Exhibit 10.8

 

 

 

purchase and sale agreement

 

 

by and among

 

Pattern Energy Group Inc.,

 

VERTUOUS ENERGY CANADA INC.,

each, a Purchaser

 

and

 

PATTERN ENERGY GROUP LP,

Seller

 

 

 

Dated as of

 

June 16, 2017

 

 

 

 

Direct or Indirect Interests

 

in

 

Meikle Wind Energy Limited Partnership

 

and

 

Meikle Wind Energy Corp.

 

 

 

 

 

 

list of APPENDICES

 

Appendix A-1 General Definitions     Appendix A-2 Rules of Construction    
Appendix B Transaction Terms and Conditions     Appendix C Acquired Interests;
Ownership Structure; and Wind Project Information     Appendix D Documents and
Key Counterparties

 

  

list of schedules

 

Schedule 2.5 Seller Consents and Approvals     Schedule 3.5 Purchaser Consents
and Approvals     Schedule 4.2(f) Tax Allocation     Schedule 6.4(b) Control of
Defense of Third Party Claims

 

 

 

PURCHASE and Sale AGREEMENT

 

THIS PURCHASE and Sale AGREEMENT (this “Agreement”), dated as of June 16, 2017,
is made by and among Pattern Energy Group Inc., a Delaware corporation (“Pegi”),
Vertuous Energy Canada Inc., a corporation incorporated under the federal laws
of Canada (“PSP,” each of PSP and PEGI a “Purchaser,” and together,
“Purchasers”), and Pattern Energy Group LP, a Delaware limited partnership
(“Seller”). Capitalized terms used in this Agreement shall have the respective
meanings specified in Appendix A-1 attached hereto.

 

RECITALS

 

WHEREAS, Seller owns, directly or indirectly through one or more of its
Affiliates (each such Affiliate, a “Seller Affiliate”), some or all of the
membership or partnership interest, shares, voting securities, or other equity
interests, as applicable, in the project company which owns the wind project
(herein referred to as the “Project Company”, as described on Part I of Appendix
C attached hereto; and the “Wind Project”, as described on Part II of Appendix
C); and

 

WHEREAS, Seller desires to sell to Purchasers, and Purchasers desire to purchase
from Seller, the Acquired Interests defined and described in Part I of Appendix
C attached hereto (herein referred to as the “Acquired Interests”), with each
Purchaser severally purchasing the percentage of the Acquired Interests set
forth opposite its name in Part I of Appendix C (such Purchaser’s “Percentage
Portion”).

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual terms,
conditions and agreements set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties hereby agree as follows:

 

ARTICLE 1
PURCHASE AND SALE OF THE ACQUIRED INTERESTS

 

1.1              Agreement to Sell and Purchase. Subject to the satisfaction or
waiver (by the party for whose benefit such condition exists) of the conditions
set forth in Article 5 and the other terms and conditions of this Agreement, at
the Closing (a) Seller shall sell, assign, transfer and convey (or, if
applicable, cause the Subsidiary Transferors to sell, assign, transfer and
convey) the Acquired Interests to Purchasers, and (b) each Purchaser shall
severally purchase its Percentage Portion of the Acquired Interests from Seller
(or, if applicable, the Subsidiary Transferors), for its pro rata portion of the
Purchase Price set forth opposite its name in Part I of Appendix B (such
Purchaser’s “Separate Purchase Price”, and collectively, the “Aggregate Purchase
Price”).

 

1.2              Signing Date Deliverables. On or prior to the date of this
Agreement, Seller has delivered or is delivering to Purchasers the Financial
Model for the Project Company as of the date hereof. On the date of this
Agreement each of Seller and Purchasers shall deliver to the other party the
deliverables set forth in Part II of Appendix B.

 

1.3              Purchase Price. The purchase price payable by each Purchaser to
Seller (or, if applicable, the Subsidiary Transferor) for the Acquired Interests
at Closing shall be such

 

 

Purchaser’s Separate Purchase Price set forth in Part I of Appendix B. The
Aggregate Purchase Price shall be subject to adjustment by the Purchase Price
Adjustment (if any) set forth in Part I of Appendix B. All payments of the
Aggregate Purchase Price and any Purchase Price Adjustment shall be paid by wire
transfer of same day funds in the applicable Currency to the applicable accounts
set forth in Part I of Appendix B.

 

1.4            The Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) will take place on the date and at the location
specified in Part III of Appendix B or such other time and place as the parties
hereto shall mutually agree (including Closing by facsimile or “PDF” electronic
mail transmission exchange of executed documents or signature pages followed by
the exchange of originals as soon thereafter as practicable), and will be
effective as of 12:01 a.m. Eastern Time on the day the Closing occurs.

 

1.5            Conduct of Closing.

 

(a)             At or prior to the Closing, Seller shall deliver, or cause to be
delivered, to each Purchaser:

 

(i)the original certificates representing such Purchaser’s Percentage Portion of
the Acquired Interests duly endorsed for transfer by Seller (or, if applicable,
the Subsidiary Transferors) to such Purchaser or with appropriate powers with
respect thereto duly endorsed by Seller (or, if applicable, such Subsidiary
Transferors); provided, that if the Acquired Interests are not in certificated
form, Seller shall deliver to such Purchaser a duly executed assignment
agreement or other instrument conveying such Acquired Interests to such
Purchaser in form and substance reasonably acceptable to such Purchaser;

 

(ii)any other documents and certificates contemplated by Article 4 and Article 5
hereof to be delivered by or on behalf of Seller, including the certificate
referred to in Section 5.2(d);

 

(iii)not less than ten (10) Business Days prior to its delivery of a Closing
Notice, Seller shall deliver to the Purchasers (A) an updated Financial Model
for the Wind Project, which shall be revised pursuant to Part I of Appendix B
and which shall be used to determine the Purchase Price Adjustment; and (B) a
detailed calculation of the proposed Purchase Price Adjustment. The Purchasers
shall have a period of five (5) Business Days to review and confirm the updates
to the Financial Model and the calculation of the Purchase Price Adjustment. If
any Purchaser disapproves of such updates to the Financial Model and/or the
calculation of the Purchase Price Adjustment, the parties shall have a further
period of five (5) Business Days to negotiate same. In the event that the
parties cannot agree on such updates to the Financial Model and/or calculation
of the Purchase Price Adjustment (acting reasonably)

 

2

 

following such five (5) Business Day period, (x) the parties shall resolve any
dispute in accordance with the procedures set forth in Section 7.4 (which, for
the avoidance of doubt, shall not delay the Closing Date) and (y) the amount in
dispute shall be retained by the Purchaser(s) until the dispute is resolved as
aforesaid. Subject to the foregoing, Seller shall deliver to Purchasers a signed
direction containing the final determination of the Separate Purchase Price
(less any disputed amount) for each Purchaser not less than five (5) Business
Days prior to the Closing Date; and

 

(iv)any other Closing deliverables set forth in Appendix B-1.

