Final Execution Version
 
DEVELOPER AGREEMENT
 
This Developer Agreement (“Agreement”), dated as of October 6, 2008 (“Effective
Date”) is among PERPETUAL ENERGY LIMITED, a United Kingdom private limited
company (“Perpetual”), HIGHER POWER ENERGY, LLC, a Texas limited liability
company (“Higher Power”), DEWIND ENERGY DEVELOPMENT COMPANY, LLC, a Nevada
limited liability company (“DeWind”), DEWIND SWI WIND FARMS, LLC, a Delaware
limited liability company (“Holdco”) and HIGHER PERPETUAL ENERGY, LLC, a Texas
limited liability company (“Higher Perpetual”) (Perpetual, Higher Power, DeWind,
Holdco and Higher Perpetual, collectively, the “Parties”, and each, a
“Party”).  Certain capitalized terms used but not defined elsewhere in the text
of this Agreement are defined in Annex I, attached hereto.
 
WHEREAS, Higher Power has acquired leases, options, wind data, studies, permits,
and interconnection applications and other property, interests and rights
(“Development Assets and Rights”), including, without limitation, the rights
described on Exhibit A attached hereto (collectively, the “LP1 Assets”) for the
development, construction, operation and ownership of a proposed wind farm
commonly referred to as Little Pringle One to be located at Northeast Corner of
Section 54, Block M23, Robert Sikes Survey, Hutchinson County, Texas, Latitude:
35º 57’21.36010”N and Longitude: 101º 32’34.46695”W (“Little Pringle One”);
 
WHEREAS, Higher Power has acquired Development Assets and Rights, including,
without limitation, the rights described on Exhibit B attached hereto
(collectively, the “LP2 Assets”) for the development, construction, operation
and ownership of a proposed wind farm commonly referred to as Little Pringle Two
to be located at Southeast Corner of Section 1, Block M24, TC & Ry Co Survey,
Hutchinson County, Texas, Latitude: 35º 55’59.46429”N and Longitude: 101º
32’34.48343”W (“Little Pringle Two”);
 
WHEREAS, Higher Power has acquired Development Assets and Rights, including,
without limitation, the rights described on Exhibit C attached hereto
(collectively, the “BP Assets”) for the development, construction, operation and
ownership of a proposed wind farm commonly referred to as Big Pringle to be
located at Big Pringle (19 miles southwest of Spearman, Texas) (“Big Pringle”);
 
WHEREAS, Higher Power has acquired Development Assets and Rights, including,
without limitation, the rights described on Exhibit D attached hereto
(collectively, the “PD Assets”, and collectively with LP1 Assets, LP2 Assets,
and BP Assets and, to the extent substituted in accordance with the terms of
this Agreement, the Baker Assets and the Haynes Assets, the “Assets”) for the
development, construction, operation and ownership of a proposed wind farm
commonly referred to as Palo Duro to be located at Palo Duro, Randall County,
Texas, Latitude:  N34.5320 and Longitude: W101.5031 (“Palo Duro”, and
collectively with Little Pringle One, Little Pringle Two, and Big Pringle, and
to the extent other assets are substituted for such assets in accordance with
this Agreement, such substituted assets, the “Wind Farms”);

 

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WHEREAS, Higher Power has, along with its affiliates, agents, and other
representatives (collectively, the “Higher Power Parties”) entered into various
agreements and other undertakings with Perpetual and with its affiliates, agents
and other representatives (collectively, the “Perpetual Parties”), including the
agreements and other undertakings described on Exhibit E attached hereto
relating to the Wind Farms and the Assets (collectively the “Existing
Transaction Agreements”);
 
WHEREAS, Higher Perpetual and DeWind are forming Holdco and four subsidiaries
thereof, LittlePringle1, LLC, a Delaware limited liability company (“LP1 Sub”),
LittlePringle2, LLC, a Delaware limited liability company (“LP2 Sub”),
BigPringle, LLC, a Delaware limited liability company (“BP Sub”), and PD1, LLC,
a Delaware limited liability company (“PD Sub”) (collectively with any entities
holding Baker Assets or Haynes Assets transferred in accordance with
Paragraph 4(c), the “Subs”), to develop, construct, own, finance, refinance and
operate, or cause to be operated Little Pringle One, Little Pringle Two, Big
Pringle, and Palo Duro, respectively, in accordance with the Limited Liability
Company Agreement of Holdco, executed as of the Effective Date (the “LLC
Agreement”);
 
WHEREAS, Higher Power has agreed to convey the Assets and render the services
for which the Development Fee is being paid hereunder to Holdco to the Subs on
Higher Perpetual’s behalf, as Higher Perpetual’s initial capital contribution to
Holdco, in exchange for Holdco issuing Holdco membership interests to Higher
Perpetual, and Higher Power desires to convey the Assets to the Subs on Higher
Perpetual’s behalf, in exchange for consideration to be paid by Perpetual,
Higher Perpetual and Holdco in accordance with this Agreement (the
“Transactions”); and
 
WHEREAS, Higher Power, Perpetual, DeWind, Higher Perpetual and Holdco wish to
effectuate the Transactions and settle all claims related thereto in accordance
with this Agreement.
 
NOW THEREFORE, intending to be bound hereby, and relying on the undertaking of
the other Parties, the Parties agree as follows:
 
1.            Perpetual Release.  To induce Higher Perpetual, Higher Power,
Holdco and DeWind to enter into the Transactions, Perpetual on behalf of itself
and the Perpetual Parties and their respective employees, officers, directors,
agents, representatives, members, owners, subsidiaries and each of their
respective affiliates, and their respective successors and assigns, hereby
RELEASES, ACQUITS, AND FOREVER DISCHARGES THE HIGHER POWER PARTIES, HOLDCO AND
DEWIND AND ALL OF THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, AGENTS,
REPRESENTATIVES, MEMBERS, OWNERS, SUBSIDIARIES AND AFFILIATES AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS, OF AND FROM ANY AND ALL CLAIMS, ACTIONS,
CAUSES OF ACTION, LIABILITIES, DAMAGES, OR DEMANDS, BOTH COMPENSATORY AND
PUNITIVE, IN WHATEVER NAME OR NATURE, IN CONTRACT, IN TORT, INCLUDING IN
NEGLIGENCE, GROSS NEGLIGENCE, AND/OR STRICT LIABILITY, AND/OR BY STATUTE,
INCLUDING ANY AND ALL KNOWN AND UNKNOWN DEBTS, INJURIES, LOSSES, AND/OR DAMAGES
TO IT OR ITS PROPERTY ARISING OUT OF OR RELATING TO THE ASSETS, WHETHER NOW
EXISTING OR HEREAFTER ACQUIRED OR ARISING (“CLAIMS”), OTHER THAN UNDER THIS
AGREEMENT OR THE RESERVED CLAIMS (“PERPETUAL RELEASED OBLIGATIONS”).

