forth below, any Construction Event of Default shall give EPE the
unconditional right, in its sole discretion, to: (i) either terminate the
Agreement or complete construction of the Facility at the expense of and for the
account of Seller and operate the Facility during the Interim Period or beyond
pursuant to Section 12.12 below, (ii) draw upon or otherwise negotiate and
liquidate the Security Fund, and (iii) in the event EPE elects not to terminate
this Agreement under Section 12.1(i) above, negotiate changes to this Agreement.
EPE shall provide notice to Seller thirty (30) Days prior to taking any of the
actions set forth in Section 12.1(i) above, specifying the Construction Event(s)
of Default triggering such action(s), and shall not take such action(s) if
Seller has remedied or is making significant progress towards remedying the
specified Construction Event(s) of Default within the thirty (30) Day period
following EPE’s notification; provided, however, such notice period shall be
fifteen (15) Days with respect to Sections 12.1(B) and (C) herein. The following
shall constitute Construction Events of Default:

(A) Seller becomes insolvent, becomes a debtor in any bankruptcy or receivership
proceedings, or dissolves as a legal business entity;

(B) Any representation or warranty made by Seller is false or misleading in any
material respect, and Seller fails to comply or make significant progress
towards compliance with such representation or warranty within thirty (30) Days
after a demand by EPE to do so;

(C) Seller fails to comply with any other material terms and conditions of the
Agreement within sixty (60) Days after a demand by EPE to do so;

(D) Seller fails to meet any Construction Milestone, unless such failure is due
to the action(s) or inaction(s) of EPE or is otherwise excused under this
Agreement;

(E) Seller fails to diligently pursue construction after the Construction
Commencement Date;

(F) The Facility fails, for reasons other than Force Majeure, to meet the
Commercial Operation Milestone, unless Seller (i) notifies EPE ninety (90) Days
prior to the Commercial Operation Milestone of a Revised Commercial Operation
Milestone that is no later than December 31, 2011, as may be extended pursuant
to Sections 4.4(i)-(ii) of this Agreement, and (ii) pursuant to Section 10.3 of
this Agreement, agrees to obtain and deliver replacement solar RECs to EPE for
the quantity of solar RECs that EPE notifies Seller EPE requires, up to the

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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quantity of solar RECs associated with the Committed Solar Energy for the period
between the Commercial Operation Milestone and the Revised Commercial Operation
Milestone, in order for EPE to meet its obligations under NMPRC Rule 572 as a
result of EPE’s acceptance of the Revised Commercial Operation Milestone;

(G) The Facility fails to meet the Commercial Operation Milestone or the Revised
Commercial Operation Milestone; or

(H) The Facility is transferred by Seller without the requisite consent of EPE,
as provided in Section 18.6 of this Agreement.

12.2 Operational Events of Default. Subject to the notice and cure provisions
set forth below, any Operational Event of Default shall give EPE the
unconditional right, in its sole discretion, to: (i) either terminate this
Agreement or operate the Facility during the Interim Period pursuant to
Section 12.12 below, (ii) draw upon or otherwise negotiate and liquidate the
Security Fund, and (iii) in the event EPE elects not to terminate this Agreement
under Section 12.1(i) above, negotiate changes to this Agreement. EPE shall
provide notice to Seller thirty (30) Days prior to taking any of the actions set
forth in Section 12.1(i) above, specifying the Operational Event(s) of Default
triggering such action(s), and shall not take such action(s) if Seller has
remedied or is making significant progress towards remedying the specified
Operational Event(s) of Default within the thirty (30) Day period following
EPE’s notification; provided, however, such notice period shall be fifteen
(15) Days with respect to Sections 12.2(B) and (C) herein. The following shall
constitute Operational Events of Default:

(A) Seller becomes insolvent, becomes a debtor in any bankruptcy or receivership
proceedings, or dissolves as a legal business entity;

(B) Any representation or warranty made by Seller is false or misleading in any
material respect, and Seller fails to comply or make significant progress
towards compliance with such representation or warranty within thirty (30) Days
after a demand by EPE to do so;

(C) Seller fails to comply with any other material terms and conditions of the
Agreement within sixty (60) Days after a demand by EPE to do so;

(D) The Facility fails to generate at least fifty percent (50%) of Expected
Solar Energy to be delivered to EPE under this Agreement for any eighteen
(18) consecutive -month period, unless such failure is due to a Force Majeure
Event(s). If such failure is due to a Force Majeure Event(s), EPE may terminate
this Agreement as provided herein, but the failure does not constitute a
default. Prior to such termination, however, EPE agrees to use good faith
efforts to renegotiate this Agreement with Seller. If EPE does not terminate
this Agreement as provided herein, Seller, pursuant to Section 10.3 of this
Agreement, shall still be obligated to provide solar RECs associated with Solar
Energy not produced; or

(E) The Facility is transferred by Seller without the requisite consent of EPE,
as provided in Section 18.6 of this Agreement.

12.3 Seller’s Abandonment of Construction or Operation of the Facility. Subject
to the notice and cure provision set forth below, any event(s) of Abandonment
described in Section

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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1.4.1 of this Agreement shall give EPE the unconditional right, in its sole
discretion, to: (i) either terminate this Agreement or complete construction of
the Facility at the expense of an for the account of Seller and operate the
Facility during the Interim Period or beyond pursuant to Section 12.12 below,
(ii) draw upon or otherwise negotiate and liquidate the Security Fund, and
(iii) in the event EPE elects not to terminate this Agreement under
Section 12.1(i) above, negotiate changes to the Agreement. EPE shall provide
notice to Seller thirty (30) Days prior to taking any of the actions set forth
in Section 12.1(i), (ii) or (iv) above, specifying the event(s) of Abandonment
triggering such action(s), and shall not take such action(s) if Seller has
remedied or is making significant progress towards remedying the specified
event(s) of Abandonment within the thirty (30) Day period following EPE’s
notification.

12.4 EPE Events of Default. Subject to the notice and cure provision set forth
below, any EPE Event of Default shall give Seller the unconditional right, in
its sole discretion, to terminate this Agreement. Seller shall provide notice to
EPE thirty (30) Days prior to terminating this Agreement specifying the Event(s)
of Default triggering such termination, and shall not terminate if EPE has
remedied or is making significant progress towards remedying the specified
Event(s) of Default within the specified cure period, and if no such cure period
is provided, within the thirty (30) Day period following Seller’s notification;
provided, however, such notice period shall be fifteen (15) Days with respect to
Sections 12.4 (B) and (C) herein. The following shall constitute EPE Events of
Default:

(A) EPE becomes insolvent, becomes a debtor in any bankruptcy or receivership
proceedings, or dissolves as a legal business entity;

(B) Any representation or warranty made by EPE is false or misleading in any
material respects, and EPE fails to comply or make significant progress towards
compliance with such representation or warranty within thirty (30) Days after a
demand by Seller to do so; or

(C) EPE fails to comply with any other material terms and conditions of the
Agreement within sixty (60) Days after a demand by Seller to do so.

12.5 Actual Damages. For all events of default described in Sections 12.1, 12.2,
12.3 and 12.4 above (each an “Event of Default”), the non-defaulting Party shall
be entitled to receive from the defaulting Party all actual damages incurred by
the non-defaulting Party in connection with such Event of Default. If Seller is
the defaulting Party, the damages recoverable by EPE on account of a
Construction Event of Default or an Operational Event of Default shall include
Replacement Energy Costs, provided that damages associated with a Construction
Event of Default shall not exceed the amount of the Security Fund provided by
Seller. If EPE is the defaulting Party, Seller shall use commercially reasonable
efforts to sell the Expected Solar Energy, and EPE shall pay Seller the
differential between the contract price under this Agreement and sales price,
which Seller shall estimate using commercially reasonable efforts if Seller is
unable to enter into a sales transaction of the same term as the remaining term
of this Agreement.

12.6 No Incidental, Consequential, or Indirect Damages. Except for Seller’s
obligations to make EPE whole for solar RECs as described in Article 10 and
Section 12.1(F) of this Agreement and the potential penalties assessed to Seller
pursuant to Section 19.3 of this Agreement, the express remedies and measures of
damages provided in this Agreement satisfy

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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the essential purposes hereof. If no remedy or measure of damages is expressly
herein provided, the obligor’s liability shall be limited to direct, actual
damages only. Neither Party shall be liable to the other Party for
consequential, incidental, punitive, exemplary or indirect damages, lost profits
or other business interruption damages by statute, in tort or contract (except
in each case to the extent expressly provided herein); provided that, if either
Party is held liable to a third party for such damages, and the Party held
liable for such damages is entitled to indemnification under this Agreement from
the other Party, the indemnifying Party shall be liable for, and obligated to
reimburse the indemnified Party for, such damages, all in accordance with the
indemnification provisions of Article 17 of this Agreement.

12.7 Duty to Mitigate. Each Party agrees that it has a duty to mitigate damages
and agrees that it will use commercially reasonable efforts to minimize any
damages that may incur as a result of the other Party’s performance or
non-performance of the Agreement.

12.8 Dispute Resolution.

(A) In the event of any dispute arising under this Agreement (“Dispute”), within
ten (10) Days following the delivered date of a written request by either Party
(a “Dispute Notice”), (i) each Party shall appoint a representative
(individually, a “Party Representative” and collectively “Parties’
Representatives”), and (ii) the Parties’ Representatives shall meet, negotiate
and attempt in good faith to resolve the Dispute quickly, informally and
inexpensively.

(B) In the event the Parties’ Representatives cannot resolve the Dispute within
thirty (30) Days after commencement of negotiations, within ten (10) Days of the
conclusion of such negotiations at the written request of either Party, each
Party Representative shall (i) independently prepare a written summary of the
Dispute describing the issues and claims, (ii) exchange its summary with the
summary of the Dispute prepared by the other Party Representative, and
(iii) submit a copy of both summaries to a senior officer of the Party
Representative’s with authority to irrevocably bind the Party to a resolution of
the Dispute.

(C) Within ten (10) Business Days after receipt of the Dispute summaries, the
senior officers for both Parties shall negotiate in good faith to resolve the
Dispute.

(D) In such meetings and exchanges, a Party shall have the right to designate as
confidential any information that such Party offers. No confidential information
exchanged in such meetings for the purpose of resolving a Dispute may be used by
a Party in any proceeding against the other Party.

12.9 Mediation. Disputes not resolved under Section 12.8 above shall, upon
mutual consent, be submitted to mediation pursuant to the Mediation Rules of the
American Arbitration Association. The Parties shall select the mediator within
fifteen (15) Days of the request for mediation. Mediation shall be conducted in
New Mexico, at a location to be determined by the Parties, notwithstanding
anything to the contrary under the Mediation Rules of the American Arbitration
Association.

12.10 Other Dispute Processes. If neither the negotiations under Section 12.8
above nor mediation successfully resolves the dispute, the Parties agree that an
action may be filed in the appropriate state or federal court located in New
Mexico.

 

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exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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12.11 Cost of Dispute Resolution. The cost of any mediation proceeding shall be
shared equally by the Parties. The prevailing Party in any dispute that goes
beyond mediation arising out of or relating to this Agreement or its breach
shall be entitled to recover from the other Party reasonable attorneys’ fees,
costs and expenses incurred by the prevailing Party in connection with such
dispute.

12.12 Operation by EPE Following a Construction Event of Default, an Operational
Event of Default, or Seller’s Abandonment of Construction or Operation of the
Facility.

(A) Upon a Construction Event of Default, or an Operational Event of Default, as
the case may be, EPE shall have the right, but not the obligation, to possess,
assume control of, and operate the Facility (in accordance with Seller’s rights,
obligations, and interest under this Agreement) during the Interim Period
provided for herein. If a Construction Event of Default lasts more than three
hundred sixty-five (365) Days, then within sixty (60) Days EPE shall have the
right but not the obligation to elect to: (i) terminate this Agreement;
(ii) continue to construct the Facility beyond the Interim Period for an
additional period of up to sixty (60) Days; or (iii) purchase the Facility at
fair market value. If an Operational Event of Default lasts more than 365 days,
then EPE shall have the right to terminate the Agreement. Upon Seller’s
Abandonment of construction or operation of the Facility, as the case may be,
EPE shall have the right, but not the obligation, to possess, assume control of,
and operate the Facility (in accordance with Seller’s rights, obligations, and
interest under this Agreement), for (i) the Interim Period, or (ii) beyond the
Interim Period on a permanent basis. Following the Interim Period, if EPE elects
to takes over on a permanent basis, EPE shall, at its sole option, within sixty
(60) Days, either buy or lease the Facility from Seller at fair market value, as
determined in a commercially reasonable manner. Subject to the provisions of
Section 3.1(A) of this Agreement, Seller shall not grant any person, other than
the Facility Lender, a right to possess, assume control of, and operate the
Facility that is equal to or superior to EPE’s right under this Section 12.12.