 

(b)           At or prior to the Closing, each Purchaser shall deliver to Seller
and the other Purchaser:

 

(i)the documents and certificates contemplated by Article 4 and Article 5 hereof
to be delivered by or on behalf of such Purchaser, including the certificate
referred to in Section 5.3(d); and

 

(ii)any other Closing deliverables set forth in Appendix B-2.

 

ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth in, or qualified by any matter set forth in, the Schedules
attached hereto, Seller hereby represents and warrants to Purchasers as set
forth in this Article 2 as of (a) the date hereof and (b) if the Closing Date is
not the date of this Agreement, the Closing Date, in each case, unless otherwise
specified in the representations and warranties below, in which case the
representation and warranty is made as of such date. Whether or not a particular
Section of this Article 2 refers to a specific, numbered Schedule, such Section
shall, to the extent applicable, be subject to the exceptions, qualifications,
and other matters set forth in the Schedules to the extent that the relevance of
such exceptions, qualifications or other matters is reasonably apparent on the
face thereof.

 

2.1              Organization and Status. Each of Seller and each Subsidiary
Transferor (a) is duly formed, validly existing and in good standing under the
laws of the jurisdiction of its formation as set forth in the preamble to this
Agreement or Part I of Appendix C, as applicable, (b) is duly qualified,
authorized to do business and in good standing in each other jurisdiction where
the character of its properties or the nature of its activities makes such
qualification necessary, and (c) has all requisite power and authority to own or
hold under lease the property it purports to own or hold under lease and to
carry on its business as now being conducted. Seller has made available to
Purchasers complete and correct copies of the Organization Documents for the
Project Company, the General Partner and each of their respective Subsidiaries.
Part I of Appendix C sets forth a list of each Subsidiary of the Project Company
or the General Partner and for each Subsidiary: (a) its name, (b) the number and
type of its outstanding equity securities and a list of the holders thereof and
(c) its jurisdiction of organization. Each Subsidiary of the Project Company or
the General Partner is a legal entity duly formed, validly existing and in

 

3

 

good standing under the Laws of the jurisdiction of its formation and has all
requisite organizational power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted, and is
duly qualified, registered or licensed to do business as a foreign entity and is
in good standing in each jurisdiction in which the property owned, leased or
operated by such Person or the nature of the business conducted by such Person
makes such qualification necessary, except where the failure to be so duly
qualified, registered or licensed and in good standing would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 

2.2              Power; Authority; Enforceability. Each of Seller and each
Subsidiary Transferor has the legal capacity and power to enter into, deliver
and perform its obligations under this Agreement and has been duly authorized,
in accordance with its Organization Documents, to enter into, deliver and
perform its obligations under this Agreement. This Agreement has been duly
executed and delivered by Seller and constitutes the legal valid and binding
obligation of Seller, enforceable against it in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting the enforcement of creditors’ rights
generally and subject to general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law.

 

2.3              No Violation. The execution, delivery and performance by Seller
of its obligations under this Agreement, and the performance by each Subsidiary
Transferor of this Agreement, in each case including without limitation the sale
of the Acquired Interests to the Purchasers, do not, and will not, (a) violate
any Governmental Rule to which Seller, any Subsidiary Transferor, the Project
Company, the General Partner or any of their respective Subsidiaries is subject
or the Organization Documents of Seller, any Subsidiary Transferor, the Project
Company, the General Partner or any of their respective Subsidiaries, (b) result
in the creation or imposition of any Lien (other than a Permitted Lien) upon the
Acquired Interests, the Project Company, the General Partner or any of their
respective Subsidiaries, (c) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel or require any notice under any
agreement, contract, lease, license, instrument or other arrangement to which
Seller or any Subsidiary Transferor is a party or by which Seller or any
Subsidiary Transferor is bound, (d) other than as set forth in Schedule 2.5,
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, or create in any party the right to accelerate, terminate,
modify or cancel or require any Consent under any Material Contract or (e) other
than as set forth in Schedule 2.5, require any notice under any Material
Contract, except in the case of this clause (e), as would not reasonably be
expected to be material in the context of the Wind Project or otherwise prevent
or materially impair or materially delay the consummation of the transactions
contemplated by this Agreement.

 

2.4              No Litigation.

 

(a)                None of Seller, the Subsidiary Transferors or their
respective Affiliates is a party to or has received written notice of any
pending or, to the Knowledge of Seller, threatened litigation, action, suit,
proceeding or governmental investigation against Seller, the Subsidiary
Transferors or their respective Affiliates which would reasonably be expected to
be material to the ownership of the Acquired Interests or which seeks the
issuance of an order

 

4

 

restraining, enjoining, altering or materially delaying the consummation of the
transactions contemplated by this Agreement.

 

(b)               None of the Project Company, the General Partner or any of
their respective Subsidiaries is a party to or has received written notice of
any pending or, to the Knowledge of Seller, threatened litigation, action, suit,
proceeding or governmental investigation which would reasonably be expected to
be material to the Project Company, the General Partner or any of their
respective Subsidiaries or the Wind Project or which seeks the issuance of an
order restraining, enjoining, altering or materially delaying the consummation
of the transactions contemplated by this Agreement.

 

(c)                There are no material disputes with any counterparty to a
Material Contract, nor has the Project Company, the General Partner or any of
their respective Subsidiaries made any material warranty claim under any
Material Contract.

 

2.5              Consents and Approvals. Except as set forth in Schedule 2.5, no
Consent of any Governmental Authority is required by or with respect to Seller,
the Subsidiary Transferors, the Project Company, the General Partner or any of
their respective Subsidiaries in connection with the execution and delivery of
this Agreement by Seller, or the consummation by Seller or any Subsidiary
Transferor of the transaction contemplated hereby, except for any Consents which
if not obtained or made prior to the Closing would not reasonably be expected to
prevent or impair or delay the consummation of the transactions contemplated by
this Agreement and which can be reasonably expected to be obtained or made in
the ordinary course after the Closing.

 

2.6              Acquired Interests. Seller owns, directly or indirectly through
one or more Seller Affiliates, of record and beneficially one hundred percent
(100%) of the Acquired Interests. Part I of Appendix C sets forth the equity
capitalization of the Project Company, the General Partner and each of their
respective Subsidiaries. All of the interests described in Part I of Appendix C
have been duly authorized, validly issued and are fully-paid and non-assessable
and, except as set forth on Part I of Appendix C, there are no outstanding (i)
equity interests or voting securities of the Project Company, the General
Partner or any of their respective Subsidiaries, (ii) securities of the Project
Company, the General Partner or any of their respective Subsidiaries convertible
into or exchangeable for any equity interests or voting securities of the
Project Company, the General Partner or any of their respective Subsidiaries or
(iii) options or other rights to acquire from the Project Company, the General
Partner or any of their respective Subsidiaries, or other obligation of the
Project Company or any of its Subsidiaries to issue, any equity interests or
voting securities or securities convertible into or exchangeable for equity
interests or voting securities of the Project Company, the General Partner or
any of their respective Subsidiaries, or any obligations of the Project Company,
the General Partner or any of their respective Subsidiaries to repurchase,
redeem or otherwise acquire any of the foregoing. The Seller (or, if applicable,
the Subsidiary Transferors) has good and valid title to, and has, or will have,
full power and authority to convey, the Acquired Interests, as of the Closing
Date. The Acquired Interests have been, or will be, validly issued, and are, or
will be, fully paid and non-assessable. No Person other than Purchasers has any
written or oral agreement or option or any right or privilege, whether by law,
pre-emptive or contractual, capable of becoming an agreement or option for the
purchase or acquisition from Seller or any Subsidiary Transferor of any of the
Acquired Interests. On the Closing Date, Seller (or, if applicable, the
Subsidiary Transferors)

 

5

 

will convey to Purchasers good and valid title to the Acquired Interests free
and clear of all Liens other than (i) any Liens granted by the Purchasers
pursuant to the Term Loan Agreement and (ii) any obligations imposed under the
Organization Documents of the Project Company, the General Partner or their
respective Subsidiaries or restrictions arising under applicable securities
laws.