 
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2.            Higher Power Release.  To induce Higher Perpetual, Perpetual,
Holdco and DeWind to enter into the Transactions, Higher Power on behalf of
itself and the Higher Power Parties and their respective employees, officers,
directors, agents, representatives, members, owners, subsidiaries and each of
their respective affiliates, and their respective successors and assigns, hereby
RELEASES, ACQUITS, AND FOREVER DISCHARGES THE PERPETUAL PARTIES, HOLDCO AND
DEWIND, AND ALL OF THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, AGENTS,
REPRESENTATIVES MEMBERS, OWNERS, SUBSIDIARIES AND EACH OF THEIR RESPECTIVE
AFFILIATES, AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, OF AND FROM ANY AND ALL
CLAIMS, ACTIONS, CAUSES OF ACTION, LIABILITIES, DAMAGES, OR DEMANDS, BOTH
COMPENSATORY AND PUNITIVE, IN WHATEVER NAME OR NATURE, IN CONTRACT, IN TORT,
INCLUDING IN NEGLIGENCE, GROSS NEGLIGENCE, AND/OR STRICT LIABILITY, AND/OR BY
STATUTE, INCLUDING ANY AND ALL KNOWN AND UNKNOWN DEBTS, INJURIES, LOSSES, AND/OR
DAMAGES TO ANY OF THEM OR THEIR PROPERTY ARISING OUT OF OR RELATING TO THE
ASSETS, WHETHER NOW EXISTING OR HEREAFTER ACQUIRED OR ARISING, OTHER THAN UNDER
THIS AGREEMENT OR THE RESERVED CLAIMS (“HIGHER POWER RELEASED OBLIGATIONS”).
 
3.            Perpetual Obligations.  (a)  Perpetual shall pay Higher Power the
following fees upon the occurrence of the applicable event specified as follows,
but only to the extent such event occurs (each, a “Developer Fee”, and
collectively, the “Developer Fees”):
 
(i)            on the date that Holdco or LP1 Sub receives the net proceeds of
the Permanent Financing of LP1 from a Third Party, $450,000, but not later than
the date any Sale Fee is payable for any other Wind Farm;
 
(ii)           on the date that Holdco or LP2 Sub receives the net proceeds of
the Permanent Financing of LP2 from a Third Party, $450,000, but not later than
the date any Sale Fee is payable for any other Wind Farm;
 
(iii)          if the BP Assets have not been transferred to Higher Power
pursuant to Paragraph 4(c), on the date that BP Sub delivers the notice to
proceed (or equivalent) for all or any material portion of the project under a
construction agreement for Big Pringle (“BP”), $20,000 per megawatt electrical
generating capacity of the wind turbines to be installed (“Installed Capacity”)
at BP (the “Notice to Proceed Fee”);
 
(iv)         if the BP Assets have not been transferred to Higher Power pursuant
to Paragraph 4(c), on the date that Holdco or BP Sub receives the net proceeds
of the Permanent Financing of BP from a Third Party, $76,250, per megawatt of
actually Installed Capacity (the “Sale Fee”) for BP;

 
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(v)           if the PD Assets have not been transferred to Higher Power
pursuant to Paragraph 4(c), on the date that PD Sub delivers the notice to
proceed (or equivalent) for all or any material portion of the project under a
construction agreement for Palo Duro (“PD”), the Notice to Proceed Fee;
 
(vi)         if the PD Assets have not been transferred to Higher Power pursuant
to Paragraph 4(c), on the date that Holdco or PD Sub receives the net proceeds
of the Permanent Financing of PD from a Third Party, the Sale Fee for PD;
 
(vii)        if the Baker Assets have been transferred to Baker Sub pursuant to
Paragraph 4(c), on the date that Baker Sub delivers the notice to proceed (or
equivalent) for all or any portion of the project under a construction agreement
for Baker, the Notice to Proceed Fee;
 
(viii)       if the Baker Assets have been transferred to Baker Sub pursuant to
Paragraph 4(c), on the date that Holdco or Baker Sub receives the net proceeds
of the Permanent Financing of Baker from a Third Party, the Sale Fee for Baker;
 
(ix)          if the Haynes Assets have been transferred to Haynes Sub pursuant
to Paragraph 4(c), on the date that Haynes Sub delivers the notice to proceed
(or equivalent) for all or any portion of the project under a construction
agreement for Haynes, the Notice to Proceed Fee;
 
(x)           if the Haynes Assets have been transferred to Haynes Sub pursuant
to Paragraph 4(c), on the date that Holdco or Baker Sub receives the net
proceeds of the Permanent Financing of Baker from a Third Party, the Sale Fee
for Haynes;
 
provided, however, that in the event any Wind Farm is constructed in phases, the
Developer Fees shall be payable as provided above with respect to each phase on
a pro rata basis, based on the total Expected MWs for such Wind Farm.
 
(b)           Perpetual agrees to perform its obligations under Section 4.01(c)
of the LLC Agreement.
 
4.           Mandatory Replacement of Higher Perpetual Contributed Assets.
 
(a)           On the date hereof, Higher Power on behalf of Higher Perpetual
shall transfer and assign to LP1 Sub, LP2 Sub, BP Sub and PD Sub, the assets
more particularly described in the Contribution Agreement, free and clear of all
Encumbrances except for Permitted Encumbrances.  From time to time after the
date hereof, and without any further consideration, Higher Power, Higher
Perpetual and Perpetual shall execute, acknowledge and deliver all such
additional deeds, assignments, conveyances, instruments, notices, releases,
acquittances and other documents, and will do all such other acts and things,
all in accordance with applicable law, as may be necessary or appropriate
(i) more fully to assure Holdco, the Subs and their successors and assigns all
of the properties, rights, titles, interests, estates, remedies, powers and
privileges required by this Agreement to be granted to Holdco and the Subs or
intended so to be, and (ii) more fully and effectively to carry out the purposes
and intent of this Agreement.