(B) EPE shall give Seller and the Facility Lender thirty (30) Days notice in
advance of the contemplated exercise of EPE’s rights under this Section 12.12.
Upon such notice, Seller shall collect and have available at a convenient,
central location at the Facility all documents, contracts, books, manuals,
reports, and records required to construct, operate, and maintain the Facility
in accordance with Good Utility Practice. Upon such notice, EPE, its employees,
contractors, or designated third parties shall have the unrestricted right to
enter the Site and the Facility for the purpose of constructing and operating
the Facility.

(C) In the event EPE exercises its option to assume possession, control and
operation of the Facility under this Section 12.12, EPE shall do so on its own
behalf and shall be solely responsible for any and all consequences of its
actions and inactions, including consequences resulting from EPE’s negligence
and misconduct. During the Interim Period, EPE agrees to keep Seller informed
regarding construction and/or operation of the Facility. Seller shall not be
bound by any contractual obligations created by EPE with third parties during
any period that EPE has assumed possession, control or operation of the
Facility.

(D) EPE shall be entitled to draw upon the Security Fund to cover any expenses
incurred by EPE in exercising its rights under this Section 12.12, provided such
draw shall not occur prior to Seller having been given a commercially reasonable
opportunity to review and dispute such expenses, which shall not exceed twenty
(20) Days.

 

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exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(E) During any period that EPE is in possession of and constructing, controlling
or operating the Facility pursuant to this Section 12.12, EPE shall perform and
comply with all of the obligations of Seller under this Agreement and shall use
the proceeds from the sale of electricity generated by the Facility to
(i) first, reimburse EPE for any and all expenses reasonably incurred by EPE in
taking possession of and operating the Facility, and (ii) second, remit any
remaining proceeds to Seller.

(F) Unless EPE elects to take over the Facility on a permanent basis and buys
the Facility from Seller at fair market value as provided in Section 12.12(A)
above, during any period that EPE assumes possession, control or operation of
the Facility, Seller shall retain legal title to and ownership of the Facility.

(1) In the event that EPE is in possession, control or is operating the Facility
for the Interim Period, Seller may resume possession, control and operation of
the Facility (in accordance with the provisions of this Agreement) when Seller
demonstrates, to EPE’s reasonable satisfaction, that Seller will cure the
Construction Event of Default, or Operational Event of Default, as the case may
be, that originally gave rise to EPE’s right to possess, control or operate the
Facility.

(2) In the event that EPE is in possession, control or is operating the Facility
for the Interim Period, the Facility Lender, or any nominee or transferee
thereof, may foreclose and assume possession, control and operation of the
Facility, and EPE shall relinquish its right to possess, control and operate the
Facility when the Facility Lender or any nominee or transferee thereof, requests
such relinquishment.

(G) EPE’s exercise of its rights under this Agreement to assume possession,
control and operation of the Facility shall not be deemed an assumption by EPE
of any liability attributable to Seller. If at any time after exercising its
rights to take possession of, control and operate the Facility EPE elects to
return such possession, control and operation to Seller, EPE shall provide
Seller with at least fifteen (15) Days advance notice of the date EPE intends to
return such possession, control and operation, and, upon receipt of such notice,
Seller shall take all measures necessary to resume possession, control and
operation of the Facility on such date.

(H) In the event EPE assumes possession, control and operation of the Facility
under this Section 12.12, EPE shall do so in conformance with Good Utility
Practice.

12.13 Specific Performance. In addition to the other remedies specified in this
Article 12, in the event that any Construction Event of Default or Operational
Event of Default is not cured within the applicable cure period set forth above,
EPE may elect to treat this Agreement as being in full force and effect, and EPE
shall have the right to specific performance. If the breach by Seller arises
from a failure by third party operating the Facility pursuant to an operating
agreement entered into with Seller, and Seller fails or refuses to enforce its
rights under the operating agreement that would result in the cure, or partial
cure, of the Construction Event of Default or Operational Event of Default, as
the case may be, then EPE’s right to specific performance shall include the
right to obtain a court order compelling Seller to enforce its rights under the
operating agreement.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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12.14 Remedies Cumulative. The exercise, or the beginning of the exercise, by a
Party of any one or more or the rights or remedies provided for herein shall not
preclude the simultaneous or later exercise by such Party of any or all other
rights or remedies provided for herein.

12.15 Payment of Amounts Due to EPE. Without limiting any other provisions of
this Article 12 and at any time before or within two (2) years after termination
of this Agreement, EPE may send Seller an invoice for such damages or other
amounts as are due to EPE at such time from Seller under this Agreement, and
such invoice shall be payable in the manner, and in accordance with the
applicable provisions, set forth in Article 9, including the provision for late
payment charges. EPE may withdraw funds from the Security Fund as needed to
provide payment for such invoice if the invoice is not paid by Seller on or
before the twentieth (20th) Business Day following the invoice due date.

ARTICLE 13 - FACILITY OPERATION AND CONTRACT ADMINISTRATION

13.1 Facility Operation. Seller shall staff, control, and operate the Facility
at all times in a manner that:

(A) is consistent with Good Utility Practice(s), subject only to Emergency
Conditions, Force Majeure Events and Delivery Excuses;

(B) complies with all applicable national and regional reliability standards,
including standards set by WECC, NERC, the FERC, and the NMPRC, or any successor
agencies setting reliability standards for the operation of generation
facilities interconnected in the WECC; and

(C) complies with the Operating Procedures developed jointly with EPE.

13.2 Operating Committee and Operating Procedures.

(A) EPE and Seller shall each appoint one representative and one alternate
representative to act in matters relating to the Parties’ performance
obligations under this Agreement and to develop operating arrangements for the
generation, delivery and receipt of Solar Energy. Such representatives shall
constitute the “Operating Committee.” The Parties shall notify each other in
writing of such appointments and any changes thereto. The Parties’
representatives designated above shall have authority to act for their
respective principals in all technical matters relating to performance of this
Agreement and to attempt to resolve disputes or potential disputes. The
Operating Committee shall have no authority to modify the terms or conditions of
this Agreement.

(B) Prior to the Commercial Operation Date, the Operating Committee shall
develop mutually agreeable written operating procedures (“Operating Procedures”)
that shall include, but not be limited to: (i) a key personnel list for
applicable EPE and Seller operating centers; (ii) the method of day-to-day
communications; (iii) metering, telemetering, telecommunications, data
acquisition, and Facility status reporting procedures; (iv) procedures for the
development and communication of weekly and daily forecasts of the hourly net
generation from the Facility; (v) maintenance scheduling and reporting
procedures; (vi) procedures as defined in Sections 13.3, 13.4, 13.5, 13.6, 13.7,
13.8, 13.9, 13.10, 13.11, 13.12, and 13.13 of this Agreement; and (v) such

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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other matters as may be mutually agreed upon by the Parties. If any such
procedures are not developed, Seller will operate the Facility using other
procedures that comply with Section 13.1 of this Agreement until agreed
procedures are developed.

13.3 Scheduling.

(A) Seller shall schedule energy deliveries from the Facility based upon a
committed delivery of As-Available Solar Energy, except for Forced Outages,
Scheduled Maintenance Outages, Additional Maintenance Outages, Force Majeure
Events and Emergency Conditions. At least thirty (30) Days prior to the
anticipated Commercial Operation Date, Seller shall provide EPE with a good
faith estimate of the quantity of Solar Energy associated with the Expected
Solar Energy that it expects to generate for the remainder of that Year and,
thereafter, by August 1 of each succeeding Year, Seller shall provide EPE with a
good faith estimate of the quantity of Solar Energy associated with the Expected
Solar Energy that Seller expects to generate in each such Year (the “Projected
Schedule”).

(B) Seller shall provide or cause the Operation and Maintenance Contractor to
provide to EPE its good faith, non-binding estimates of the daily quantity of
Solar Energy associated with the Expected Solar Energy to be delivered by Seller
to the Point of Delivery for each week (starting on Sunday through Saturday) by
4:00 p.m. MPT on the date falling at least three (3) Days prior to the beginning
of that week.

(C) Pursuant to scheduling instructions of EPE or any superseding policies or
procedures of EPE’s SOC or otherwise, by 8:00 a.m. MPT on each Day, Seller shall
submit to EPE a good faith estimate of the hourly quantities of Solar Energy
associated with the Expected Solar Energy to be delivered for EPE at the Point
of Delivery for the next three (3) subsequent Days.

(D) If, at any time following submission of a good faith estimate to EPE on the
Day preceding the next subsequent Day, Seller becomes aware of any change to any
of the values contained in the good faith estimate or predicts that such values
will be subject to change before the end of the next subsequent Day, then Seller
shall promptly notify EPE no later than sixty (60) minutes before the next
scheduling hour of such change or predicted change.

13.4 Forced Outages. Seller shall notify EPE by telephone or e-mail (with
confirmation to follow by written notice in each case) immediately upon
discovering that the Facility is unable to deliver all or part of any scheduled
quantity of Solar Energy associated with the Expected Solar Energy due to a
Forced Outage and, as soon as reasonably practicable following such discovery,
shall notify EPE in writing of its best estimate of the expected duration of
such Forced Outage. Such estimate by Seller shall be based on the best
information available to it. Should Seller expect any further changes in the
duration of any such Forced Outage, it shall promptly notify EPE of the same.

13.5 Scheduled Maintenance.

(A) Three (3) Months prior to the Commercial Operation Date and, thereafter, by
August 1 of each Year, Seller shall deliver to EPE the Projected Schedule for
the Facility for the subsequent four (4) Year period, including Scheduled
Maintenance Outages. Seller shall take

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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manufacturers’ recommendations and Good Utility Practices into account when
establishing the proposed schedule for Scheduled Maintenance Outages, which
schedule shall correspond with the Projected Schedule. Unless otherwise required
by Good Utility Practice, Scheduled Maintenance Outages and Additional
Maintenance Outages may not be scheduled during the Months of June, July,
August, or September unless agreed to in writing by EPE at its sole discretion
(the “Non-Scheduled Maintenance Period”).

(B) Within thirty (30) Days of receiving the Projected Schedule for Scheduled
Maintenance Outages from Seller, EPE may propose amendments thereto. Seller
shall not unreasonably withhold its consent to such proposed amendments,
provided that, it shall not be unreasonable for Seller to withhold its consent
to any such proposed amendments that would be contrary to Good Utility
Practices, and EPE shall pay the incremental costs of implementing such proposed
amendments.

(C) In the event that Seller should reject any proposed amendments of EPE as set
forth in Section 13.5(B) above, Seller shall promptly notify EPE of its reasons
for such rejection, whereupon Seller and EPE shall in good faith negotiate a
reasonable schedule of Scheduled Maintenance Outages. If such agreement is not
reached within ten (10) Days of receipt by EPE of Seller’s rejection notice,
Seller shall submit a final schedule of Scheduled Maintenance Outages based on
Good Utility Practices and the availability of the Operation and Maintenance
Contractor which final schedule shall, to the extent reasonably possible, take
into account the proposed amendments of EPE.