 

2.7              Solvency. There are no bankruptcy, reorganization or
arrangement proceedings pending against, being contemplated by or, to the
Knowledge of Seller, threatened against, Seller or any Subsidiary Transferor,
the Project Company, the General Partner or any of their respective
Subsidiaries. None of Seller, any Subsidiary Transferor, the Project Company,
the General Partner or any of their respective Subsidiaries (a) has had a
receiver, receiver and manager, liquidator, sequestrator, trustee or other
officer with similar powers appointed over all or part of its business or its
assets, and to the Knowledge of Seller, no application therefor is pending or
threatened, (b) is insolvent or presumed to be insolvent under any law or is
unable to pay its debts as and when they fall due, (c) has made a general
assignment for the benefit of its creditors, or (d) has taken any action to
approve any of the foregoing.

 

2.8              Compliance with Law.

 

(a)                There has been no actual violation by Seller or any
Subsidiary Transferor of or failure by Seller or any Subsidiary Transferor to
comply with any Governmental Rule that is applicable to it, or allegation by any
Governmental Authority of such a violation, that would reasonably be expected to
prevent or materially impair or delay the consummation of the transactions
contemplated by this Agreement.

 

(b)               To the Knowledge of Seller, there has been no actual violation
by the Project Company, the General Partner or any of their respective
Subsidiaries of or failure by the Project Company, the General Partner or any of
their respective Subsidiaries to comply with any Governmental Rule that is
applicable to it, or allegation by any Governmental Authority of such a
violation, that would reasonably be expected to be material and relates to the
Wind Project or would otherwise reasonably be expected to prevent or materially
impair or delay the consummation of the transactions contemplated by this
Agreement.

 

2.9              Taxes.

 

(a)                Meikle Wind Energy Corp. (the “General Partner”) and any
Subsidiary Transferor is, and has been at all times, a resident of Canada for
the purposes of the Income Tax Act (Canada) (the “Canadian Tax Act”).

 

(b)               Each of the Project Company and PRHC Holdings LP is a Canadian
partnership within the meaning of the Canadian Tax Act.

 

(c)                The Project Company is not a “SIFT Partnership” within the
meaning of the Canadian Tax Act.

 

(d)               No jurisdiction or authority in or with which the General
Partner and the Project Company do not file Tax Returns has alleged that they
are required to file such Tax Returns.

 

6

 

(e)                Each of the General Partner and the Project Company has
timely filed all Tax Returns that it is required to file in all applicable
jurisdictions and all such Tax Returns are accurate and complete in all material
respects, has timely paid or has caused to be timely paid all Taxes it is
required to pay to the extent due (other than those Taxes that it is contesting
in good faith and by appropriate proceedings, with adequate, segregated reserves
established for such Taxes) and, to the extent such Taxes are not due, has
established or caused to be established reserves that are adequate for the
payment thereof as required by GAAP.

 

(f)                Each of the General Partner and the Project Company has
withheld from each payment made to any Person, including a Person who is or is
deemed to be a non-resident of Canada, all amounts required by applicable law to
be withheld, and has remitted such withheld amounts within the prescribed
periods to the appropriate Governmental Authorities.

 

(g)               Each of the General Partner and the Project Company has
charged, collected and remitted on a timely basis all Taxes as required under
applicable laws on any sale, supply or delivery whatsoever, made by it.

 

(h)               Each of the General Partner and the Project Company is
registered under GST/HST Legislation and their registration numbers are 85684
0319 and 83618 0901 respectively.

 

(i)                 Each of the General Partner and the Project Company has
maintained and continues to maintain at its place of business in Canada all
material records and books of account required to be maintained under applicable
Law, including laws relating to sales and use Taxes.

 

(j)                 No reassessments of the Taxes of the General Partner or the
Project Company have been issued and are outstanding. None of the Seller, the
Subsidiary Transferor, the General Partner or the Project Company has received
any indication from any Governmental Authority that an assessment or
reassessment of the General Partner or the Project Company is proposed in
respect of any Taxes, regardless of its merits. Neither the General Partner nor
the Project Company has executed or filed with any Governmental Authority any
agreement or waiver extending the period for assessment, reassessment or
collection of any Taxes.

 

(k)               The terms and conditions made or imposed in respect of every
transaction (or series of transactions) between the General Partner or the
Project Company and any Person that is (i) a non-resident of Canada for purposes
of the Canadian Tax Act, and (ii) not dealing at arm’s length with it for
purposes of the Canadian Tax Act, do not differ from those that would have been
made between persons dealing at arm’s length for purposes of the Canadian Tax
Act.

 

(l)                 There are no Liens for Taxes on any of the assets of the
General Partner or the Project Company other than Permitted Liens.

 

2.10          Unregistered Securities. Assuming the accuracy of the
representations made by the Purchasers in Section 3.8 and Section 3.9, (i) it is
not necessary in connection with the sale of the Acquired Interests, under the
circumstances contemplated by this Agreement, to register such Acquired
Interests under the Securities Act of 1933 (the “Securities Act”) and (ii) no
filings are required pursuant to the securities laws of any province or
territory of Canada or under any other applicable securities laws.

 

7

 

2.11          Broker’s Fees. None of Seller, any Subsidiary Transferor, the
Project Company, the General Partner or any of their respective Subsidiaries has
any liability or obligation for any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement.

 

2.12          Material Contracts. Parts I, III, IV and V of Appendix D
collectively set forth a list of all Material Contracts. At or prior to the date
hereof (or, in the case of Material Contracts included in any Updated Disclosure
Schedules, at or prior to the date such Updated Disclosure Schedules are
delivered) Seller has provided Purchasers with, or access to, copies of all
Material Contracts. Each Material Contract is in full force and effect and
constitutes the legal, valid, binding and enforceable obligation of the Project
Company, the General Partner or the Subsidiary that is a party thereto, as
applicable, and, to the Knowledge of Seller, each other party thereto, in
accordance with its terms, except as such terms may be limited by (i) applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
enforcement of creditors’ rights generally and (ii) general principles of
equity, whether considered in a proceeding in equity or at law. None of the
Project Company, the General Partner or any of their respective Subsidiaries, or
to the Knowledge of Seller, any other party thereto (i) is in breach of or
default in any material respect under a Material Contract and, to the Knowledge
of Seller, no event has occurred and continuing which, with notice or the lapse
of time or both, would constitute a material breach of or default under a
Material Contract or would give rise to any right of termination, cancellation,
acceleration, amendment, suspension or revocation of a Material Contract, or
(ii) has received any written notice of termination or suspension of any
Material Contract, and to the Knowledge of Seller, no action is being taken by
any Person to terminate or suspend any Material Contract.