 
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(b)           Commencing on the date hereof and for a period of one hundred
twenty (120) days thereafter and so long thereafter as may be extended upon the
mutual agreement of the Parties, which agreement shall not be unreasonably
withheld (the “Screening Period”), Holdco shall screen the BP Assets, the PD
Assets, the Baker Assets and the Haynes Assets to determine by unanimous consent
of the Management Committee (as defined in the LLC Agreement) the number of
megawatts of wind powered generation facilities reasonably expected to be
developed with the applicable power purchase agreements or other offtake
arrangements (the “Expected MWs”) by shall be the date 36 months after the
Effective Date (the “Expected Start of Construction Date”).  Higher Perpetual
shall cause Perpetual and Higher Power promptly following any reasonable request
therefor, to provide to Holdco, the Subs and DeWind such financial information
with respect to such Assets, their plans, business, affairs and condition as of
any of them may reasonably request.  During the Screening Period and thereafter
if such assets are required to be transferred to Holdco or any Sub in accordance
with this Paragraph 4, Higher Perpetual, Higher Power and Perpetual shall not
solicit any offers, market or enter into (or permit to exist) any agreement or
Encumbrance affecting the Baker Assets and the Haynes Assets that might prohibit
any portion of the Baker Assets and the Haynes Assets from being transferred to
Holdco or any Sub if and as required under this Paragraph 4.  In furtherance of
the foregoing, during such period, none of Higher Perpetual, Higher Power or
Perpetual, nor any of their Affiliates, shall solicit any offers, market or
enter into any agreement respecting the Baker Assets or the Haynes Assets
(except as expressly provided for in this Agreement), written or oral, with any
other Person relating to the development, construction or operation of Baker or
Haynes that conflicts with the terms hereof or the transactions contemplated by
the Transactions Documents.
 
(c)           If at the end of the Screening Period, the aggregate Expected MWs
of the BP Assets and the PD Assets are less than 600 MW of installed capacity
(the “Target MWs”), with the approval of the Members, which shall not be
unreasonably delayed or denied, Holdco may elect by written notice delivered no
later than the first business day after the end of the Screening Period, to
substitute the Baker Assets and/or the Haynes Assets for either or both of the
BP Assets and the PD Assets, such that the Expected MWs of the assets owned and
developed by Holdco and the Subs equals or exceeds the Target MWs.  Upon such
election by Holdco, Higher Power on behalf of Higher Perpetual shall transfer
and assign the Baker Assets to the Baker Sub and/or the Haynes Assets to the
Haynes Sub, as applicable, free and clear of all Encumbrances other than
Permitted Encumbrances pursuant to an agreement substantially in the form of the
Contribution Agreement and related documents, including a release in the form of
Paragraphs 1 and 2 of this Agreement, with such changes as Holdco, Higher
Perpetual and Higher Power may reasonably request.  Concurrently, the BP Sub
shall transfer and assign the BP Assets, and the PD Sub shall transfer and
assign the PD Assets, as applicable, to Higher Power on behalf of Higher
Perpetual free and clear of all Encumbrances created by, through or under Holdco
or the Subs other than Permitted Encumbrances, pursuant to an agreement in form
and substance reasonably acceptable to Holdco and Higher Power The assumed
Installed Capacity of the Wind Farms is set forth on Exhibit F attached hereto.

 
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5.           Higher Perpetual and Holdco Payment Obligations.
 
(a)           Higher Perpetual shall pay to Higher Power each Developer Fee on
the date of the applicable event specified in Paragraph 3, but only to the
extent such event occurs and such Developer Fee has not already been paid by
Perpetual pursuant to Paragraph 3 or by any other Person and if Higher Perpetual
and Perpetual (and all other Persons) fail to make such payment within thirty
(30) days of the applicable event specified in Paragraph 3 (or if such payment
is avoided, rescinded or must otherwise be returned by Higher Power for any
reason including as a result of any insolvency, bankruptcy or reorganization
proceeding) Holdco shall pay to Higher Power such Developer Fee; provided
however that, Holdco’s liability for any Notice to Proceed Fee shall be limited
to $10,000 per megawatt of Installed Capacity and if Holdco shall pay such
amount, Higher Power shall have been paid in full for such Notice to Proceed Fee
and shall have no claim to Perpetual, Higher Perpetual, Holdco or their
Affiliates for any additional amount pursuant to this Agreement; provided
further however, that if Holdco pays such Notice to Proceed Fee for any Wind
Farm and is required to pay the Sale Fee for such Wind Farm, such Sale Fee to be
paid by Higher Perpetual and/or Holdco shall be $86,250 per megawatt of
Installed Capacity.  Perpetual and Higher Perpetual acknowledge and agree that
Holdco shall have the ability to collect from Higher Perpetual and Perpetual the
amount of such Developer Fees with interest accrued thereon at the rate of 15%
per annum from the date of such payment to but excluding the date of such
payment, and that any failure by Perpetual and Higher Perpetual to make such
payment shall entitle Holdco and DeWind to exercise their rights and remedies
under Section 4.08 of the LLC Agreement and other applicable law, which may,
among other things, result in a dilution of Higher Perpetual’s Membership
Interest under the LLC Agreement.  Holdco’s obligation to pay the Developer Fees
to Higher Power when due is not subject to the making and funding of Capital
Calls under the LLC Agreement. Each of Higher Perpetual, Perpetual and Holdco
waives, to the extent permitted by law, any applicable surety defenses; provided
that Holdco's waiver shall not impair its ability to recover any payment of the
Sale Fee with interest as described in this Section 5(a) or the ability of
Holdco and DeWind to exercise their rights described in this Section 5(a).
 
(b)           Holdco shall upon Higher Power’s execution and delivery of the
Contribution Agreement on behalf of Higher Perpetual pay to Higher Power
$607,500 in reimbursement for funds currently on deposit with a government
agency or other Person and assume all rights and obligations of Higher Power
with respect to all rights of Higher Power pursuant to the interconnect
applications as listed on Exhibit G attached hereto.
 
(c)           Before Permanent Financing occurs for such Wind Farm, the BP
Assets (or substituted assets pursuant to Paragraph 4(c)) and/or the PD Assets
(or assets substituted pursuant to Paragraph 4(c)) may only be sold or otherwise
disposed of to a Third Party if any unpaid Developer Fees applicable to such
Assets shall have been assigned to and assumed by the acquiring Third Party
pursuant to a written agreement under which Higher Power would receive the
related Developer Fees payable on the related Commercial Operation Date.