(D) Seller shall be entitled to change any Scheduled Maintenance Outages for the
then current Year if such changes are required to comply with Good Utility
Practices or, in the alternative, if EPE consents to the change, provided that:
(i) any changes in annual scheduled maintenance of up to two (2) Days’ duration
shall require one (1) week’s prior written notice to EPE, (ii) any changes in
annual scheduled maintenance of greater than two (2) Days but less than three
(3) weeks’ duration shall require one (1) Months’ prior written notice to EPE
and (iii) any changes shall not be scheduled during the Non-Scheduled
Maintenance Period unless otherwise required by Good Utility Practice. Seller
shall not unreasonably refuse to change the schedule of Scheduled Maintenance
Outages if requested to do so by EPE upon not less than thirty (30) Days prior
notice, provided that: (y) any such change would not be contrary to Good Utility
Practices, and (z) the Operation and Maintenance Contractor is available.

(E) Any maintenance outages that do not correspond to the descriptions contained
in clauses (A)-(D) of this Section 13.5 shall be deemed to be Additional
Maintenance Outages under Section 13.6 below.

13.6 Additional Maintenance Outages. As the need arises for Seller to conduct
further maintenance on the Facility in addition to that conducted pursuant to
Section 13.2, 13.5 and elsewhere in this Agreement (“Additional Maintenance
Outages”), Seller shall notify EPE of such required maintenance, together with
proposed dates for carrying out such additional maintenance and the estimated
duration of the work to be carried out. Unless deferral of such maintenance
would cause an Emergency Condition, without prejudice to the commitment of
Seller in respect of the availability of the Facility, Seller and EPE shall
negotiate in good faith a reasonable schedule during which such Additional
Maintenance Outages shall take place. If agreement is not reached within twenty
(20) Days of receipt of such notice, Seller shall prepare a

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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schedule of such Additional Maintenance Outages based on Good Utility Practices
taking into account the reasonable requests of EPE to the extent reasonably
possible.

13.7 Access to and Inspection of Facility.

(A) Seller shall provide EPE and its authorized agents, employees and inspectors
with reasonable access to the Facility for the purposes set forth in this
Article 13. EPE acknowledges that such access does not provide EPE with the
right to direct or modify the operation of the Facility in any way and further
acknowledges that any exercise by EPE of its rights under this Section 13.7
shall be at its own risk and expense.

(B) No inspections of the Facility, whether by EPE or otherwise, shall relieve
Seller of its obligation to maintain the Facility and operate the same in
accordance with Good Utility Practices. In no event shall any statement,
representation, or lack thereof by EPE, either express or implied, relieve
Seller of its exclusive responsibility for the Facility. Any inspection of
property or equipment owned or controlled by Seller by EPE or any review by EPE
or consent by EPE to Seller plans, shall not be construed as an endorsement by
EPE of the design, fitness or operation of the Facility equipment or a warranty
by EPE as to the safety, durability or reliability of the Facility equipment.

13.8 Operating Parameters.

(A) Seller shall: (i) have the sole responsibility to, and shall at its sole
expense, operate and maintain the Facility in accordance with all requirements
set forth in this Agreement, and (ii) comply with reasonable requirements of EPE
regarding Day-to-Day or hour-by-hour communications with EPE. Seller agrees to
operate the Facility in such a manner that Solar Energy delivered by Seller will
meet all applicable requirements for voltage level, harmonics, power factor,
vars, ancillary services and other electrical specifications required by the
Transmission Provider.

(B) Seller shall operate the Facility in accordance with all system protection
equipment as required by the Interconnection Agreement.

13.9 Operating Records. Seller and EPE shall each keep and maintain complete and
accurate records and all other data required by each of them for the purposes of
proper administration of this Agreement, including such records as may be
required by Governmental Authorities and WECC in the prescribed format of those
entities. Such requirements shall be specified in the Operating Procedures
described in Section 13.2(B) of this Agreement. All records of Seller and EPE
pertaining to this Agreement or to the operation of the Facility, as specified
herein or otherwise shall be maintained for a period of two (2) years in either
hard copy (paper) or in electronic form by Seller at the Facility or by EPE, as
applicable, in the Las Cruces, New Mexico, metropolitan area in such format as
may be required by Applicable Law or any Governmental Authority.

13.10 Operating Log. Seller shall maintain an accurate and up-to-date operating
log in electronic format as defined in the Operating Procedures, with records of
production for each hour and changes in operating status.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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13.11 Availability Reporting. Seller shall comply with all current EPE, NERC,
and WECC generating unit outage reporting requirements as they may be revised
from time to time and as they apply to the Facility. Such outage reporting
requirements shall be specified in the Operating Procedures.

13.12 Examination and Retention of Records. Seller or EPE may examine, and each
at its own expense obtain copies, of the operating records and data kept by the
other Party relating to transactions under and administration of this Agreement,
at any time during the period the records are required to be maintained, upon
prior request and during normal business hours. A Party’s review of any such
data shall in no way relieve the other Party of its responsibility for the
professional quality, technical accuracy and completeness of such data. Each
Party shall retain such operating records and data for the period of time
required by applicable law.

13.13 Facility Development Records and Data Submissions. Seller shall submit or
cause to be submitted to EPE the following documents on or before the dates
specified below:

(1) In addition to the progress reports required under Section 4.5 of this
Agreement, commencing on the Agreement Approval Date and ending on the
Commercial Operation Date, (i) a summary of such other reports as are submitted
to Seller by its engineer, and (ii) written notification, when and as Seller
becomes aware, of any new condition or event that may have a material adverse
effect on the timely completion of the Facility.

(2) Seller shall maintain all records, invoices and other information relating
to the costs of construction of the Facility. Quarterly, beginning no later than
ninety (90) Days after the Agreement Approval Date and ending when all costs
have been determined or incurred, a statement from Seller showing the percentage
of the level of completion of the Facility.

(3) No later than thirty (30) Days prior to the Commercial Operation Date,
(i) evidence demonstrating that Seller has obtained all Governmental Approvals
then required to be obtained for the ownership, operation and maintenance of,
and the supply of Solar Energy from, the Facility in accordance with this
Agreement, and (ii) a list identifying the remaining Governmental Approvals for
which Seller is responsible under the terms of this Agreement, which
Governmental Approvals are not yet required for the operation and maintenance
of, and the supply of Solar Energy from, the Facility, together with a plan
reasonably acceptable to EPE for obtaining such Governmental Approvals and an
estimate of the time within which such Governmental Approvals will be obtained
by Seller.

(4) On or before the Commercial Operation Date, a certificate from its engineer
to the effect that, based upon the engineer’s monitoring and review of
construction, the Facility has been constructed in all material respects in
compliance with the development plan for the Facility and all permanent
equipment installed as part of the Facility was new (or remanufactured) and
unused (as remanufactured, if applicable) when installed.

(5) A certificate dated as of the Commercial Operation Date signed by the
representative of Seller, which certificate shall specify that no default or
Event of Default

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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by Seller has occurred that would, with or without the giving of notice or
passage of time, or both, constitute an Event of Default by Seller.

(6) As soon as available, but not later than sixty (60) Days following the
Commercial Operation Date, two (2) copies of all results of Commissioning Tests
performed on the Facility, including Commissioning Testing of major equipment
included in the Facility and the Transmission System.

(7) Upon request by EPE and at least thirty (30) Days following the Commercial
Operation Date, a list of all manufacturers’ specifications and manufacturers’
operation manuals for all major items of equipment incorporated into the
Facility.

(8) Upon request by EPE, a list of all as-built drawings for the Facility,
including the civil and architectural works, and when provided to Seller, a list
of all other design and engineering data and information necessary to enable the
Operation and Maintenance Contractor to operate and maintain the Facility during
any period when such operation and maintenance is required under the Operation
and Maintenance Agreement. However, should EPE exercise its rights under this
Agreement to operate and/or purchase the Facility, Seller shall immediately
provide copies of the aforementioned documents to EPE, and EPE shall utilize
such documents on a need-to-know basis for the sole purpose of operating the
Facility.

(9) The receipt of the above schedules, data, certificates and reports by EPE
shall not (i) be construed as an endorsement by EPE of the design of the
Facility, (ii) constitute a warranty by EPE as to the safety, durability or
reliability of the Facility, (iii) relieve Seller of any of its obligations or
potential liabilities under the Project Contracts, or (iv) except with respect
to the obligations of EPE to maintain the confidentiality of documents and
information received by it, impose any obligation or liability on EPE.

ARTICLE 14 - FORCE MAJEURE

14.1 Definition of a Force Majeure Event.

(A) The term “Force Majeure Event,” as used in this Agreement, means causes or
events beyond the reasonable control of, and without the fault or negligence of
the Party claiming Force Majeure, including, without limitation: (i) acts of
God; (ii) sudden actions of the elements such as floods, earthquakes,
hurricanes, or tornadoes; (iii) high winds of sufficient strength or duration to
materially damage a facility or significantly impair its operation for a period
of time longer than normally encountered by similar businesses under comparable
circumstances; (iv) material changes in the Facility’s Solar Energy potentially
caused by climactic change; (v) lightning, fire, ice storms, or sabotage;
(vi) vandalism beyond that which could reasonably be prevented by Seller;
(vii) terrorism; (viii) war; (ix) riots; (x) explosion; (xi) blockades;
(xii) insurrection; (xiii) strike; (xiv) slow down or labor disruptions (even if
such difficulties could be resolved by conceding to the demands of a labor
group); (xv) actions or inactions by any Governmental Authority taken after the
date hereof (including the adoption or change in any rule or regulation or
environmental constraints lawfully imposed by such Governmental Authority), but
only if such requirements, actions, or failures to act prevent or delay
performance; (xvi) inability, despite due diligence, to obtain any licenses,
permits, or

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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approvals required by any Governmental Authority; (xvii) construction delays
beyond Seller’s control, including but not limited to litigation by a third
party to prevent Construction of the Facility, that occur despite Seller’s
commercially reasonable efforts to achieve the Construction Milestones set forth
in Exhibit A to this Agreement, and (xviii) a national, regional, or local
pandemic as declared by the United States government.

(B) The term Force Majeure Event does not include: (a) any acts or omissions of
any third party, including, without limitation, any vendor, customer, or
supplier of Seller, unless such acts or omissions are themselves excused by
reason of a Force Majeure Event; (b) any failure or inability to make payments
when due, (c) any full or partial curtailment in the electric output of the
Facility that is caused by or arises from a mechanical or equipment breakdown or
other mishap or events or conditions attributable to normal wear and tear or
flaws (unless such mishap is caused by one of the following: (i) acts of God,
(ii) sudden actions of the elements, including, but not limited to, floods,
hurricanes, or tornadoes, (iii) sabotage, (iv) terrorism, (v) war, (vi) riots,
and (vii) emergency orders issued by a Governmental Authority); or (d) changes
in market conditions that affect the cost of EPE’s or Seller’s supplies, or that
affect demand or price for any of EPE’s or Seller’s products, .

14.2 Applicability of Force Majeure.

(A) Except as otherwise provided in this Agreement, neither Party shall be
responsible or liable for any delay or failure in its performance under this
Agreement, nor shall any delay, failure, or other occurrence or event become a
Construction Event of Default, an Operational Event of Default, or an EPE Event
of Default, to the extent such delay, failure, occurrence or event is
substantially caused by a Force Majeure Event, provided that the notification
obligations and terms of Section 14.3(B) and 14.4(B) of this Agreement are
complied with.

(B) Except as otherwise expressly provided for in this Agreement, the existence
of a Force Majeure Event shall not relieve the Parties of their obligations
under this Agreement to the extent that performance of such obligations is not
precluded by a Force Majeure Event, provided, a Force Majeure Event shall not
excuse either Party from any failure or inability to make payments when due.

14.3 Effect of Seller’s Force Majeure.

(A) Adjustment. (1) If Seller should suffer a Force Majeure Event that reduces
the generating capability of the Facility below the Expected Solar Energy,
Seller may, upon notice to EPE, temporarily adjust the Expected Solar Energy for
up to twenty-four (24) consecutive Months; provided, however, that no more than
one such temporary adjustment may be made by Seller within any twenty-four
(24) Month period in relation to that Force Majeure Event, unless EPE otherwise
consents to such additional temporary adjustment in writing, such consent not to
be unreasonably withheld. Within three (3) Months after any such Force Majeure
Event is cured, Seller may, on one occasion, and without penalty, designate a
new Expected Solar Energy level to apply for the remainder of the Term;
provided, however, that such new Expected Solar Energy level shall be at least
seventy percent (70%) and no more than one hundred percent (100%) of the
Expected Solar Energy at the time immediately prior to the Force Majeure Event.
Any temporary or final adjustment or re-designation of the Expected Solar Energy
pursuant to this subsection (A)(1) must be directly attributable to the Force
Majeure Event and of a magnitude

 

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exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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commensurate with the scope and impact of the Force Majeure Event. Such
adjustment shall be effective upon the first Day immediately following receipt
of such notice by EPE or such later date as may be specified by Seller, and
shall not exceed the amount necessary to accommodate the Force Majeure Event.
Any Dispute between Seller and EPE regarding the amount of such temporary or
final re-designation shall be settled in accordance with Section 12.8 of this
Agreement.