 

2.13          Real Property.

 

(a)                Except as set forth in Part II of Appendix C, none of the
Project Company, the General Partner or any of their respective Subsidiaries
owns any real property. To the Knowledge of Seller, no Governmental Authority
has commenced the exercise of any eminent domain or similar power with respect
to any Project Company Real Property owned by the Project Company or any of its
Subsidiaries, and there are no pending or, to the Knowledge of Seller,
threatened condemnation or eminent domain proceedings that affect any such
Project Company Real Property.

 

(b)               The Project Company, the General Partner and their respective
Subsidiaries have good and marketable title to or, subject to the terms and
conditions of the Material Leases, the right to use all Project Company Real
Property, free and clear of all Liens other than Permitted Liens. With respect
to the Project Company Real Property it leases or on which it was granted
servitudes or superficies pursuant to the Material Leases, the Project Company,
the General Partner or their respective Subsidiaries, as applicable, have
peaceful and undisturbed nonexclusive possession under all Material Leases,
servitudes or superficies under which they are leasing or occupying property in
accordance with the terms and conditions of the relevant Material Leases,
servitude or superficies and subject to the Permitted Liens. All rents and other
payments under the Material Leases have been paid in full to the extent due.

 

8

 

(c)                The Project Company Real Property is sufficient to provide
the Project Company, the General Partner and their respective Subsidiaries with
continuous, uninterrupted and, together with public roads, contiguous access to
the Wind Project sufficient for the operation and maintenance of the Wind
Project as currently conducted. All utility services necessary for the
construction and operation of the Wind Project for its intended purposes are
available or are reasonably expected to be so available as and when required
upon commercially reasonable terms.

 

2.14          Permits. Part II of Appendix C sets forth a list of all material
Permits acquired or held by the Project Company, the General Partner or their
respective Subsidiaries in connection with the operation of the Wind Project.
The Project Company, the General Partner or their respective Subsidiaries hold
in full force and effect all Permits required for the operation of the Wind
Project as presently conducted, other than those Permits required in connection
with certain construction and maintenance activities which are ministerial in
nature and can reasonably be expected to be obtained in due course on
commercially reasonable terms and conditions as and when needed. None of the
Project Company, the General Partner nor any of their respective Subsidiaries is
in material default or material violation, and, to the Knowledge of Seller, no
event has occurred and continuing which, with notice or the lapse of time or
both, would constitute a material default or material violation of, or would
give rise to any right of termination, cancellation, acceleration, amendment,
suspension or revocation under, any of the terms, conditions or provisions of
any Permits held by the Project Company, the General Partner or their respective
Subsidiaries. There are no legal proceedings pending or, to the Knowledge of
Seller, threatened in writing, relating to the suspension, revocation or
modification of any Permits held by the Project Company, the General Partner or
any of their respective Subsidiaries.

 

2.15          Environmental Matters. Except as set forth in Part II of Appendix
D, (i) the Project Company, the General Partner and their respective
Subsidiaries, the Project Company Real Property and the Wind Project are in
material compliance with all Environmental Laws, (ii) none of the Project
Company, the General Partner or any of their respective Subsidiaries has caused
or contributed to the release of any Hazardous Substances in any material
respect, and (iii) none of the Seller, the Project Company, the General Partner
or any of their respective Subsidiaries has received written notice from any
Governmental Authority of any material Environmental Claim, or any written
notice of any investigation, or any written request for information, in each
case, under any Environmental Law. None of Seller, the Project Company, the
General Partner or any of their respective Subsidiaries has given any release or
waiver of liability that would waive or impair any material claim based on the
presence of Hazardous Substances in, on or under any real property, against a
previous owner of any real property or against any Person who may be potentially
responsible for the presence of Hazardous Substances in, on or under any such
real property.

 

2.16          Insurance. Part II of Appendix D sets forth a list of all material
insurance maintained by or on behalf of the Project Company, the General Partner
or any of their respective Subsidiaries (the “Insurance Policies”). All
Insurance Policies are now in full force and effect. All premiums with respect
to the Insurance Policies covering all periods to and including the date hereof
have been paid and, with respect to premiums due and payable prior to Closing,
will be so paid. None of these Insurance Policies have lapsed and, to the
Knowledge of Seller, there are no circumstances that have rendered such
insurance unenforceable, void or

 

9

 

voidable. None of Seller, any Subsidiary Transferor, the Project Company, the
General Partner or any of their respective Subsidiaries has received any written
notice in the past 12 months from the insurer under any Insurance Policies
disclaiming coverage, reserving rights with respect to a particular claim or
such Insurance Policy in general or canceling or materially amending any such
Insurance Policy. Each of the Project Company, the General Partner and any of
their respective Subsidiaries’ assets and properties are insured in amounts no
less than as required by applicable Law, applicable Permits or any Material
Contract to which such Project Company, the General Partner or any of their
respective Subsidiaries is a party or by which its assets or properties are
bound.

 

2.17          Financial Model. The Financial Model has been prepared in good
faith based on reasonable assumptions as to the estimates set forth therein and
is consistent in all material respects with the provisions of the Material
Contracts.

 

2.18          Financial Statements; No Undisclosed Liabilities; No Material
Adverse Effect. The Financial Statements have been prepared in accordance with
GAAP applied on a consistent basis with prior periods, are correct and complete
in all material respects and present fairly in accordance with GAAP the assets,
liabilities, financial condition and results of operations of the Project
Company as at their respective dates for the periods covered by the respective
Financial Statements. None of the Project Company, the General Partner or any of
their respective Subsidiaries has any Indebtedness other than (i) as disclosed
in the Financial Statements or pursuant to the Material Contracts, (ii) incurred
since the date of the Financial Statements and disclosed on Appendix D, (iii)
incurred after the date hereof in accordance with this Agreement, including
Section 4.1(a), and (iv) interest and fees accrued on any Indebtedness referred
to in clause (i) after the date of the Financial Statements. Except as set forth
in the Financial Statements, none of the Project Company, the General Partner
nor any of their respective Subsidiaries has any liabilities that would be
required to be disclosed on a balance sheet prepared in accordance with GAAP,
other than any liabilities incurred in the ordinary course of business since the
date of the most recent balance sheet included in the Financial Statements and
any liabilities contained in the Material Contracts, other than liabilities
thereunder arising from contractual breach. Since the date of the most recent
balance sheet included in the Financial Statements, no Material Adverse Effect
has occurred.