 
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6.           Performance of Development Services.  Higher Power shall at its
sole cost and expense perform the development services on behalf of Higher
Perpetual for each of Big Pringle, Palo Duro, Baker, Haynes, and (with respect
to title work only) Little Pringle One and Little Pringle Two in accordance with
Prudent Wind Industry Practices as set forth on Exhibit H attached hereto.
 
7.           Late Payments.  In the event any payment (including Developer Fees)
due to either Party is not paid when such amount becomes due hereunder, then
interest shall accrue on such outstanding amount and shall be payable to such
Party at a rate of the Prime Rate as published in the Wall Street Journal plus
two percent per annum, or the maximum rate permitted by applicable law,
whichever is less.  Interest shall begin to accrue on the date payment was due.
 
8.           Entire Agreement.  This Agreement constitutes the entire agreement
among the Parties regarding the Assets, Perpetual Released Obligations, Higher
Power Released Obligations, Developer Fees and the other matters described in
this Agreement.  There are no other written or oral understandings or
agreements, directly or indirectly connected therewith.
 
9.           Higher Power Representations and Warranties.  Higher Power hereby
represents and warrants to the other Parties that:
 
(a)           there are no other costs, expenses, or liabilities owed by Higher
Power, the Higher Power Parties or any of their respective affiliates,
directors, officers, employees or agents in connection with the business or
operation of the Assets, other than the Developer Fees, for which Higher Power
could or will claim reimbursement from Higher Perpetual, Perpetual, DeWind,
Holdco or any Sub pursuant to the terms of this Agreement or otherwise;
 
(b)           the Assets are not subject to any lien (statutory or otherwise),
mortgage, deed of trust, claim, option, right to purchase, right to obtain,
lease, easement, charge, pledge, security interest, hypothecation, assignment,
use restriction or other encumbrance of any kind or nature whatsoever, whether
voluntary or involuntary, choate or inchoate (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement)
(“Encumbrance”) other than Permitted Encumbrances; and
 
(c)           it has, as of the date hereof (or will have, within the period
determined by the Management Committee to meet the Expected Start of
Construction Date for each Wind Farm, at its own cost and expense use its
commercially reasonable efforts in accordance with Prudent Wind Industry
Practices to have):
 
(i)           obtained sites and optimal placement of wind turbines at the Wind
Farms (located 10 MWs at Little Pringle One, 10 MWs at Little Pringle Two,
200 MWs at Big Pringle, and 400 MWs at Palo Duro);
 
(ii)           obtained all site leases for the Wind Farms on terms accepted by
prudent project financiers;

 
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(iii)          prepared, submitted, and obtained all other permit applications
required to design, construct, and operate the Wind Farms;
 
(iv)         obtained FAA, applicable environmental, and authority to construct
permits;
 
(v)          obtained tax abatements for not less than seven (7) years;
 
(vi)         conducted public and community relations, including communications
with local governmental agencies and community members;
 
(vii)        designed, and obtained required approvals of, any transmission and
interconnect facilities;
 
(viii)       coordinated with ERCOT, the Southwest Power Pool, the Federal
Energy Regulatory Commission, and Excel, and communicated with, and assured
compliance with, Texas or other applicable state, county, and municipal
regulatory agencies; and
 
(ix)          erected meteorological towers or monitoring equipment sufficient
to satisfy financing of project; collected, monitored, and obtained wind
resource data for Assets for at least twelve (12) continuous months, and for not
less than one (1) 60 meters in height meteorological towers per 100 MWs of wind
turbines; and obtained transmission studies and information.
 
(x)           Assist as required to support the needs of Holdco, the Subs, BOP
contractors, land lease owners, local authorities, and utilities during
construction and during commercial operations until sale of Assets by Holdco.
 
10.           Perpetual Representation and Warranties.  Perpetual hereby
represents and warrants to the other Parties that there are no costs, expenses,
or liabilities incurred or owed by Perpetual, the Perpetual Parties, or any of
their respective affiliates, directors, officers, employees or agents in
connection with the business or operation of Holdco for which Perpetual could or
will claim reimbursement from Higher Perpetual, Higher Power, DeWind, Holdco or
the Subs pursuant to the terms of this Agreement or otherwise.
 
11.           No Assignment of Claims.  Each of Higher Power, Higher Perpetual,
Perpetual, and Holdco hereby represents and acknowledges that it has not
assigned or attempted to assign any claim under or related to the Assets,
Existing Transaction Agreements, Perpetual Released Obligations, Higher Power
Released Obligations, Developer Fees, Perpetual Distributions Pledge, and
Perpetual Distributions Negative Pledge to any third party.  No party hereto may
assign its rights or obligations under this Agreement without the prior written
consent of the other Parties.
 
12.           Acknowledgement of Pledge and Subordination.  Each of the Parties
acknowledges that Higher Perpetual has pledged its interest in the LLC
Agreement, including its membership interest and right to receive distributions,
whether now existing or hereafter acquired, to DeWind and its successor and
assigns.

 
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13.           Prior Claims.  Each of Perpetual and Higher Power (with respect to
its parents, affiliates, investors, and principals), hereby covenant, warrant,
and undertake that they shall not at any time initiate, assert, or bring any
claim (in any court, administrative agency, or other tribunal, anywhere in the
world) against any other Party for any claim or alleged liabilities of any kind
and nature, at law, in equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, relating to any past or existing claims
that were or could have been brought against any other Party regarding, related
to, or in connection with the Perpetual Released Obligations and Higher Power
Released Obligations; provided, however, that nothing in this Paragraph 13 shall
preclude any Party from enforcing its rights under this Agreement.
 
14.           Acknowledgement of Release.  The Parties acknowledge, agree, and
specifically warrant to each other that the releases contained herein are not
intended to affect any claims or liabilities among the Parties that are
unrelated to the Assets or the Existing Transaction Agreements.
 
15.           Joint Drafting.  The Parties acknowledge, agree, and specifically
warrant to each other that they have fully read this Agreement and the releases
contained herein, received independent legal advice with respect to the
advisability of entering into this Agreement and the releases, and concerning
the legal effect of the releases, and fully understand the effect of this
Agreement.  In order to induce one another to enter into this Agreement, each of
the Parties represents that it has determined that the terms of this Agreement
are fair and reasonable under all the circumstances and that this determination
has been based solely upon its independent judgment after consulting with
counsel, and that, in making this determination, it has had an adequate
opportunity to discuss and assess the merits of its claims.
 