(2) If the Facility should be rendered completely inoperative as a result of a
Force Majeure Event, Seller shall temporarily set the Committed Solar Energy at
0 kWh until such time as the Facility can partially or fully operate at the
Committed Solar Energy level that existed prior to the Force Majeure Event.
Except for amounts payable and owing to Seller by EPE under this Agreement, if
the Committed Solar Energy is 0 kWh, EPE shall have no obligation to make any
payments under this Agreement.

(3) Subject to (1) and (2) above, upon the cessation of a Force Majeure Event or
upon its cure, the Expected Solar Energy shall be restored to the Expected Solar
Energy level that existed immediately prior to such Force Majeure Event.
Notwithstanding any other provisions of this Agreement, upon such cessation or
cure, EPE shall have the right to require a test to demonstrate the Facility’s
compliance with the requirements of this Section.

(4) Subject to subsection (E), Seller agrees to be responsible for and pay the
costs necessary to reactivate the Facility and the interconnection with the
Transmission Provider’s Interconnection System up to the Point of Delivery, if
the same are rendered inoperable due to actions of Seller, its employees,
representatives or agents, or Force Majeure Events affecting Seller, the
Facility or the interconnection with the Transmission Provider’s Interconnection
System.

(B) Seller’s Notification Obligations. In the event of any delay or
nonperformance resulting from a Force Majeure Event, Seller shall notify EPE in
writing as soon as practicable after becoming aware of such occurrence. Within
fourteen (14) days of becoming aware of the occurrence of a Force Majeure Event,
Seller shall notify EPE in writing of the nature, cause, date of commencement
thereof and the anticipated duration, and shall indicate whether any deadlines
or date(s) imposed under this Agreement may be affected thereby. The suspension
of performance shall be of no greater scope and of no greater duration than the
cure for the Force Majeure Event requires. A Party claiming that a Force Majeure
Event has occurred shall not be entitled to any relief therefor unless
conforming notice is provided within the time period required. Seller shall
notify EPE of the cessation of the Force Majeure Event or of the conclusion of
Seller’s cure for the Force Majeure Event, in either case within two
(2) Business Days thereof.

(C) Seller’s Duty to Mitigate. Seller shall use commercially reasonable efforts
to cure the cause(s) preventing its performance of this Agreement; provided,
however, that the settlement of strikes, lockouts and other labor disputes shall
be entirely within the discretion of Seller, and Seller shall not be required to
settle such strikes, lockouts or other labor disputes by acceding to demands
which Seller deems to be unreasonable.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(D) Delay Caused by Seller’s Force Majeure Event. Upon the occurrence and during
the continuance of a Force Majeure Event and the effects thereof, to the extent
that a Force Majeure Event affects the ability of the Transmission Provider to
accept Solar Energy from the Facility or to the extent that a Force Majeure
Event affects the ability of Seller to test for Committed Solar Energy pursuant
to Section 4.6 or to deliver Solar Energy from the Facility, then the hours
during which the Force Majeure Event occurs shall be excluded from the payment
calculations as set forth in Section 8.1 of this Agreement.

(E) Seller’s Force Majeure Restoration. (1) In the event that, as a result of
one or more Force Majeure Event(s) or its or their effects or by any combination
thereof, the construction or operation of the Facility or any part thereof is
affected and is not restored or remedied within thirty (30) Days following the
date the Force Majeure Event(s) began, then Seller shall prepare and deliver to
EPE a Restoration Report pursuant to subsection (G) below and provisions
(3)-(5) of this subsection (E) shall apply.

(2) Subject to clauses (3) and (4) below, Seller shall proceed with the
remedying of the construction or operation of the Facility (“Restoration”) in
accordance with a schedule contained in the relevant Restoration Report, as
defined in subsection (G) hereof (the “Restoration Schedule”). The cost of such
Restoration shall be the sole responsibility of Seller; and no compensation
shall be payable by EPE to Seller with respect to any damage to the Facility as
a result of the Force Majeure Event.

(3) If EPE does not agree with the Restoration Schedule contained in the
Restoration Report, then EPE shall notify Seller within fifteen (15) Days of
receipt of the Restoration Report and shall, in such notice, propose an
alternative Restoration Schedule. If the Parties cannot agree upon a revised
Restoration Schedule within the fifteen (15) Day period following the notice,
then either Party may submit the matter to mediation pursuant to Section 12.9 of
this Agreement to determine the proper Restoration Schedule. Notwithstanding the
foregoing, Seller shall, subject to satisfying any of the conditions or
requirements of the entity providing the financing for the Restoration
(including any insurance company paying a claim to Seller), have the option to
proceed with the Restoration while the issue of the Restoration Schedule is
being resolved.

(4) If Restoration of the Facility is not technically feasible or the
Restoration cost estimate is greater than Five Million Dollars ($5,000,000),
then Seller shall have the right to terminate this Agreement, whereupon EPE
shall have the right but not the obligation to purchase the Facility at fair
market value, as determined in a commercially reasonable manner. Seller shall
not be entitled to any compensation from EPE unless EPE elects that Seller shall
sell the Facility to EPE or its designee(s). If Seller decides not to terminate
this Agreement, Seller may seek to renegotiate this Agreement only if the market
price for Solar Energy is more than 125 percent of the Solar Energy Payment
Rate. EPE is not required to renegotiate, and any agreement resulting from a
renegotiation may be subject to approval by the NMPRC.

(5) Where Seller is prevented from complying with its obligations under this
Agreement as a result of one or more Force Majeure Event(s) or its or their
effects or by any combination thereof for a continued period of three hundred
sixty five (365) Days, then Section 14.5 below shall apply.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(F) Seller’s Restoration Consents. Notwithstanding anything herein to the
contrary, Seller shall not be required to proceed with any Restoration unless
and until it shall have received all necessary Additional Consents and any
Governmental Approvals required therewith. If Seller does not receive any such
Additional Consents or any Governmental Approvals required therewith for any
reason (other than an act, omission or default of Seller) within twelve
(12) Months after the date that it becomes obligated to proceed with such
Restoration, then both Seller and EPE shall have the right to terminate this
Agreement. If Seller terminates this Agreement pursuant to this subsection (F),
EPE shall have the right but not the obligation to purchase the Facility at fair
market value, as determined in a commercially reasonable manner.

(G) Preparation of Seller’s Restoration Report. When required by subsection (E),
Seller shall commence the preparation of an appraisal report (the “Restoration
Report”) within thirty (30) Days after the date it was required to provide a
notice under subsection (B) and shall deliver a copy of such Restoration Report
to EPE within sixty (60) Days after provision of such notice was required. The
Restoration Report shall be accompanied by reasonable supporting data and
certificates and reports of financial and technical advisers of Seller, as
appropriate or as reasonably requested by EPE, in support of the Force Majeure
Event in question, and shall include (i) a description of such Force Majeure
Event and its impact on the Facility, (ii) an estimate in good faith of the time
required to restore the Facility (insofar as practicable) to its condition
immediately prior to the occurrence of the Force Majeure Event and (iii) a
proposed Restoration Schedule.

(H) Discussion of Seller’s Restoration Report. Within fifteen (15) Days of the
delivery of a Restoration Report to EPE or such further time as the Parties may
agree, the Parties shall meet to discuss the Restoration Report and any action
to be taken. Seller shall promptly provide to EPE such additional financial and
related information pertaining to the Restoration Report and the matters
described therein as EPE may reasonably request in connection with its review of
the Restoration Report.

14.4 Effect of EPE’s Force Majeure.

(A)(1) Adjustment. If EPE should suffer a Force Majeure Event that affects its
ability to take Solar Energy from Seller under this Agreement, EPE may, upon
notice to Seller, temporarily adjust the Expected Solar Energy for up to
twenty-four (24) consecutive months; provided, however, that no more than one
such temporary adjustment may be made by EPE within any twenty-four (24) month
period in relation to that Force Majeure Event, unless Seller otherwise consents
to such additional temporary adjustment in writing; such consent not to be
unreasonably withheld. Within three (3) Months after any such Force Majeure
Event is cured, EPE may, on one occasion, and without penalty, designate a new
Expected Solar Energy level to apply for the remainder of the term; provided,
however, that such new Expected Solar Energy level shall be at least seventy
percent (70%) and no more than one hundred percent (100%) of the Expected Solar
Energy at the time immediately prior to the Force Majeure Event. Any temporary
or final adjustment or re-designation of the Expected Solar Energy pursuant to
this subsection (A)(1) must be directly attributable to the Force Majeure Event
and of a magnitude commensurate with the scope and impact of the Force Majeure
Event. Such adjustment shall be effective upon the first Day immediately
following receipt of such notice by Seller or such later date as may be
specified by EPE. Any dispute between EPE and Seller regarding the amount of

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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such temporary or final re-designation shall be settled in accordance with
Section 12.8 of this Agreement.

(2) Subject to subsection (1) above, upon the cessation of a Force Majeure Event
or upon its cure, the Expected Solar Energy shall be restored to the Expected
Solar Energy level that existed immediately prior to such Force Majeure Event.

(B) EPE’s Notification Obligations. In the event of any delay or nonperformance
resulting from a Force Majeure Event, EPE shall notify Seller in writing as soon
as practicable after becoming aware of such occurrence. Within fourteen
(14) days of becoming aware of the occurrence of a Force Majeure Event, EPE
shall notify Seller in writing of the nature, cause, date of commencement
thereof and the anticipated duration, and shall indicate whether any deadlines
or date(s) imposed under this Agreement may be affected thereby. The suspension
of performance shall be of no greater scope and of no greater duration than the
cure for the Force Majeure Event requires. A Party claiming that a Force Majeure
Event has occurred shall not be entitled to any relief therefor unless
conforming notice is provided within the time period required. EPE shall notify
Seller of the cessation of the Force Majeure Event or of the conclusion of EPE’s
cure for the Force Majeure Event, in either case within two (2) Business Days
thereof.

(C) EPE’s Duty to Mitigate. EPE shall use commercially reasonable efforts to
cure the cause(s) preventing its performance of this Agreement; provided,
however, that the settlement of strikes, lockouts and other labor disputes shall
be entirely within the discretion of EPE, and EPE shall not be required to
settle such strikes, lockouts or other labor disputes by acceding to demands
which EPE deems to be unreasonable.

(D) Delay Caused by EPE’s Force Majeure Event. Upon the occurrence and during
the continuance of a Force Majeure Event and the effects thereof, to the extent
that a Force Majeure Event affects the ability of the Transmission Provider to
deliver Solar Energy to EPE from the Facility, then the hours during which the
Force Majeure Event occurs shall be excluded from the payment calculations as
set forth in Section 8.1 of this Agreement.

14.5 Limitations on Effect of Force Majeure. In no event will any delay or
failure of performance caused by a Force Majeure Event extend this Agreement
beyond its stated Term. In the event that any delay or failure of performance
caused by a Force Majeure Event continues for an uninterrupted period of three
hundred sixty-five (365) Days from its occurrence or inception, the Party not
claiming a Force Majeure Event may, so long as the Force Majeure Event is
continuing beyond the three hundred sixty-five (365) Day period, terminate this
Agreement upon no less than sixty (60) Days written notice to the affected Party
and without further obligation by either Party, except as to the obligations
incurred prior to the effective date of such termination. Once the right to
terminate as provided in this Section 14.5 is triggered, the Party with the
termination right must exercise such right within sixty (60) Days of the date
such right is triggered, and the right to terminate this Agreement with respect
the specific Force Majeure Event shall be waived after the expiration of such
sixty (60) Day period. The Party not claiming a Force Majeure Event may, but
shall not be obligated to, extend the three hundred sixty-five (365) Day period,
for such additional time as it, at its sole discretion, deems appropriate, such
additional time not to exceed two (2) years.