 

2.19          Personal Property. The Project Company, the General Partner or a
Subsidiary of the Project Company or the General Partner has good and valid
title to (or a valid leasehold interest in) the Personal Property currently
owned or used by the Project Company, the General Partner and their respective
Subsidiaries in the operation of the Wind Project (other than Personal Property
that individually and in the aggregate are immaterial to such operations), and
such title or leasehold interests are free and clear of Liens other than
Permitted Liens. All Personal Property that is material to the operation of the
Wind Project is in good operating condition and repair, subject to normal wear
and maintenance, and is usable in the ordinary course of business.

 

2.20          Employees. None of the Project Company, the General Partner or any
of their respective Subsidiaries has, or has ever had, any employees.

 

10

 

2.21          Employee Benefits. No employee benefit plan is maintained,
established or sponsored by the Project Company, the General Partner or any of
their respective Subsidiaries, nor does the Project Company, the General Partner
or any of their respective Subsidiaries participate in or contribute to any such
plan.

 

2.22          Labor Matters. None of the Project Company, the General Partner or
any of their respective Subsidiaries is a party to any collective bargaining
agreement with a labor union or organization or any other Contract with any
labor union or other employee representative of a group of employees.

 

2.23          Intellectual Property. The Project Company, the General Partner or
their respective Subsidiaries own, license or can acquire on reasonable terms
the Intellectual Property necessary to operate the Wind Project. To the
Knowledge of Seller, no Intellectual Property required to operate the Wind
Project infringes upon or otherwise violates any intellectual property rights of
any third party. There are no unresolved pending or, to the Knowledge of Seller,
threatened actions or claims that allege that the Project Company, the General
Partner or any of their respective Subsidiaries has infringed or otherwise
violated any material intellectual property rights of any third party. To the
Knowledge of Seller, no third party is infringing, misappropriating or otherwise
violating rights in any material respect any Intellectual Property of the
Project Company, the General Partner or any of their respective Subsidiaries.

 

2.24          Affiliate Transactions. Except as disclosed on Appendix E, there
are no transactions, contracts or liabilities between or among (a) the Project
Company, the General Partner or their respective Subsidiaries on the one hand,
and (b) Seller, any of its Affiliates or, to the Knowledge of Seller, any
current representative of the Project Company, the General Partner or their
respective Subsidiaries, Seller or its Affiliates, or any member of the
immediate family of any such representative, on the other hand.

 

2.25          First Nations Matters. There is no pending dispute with, or to the
Knowledge of Seller threatened by, any First Nation in respect of aboriginal
rights, aboriginal title, treaty rights or any other aboriginal interest of such
First Nation in or to all or any portion of the Project Company Real Property or
the Wind Project. Other than as disclosed in Part V of Appendix D, none of the
Project Company, the General Partner or any of their respective Subsidiaries is
a party to any agreement with a First Nations to provide benefits, pecuniary or
otherwise, with respect to the Wind Project at any stage of development. Part V
of Appendix D lists all First Nations with which the Project Company, the
General Partner or their respective Subsidiaries has had active consultation in
developing the Wind Project.

 

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PurchaserS

 

Except as set forth in, or qualified by any matter set forth in, the Schedules
attached hereto, each Purchaser hereby severally represents and warrants to
Seller as set forth in this Article 3 as of (A) the date hereof and (B) if the
Closing Date is not the date of this Agreement, the Closing Date, in each case,
unless otherwise specified in the representations and warranties below, in which
case the representation and warranty is made as of such date. Whether or not a
particular Section of this Article 3 refers to a specific, numbered Schedule,
such Section shall, to

 

11

 

the extent applicable, be subject to the exceptions, qualifications, and other
matters set forth in the Schedules to the extent that the relevance of such
exceptions, qualifications or other matters is reasonably apparent on the face
thereof.

 

3.1              Organization and Status. Such Purchaser (a) is duly formed,
validly existing and in good standing under the laws of the jurisdiction of its
formation as set forth in the preamble to this Agreement, (b) is duly qualified,
authorized to do business and in good standing in each other jurisdiction where
the character of its properties or the nature of its activities makes such
qualification necessary, and (c) has all requisite power and authority to own or
hold under lease the property it purports to own or hold under lease and to
carry on its business as now being conducted. Such Purchaser has made available
to Seller complete and correct copies of the Organization Documents for such
Purchaser.

 

3.2              Power; Authority; Enforceability. Such Purchaser has the legal
capacity and power to enter into and perform its obligations under this
Agreement and has been duly authorized, in accordance with its Organization
Documents, to enter into and perform its obligations under this Agreement. This
Agreement has been duly executed and delivered by such Purchaser and constitutes
the legal valid and binding obligation of such Purchaser, severally enforceable
against such Purchaser in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization and similar laws
affecting the enforcement of creditors’ rights generally and subject to general
principles of equity regardless of whether enforceability is considered in a
proceeding in equity or at law.

 

3.3              No Violation. The execution, delivery and performance by such
Purchaser of its obligations under this Agreement, including without limitation
the purchase of the Acquired Interests from Seller or the Subsidiary
Transferors, do not, and will not, (a) violate any Governmental Rule to which
such Purchaser is subject or the Organization Documents of such Purchaser, or
(b) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify or cancel or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which such Purchaser is a party or
by which such Purchaser is bound.

 

3.4              No Litigation. Such Purchaser is not a party to and has not
received written notice of any pending or, to the Knowledge of such Purchaser,
threatened litigation, action, suit, proceeding or governmental investigation
against such Purchaser, which, in either case, would reasonably be expected to
materially impair or delay the ability of such Purchaser to perform its
obligations under this Agreement or which seeks the issuance of an order
restraining, enjoining, altering or materially delaying the consummation of the
transactions contemplated by this Agreement.

 

3.5              Consents and Approvals. Except as set forth in Schedule 3.5, no
Consent of any Governmental Authority or any other Person, is required by or
with respect to such Purchaser in connection with the execution and delivery of
this Agreement by such Purchaser, or the consummation by such Purchaser of the
transaction contemplated hereby, except for any consents which if not obtained
would not reasonably be expected to materially impair or delay the ability of
such Purchaser to perform its obligations under this Agreement.

 

12

 

3.6           Solvency. There are no bankruptcy, reorganization or arrangement
proceedings pending against, being contemplated by or, to the Knowledge of such
Purchaser, threatened against such Purchaser. Such Purchaser (a) has not had a
receiver, receiver and manager, liquidator, sequestrator, trustee or other
officer with similar powers appointed over all or part of its business or
assets, and to the Knowledge of such Purchaser, no application therefor is
pending or threatened, (b) is not insolvent or presumed to be insolvent under
any Law and is able to pay its debts as and when they fall due, (c) has not made
a general assignment for the benefit of its creditors, and (d) has not taken any
action to approve any of the foregoing.