16.           Severability.  If and for so long as any provision of this
Agreement shall be deemed to be judged invalid for any reason whatsoever, such
invalidity shall not affect the validity or operation of any other provision of
this Agreement except only so far as shall be necessary to give effect to the
construction of such invalidity, and any such invalid provision shall be deemed
severed from this Agreement without affecting the validity of the balance of
this Agreement.
 
17.           Notices.  Except as expressly set forth to the contrary in this
Agreement, all notices, requests or consents provided for or permitted to be
given under this Agreement must be in writing and must be delivered to the
recipient in person, by courier or mail or by facsimile or other electronic
transmission to the following addresses:

 
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If to Perpetual:
 

 
Perpetual Energy Limited

 
Booths Park 1

 
Booths Hall

 
Chelford Road

 
Knutsford

 
Cheshire  WA16 8GS

 
Attention: David Tatton

 
Tel: +44-1565-757829

 
Fax: +44-1565-757852
 

 
If to Higher Perpetual:

 
 
Higher Perpetual Energy, LLC

 
222 West Las Colinas Blvd

 
Millenium Centre

 
Suite 1650

 
Irving, TX 75039

 
Attention: Mark Patkunas

 
Tel: +1-972-444-2575

 
Fax: +1-972-444-2579
   

 
with copy to:

 
 
Perpetual Energy Limited

 
Booths Park 1

 
Booths Hall

 
Chelford Road

 
Knutsford

 
Cheshire  WA16 8GS

 
Attention: David Tatton

 
Tel: +44-1565-757829

 
Fax: +44-1565-757852

 
 
If to Higher Power:

 
 
Higher Power Energy, LLC

 
2221 Justin Rd. Suite 119-137

 
Flower Mound, TX 75028

 
Attention: Mark Patkunas

 
Tel: +1-214-636-5613

 
Fax: +1-972-317-9080

 
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If to Holdco:

 
 
DeWind SWI Wind Farms, LLC

 
2026 McGaw Avenue

 
Irvine, CA  92614

 
Attention: Michael McIntosh

 
Tel: +1-949-428-8500

 
Fax: +1-949-660-1533
   

 
If to DeWind:

 
 
DeWind Energy Development Company, LLC

 
2026 McGaw Avenue

 
Irvine, CA  92614

 
Attention: Michael McIntosh

 
Tel: +1-949-428-8500

 
Fax: +1-949-660-1533

 
 
with copy to:

 
 
DeWind, Inc.

 
44 Cook Street #600

 
Denver, CO 80206

 
Attention: President

 
Tel: +1-303-270-0141

 
Fax: +1-303-270-0143

 
A notice, request or consent given under this Agreement is effective on receipt
by the Party to receive it; provided, however, that a facsimile or other
electronic transmission that is transmitted to a Party after 5:00 pm the
recipient’s time shall be deemed effective on the next Business Day.  All
notices, requests and consents to be sent to a Party must be sent to or made at
the addresses given for that Party above, or such other address as that Party
may specify by notice to the other Parties.  Whenever any notice is required to
be given by law or this Agreement, a written waiver thereof, signed by the
Person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice.
 
18.          GOVERNING LAW.  THE TERMS OF THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF TEXAS, WITHOUT REGARD TO ITS
CONFLICT-OF-LAW RULES.  EACH OF THE PARTIES WAIVES ITS RIGHT TO TRIAL BY JURY
AND AGREES AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF STATE AND FEDERAL
COURTS SITTING IN HOUSTON, TEXAS IN CONNECTION WITH ALL DISPUTES AND PROCEDURES
IN CONNECTION WITH THIS AGREEMENT.  THE PARTIES AGREE THAT ANY CONTROVERSY,
CLAIM OR DISPUTE THAT ARISES OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
INCLUDING THE CONSTRUCTION, INTERPRETATION, PERFORMANCE, BREACH, TERMINATION,
ENFORCEABILITY OR VALIDITY OF THIS AGREEMENT, WHETHER THE SAME IS BASED ON
RIGHTS, PRIVILEGES OR INTERESTS RECOGNIZED BY OR BASED UPON STATUTE, CONTRACT,
AGREEMENT (WHETHER WRITTEN OR ORAL), TORT, COMMON LAW OR OTHER LAW (A “DISPUTE”)
AMONG THEM SHALL BE RESOLVED IN ACCORDANCE WITH THE DISPUTE RESOLUTION
PROCEDURES SET FORTH IN EXHIBIT K HERETO.

 
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19.           Counterparts.  This Agreement may be executed in counterparts by
the Parties with the same force and effect as if a single copy of this Agreement
was executed by the Parties, and a signature transmitted by facsimile (or other
form of electronic transmission) shall be deemed an original signature for the
purposes of this Agreement.
 
[Remainder of this page intentionally left blank]

 
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20.           Each of the signatories below represents and warrants that he or
she has full power and authority to sign this Agreement and to bind legally his
or her respective principal to all of the terms of this Agreement.
 
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the date first written above.
 
HIGHER PERPETUAL ENERGY, LLC
 
By:
/s/
Name:
   
Title:
       
PERPETUAL ENERGY LIMITED
   
By:
/s/
Name:
   
Title:
       
HIGHER POWER ENERGY, LLC
   
By:
/s/
Name:
  
Title:
       
DEWIND SWI WIND FARMS, LLC
   
By:
/s/
Name:
   
Title:
      
DEWIND ENERGY DEVELOPMENT COMPANY, LLC
   
By:
/s/
Name:
  
Title:
   

 
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ANNEX I
 
DEFINED TERMS
 
“Assets” has the meaning set forth in the Recitals.
 
“Baker” has the meaning set forth in the definition of Baker Assets.
 
“Baker Assets” Development Assets and Rights, including, without limitation, the
rights described on Exhibit I attached hereto for the development, construction,
operation and ownership of a proposed wind farm commonly referred to as Baker to
be located on real property of approximately 378 acres in the Counties of
Haskell and Throckmorton, Texas, at Latitude: 33' 18.47N, Longitude: 99' 28.73W
(“Baker).
 
“Baker Sub” means the Sub owning the Baker Assets.
 
“Big Pringle” has the meaning set forth in the Recitals.
 
“BP” has the meaning set forth in Paragraph 3(a)(iii).
 
“BP Assets” has the meaning set forth in the Recitals.
 
“BP Sub” has the meaning set forth in the Recitals.
 