 

47

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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ARTICLE 15 - REPRESENTATIONS, WARRANTIES AND COVENANTS

15.1 Seller’s Representations, Warranties and Covenants. Seller hereby
represents and warrants as follows:

(A) Seller is a Delaware corporation duly organized, validly existing and in
good standing under the laws of the State of its creation. Seller is qualified
to do business in each other jurisdiction where the failure to so qualify would
have a material adverse effect on the business or financial condition of Seller,
and Seller has all requisite power and authority to conduct its business, to own
its properties, and to execute, deliver, and perform its obligations under this
Agreement.

(B) The execution, delivery, and performance of its obligations under this
Agreement by Seller have been duly authorized by all necessary corporate action,
and do not and will not:

(1) require any consent or approval by any governing body of Seller, other than
that which has been obtained and is in full force and effect (evidence of which
shall be delivered to EPE upon its request);

(2) violate any provision of law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award currently in effect having
applicability to Seller or violate any provision in any formation documents of
Seller, the violation of which could have a material adverse effect on the
ability of Seller to perform its obligations under this Agreement;

(3) result in a breach or constitute a default under Seller’s formation
documents or bylaws, or under any agreement relating to the management or
affairs of Seller or any indenture or loan or credit agreement, or any other
agreement, lease, or instrument to which Seller is a party or by which Seller or
its properties or assets may be bound or affected, the breach or default of
which could reasonably be expected to have a material adverse effect on the
ability of Seller to perform its obligations under this Agreement; or

(4) result in, or require the creation or imposition of any mortgage, deed of
trust, pledge, lien, security interest, or other charge or encumbrance of any
nature (other than as may be contemplated by this Agreement) upon or with
respect to any of the assets or properties Seller now owns or hereafter
acquires, the creation or imposition of which could reasonably be expected to
have a material adverse effect on the ability of Seller to perform its
obligations under this Agreement.

(C) This Agreement is a valid and binding obligation of Seller, subject to the
contingency identified in Section 6.1 of this Agreement.

(D) The execution and performance of this Agreement will not conflict with or
constitute a breach or default under any contract or agreement of any kind to
which Seller is a party or any judgment, order, statute, or regulation that is
applicable to Seller or the Facility.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(E) To the knowledge of Seller, Seller has identified in Exhibit E to this
Agreement all permits, consents, approvals, licenses and authorizations which
Seller anticipates will be obtained by Seller in the ordinary course of
business, and all permits, consents, approvals, licenses, authorizations, or
other action required by any Governmental Authority to authorize Seller’s
execution, delivery and performance of this Agreement. Seller shall obtain all
such permits, consents, approvals, licenses, and authorizations or other action
required by any Governmental Authority identified in Exhibit E prior to the
Commercial Operation Date to the extent required for Commercial Operation of the
Facility. However, failure of Seller to identify a necessary permit, consent,
approval, license or authorization in Exhibit E to this Agreement does not
relieve Seller of the obligation under this Agreement to obtain all such
necessary Governmental Approvals.

(F) Seller shall comply with all applicable local, state, and federal laws,
regulations, and ordinances, including but not limited to equal opportunity and
affirmative action requirements and all applicable federal, state, and local
environmental laws and regulations presently in effect or which may be enacted
during the Term of this Agreement.

(G) As soon as it is known to Seller, Seller shall disclose to EPE the nature
and extent of any (i) Environmental Contamination on or relating to the Site
(and Seller shall be solely responsible and liable for any corresponding
clean-up and remediation costs), (ii) violation of any laws or regulations; or
(iii) litigation, liens, or encumbrances arising out of the construction or
operation of the Facility.

(H) Seller has obtained sufficient water rights or water supply agreements
necessary for uninterrupted operation of the Facility.

15.2 EPE’s Representations, Warranties and Covenants. EPE hereby represents and
warrants as follows:

(A) EPE is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and is qualified in each other jurisdiction
where the failure to so qualify would have a material adverse effect upon the
business or financial condition of EPE. EPE has all requisite power and
authority to conduct its business, to own its properties, and to execute,
deliver, and perform its obligations under this Agreement.

(B) The execution, delivery, and performance of its obligations under this
Agreement by EPE have been duly authorized by all necessary corporate action,
and do not and will not:

(1) require any consent or approval of EPE’s Board of Directors, or
shareholders, other than that which has been obtained and is in full force and
effect (evidence of which shall be delivered to Seller upon its request);

(2) violate any provision of law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award currently in effect having
applicability to EPE or violate any provision in any corporate documents of EPE,
the violation of which could have a material adverse effect on the ability of
EPE to perform its obligations under this Agreement;

 

49

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(3) result in a breach or constitute a default under EPE’s corporate charter or
bylaws, or under any agreement relating to the management or affairs of EPE, or
any indenture or loan or credit agreement, or any other agreement, lease, or
instrument to which EPE is a party or by which EPE or its properties or assets
may be bound or affected, the breach or default of which could reasonably be
expected to have a material adverse effect on the ability of EPE to perform its
obligations under this Agreement; or

(4) result in, or require the creation or imposition of, any mortgage, deed of
trust, pledge, lien, security interest, or other charge or encumbrance of any
nature (other than as may be contemplated by this Agreement) upon or with
respect to any of the assets or properties of EPE now owned or hereafter
acquired, the creation or imposition of which could reasonably be expected to
have a material adverse effect on the ability of EPE to perform its obligations
under this Agreement.

(C) This Agreement is a valid and binding obligation of EPE, subject to the
conditions precedent identified in Section 6.1 of this Agreement.

(D) The execution and performance of this Agreement will not conflict with or
constitute a breach or default under any contract or agreement of any kind to
which EPE is a party or any judgment, order, statute, or regulation that is
applicable to EPE.

(E) To the knowledge of EPE, and except for the NMPRC approval(s) identified in
Section 6.1 of this Agreement, all approvals, authorizations, consents, or other
action required by any Governmental Authority to authorize EPE’s execution,
delivery and performance of this Agreement, have been duly obtained and are in
full force and effect.

ARTICLE 16 - INSURANCE

16.1 Evidence of Insurance. Seller shall, on or before June 1 of each Commercial
Operation Year and pursuant to the requirements of Section 4.9(C) of this
Agreement, provide EPE with copies of certificates of insurance evidencing that
insurance coverages for the Facility are in compliance with the specifications
for insurance coverage set forth in Exhibit D to this Agreement. Such
certificates shall (a) provide that EPE shall receive thirty (30) Days prior
written notice of non-renewal, cancellation of, or significant modification to
any of the corresponding policies (except that such notice shall be ten
(10) Days for non-payment of premiums) and (b) provide a waiver of any rights of
subrogation against EPE, its Affiliates and their officers, directors, agents,
subcontractors, and employees. All policies shall be written with insurers that
EPE, in its reasonable discretion, deems acceptable (such acceptance will not be
unreasonably withheld). All policies shall be written on an occurrence basis,
except as provided in Section 16.2 below. All policies shall contain an
endorsement that Seller’s policy shall be primary in all instances regardless of
like coverage, if any, carried by EPE. Seller’s liability under this Agreement
is not limited to the amount of insurance coverage required herein.

 

50

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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16.2 Term and Modification of Insurance.

(A) All insurance required under this Agreement shall cover occurrences during
the Term and claims for events occurring during the term of this Agreement for a
period of two (2) years after the Term. In the event that any insurance as
required herein is commercially available only on a “claims-made” basis, such
insurance shall provide for a retroactive date not later than the date of this
Agreement, and such insurance shall be maintained by Seller, with a retroactive
date not later than the retroactive date required above, for a minimum of five
(5) years after the Term. Any insurer shall carry at least a best rating of A-V
or better and must include EPE as an additional insured. A waiver of subrogation
will also be required.

(B) EPE shall have the right, at times deemed appropriate to EPE during the
Term, to request Seller to modify the insurance minimum limits specified in
Exhibit D to this Agreement in order to maintain reasonable coverage amounts.
Seller shall comply with such request if commercially reasonable.

(C) If any insurance required to be maintained by Seller under this Agreement
ceases to be reasonably available and commercially feasible in the commercial
insurance market, Seller shall provide written notice to EPE, accompanied by a
certificate from an independent insurance advisor of recognized national
standing, certifying that such insurance is not reasonably available and
commercially feasible in the commercial insurance market for electric generating
plants of similar type, geographic location and design. Upon receipt of such
notice, Seller shall use commercially reasonable efforts to obtain other
insurance that would provide comparable protection against the risk to be
insured, and EPE shall not unreasonably withhold its consent to modify or waive
such requirement.

16.3 Endorsements to Fire and All-Perils and Machinery Breakdown Policies.
Seller shall insure the Facility against all risks of physical loss or damage,
including boiler and machinery breakdown and shall also maintain business
interruption/extra expense endorsements as set forth in Exhibit D, and such
coverage shall be reasonable and customary in the power generation industry for
projects of the size and scope of the Facility and, further, shall cause its
insurers and brokers to provide standard thirty (30) Day non-cancellation
provisions in such policies naming EPE as additional named insured.

16.4 Insurance Reports. Seller shall provide EPE with copies of any technical
underwriters’ reports or other technical reports received by it from any
insurer; provided, however, that EPE shall not disclose such reports to any
other Person except as necessary in connection with administration and
enforcement of this Agreement or as may be required by any Governmental
Authority or other relevant authority having jurisdiction over EPE, and shall
use and internally distribute such reports only as necessary in connection with
the administration and enforcement of this Agreement.

ARTICLE 17 - INDEMNITY

17.1 Indemnification. EACH PARTY (THE “INDEMNIFYING PARTY”) AGREES TO INDEMNIFY,
DEFEND AND HOLD HARMLESS THE OTHER PARTY (THE “INDEMNIFIED PARTY”) FROM AND
AGAINST ALL THIRD PARTY CLAIMS, DEMANDS, LOSSES, LIABILITIES, PENALTIES, AND
EXPENSES (INCLUDING

 

51

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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REASONABLE ATTORNEYS’ FEES) TO THE EXTENT ARISING OUT OF, RESULTING FROM, OR
CAUSED BY: (A) CONSTRUCTION EVENTS OF DEFAULT, OPERATIONAL EVENTS OF DEFAULT, OR
EPE EVENTS OF DEFAULT, AS APPLICABLE, (B) VIOLATION OF ANY APPLICABLE
ENVIRONMENTAL LAWS, OR (C) THE NEGLIGENT OR TORTIOUS ACTS, ERRORS, OR OMISSIONS
OF THE INDEMNIFYING PARTY, ITS AFFILIATES, ITS DIRECTORS, OFFICERS, EMPLOYEES,
OR AGENTS IN PERFORMING ITS OBLIGATIONS UNDER THIS AGREEMENT OR ITS FAILURE TO
ABIDE BY THE PROVISIONS OF THIS AGREEMENT. NOTHING IN THIS ARTICLE 17 SHALL
ENLARGE OR RELIEVE SELLER OR EPE OF ANY LIABILITY TO THE OTHER FOR ANY BREACH OF
THIS AGREEMENT. NEITHER PARTY SHALL BE INDEMNIFIED FOR ITS DAMAGES RESULTING
FROM ITS SOLE NEGLIGENCE, INTENTIONAL ACTS OR WILLFUL MISCONDUCT. THESE
INDEMNITY PROVISIONS SHALL NOT BE CONSTRUED TO RELIEVE ANY INSURER OF ITS
OBLIGATION TO PAY CLAIMS CONSISTENT WITH THE PROVISIONS OF A VALID INSURANCE
POLICY.

17.2 Indemnification for Fines and Penalties. Except as otherwise provided in
Sections 10.3(B) and 19.3 of this Agreement, any fines or other penalties
incurred by a Party (other than fines or penalties due to the negligence or
intentional acts or omissions of the other Party) for non-compliance with any
municipal, state or federal laws shall be the sole responsibility of the
non-complying Party.