 

3.7           Compliance with Law. To the Knowledge of such Purchaser, there has
been no actual violation by such Purchaser of or failure of such Purchaser to
comply with any Governmental Rule that is applicable to it, or allegation by any
Governmental Authority of such a violation, that would reasonably be expected to
prevent or materially impair or delay the consummation of the transactions
contemplated by this Agreement.

 

3.8           Accredited Investor. Such Purchaser is an “accredited investor”
within the meaning of Section 73.3(1) of the Securities Act (Ontario) if such
Purchaser is resident in the Province of Ontario or within the meaning of
National Instrument 45-106 – Prospectus Exemptions if the Purchaser is resident
elsewhere in Canada, and, if the Purchaser is a U.S. Person, the Purchaser is an
“accredited investor” within the meaning of Rule 501(a)(1), (2), (3), (7) or (8)
of Regulation D, promulgated by the Securities and Exchange Commission under the
Securities Act (provided that, in each case, upon reasonable request of the
Seller at any time, such Purchaser shall provide a written certificate to such
effect to the Seller).

 

3.9           Purchase Entirely for Own Account. The Acquired Interests to be
acquired by such Purchaser will be acquired for investment for such Purchaser’s
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and such Purchaser has no present intention of
selling, granting any participation in or otherwise distributing the same. By
executing this Agreement, such Purchaser further represents that such Purchaser
does not presently have any contract, undertaking, agreement or arrangement with
any Person to sell, transfer or grant participations to such Person or to any
third Person, with respect to any of the Acquired Interests.

 

3.10           Broker’s Fee. Such Purchaser has no liability or obligation for
any fees or commissions payable to any broker, finder or agent with respect to
the transactions contemplated by this Agreement.

 

ARTICLE 4
COVENANTS; OTHER OBLIGATIONS

 

4.1           Covenants Between Signing and Closing. If the Closing Date is not
the date of this Agreement, the provisions of this Section 4.1 shall apply
during the period from the date hereof to the earlier of the Closing Date and
the termination of this Agreement pursuant to Section 5.4:

 

(a)                Project Specific Pre-Closing Covenants of Seller. Seller
shall use commercially reasonable efforts to conduct the business, operations
and affairs of the Project

 

13

 

Company only in the ordinary and normal course of business, subject to the
following provisions with respect to any proposed entry into any Material
Contract or any proposed amendment, termination or waiver (in whole or in part)
of any Material Contract (each such proposal, a “Material Contract Change”):

 

(i)Seller shall give prior written notice to Purchasers of, and shall to the
extent practicable consult in good faith with Purchasers regarding, any Material
Contract Change that would reasonably be expected to materially and adversely
affect the Operating Period; and

 

(ii)Seller may, but shall not be obligated to, seek by written notice the
approval of each Purchaser to any Material Contract Change. During the twenty
calendar-day period following delivery of any such notice, Seller shall provide
to each Purchaser promptly any information within Seller’s possession regarding
such Material Contract Change as such Purchaser reasonably requests. Each
Purchaser shall, by the end of such twenty calendar-day period, notify Seller
whether it approves (acting reasonably) such Material Contract Change. If
neither Purchaser approves such Material Contract Change, Seller may (A) abstain
from proceeding with such Material Contract Change, (B) proceed with such
Material Contract Change (in which case each Purchaser retains its right to
assert a failure of a condition precedent to Closing, if applicable), or (C)
terminate this Agreement. If either Purchaser approves such Material Contract
Change while the other Purchaser does not, Seller may nonetheless proceed with
such Material Contract Change. In such event, the non-approving Purchaser shall
be deemed to have refused to waive a condition precedent to Closing under
Section 5.2, and Section 5.5(b)(ii) or (c)(ii) shall apply at any time
thereafter. If either Purchaser fails to complete the Closing as a result of a
proposed Material Contract Change, then the Seller must proceed with such
Material Contract Change, or notify the non-approving Purchaser and provide such
non-approving Purchaser with the opportunity to complete the Closing.

 

(b)               Access, Information and Documents. Subject to the next
sentence, Seller will give to each Purchaser and to such Purchaser’s counsel,
accountants and other representatives reasonable access during normal business
hours to all material Books and Records and the Wind Project (subject to all
applicable safety and insurance requirements and any limitations on Seller’s
rights to, or right to provide others with, access) and will furnish to such
Purchaser all such documents and copies of documents and all information,
including operational reports, with respect to the affairs of the Project
Company, the General Partner, the Seller Affiliates, and the Wind Project as
such Purchaser may reasonably request. If, by reason of any confidentiality
obligations imposed on Seller by any counterparty to a Contract who deals at
arm’s length with Seller, Seller is unable to comply with the foregoing
covenant, Seller and such Purchaser shall use commercially reasonable efforts to
obtain all necessary consents or

 

14

 

waivers required to make the disclosure (which, in the case of such Purchaser,
may include the requirement to enter into a reasonable confidentiality or
non-disclosure agreement). Each Purchaser agrees to comply with any
confidentiality obligations which would be applicable to it under any such
Contracts received from Seller hereunder.

 

(c)                Updating of Disclosure Schedules. Seller shall notify
Purchasers in writing of any material changes, additions, or events occurring
after the date of this Agreement which require a representation and warranty of
Seller (other than any representations or warranties in Sections 2.6, 2.7 and
2.11, which, for clarity, may not be updated by Seller) to be supplemented with
a new Schedule or cause any material change in or addition to a Schedule
promptly after Seller becomes aware of the same by delivery of such new Schedule
or appropriate updates to any such Schedule (each, an “Updated Disclosure
Schedule”) to Purchaser. Each Updated Disclosure Schedule shall (i) expressly
state that it is being made pursuant to this Section 4.1(c), (ii) specify the
representations and warranties to which it applies and (iii) describe in
reasonable detail the changes, additions or events to which it relates. No
Updated Disclosure Schedule delivered pursuant to this Section 4.1(c) shall be
deemed to cure any breach of any representation or warranty made to any
Purchaser unless such Purchaser specifically agrees thereto in writing or, as
provided in and subject to Article 5, consummates the Closing under this
Agreement after receipt of such written notification, nor shall any such Updated
Disclosure Schedule be considered to constitute or give rise to a waiver by
either of the Purchasers of any condition set forth in this Agreement, unless
such Purchaser specifically agrees thereto in writing or consummates the Closing
under this Agreement after receipt of such written notification.

 

(d)               Further Assurances. Each of the parties hereto shall use
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
consummate the transactions contemplated hereby as soon as practicable.

 

4.2           Other Covenants

 

(a)                Costs, Expenses. Except as may be specified elsewhere in this
Agreement, such Purchaser shall pay all costs and expenses, including legal fees
and the fees of any broker, environmental consultant, insurance consultant,
independent engineer, and title company retained by such Purchaser for its due
diligence and its negotiation, performance of and compliance with this
Agreement. Seller shall pay all costs and expenses (including in connection with
any reports, studies or other documents listed in Part II of Appendix D, unless
specifically noted in Part II of Appendix D), including legal fees and the fees
of any broker of Seller or its Affiliates, relating to or resulting from the
negotiation, performance of and compliance with this Agreement by Seller.