“Commercial Operation Date” means, with respect to a Wind Farm, the date upon
which commercial operation under a power purchase agreement has occurred, or if
there is no power purchase agreement, substantial completion (or the like) under
construction contracts has occurred, in each case affecting substantially all of
the Expected MWs for such Wind Farm, and such wind turbines have been placed in
service for the purpose of qualifying for federal production tax credits, if
any, and depreciation.
 
“Contribution Agreement” has the meaning set forth in Exhibit E.
 
“Developer Fee(s)” has the meaning set forth in Paragraph 3(a).
 
“Development Assets and Rights” has the meaning set forth in the Recitals.
 
“DeWind” has the meaning set forth in the Recitals.
 
“Disposition” means, with respect to any asset or any equity interest (including
stock, share, partnership interest, membership interest or any other equity
interest (each an “equity interest”)) of Holdco or any Sub, a sale, assignment,
transfer, conveyance, gift, exchange or other disposition of such asset or
equity interest, whether such disposition be voluntary, involuntary or by
operation of law and a pledge of an equity interest (and any foreclosure
thereof).
 
“Effective Date” has the meaning set forth in the Recitals.

 
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“Encumbrance” has the meaning set forth in Paragraph 9(b).
 
“Existing Transaction Agreements” has the meaning set forth in the Recitals.
 
“Expected MWs” has the meaning set forth in Paragraph 4(b).
 
“Expected MWs TSA” has the meaning set forth in Paragraph 4(d).
 
“Expected Start of Construction Date” has the meaning set forth in Paragraph
4(b).
 
“GAAP” means generally accepted accounting principles as in effect in the United
States from time to time.
 
“Haynes” has the meaning set forth in the definition of Haynes Assets.
 
“Haynes Assets” Development Assets and Rights, including, without limitation,
the rights described on Exhibit J attached hereto for the development,
construction, operation and ownership of a proposed wind farm commonly referred
to as Haynes to be located on real property of approximately 3352 acres in Grey
County, Texas, approximately 12 miles northwest of McLean, Texas, in rural,
varying terrain area of USGS Hudgens Ranch, TX Quadrangle (35.3680N, 100.6667W
[NAD 27]) - 65 miles south, southeast of Spearman, Texas (“Haynes”).
 
“Haynes Sub” means the Sub owning the Haynes Assets.
 
“Higher Perpetual” has the meaning set forth in the Recitals.
 
“Higher Power” has the meaning set forth in the Recitals.
 
“Higher Power Sub I” has the meaning set forth in Exhibit E.
 
“Higher Power Sub II” has the meaning set forth in Exhibit E.
 
“Higher Power Parties” has the meaning set forth in the Recitals.
 
“Higher Power Released Obligations” has the meaning set forth in Paragraph 2.
 
“Holdco” has the meaning set forth in the Recitals.
 
“Installed Capacity” has the meaning set forth in Paragraph 4(a)(iii).
 
“Lien” means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including, without limitation, any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any lien or security interest).
 
“Little Pringle One” has the meaning set forth in the Recitals.
 
“Little Pringle Two” has the meaning set forth in the Recitals.
 
“LLC Agreement” has the meaning set forth in the Recitals.

 
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“LP1 Assets” has the meaning set forth in the Recitals.
 
“LP1 Sub” has the meaning set forth in the Recitals.
 
“LP2 Assets” has the meaning set forth in the Recitals.
 
“LP2 Sub” has the meaning set forth in the Recitals.
 
“Notice to Proceed Fee” has the meaning set forth in Paragraph 3(a)(iii).
 
“Palo Duro” has the meaning set forth in the Recitals.
 
“Party” or “Parties” has the meaning set forth in the Recitals.
 
“PD” has the meaning set forth in Paragraph 3(a)(v).
 
“PD Assets” has the meaning set forth in the Recitals.
 
“PD Sub” has the meaning set forth in the Recitals.
 
“Permanent Financing” means on or after the Commercial Operation Date, (i) for
LP1 and LP2, the receipt by Holdco or the Sub for such Wind Farm of an amount in
excess of 80% of the Wind Farm’s actual project costs, whether upon the issuance
of equity or long term debt as determined in accordance with GAAP or the sale or
other disposition of the Sub owning such Wind Farm or of all or any portion of
such Wind Farm, and (ii) for any other Wind Farm, the receipt by Holdco or the
Sub for such Wind Farm of an amount in excess of 50% of the Wind Farm’s actual
project costs, whether upon the issuance of equity or long term debt as
determined in accordance with GAAP or the sale or other disposition of the Sub
owning such Wind Farm or of all or any portion of such Wind Farm.
 
“Permitted Encumbrance” means (a) any Encumbrance for taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with United States
generally accepted accounting principles; (b) any statutory Encumbrance for
utility assessments or other charges or assessments arising in the ordinary
course of business by operation of law with respect to a liability which is not
yet due or delinquent; (c) any Encumbrance or other matters relating to the
Assets (other than the PD Assets) disclosed in a title report delivered to
Holdco before the date of transfer of such Assets (other than the PD Assets)
pursuant to this Agreement; (d) any Encumbrance or other matters relating to the
PD Assets disclosed in a title report delivered to Holdco prior to the
expiration of the Screening Period; (e) materialmen’s, mechanics’, workers’,
repairmen’s, employees’ or other like Encumbrance, either for amounts not yet
due or for amounts being contested in good faith and by appropriate proceedings;
(f) encumbrances consisting of zoning restrictions, licenses, or restrictions on
the use of property, none of which, individually or collectively, materially
impair the property affected thereby for the purpose for which title was
acquired, materially interfere with the operation of the project, or otherwise
materially adversely impact the value of the Assets; and (g) any state of facts
that a current and accurate survey of real property would reveal.

 
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“Perpetual” has the meaning set forth in the Recitals.
 
“Perpetual Parties” has the meaning set forth in the Recitals.
 
“Perpetual Released Obligations” has the meaning set forth in Paragraph 1.
 
“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, unincorporated organization or government or
any agency, instrumentality or political subdivision thereof, or any other
entity.
 
“Prudent Wind Industry Practices” means those practices, methods, standards and
acts (including those engaged in or approved by a significant portion of the
wind power industry for similar facilities in the United States) that at a
particular time in the exercise of good judgment would have been expected to
accomplish the desired result in a manner consistent with applicable laws,
safety, environmental protection, economy and expedition.  Prudent Wind Industry
Practices are not intended to be limited to the optimum practices, methods or
acts to the exclusion of all others, but rather to be a spectrum of good and
proper practices, methods and acts.
 