17.3 Notice of Claim, Loss or Proceeding. Each Party shall promptly notify the
other Party in writing of any claim, loss, suit, or administrative or legal
proceeding in respect of which such notifying Party is or may be entitled to
indemnification pursuant to Section 17.1 (an “Indemnification Event”). Such
notice shall be given as soon as reasonably practicable after the relevant Party
becomes aware of the Indemnification Event and that such Indemnification Event
may give rise to an indemnification, but in any event no later than seven
(7) Days after the Party seeking indemnification has notice or becomes aware of
the Indemnification Event. The delay or failure of such Indemnified Party to
provide the notice required pursuant to this Section 17.3 to the other Party
shall not release the other Party from any indemnification obligation which it
may have to such Indemnified Party except (i) to the extent that such failure or
delay materially and adversely affects the Indemnifying Party’s ability to
defend such Indemnification Event or increased the amount of the loss, and
(ii) that the Indemnifying Party shall not be liable for any costs or expenses
of the Indemnified Party in the defense of the Indemnification Event during such
period of failure or delay.

17.4 Defense of Claims.

(A) Claim, Loss or Proceeding. Promptly after receipt by a Party of notice of an
Indemnification Event, the Indemnifying Party shall have the option to assume
the defense of the Indemnification Event, with counsel designated by such
Indemnifying Party, provided, however, the Indemnified Party shall have the
right to select and be represented by separate counsel if (i) the Indemnified
Party shall have reasonably concluded and specifically notified the Indemnifying
Party that there may be specific defenses available to it which are different
from or additional to those available to the Indemnifying Party, or that such
Indemnification Event involves or could have a material adverse effect upon the
Indemnified Party beyond the scope of this Agreement, unless a liability insurer
is willing to cover such effects; or (ii) the Indemnified

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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Party shall have reasonably concluded and specifically notified the Indemnifying
Party that there may be a conflict of interest between the Indemnifying Party
and the Indemnified Party in the conduct of the defense of such Indemnification
Event. If the Indemnified Party has the right to select and be represented by
separate counsel as provided herein, then counsel for the Indemnified Party
shall have the right to direct the defense of the Indemnification Event on
behalf of the Indemnified Party and, to the extent possible, shall coordinate
with counsel representing the Indemnifying Party.

(B) Unless and until the Indemnifying Party assumes control of the defense of an
Indemnification Event in accordance with Section 17.2 above, the Indemnified
Party shall have the right, but not the obligation, to contest, defend and
litigate, with counsel of its own selection, any such Indemnification Event, and
the reasonable costs and expenses thereof shall be subject to the
indemnification obligations of the Indemnifying Party hereunder.

(C) Neither the Indemnifying Party nor the Indemnified Party shall be entitled
to settle or compromise any Indemnification Event without the prior consent of
the other; provided, however, that after agreeing in writing to indemnify the
Indemnified Party, the Indemnifying Party may settle or compromise any claim
without the approval of such Indemnified Party. Except where such consent is
unreasonably withheld, if the Indemnified Party settles or compromises an
Indemnification Event without the prior consent of the Indemnifying Party, the
Indemnifying Party shall be excused from any indemnification obligation in
respect of such settlement or compromise.

17.5 Subrogation. Upon payment of any indemnification pursuant to Section 17.1
above, the Indemnifying Party, without any further action, shall be subrogated
to any and all claims that the Indemnified Party may have relating thereto, and
the Indemnified Party shall, at the request and expense of the Indemnifying
Party, cooperate with the Indemnifying Party and give at the request and expense
of the Indemnifying Party such further assurances as are necessary or advisable
to enable the Indemnifying Party vigorously to pursue such claims.

ARTICLE 18 - ASSIGNMENT AND OTHER TRANSFER RESTRICTIONS

18.1 No Assignment Without Consent. Except as permitted in this Article 18 of
this Agreement, neither Party shall assign this Agreement or any portion
thereof, without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed, provided, that: (i) at least
thirty (30) Days’ prior notice of any such assignment is be given to the other
Party; (ii) any assignee expressly assumes the assignor’s obligations under this
Agreement, unless otherwise agreed to by the other Party, and no assignment,
whether or not consented to, shall relieve the assignor of its obligations under
this Agreement in the event the assignee fails to perform, unless the other
Party agrees in writing in advance to waive the assignor’s continuing
obligations pursuant to this Agreement; (iii) no such assignment impairs any
security given by Seller under this Agreement; and (iv) before the Agreement is
assigned by Seller, the assignee first obtains such approvals as may be required
by all applicable Governmental Authorities.

(A) Consent to assignment shall not be required to assign this Agreement to an
Affiliate of EPE or Seller, if any.

 

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****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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(B) EPE’s consent shall not be required for Seller to assign this Agreement for
collateral purposes to the Facility Lender. Seller shall notify EPE, pursuant to
Section 19.4 of this Agreement, of any such assignment to the Facility Lender no
later than thirty (30) Days after the assignment.

18.2 Restriction on Transfers. Except as otherwise permitted by this Agreement,
Seller may not sell the Facility, and Seller’s parent company (the “Parent”) may
not transfer all or any portion of its ownership interest in Seller (the
“Interests”). In the event that the Parent should pledge or otherwise encumber
any of its Interests as security for the payment of indebtedness under the
Financing Documents, any such pledge or hypothecation shall be made pursuant to
a pledge or hypothecation agreement that requires the pledgee or secured party
to be bound by all of the terms and conditions of this Article 18.

18.3 Permitted Transfers. Subject to the conditions and restrictions set forth
in Section 18.5 hereof and written notice to EPE within thirty (30) Days of a
transfer, (A) Parent may at any time transfer all or any portion of its
Interests to (i) any Affiliate of Parent, or (ii) any Purchaser and (B) Seller
may at any time transfer all or any portion of its ownership interest in the
Facility to (i) any Affiliate of Seller, or (ii) any Purchaser (any such
Transfer being referred to in this Agreement as a “Permitted Transfer”).

18.4 Collateral Assignment. EPE’s consent shall not be required for Seller to
assign this Agreement for collateral purposes to a lender under the Financing
Documents. Seller shall notify EPE of any such assignment no later than thirty
(30) Days after the assignment.

18.5 Change of Control. Any direct or indirect voluntary change of control of
Seller, shall require the prior written consent of EPE, which shall not be
unreasonably withheld. No consent of EPE shall be required, however, to any
change of control resulting from (i) transactions among Affiliates of Seller, or
(ii) any exercise by the Facility Lender of its rights and remedies under the
Financing Documents.

18.6 Transfer without Consent is Null and Void. Any change of control or sale,
transfer, or assignment of any interest in the Facility or in this Agreement,
including, without limitation, any sale and lease-back of the Facility under
Section 3.1(A) of this Agreement, made without fulfilling the requirements of
this Agreement shall be null and void and shall constitute an Event of Default
pursuant to Article 12.

18.7 Prohibited Transfers. Any purported transfer of Interests or transfer of
the Facility that is not a Permitted Transfer shall be null and void and of no
force or effect whatsoever.

18.8 Reimbursement for EPE’s Costs from Transfers or Assignments. Seller agrees
that, in the event Seller assigns or transfers an interest in the Facility or
the Agreement, as such transactions are described in Article 18, Seller shall be
responsible for costs incurred by EPE, including reimbursement of costs,
expenses and reasonable attorneys’ fees incurred to effectuate the consent to
such proposed transaction.

 

54

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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ARTICLE 19 - MISCELLANEOUS

19.1 Waiver. Unless specifically provided otherwise in this Agreement, the
failure of either Party to enforce or insist upon compliance with or strict
performance of any of the terms or conditions of this Agreement, or to take
advantage of any of its rights under this Agreement, shall not constitute a
waiver or relinquishment of any such terms, conditions, or rights, but the same
shall be and remain at all times in full force and effect.

19.2 Taxes.

(A) Seller shall be solely responsible for:

(1) any and all present or future taxes and other impositions of Governmental
Authorities relating to the construction, ownership or leasing, operation or
maintenance of the Facility, the Site, or any components or appurtenances
thereof, including, without limitation, taxes and impositions that vary based
upon the amount of power produced, the amount or nature of fuel consumed, and
the nature of wastes produced by the Facility;

(2) any and all present or future taxes and other impositions of Governmental
Authorities on or with respect to the energy generated by the Facility or the
transaction under this Agreement arising up to the Point of Delivery, including
ad valorem taxes; and

(3) all ad valorem taxes relating to the Facility except for ad valorem taxes on
or with respect to the energy generated by the Facility or the transaction under
this Agreement arising at or beyond the Point of Delivery.

(B) Seller shall not be responsible for payment of gross receipts taxes on
energy sales to EPE.

(C) EPE shall be solely responsible for any and all present or future taxes and
other impositions of Governmental Authorities on or with respect to the energy
generated by the Facility or the transaction under this Agreement arising at or
beyond the Point of Delivery, including ad valorem taxes.

(D) In the event EPE is required by law or regulation to remit or pay such taxes
or other impositions of Governmental Authorities that are Seller’s
responsibility pursuant to Section 19.2(A) of this Agreement, Seller shall
promptly reimburse EPE for such amounts. If Seller is required by law or
regulation to remit or pay such taxes or other impositions of Governmental
Authorities that are EPE’s responsibility pursuant to Section 19.2(C) of this
Agreement, EPE shall promptly reimburse Seller for such amounts. Either Party
may offset such amounts against any undisputed amounts owed to it by the other
Party, as provided in Section 9.3(A) of this Agreement.

(E) The Parties shall cooperate to minimize tax exposure; however, neither Party
shall be obligated to incur any financial burden to reduce taxes for which the
other Party is responsible under this Agreement.

 

55

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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19.3 Monetary Penalties. If fees, fines, penalties, or costs are claimed or
assessed against EPE or Seller by any Governmental Authority that are in whole
or in part contributed to or due to noncompliance by the other Party with this
Agreement, any requirements of law, any permit or contractual obligation, the
other Party shall promptly reimburse EPE or Seller for related monetary
penalties to the extent of such contribution or attribution.

19.4 Notices in Writing. Notices required by this Agreement shall be addressed
to the Party’s representative named in Exhibit C to this Agreement at the
addresses noted in Exhibit C. Any notice, request, consent, or other
communication required or authorized under this Agreement to be given by one
Party to the other Party shall be in writing. It shall either be hand delivered
or mailed, postage paid, to the representative of the other Party. If mailed,
the notice, request, consent or other communication shall be simultaneously sent
by facsimile or other electronic means. Any such notice, request, consent, or
other communication shall be deemed to have been received by the Close of the
Business Day on which it was hand delivered or transmitted electronically
(unless hand delivered or transmitted after such close, in which case it shall
be deemed received at the close of the next Business Day). Real-time or routine
communications concerning Facility operations shall be exempt from this
Section 19.4.

19.5 Exhibit Changes. Either Party may change its representative or the
information for its notice addresses in Exhibit C at any time without the
approval of the other Party. Exhibit A, Exhibit B, Exhibit F, and Exhibit G may
be changed at any time with the mutual consent of both Parties. Exhibit E may be
changed by the Seller at any time. Exhibit D may be changed in accordance with
Section 16.2 (B) of this Agreement. A Party making a change that does not
require the consent of the other Party shall provide thirty (30) Days notice of
the change to the other Party.

19.6 Other Changes.

(A) The terms and conditions and the rates for service specified in this
Agreement shall remain in effect for the term of the transaction described
herein. Absent the Parties’ written agreement, this Agreement shall not be
subject to change by application of either Party pursuant to Section 205 or 206
of the Federal Power Act.

(B) Absent the written agreement of all entities to a proposed change, the
standard of review for changes to this Agreement whether proposed by a Party, a
non-party, or the FERC acting sua sponte shall be the “public interest” standard
of review set forth in United Gas Pipe Line v. Mobile Gas Service Corp., 350
U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350
U.S. 348 (1956) (known as the “Mobile-Sierra doctrine”).

19.7 Disclaimer of Third Party Beneficiary Rights. In executing this Agreement,
EPE does not, nor should it be construed to, extend its credit or financial
support for the benefit of any third parties lending money to or having other
transactions with Seller. Nothing in this Agreement shall be construed to create
any duty to, or standard of care with reference to, or any liability to, any
person not a Party to this Agreement.