 

(b)               Public Announcement; Confidentiality. No party hereto shall
make or issue, or cause to be made or issued, any public announcement or written
statement concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other parties, except to the extent
required by law (including any disclosure which, in the reasonable judgment of
the disclosing party, is necessary or appropriate to comply with Governmental
Rules and standards governing disclosures to investors) or in accordance with
the

 

15

 

rules, regulations and orders of any stock exchange. Seller shall not, and shall
cause its Affiliates and directors, officers, employees, agents, consultants
advisors and partners not to, disclose any confidential information in or
relating to this Agreement other than (i) to its Affiliates and its and their
directors, officers, employees, agents, consultants, advisors and partners,
provided in each case that such recipient is bound by reasonable confidentiality
obligations, (ii) as required by applicable law or regulation or (iii) with the
prior consent of Purchasers. Seller shall not use, and shall not enable any
third party to use, any confidential information in or relating to this
Agreement that constitutes material non-public information regarding Purchasers
in a manner that is prohibited by the U.S. securities laws.

 

(c)             Regulatory Approvals. Each party shall use its commercially
reasonable efforts to obtain all required regulatory approvals (including the
required Governmental Approvals set forth in Part VII of Appendix B) as promptly
as possible and, in any event, prior to the Closing Date. To that end, each of
the parties shall make, or cause to be made, all other filings and submissions,
and submit all other documentation and information that in the reasonable
opinion of any Purchaser is required or advisable, to obtain the regulatory
approvals, and will use its commercially reasonable efforts to satisfy all
requests for additional information and documentation received under or pursuant
to those filings, submissions and the applicable legislation and any orders or
requests made by any Governmental Authority. Notwithstanding any other provision
of this Agreement, no Purchaser will be required to (i) propose or agree to
accept any undertaking or condition, enter into any consent agreement, make any
divestiture or accept any operational restriction or other behavioral remedy,
(ii) take any action that, in the reasonable judgment of such Purchaser, could
be expected to limit the right of such Purchaser to own or operate all or any
portion of the business or assets of the Project Company, the General Partner or
any of their respective Subsidiaries, or of such Purchaser or any of its
Affiliates, or to conduct their respective affairs in a manner consistent with
how they each conduct their affairs as of the date of this Agreement, or (iii)
contest or defend any judicial or administrative proceeding brought by any
Governmental Authority seeking to prohibit, prevent, restrict or unwind the
consummation of all or a part of the transaction contemplated herein.

 

(d)             Consents. Except in respect of regulatory approvals, which shall
be governed by Section 4.2(c), as promptly as possible and, in any event, prior
to the Closing Date, Seller shall use commercially reasonable efforts to (i)
make or cause to be made all filings required by Law to be made by it in order
to consummate the transaction contemplated hereby; and (ii) seek and obtain all
Consents required pursuant to Section 2.5.

 

(e)             Other Obligations of Seller and Purchasers. The parties mutually
covenant as follows:

 

(i)to use all reasonable efforts in good faith to obtain promptly the
satisfaction of the conditions to Closing of the transactions contemplated
herein;

 

(ii)to furnish to the other parties and to the other parties’ counsel all such
information as may be reasonably required in order to effectuate the foregoing
actions, including draft regulatory filings and submissions, provided that such
information may be redacted

 

16

 

to render illegible any commercially sensitive portions thereof, and in such
event the parties will meet in good faith to agree on protective measures to
allow disclosure of such redacted information to counsel in a manner that
affords the maximum protection to such commercially sensitive information as is
reasonable in the circumstances; and

 

(iii)to advise the other parties promptly if any party determines that any
condition precedent to its obligations hereunder will not be satisfied in a
timely manner.

 

(f)                Allocation of Aggregate Purchase Price. The Aggregate
Purchase Price shall be allocated between the Acquired Interests based on the
percentages set forth on Schedule 4.2(f) and the parties agree to report the
transactions contemplated in this Agreement in a manner consistent with such
allocation in the preparation, filing and audit of any Tax Return.

 

(g)               Allocation of Partnership Income and Loss. With respect to the
income or loss of the Project Company for the fiscal year in which the Closing
occurs, the Purchasers shall cause the General Partner to allocate income or
loss of the Project Company for the period up to and including the date of
Closing to the Seller, and to allocate income or loss of the Project Company for
the period after the date of Closing to the Purchasers on a pro rata basis based
on their respective interests in the Project Company at the end of the fiscal
year.

 

ARTICLE 5
CONDITIONS TO CLOSING; TERMINATION

 

5.1           Conditions Precedent to Each Party’s Obligations to Close. The
obligations of the parties to proceed with the Closing under this Agreement are
subject to the fulfillment prior to or at Closing of the following conditions
(any one or more of which may be waived in whole or in part by all parties in
their sole discretion):

 

(a)                No Violations. The consummation of the transactions
contemplated hereby shall not violate any applicable Governmental Rule.

 

(b)               No Adverse Proceeding. No order of any court or administrative
agency shall be in effect which restrains or prohibits the transactions
contemplated hereby, and there shall not have been threatened, nor shall there
be pending, any action or proceeding by or before any court or Governmental
Authority challenging any of the transactions contemplated by this Agreement or
seeking monetary relief by reason of the consummation of such transactions.

 

(c)                No Termination. This Agreement shall not have been terminated
pursuant to Section 5.4.

 

(d)               Other Conditions Precedent to Closing to Each Party’s
Obligations. The conditions precedent, if any, set forth on Appendix B-3 shall
have been satisfied (any one or more of which may be waived in whole or in part
by all parties in their sole discretion).

 

17

 

5.2           Conditions Precedent to Obligations of Purchasers to Close. The
obligations of each Purchaser to proceed with the Closing under this Agreement
with respect to the purchase of the Acquired Interests are subject to the
fulfillment prior to or at Closing of the following conditions (any one or more
of which may be waived in whole or in part by such Purchaser in its sole
discretion):

 

(a)                Representations and Warranties. The representations and
warranties of Seller set forth in Sections 2.1 to 2.7 (inclusive) and 2.11 shall
be true and correct as of the Closing Date as if made at and as of such date.
All other representations and warranties of Seller set forth in Article 2 shall
be true and correct at and as of the Closing Date as if made at and as of such
date (other than any representations or warranties that are qualified by
materiality, including by reference to Material Adverse Effect, which shall be
true in all respects) as though such representations and warranties were made on
and as of the Closing Date, except to the extent that (i) such representations
and warranties expressly relate to an earlier date, in which case as of such
earlier date and (ii) the failure of such representations and warranties to be
true and correct, taken in the aggregate, would not have a Material Adverse
Effect.

 

(b)               Performance and Compliance. Seller shall have performed, in
all material respects, all of the covenants and complied with all of the
provisions required by this Agreement to be performed or complied with by it on
or before the Closing.

 

(c)                Consents. All necessary Consents shall have been obtained,
including those set forth in Schedules 2.5 and 3.5.