“Reserved Claims” means, in the event of the failure of Perpetual to pay
Developer Fees to Higher Power when and as due pursuant to Paragraph 3 hereof,
the right of Higher Power to terminate the Lease Purchase Agreement, dated as of
July 27, 2007, by and between Higher Power and Higher Perpetual, as amended by
this Agreement.
 
“Sale Fee” has the meaning set forth in Paragraph 3(a)(iv).
 
“Screening Period” has the meaning set forth in Paragraph 4(b).
 
“Target MWs” has the meaning set forth in Paragraph 4(c).
 
“Texas Courts” has the meaning set forth in Exhibit K.
 
“Third Party” means a person not Holdco, a Sub, Perpetual or DeWind or an
affiliate thereof.
 
“Transactions” has the meaning set forth in the Recitals.
 
“Wind Farms” has the meaning set forth in the Recitals.

 
- 17 -

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ANNEX II
 
LIST OF EXHIBITS

Exhibit A
Little Pringle One Development Rights and Assets
Exhibit B
Little Pringle Two Development Rights and Assets
Exhibit C
Big Pringle Development Rights and Assets
Exhibit D
Palo Duro Development Rights and Assets
Exhibit E
Existing Transaction Documents
Exhibit F
Assumed Installed Capacity of the Wind Farms
Exhibit G
Interconnection Agreements to Be Assumed
Exhibit H
Higher Power Development Services
Exhibit I
Baker Development Rights and Assets
Exhibit J
Haynes Development Rights and Assets
Exhibit K
Dispute Resolution Procedures

 
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EXHIBIT A
 
LITTLE PRINGLE ONE DEVELOPMENT RIGHTS AND ASSETS

The “LP1 Assets”, as such term is defined in the Contribution Agreement.

 
 

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EXHIBIT B
 
LITTLE PRINGLE TWO DEVELOPMENT RIGHTS AND ASSETS
 
The “LP2 Assets”, as such term is defined in the Contribution Agreement.

 
 

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EXHIBIT C
 
BIG PRINGLE DEVELOPMENT RIGHTS AND ASSETS
 
The “Big Pringle Assets”, as such term is defined in the Contribution Agreement.

 
 

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EXHIBIT D
 
PALO DURO DEVELOPMENT RIGHTS AND ASSETS
 
The “PD1 Assets”, as such term is defined in the Contribution Agreement.

 
 

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EXHIBIT E
 
EXISTING TRANSACTION AGREEMENTS
 
Lease Purchase Agreement, dated as of July 27, 2007, by and between Higher Power
and Higher Perpetual
 
Company Agreement of Higher Perpetual, dated as of July 27, 2007, by Higher
Power and Perpetual
 
Limited Liability Company Agreement of Holdco, dated as of the Effective Date,
by Higher Perpetual and DeWind
 
Conveyance and Contribution Agreement, dated as of the Effective Date, by and
between Higher Perpetual, Perpetual, DeWind, Higher Power, Holdco, LP1 Sub, LP2
Sub, BP Sub, and PD Sub (“Contribution Agreement”)
 
Assignment and Assumption Agreement, dated on or about the Effective Date, by
and between Higher Power and LP1 Sub
 
Assignment and Assumption Agreement, dated on or about the Effective Date, by
and between Higher Power and LP2 Sub
 
Assignment and Assumption Agreement, dated on or about the Effective Date, by
and between Higher Power and BP Sub
 
Assignment and Assumption Agreement, dated on or about the Effective Date, by
and between Higher Power and PD Sub
 
Assignment and Assumption Agreement to be entered into by and between Pringle
Wind II, LLC, a Texas limited liability company (“Higher Power Sub II”), and LP1
Sub, and to be consented to and acknowledged by Hutchinson County, acting
through its Commissioners Court, of that certain Tax Abatement Agreement dated
August 15, 2008, between Higher Power Sub II and Hutchinson County, acting
through its Commissioners Court
 
Assignment and Assumption Agreement to be entered into by and between Pringle
Wind I, LLC, a Texas limited liability company (“Higher Power Sub I”),  and LP2
Sub, and to be consented to and acknowledged by Hutchinson County, acting
through its Commissioners Court, of that certain Tax Abatement Agreement dated
August 15, 2008, between Higher Power Sub I and Hutchinson County, acting
through its Commissioners Court
 
Assignment Agreement, dated on or about the Effective Date, by and between
Higher Power Sub II and LP1 Sub
 
Assignment Agreement, dated on or about the Effective Date, by and between
Higher Power Sub I and LP2 Sub

 
 

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Turbine Supply and Warranty Agreement, dated on or about the Effective Date, by
and between DeWind, Inc., a Nevada corporation (“DeWind, Inc.”), and LP1 Sub
 
Turbine Supply and Warranty Agreement to be entered into by DeWind, Inc. and LP2
Sub, in the form attached to the LLC Agreement
 
Turbine Supply and Warranty Agreement to be entered into by DeWind, Inc. and BP
Sub, in the form attached to the LLC Agreement
 
Turbine Supply and Warranty Agreement to be entered into by DeWind, Inc. and PD
Sub, in the form attached to the LLC Agreement
 
Limited Liability Company Agreement of LP1 Sub, dated as of the Effective Date,
by Holdco
 
Limited Liability Company Agreement of LP2 Sub, dated as of the Effective Date,
by Holdco
 
Limited Liability Company Agreement of BP Sub, dated as of the Effective Date,
by Holdco
 
Limited Liability Company Agreement of PD Sub, dated as of the Effective Date,
by Holdco

 
- E2 -

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EXHIBIT F
 
ASSUMED INSTALLED CAPACITY OF THE WIND FARMS
 
WIND FARM INSTALLED CAPACITY (MWs)
Little Pringle 1
10
Little Pringle 1
10
Big Pringle
200
Palo Duro
400
Baker
400
Haynes
200

 
 
 

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EXHIBIT G
 
INTERCONNECTION AGREEMENTS TO BE ASSUMED

Interconnection Feasibility Study Agreement (GEN-2007-005) dated as of February
19, 2007 by Higher Power Energy and Southwest Power Pool, Inc., a corporation
existing under the laws of the State of Arkansas, with accompanying letter dated
February 23, 2007 from Southwest Power Pool to Richard C. Gross P.E. Inc.
regarding Feasibility Study GEN-2007-005.