 

56

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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19.8 Relationship of the Parties.

(A) This Agreement shall not be interpreted to create an association, joint
venture, or partnership between the Parties or to impose any partnership
obligation or liability upon either Party. Neither Party shall have any right,
power, or authority to enter into any agreement or undertaking for, or act on
behalf of, or to act as an agent or representative of, the other Party.

(B) Seller shall be solely liable for the payment of all wages, taxes, and other
costs related to the employment of persons to perform such services, including
all federal, state, and local income, social security, payroll, and employment
taxes and statutorily mandated workers’ compensation coverage. None of the
persons employed by Seller shall be considered employees of EPE for any purpose;
nor shall Seller represent to any person that he or she is or shall become an
EPE employee.

19.9 Equal Employment Opportunity Compliance Certification. Seller acknowledges
that, as a government contractor, EPE is subject to various federal laws,
executive orders, and regulations regarding equal employment opportunity and
affirmative action. All applicable equal employment opportunity and affirmative
action clauses shall be deemed to be incorporated herein as required by federal
laws, executive orders, and regulations, including, but not limited to, 41
C.F.R. §60 1.4(a)(1-7) but shall not thereby apply to Seller.

19.10 Survival of Obligations. Cancellation, expiration, or earlier termination
of this Agreement shall not relieve the Parties of obligations that by their
nature should survive such cancellation, expiration, or termination, prior to
the term of the applicable statute of limitations, including without limitation
warranties, remedies, or indemnities, which shall survive for the period of the
applicable statute(s) of limitation. Applicable provisions of this Agreement
shall continue in effect after termination, including early termination, to the
extent necessary to enforce or complete the duties, obligations or
responsibilities of the Parties arising prior to termination and, as applicable,
to provide for final billings and adjustments related to the period prior to
termination, payment of any money due and owing to either Party pursuant to this
Agreement, payment of principal and interest associated with the Security Fund,
and the indemnifications specified in this Agreement.

19.11 Severability. In the event any of the terms, covenants, or conditions of
this Agreement, its Exhibits, or the application of any such terms, covenants,
or conditions, shall be held invalid, illegal, or unenforceable by any court or
administrative body having jurisdiction, all other terms, covenants, and
conditions of the Agreement and their application not adversely affected thereby
shall remain in force and effect; provided, however, that EPE and Seller shall
negotiate in good faith to attempt to implement an equitable adjustment in the
provisions of this Agreement with a view toward effecting the purposes of this
Agreement by replacing the provision that is held invalid, illegal, or
unenforceable with a valid provision the economic effect of which comes as close
as possible to that of the provision that has been found to be invalid, illegal
or unenforceable.

19.12 Complete Agreement; Amendments. The terms and provisions contained in this
Agreement and its Exhibits constitute the entire agreement between EPE and
Seller with respect to the Facility and shall supersede all previous
communications, representations, or agreements, either verbal or written,
between EPE and Seller with respect to the sale of Solar Energy from the

 

57

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

Facility. This Agreement may be amended, changed, modified, or altered, provided
that such amendment, change, modification, or alteration shall be in writing and
signed by both Parties hereto, and provided further, that the Exhibits attached
hereto may be changed according to the provisions of Section 19.5 of this
Agreement.

19.13 Binding Effect. This Agreement, as it may be amended from time to time
pursuant to this Article, shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors in interest, legal
representatives, and permitted assigns.

19.14 Headings. Captions and headings used in this Agreement are for ease of
reference only and do not constitute a part of this Agreement.

19.15 Counterparts. This Agreement may be executed in any number of
counterparts, and each executed counterpart shall have the same force and effect
as an original instrument.

19.16 Governing Law. The interpretation and performance of this Agreement and
each of its provisions shall be governed and construed in accordance with the
laws of the State of New Mexico. The Parties hereby submit to the exclusive
jurisdiction of the courts of the State of New Mexico, and venue is hereby
stipulated as New Mexico.

19.17 Confidentiality.

(A) For purposes of this Section 19.17, “Disclosing Party” refers to the Party
disclosing information to the other Party, and the term “Receiving Party” refers
to the Party receiving information from the other Party.

(B) Other than in connection with this Agreement, the Receiving Party shall not
use the Confidential Information (as defined in clause (D) below) and shall keep
the Confidential Information confidential. The Confidential Information may be
disclosed to the Receiving Party’s or its affiliates’ directors, officers,
employees, financial advisors, legal counsel and accountants (collectively,
“Representatives”), but only if such Representatives need to know the
Confidential Information in connection with this Agreement. The Parties agree
that (i) such Representatives will be informed by the Receiving Party of the
confidential nature of the Confidential Information and the requirement and the
limitations of its use, (ii) such Representatives will be required to agree to
and be bound by the terms of this Section 19.17 as a condition of receiving the
Confidential Information, and (iii) in any event, the Receiving Party will be
responsible for any disclosure of Confidential Information, or any other breach
of confidentiality provisions of this Agreement, by any of its Representatives.
The Receiving Party shall not disclose the Confidential Information to any
person other than as permitted hereby, and shall safeguard the Confidential
Information from unauthorized disclosure using the same degree of care as it
takes to preserve its own confidential information (but in any event no less
than a reasonable degree of care). To the extent the Disclosing Party is
required to submit Confidential Information to a Governmental Authority, the
Disclosing Party shall use all available means to ensure that such Confidential
Information is not made public.

(C) If the Receiving Party or its Representatives are requested or required (by
oral question, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process, or by applicable law) to disclose
any Confidential Information, the

 

58

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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Receiving Party shall promptly notify the Disclosing Party of such request or
requirement, if that notification can be made without violating the terms of
such compelled disclosure, so that the Disclosing Party may seek an appropriate
protective order or waive compliance with this Section 19.17 with respect to
such disclosure. If, in the absence of a protective order or the receipt of a
waiver under this Agreement, the Receiving Party or its Representatives are, in
the opinion of their legal counsel, compelled to disclose the Confidential
Information, the Receiving Party and its Representatives may disclose only such
of the Confidential Information to the party compelling disclosure as is
required by law and, in connection with such compelled disclosure, the Receiving
Party and its Representatives shall use their reasonable efforts to obtain from
the party to whom disclosure is made written assurance that confidential
treatment will be accorded to such portion of the Confidential Information as is
disclosed.

(D) As used in this Section 19.17, “Confidential Information” means all
information that is furnished in connection with this Agreement to the Receiving
Party or its Representatives by the Disclosing Party, or to which the Receiving
Party or its Representatives have access by virtue of this Agreement (in each
case, whether such information is furnished or made accessible in writing,
orally, visually or by any other (including electronic) means), or which
concerns this Agreement, the Disclosing Party or the Disclosing Party’s
stockholders, members, affiliates or subsidiaries, and which is designated by
the Disclosing Party at the time of its disclosure, or promptly thereafter, as
“confidential” (whether by stamping any such written material or by
memorializing in writing the confidential nature of any such oral or visual
information). Any such information furnished to the Receiving Party or its
Representatives by a director, officer, employee, affiliate, stockholder,
consultant, agent or representative of the Disclosing Party will be deemed
furnished by the Disclosing Party for the purpose of this Agreement.
Notwithstanding the foregoing, the following will not constitute Confidential
Information for purposes of this Agreement:

(1) information that is or becomes generally available to the public other than
as a result of a disclosure or other act by the Receiving Party or its
Representatives;

(2) information that can be shown by the Receiving Party to have been already
known to the Receiving Party on a non-confidential basis prior to being
furnished to the Receiving Party by the Disclosing Party;

(3) information that becomes available to the Receiving Party on a
non-confidential basis from a source other than the Disclosing Party or a
representative of the Disclosing Party if such source was not subject to any
prohibition against transmitting the information to the Receiving Party; and

(4) information developed by the Parties during the negotiation of this
Agreement that relates solely to this Agreement (as opposed to confidential
business or operating information of either Party, including pricing), which
information shall be deemed proprietary to both Parties, each of whom shall be
free to use such information, as they would any information already known to the
Parties prior to the negotiation of this Agreement.

(E) The Confidential Information will remain the property of the Disclosing
Party. Any Confidential Information that is reduced to writing, except for that
portion of the

 

59

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

Confidential Information that may be found in analyses, compilations, studies or
other documents prepared by or for the Receiving Party in connection with this
Agreement, will be returned to the Disclosing Party immediately upon its request
after expiration or termination of this Agreement, unless such Confidential
Information has been destroyed by the Receiving Party, and no copies will be
retained by the Receiving Party or its Representatives, unless the Parties agree
otherwise. That portion of the Confidential Information that may be found in
analyses, compilations, studies or other documents prepared by or for the
Receiving Party, oral or visual Confidential Information, and written
Confidential Information not so required to be returned will be held by the
Receiving Party and kept subject to the terms of this Agreement, or destroyed.

(F) It is understood and agreed that neither this Agreement nor disclosure of
any Confidential Information by the Disclosing Party to the Receiving Party
shall be construed as granting to the Receiving Party or any of its
Representatives any license or rights in respect of any part of the Confidential
Information disclosed to it, including any trade secrets included in any such
Confidential Information.

19.18 Compliance with Applicable Law. This Agreement and the obligations of the
Parties under this Agreement are subject to all present and future laws with
respect to the subject matter hereof, either state or federal, and to all valid
present and future orders, rules, and regulations of duly constituted
Governmental Authorities having jurisdiction. The Parties agree to comply with
any and all such applicable federal, state, and local laws, orders, and
regulations in connection with the performance of their respective obligations
under this Agreement.

19.19 Press Releases and Media Contact. Upon the request of either Party, the
Parties shall develop a mutually agreed joint press release to be issued
describing the location, size, type and timing of the Facility, the long-term
nature of this Agreement, and other relevant factual information about the
relationship. In the event during the Term, either Party is contacted by the
media concerning this Agreement, the contacted Party shall inform the other
Party of the existence of the inquiry, and the Parties shall jointly agree upon
the substance of any information to be provided to the media.

19.20 Due Authority. Each Party represents and warrants that it has full and
complete authority to enter into and perform this Agreement. Each person who
executes this Agreement on behalf of either Party represents and warrants that
he or she has full and complete authority to do so and that such Party will be
bound thereby.

 

60

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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IN WITNESS WHEREOF, the Parties have executed this Agreement.

 

Seller: New Mexico SunTower, LLC By:   /s/ Asif Ansari EPE: El Paso Electric
Company By:   /s/ Gary Sanders By:   /s/ J. Frank Bates

 

DATED: October 17, 2008    APPROVED AS TO FORM    OFFICE OF THE GENERAL COUNSEL
65                                           
                                      10/17/08

 

61

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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EXHIBIT A

CONSTRUCTION MILESTONES

Seller shall specify the following Construction Milestones. If not applicable,
enter “NA.”

 

1. Financial Commitment Milestone: the date that Seller delivers documents to
EPE showing that financing for the Facility has been secured. 4/30/2010

 

2. Project Construction Commencement Milestone: the date on which grading and
excavation for the Facility begins and substantial construction at the facility
site thereafter continues. 6/1/2010

 

3. Generator Installation Milestone: the date that the installation of the
generator commences. 4/1/2011

 

4. Interconnection Milestone: the date that the Interconnection Facilities are
to be completed. 4/1/2011

 

5. Commercial Operation Milestone: the Commercial Operation Date. 7/31/2011

Exhibit A

 

Page 1 of 1

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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EXHIBIT B

FACILITY DESCRIPTION AND SITE MAPS

Bid Specific

 

1. Generating Facility Description.

The Facility consists of two 46 MW units on approximately 400 acres. Each unit
employs a modular architecture, where fields of dual-axis heliostats point to a
thermal receiver, converting water directly to steam. Steam from 16 receivers is
aggregated at a central steam turbine and generator and is used to produce 46 MW
(net) of electric energy. The electric output from each unit is aggregated in a
collector line, which will interconnect to EPE’s transmission system.

The following are renderings of the 92 MW project:

LOGO [g99013g70u12.jpg]

Exhibit B

 

Page 1 of 3

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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2. Site Description.

The maps below show the two prospective sites for the Facility.

The Facility in Deming will be located on either the cluster of private land
parcels or the larger single parcel of City land directly to the west of the
private land. The Facility will interconnect at 345 kV to EPE’s Luna substation.

LOGO [g99013g04v06.jpg]

The Facility in Santa Teresa will be located on private land as indicated by the
green rectangle on the left side of the map below. The Facility will
interconnect to EPE’s 115 kV transmission line directly adjacent to and on the
north side of the property. The Facility may be located further east along EPE’s
115 kV line that terminates at EPE’s Diablo substation, which is marked by a red
box directly below Sunland Park.

Exhibit B

 

Page 2 of 3

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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LOGO [g99013g07h41.jpg]

Exhibit B

 

Page 3 of 3

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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EXHIBIT C

NOTICE ADDRESSES

 

EPE

 

Seller

Notices:

 

El Paso Electric Company

Attn: Ricardo Acosta

Manager, Resource Planning

PO Box 982

El Paso, TX 79901

Phone:         915-543-2040

Facsimile:   915-521-4799

 

Notices:

Attn:     Jim Shandalov, VP Business Development

Street:  130 West Union St.

City:     Pasadena, CA 91103

Phone:             626-685-1846

Facsimile:       626-535-2701

Email:  jim.shandalov@esolar.com

Reference Numbers:

Duns:     007928955

 

Federal Tax ID Number: 74-0607870

 

Reference Numbers:

Duns:   To be provided by Seller

 

Federal Tax ID Number: 26-3543476

Contract Administration:

Attn:     To be provided by Buyer

 

Phone and Fax: To be provided by Buyer

 

Contract Administration:

Attn:     To be provided by Seller

Phone:

 

Phone and Fax:                 To be provided by Seller

Maintenance Forecasting/Scheduling:

 

Attn:     Control Room

 

Phone and Fax:                  To be provided by

 

Buyer

 

Maintenance Forecasting/Scheduling:

Attn:     Control Room

Phone and Fax:                 To be provided by Seller

Day Ahead, Hour Ahead, and Real Time Forecasting/Scheduling:

 

Phone: To be provided by Seller

 

Day Ahead, Hour Ahead, and Real Time Forecasting/Scheduling:

 

Phone: To be provided by Seller

Payments, Security:

 

Attn:     To be provided by Buyer

 

Payments, Security:

Attn:     John Faieta, Controller

Phone:             626-685-1830

Facsimile:       626-535-2701

Email: john.faieta@esolar.com

With additional Notices of an Event of Default or Potential Event of Default to:
  With additional Notices of an Event of Default or Potential Event of Default
to:

 

Exhibit C

Page 1 of 2

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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Attn:     Gary Sanders, General Counsel

Phone: (915) – 543 -2285

Facsimile: (915) – 543-4728

 

Email: gsande1@epelectric.com

 

Attn:     Asif Ansari, CEO

Phone: (626) 685-4966

Facsimile:       626-535-2701

 

Email: asif.ansari@esolar.com

 

Exhibit C

Page 2 of 2

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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EXHIBIT D

INSURANCE COVERAGE

 

Type of Insurance

  

Minimum Limits of Coverage

1.    Commercial General Liability

(CGL)

   $2,000,000 per occurrence and $5,000,000 combined single limit each and
commercial umbrella occurrence and the aggregate, where applicable. If CGL
insurance contains a general aggregate limit, it shall apply separately to the
Facility.

CGL insurance shall be written on ISO occurrence form CG 00 01 01 96 (or a
substitute form providing equivalent coverage) and shall cover liability arising
from premises, operations, independent contractors, products/completed
operations, contracts, property damage, personal injury and advertising injury,
and liability assumed under an insured contract (including the tort liability of
another assumed in a business contract), all with limits as specified above. CGL
insurance shall include ISO endorsement CG 24 17 (or an equivalent endorsement)
which modifies the definition of “Insured contract” to eliminate the exclusion
of easement or license agreements in connection with construction or demolition
operations on or within 50 feet of a railroad. There shall be no endorsement or
modification of the CGL insurance limiting the scope of coverage for liability
arising from explosion, collapse, or underground property damage.

EPE shall be included as an insured under the CGL policy, using ISO additional
insured endorsement CG 20 10 (or a substitute providing equivalent coverage),
and under the commercial umbrella insurance. The commercial umbrella insurance
shall provide coverage over the top of the CGL insurance, the Business
Automobile Liability insurance, and the Employers Liability insurance.

The CGL and commercial umbrella insurance to be obtained by or on behalf of
Seller shall be endorsed as follows:

Such insurance as afforded by this policy for the benefit of EPE shall be
primary as respects any claims, losses, damages, expenses, or liabilities
arising out of that certain Solar Energy Purchase Power Agreement dated
October 17, 2008 and insured hereunder, and any insurance carried by EPE shall
be excess of and noncontributing with insurance afforded by this policy.

 

2.    Business Automobile Liability

   $1,000,000 combined single limit (each accident), including all Owned, Non
Owned, Hired and Leased Autos

Business Automobile Liability insurance shall be written on ISO form CA 00 01,
CA 00 05, CA 00 12, CA 00 20, or a substitute form providing equivalent
liability coverage. If necessary, the policy shall be endorsed to provide
contractual liability coverage equivalent to that provided in the 1990 and later
editions of CA 00 01.

 

Exhibit D

Page 1 of 2

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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3.    Workers Compensation

   $1,000,000 minimum and Statutory Requirements. Seller may comply with these
requirements through the use of a qualified self-insurance plan.

4.    Employers Liability

  

$1,000,000 each accident for bodily injury by accident, or

$1,000,000 each employee for bodily injury by disease.

5.    Excess Liability Coverage

   $6,500,000 general aggregate

6.    Business Interruption/Extra Expense Endorsements

   $5,000,000 general aggregate

 

Exhibit D

Page 2 of 2

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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EXHIBIT E

SELLER’S REQUIRED GOVERNMENTAL AUTHORITY PERMITS, CONSENTS,

APPROVALS, LICENSES AND AUTHORIZATIONS TO BE OBTAINED

The following is a list of key environmental compliance activities.

 

1. National Environmental Policy Act (NEPA) review: Not required as the project
will not be sited on public lands.

 

2. Federal Aviation Agency (FAA) Notice of Obstruction: eSolar will submit this
application, even through the project design is within FAA guidelines for sites
close to airports.

 

3. Clean Water Act (CWA), Wetlands and Waters of the United States: The project
is expected to have no impact on wetlands and waters of the United States,
nevertheless, eSolar will consult with appropriate federal and/or state agencies
to confirm.

 

4. Endangered Species Act - Section 10: the Santa Teresa site is not located in
any designated critical habitats. For the Deming site, eSolar will perform
preconstruction surveys to ensure that no federal or state threatened endangered
or special status species will be affected by the project.

 

5. Clean Air Act (CAA) Permits: Cooling towers will be designed, constructed,
and operated according to New Mexico Environmental Department (NMED) air quality
requirements.

 

6. National Historic Preservation Act (NHPA) – Historically and culturally
significant areas have previously been identified at Santa Teresa. For the
Deming site, eSolar will consult with the New Mexico Historic Preservation
Division (NMHPD) to identify and avoid potentially eligible historic sites. If
necessary, eSolar will obtain the required antiquities permits consult with the
state archaeologist during construction, as required.

 

7. Renewable Energy Credit Generator Certification: eSolar will file for
certification by the NMPRC so that the facility to participate in the renewable
energy credit program.

 

8. Spill Prevention Containment and Control Plan (SPCC Plan): eSolar will
complete an SPCC Plan for the site that complies with all EPA and NMED
requirements.

 

9. Storm Water Management: eSolar will obtain a general construction permit for
authorization to discharge storm water under the New Mexico Pollution Discharge
Elimination System. The goal of the project will be to maintain the site’s
pre-existing storm runoff characteristics during both construction and operation
of the facility.

 

10. Construction Permits: The project will obtain local construction permits
from the City of Deming, Luna County or Dona Ana County, as applicable, such as
those required for storm-water management, driveway easements, the completion of
sewer or septic facilities, and transportation of over-size materials.

 

Exhibit E

Page 1 of 1

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

EXHIBIT F

SELLER’S EXPECTED AND COMMITTED RENEWABLE ENERGY

AND RENEWABLE ENERGY PAYMENT RATE

 

Commercial
Operation
Year

  Expected
Renewable
Energy (in
MWh)   Committed
Renewable
Energy (in
MWh)   Renewable Energy
Payment Rate (in
$/MWh) for
Deming site   Renewable Energy
Payment Rate (in
$/MWh) for Santa
Teresa site 1   ****   ****   ****   **** 2   ****   ****   ****   **** 3   ****
  ****   ****   **** 4   ****   ****   ****   **** 5   ****   ****   ****   ****
6   ****   ****   ****   **** 7   ****   ****   ****   **** 8   ****   ****  
****   **** 9   ****   ****   ****   **** 10   ****   ****   ****   **** 11  
****   ****   ****   **** 12   ****   ****   ****   **** 13   ****   ****   ****
  **** 14   ****   ****   ****   **** 15   ****   ****   ****   **** 16   ****  
****   ****   **** 17   ****   ****   ****   **** 18   ****   ****   ****   ****
19   ****   ****   ****   **** 20   ****   ****   ****   ****

If Seller is not awarded the solar Renewable Energy Production Tax Credit,
pursuant to New Mexico Statute §7-2A-19, the Renewable Energy Payment Rate shall
increase by ****.

If a change in law eliminates the availability of the federal Investment Tax
Credit of 30% for solar technology prior to the Required Commercial Operation
Date, Seller and EPE shall negotiate in good faith for a price adjustment
commensurate with the reduction of tax benefits to the Seller.

If the Seller’s cost of interconnection, including generator-step up
transformers and tap, to the EPE electric system exceeds $4 million, then for
each additional $1 million of network upgrades, the Renewable Energy Payment
Rate shall increase by **** and for each additional $1 million of transmission
upgrades that are not network upgrades by ****.

 

Exhibit F

Page 1 of 1

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

EXHIBIT G

SELLER’S FORMAT FOR RENEWABLE ENERGY CERTIFICATES

In accordance with Article 10 of this Agreement, Seller shall provide EPE with
RECs in the format prescribed in this exhibit.

RENEWABLE ENERGY CERTIFICATE

Period: For the month of                                         , 20__.

Source of REC: Renewable Energy Provider

[Seller Name, Address, Facility Name]

Contact:

[Seller contact person, address, telephone, fax and email]

Generator type:                                         

Nameplate capacity:                          (in MW)

Date of generator start-up:                                          
           

Fuel source:                                                      

Revenue Meter manufacturer and identification / serial number:

 

    

Location of generator:                                          
                                                    

Renewable Energy Purchaser:

Interconnection Utility: El Paso Electric Company

Control Area Operator: El Paso Electric Company

EPE Contact:

Evan Evans

P.O. Box 982

El Paso, TX 79960

(915)543-5995

Fax (915) 521-4729

 

Exhibit G

Page 1 of 2

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.

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

MONTHLY STATEMENT OF RECS

Renewable energy delivery for the month of
                                        , 20        

Energy Delivered:                                          kWh

Weighted Value of Energy Delivered                                          kWh
(multiply by RPS multiplier)

SUPPLIER CERTIFICATION

I,                                          
                                                    , hereby certify that:

The energy produced, sold and delivered by [Seller] to El Paso Electric Company
from these facilities is from a renewable energy resource, as defined by the New
Mexico Renewable Energy Act, NMSA 1978, Section 62-16-1 et seq., and the NMPRC
Rule 572, Renewable Energy For Electric Utilities, 17.9.572 NMAC;

Each kilowatt hour of electricity is generated using a                  fuel
source; and

No other Renewable Energy Certificates associated with the renewable energy
produced and delivered by [Seller] to El Paso Electric Company have been traded,
sold, retired or otherwise transferred by [Seller] to any other person or
entity.

[SELLER]

 

By:           [Name/Title]       Date

 

Exhibit G

Page 2 of 2

****=Confidential treatment has been requested for the redacted portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as ****. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.