Interconnection Feasibility Study Agreement (GEN-2007-048) dated as of October
23, 2007 by Higher Power Energy and Southwest Power Pool, Inc., a corporation
existing under the laws of the State of Arkansas, along with accompanying
letters dated October 18, 2007 and October 25, 2007, respectively, each from
Southwest Power Pool to Mark Patkunas at Higher Power Energy regarding
Feasibility Study GEN-2007-048, and along with other accompanying documentation.

 
 

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EXHIBIT H
HIGHER POWER DEVELOPMENT SERVICES
 
·
Community Support and Involvement

 
 
o
Encumbrance Research

 
 
o
Education and Charity

 
 
o
Ongoing Community Relations

 
·
Met Tower Installation

 
 
o
Wind Data Collection

 
·
Interconnect Agreement

 
 
o
Feasibility Study

 
 
o
Impact Study

 
 
o
Facility Study

 
·
Transmission Agreement

 
·
Site Survey

 
·
Environmental Study

 
·
Geotechnical Study

 
·
Wind Study

 
·
Wind Farm Design Input

 
·
Local Permits

 
·
Title Work (as necessary to render title reasonably acceptable to a lender
exercising Prudent Wind Energy Practices, including:)

 
 
o
Pursuing appropriate noninterference/nondisturbance agreements with oil and gas
operators and pipeline operators and holders of mortgages

 
 
o
Assist in obtaining title insurance

 
 
 

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o
Pursuing appropriate subordination agreements or nondisturbance agreements with
lenders holding mortgages superior to any wind leases for the Wind Farms

 
·
Prepare, submit, obtain all other permit applications required to design,
construct and operate the Wind Farms

 
·
Obtain FAA and applicable environmental permits

 
·
Obtain favorable tax abatement and value limitation decisions under Texas Tax
Code Section 312 and assist with obtaining favorable tax abatement and value
limitation decisions under Texas Tax Code Section 313, in each case for not less
than 7 years

 
·
Design and obtain required approvals of any transmission and interconnect
facilities and fully executed interconnection and transmission agreements

 
·
Coordinate with ERCOT, Southwest Power Pool, Federal Energy Regulatory
Commission, and assure compliance with Texas or other applicable state, county
and municipal regulatory agencies

 
·
Assist as required to develop market opportunities for the sale of the
electricity renewable energy credits and other environmental attributes to be
produced by the Wind Farms and offered for sale by the Subs and prepare and to
obtain binding letters of intent or term sheets and take or pay power purchase
agreements for each Wind Farm other than Little Pringle One and Little Pringle
Two sufficient for project financiers to support financing

 
·
Assist as required to develop plan design, BOP specifications, BOP contract
negotiations and facilitate BOP contract administration

 
·
Assist in hiring of owner’s engineer

 
·
Assist in preparing the initial designs and specifications of and siting of
equipment to achieve the development budget

 
- H2 -

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EXHIBIT I
 
BAKER DEVELOPMENT RIGHTS AND ASSETS
 
Any and all data, books, records, contracts, permits, reports, and any other
properties, assets and rights of any kind, whether tangible or intangible, real
or personal, as well as any communications, correspondence, and business
dealings regarding the Baker Assets, sent by Higher Power, Higher Perpetual, or
Perpetual to Holdco or DeWind or their respective agents or representatives.

 
 

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EXHIBIT J
 
HAYNES DEVELOPMENT RIGHTS AND ASSETS
 
Any and all data, books, records, contracts, permits, reports, and any other
properties, assets and rights of any kind, whether tangible or intangible, real
or personal, as well as any communications, correspondence, and business
dealings regarding the Haynes Assets, sent by Higher Power, Higher Perpetual, or
Perpetual to Holdco or DeWind or their respective agents or representatives.

 
 

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EXHIBIT K
 
DISPUTE RESOLUTION PROCEDURES
 
1.0
Applicability

 
Unless stated otherwise herein, all Disputes shall be resolved in accordance
with the dispute resolution procedures set forth in this Exhibit K.
Notwithstanding the foregoing, (a) the Parties may at any time seek injunctive
or equitable relief from a court of competent jurisdiction, and (b) nothing
herein shall prevent a Party from defending or pursuing any claim in a court or
other proceeding against a third party that has been initiated by such third
party.
 
2.0
Negotiations By Senior Management

 
2.1           In the event of a Dispute between the Parties, the Parties will
use all reasonable efforts to reach a satisfactory solution by referring the
Dispute to senior management of each of the Parties.
 
2.2           Senior management of the Parties will meet as soon as possible, on
no less than seven (7) Days’ written notice, unless specifically agreed
otherwise and shall negotiate in good faith.  Senior management of the Parties
shall examine any submissions by the Parties, and shall, if the Dispute cannot
be resolved immediately, agree to convene for further negotiations aimed at
resolving the Dispute.
 
2.3           Should senior management of the Parties be unable to resolve the
Dispute within thirty (30) Days after commencement of negotiation by such senior
management, then the Parties shall be entitled to pursue any and all available
remedies at law, equity or contract in accordance with Section 3 of this Exhibit
K below.
 
3.0
Jurisdiction; Consent to Service of Process; Waiver of Jury Trial

 
3.1           Any Dispute, which cannot be amicably resolved by the Parties
hereto as provided above, shall be exclusively resolved in the Texas Courts in
accordance with this Section 3 of this Exhibit K.
 
3.2           Each of the Parties hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any Texas
State court or federal court of the United States of America sitting in Houston,
and any appellate court from any thereof (collectively, the “Texas Courts”), in
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the Parties hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in the Texas Courts.  Each of
the Parties further irrevocably consents to the service of process in any action
or proceeding in such courts by the mailing thereof by any parties thereto by
registered or certified mail, postage prepaid, to such Party at the address
specified for such Party in Paragraph 17 of this Agreement.  Each of the Parties
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by Law.  In addition, Perpetual hereby appoints CT
Corporation as its agent to receive service of process in any Dispute or other
matter relating to this Agreement or the transactions contemplated hereby and
agrees that such a mailing to CT Corporation shall be valid service of process
on Perpetual.
 

 
 

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3.3           Each of the Parties hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any Texas
Court.  Each of the Parties hereby irrevocably waives, to the fullest extent
permitted by Law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
 
3.4           EACH OF THE PARTIES HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT.  EACH PARTY HERETO (A) CERTIFIES THAT IT IS RELYING ON THE WAIVER
CONTAINED HEREIN AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTION DOCUMENTS, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3.4.

 
- K2 -

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