 

(d)               Certificate of Seller. Such Purchaser shall have received a
certificate of Seller dated the date of the Closing confirming the matters set
forth in Sections 5.2(a) and (b) in a form reasonably acceptable to such
Purchaser.

 

(e)                Good Standing Certificate. Such Purchaser shall have received
a good standing certificate of Seller, each Subsidiary Transferor, the Project
Company, the General Partner and each of their respective Subsidiaries, in each
case issued by the secretary of state of the state or provincial authority of
the province (as applicable) of its formation.

 

(f)                Satisfactory Instruments. All instruments and documents
reasonably required on the part of Seller to effectuate and consummate the
transactions contemplated hereby shall be delivered to such Purchaser and shall
be in form and substance reasonably satisfactory to such Purchaser.

 

(g)               Loan Documents. Absence of any material amendment to, or any
default under, any Loan Document (as defined in the Term Loan Agreement).

 

(h)               Term Conversion. Term Conversion shall have occurred.

 

(i)                 Material Contracts. Absence of any amendment to, entry into,
termination or waiver (in whole or in part) of any Material Contract, except any
such amendment, termination or waiver that has been approved by each Purchaser,
that would reasonably be expected to materially and adversely affect the
Operating Period.

 

18

 

5.3           Conditions Precedent to the Obligations of Seller to Close.
Subject to Section 5.5, the obligations of Seller to proceed with the Closing
hereunder with respect to Seller’s sale of the Acquired Interests are subject to
the fulfillment prior to or at Closing of the following conditions (any one or
more of which may be waived in whole or in part by Seller in its sole
discretion):

 

(a)                Purchase Price. Purchasers shall have transferred in
immediately available funds the Aggregate Purchase Price pursuant to, in
accordance with and into the account or accounts designated in, Part I of
Appendix B.

 

(b)               Representations and Warranties. The representations and
warranties set forth in Article 3 shall be true and correct at and as of the
Closing Date as if made at and as of such date (other than any representations
or warranties that are made as of a specific date, which shall be true and
correct as of such date).

 

(c)                Performance and Compliance. Purchasers shall have performed
all of the covenants and complied, in all material respects, with all the
provisions required by this Agreement to be performed or complied with by it on
or before the Closing.

 

(d)               Certificate of Purchaser. Seller shall have received a
certificate of each Purchaser dated the date of the Closing confirming the
matters set forth in Sections 5.3(b) and (c) in a form reasonably acceptable to
Seller.

 

(e)                Satisfactory Instruments. All instruments and documents
required on the part of each Purchaser to effectuate and consummate the
transactions contemplated hereby shall be delivered to Seller and shall be in
form and substance reasonably satisfactory to Seller.

 

(f)                Other Conditions Precedent to Seller’s Obligation to Close.
The conditions precedent, if any, set forth in Appendix B-5 shall have been
satisfied or waived in whole or in part by Seller in Seller’s sole discretion.

 

5.4           Termination. If the Closing Date is not the date of this
Agreement, the following termination provisions shall be applicable:

 

(a)                By the Parties. This Agreement may be terminated at any time
by mutual written consent of Purchasers and Seller.

 

(b)               By Either Party. This Agreement may be terminated at any time
prior to the Closing by either Seller or either of the Purchasers, if (i) a
Governmental Approval required to be obtained as set forth on Part VII of
Appendix B shall have been denied and all appeals of such denial have been taken
and have been unsuccessful, (ii) one or more courts of competent jurisdiction in
the United States or Canada (as applicable), any state, provincial or any other
applicable jurisdiction has issued an order permanently restraining, enjoining,
or otherwise prohibiting the Closing, and such order has become final and
non-appealable, or (iii) the Closing has not occurred by the Outside Closing
Date, but if such failure to close by the Outside Closing Date is due to any
breach of this Agreement by any party, such party shall not have any right to
terminate this Agreement pursuant to this clause (iii).

 

19

 

(c)                Other Termination Rights. This Agreement may be terminated at
any time prior to the Closing by the applicable party if and to the extent
permitted in Part V of Appendix B.

 

(d)               Termination Procedure. In the event of termination of this
Agreement by any or all parties pursuant to this Section 5.4, written notice
thereof will forthwith be given by the terminating party to the other parties
and this Agreement will terminate and the transactions contemplated hereby will
be abandoned, without further action by any party. If this Agreement is
terminated as permitted by this Section 5.4, such termination shall be without
liability of any party (or any stockholder, shareholder, director, officer,
employee, agent, consultant or representative of such party) to the other
parties to this Agreement; provided that (i) the foregoing will not relieve any
party for any liability for willful and intentional material breaches of its
obligations hereunder occurring prior to such termination and (ii) except as
specifically set forth herein, nothing in this Agreement shall derogate from the
provisions of the Purchase Rights Agreements, which agreements shall remain in
full force and effect after termination of this Agreement.

 

5.5            Purchaser Default or Waiver.

 

(a)                Closing Notice. Upon the satisfaction of the conditions set
forth in Sections 5.1 and 5.2, Seller shall deliver a notice to Purchasers
scheduling the date of the Closing (a “Closing Notice”), which shall be at least
ten (10) Business Days after the date of delivery of the Closing Notice. Subject
to Sections 1.5(a)(iii) and 4.1(a), if any Purchaser fails to confirm its
willingness to proceed with the Closing within three (3) Business Days after
delivery of the Closing Notice, or confirms such willingness but subsequently
fails to pay its Separate Purchase Price, such Purchaser shall be deemed to be a
“Defaulting Purchaser.” For greater certainty, a Purchaser shall not be
considered a Defaulting Purchaser where a condition to Closing in its favor (or
a mutual condition to Closing in favor of Purchasers and Seller) has not been
fulfilled and it has elected not to waive such condition.

 

(b)               PSP Breach. On the date scheduled for the Closing or within
ten (10) days after the Closing, in the event that (i) PSP is a Defaulting
Purchaser (a “PSP Default”), or (ii) PEGI elects to waive a condition precedent
to Closing under Section 5.2 but PSP does not so elect (a “PEGI Waiver”), PEGI
shall have the right, exercisable in its sole discretion and by written notice
to the other parties, to (A) fund the entire Aggregate Purchase Price (including
any Purchase Price Adjustment) within thirty (30) days following such PSP
Default or PEGI Waiver, as applicable, or as may be reasonably extended for PEGI
to obtain financing, additional regulatory approvals or applicable internal
consents to consummate such funding, in which case, following the consummation
of such funding, PEGI shall be the sole Purchaser of the Acquired Interests
under this Agreement, (B) decline to fund any amount under this Agreement, or
(C) fund PEGI’s Separate Purchase Price (including any Purchase Price
Adjustment) only.

 

(c)                PEGI Breach. On the date scheduled for the Closing or within
ten (10) days after the Closing, in the event that (i) PEGI is a Defaulting
Purchaser (a “PEGI Default”), or (ii) PSP elects to waive a condition precedent
to Closing under Section 5.2 but PEGI does not so elect (a “PSP Waiver”), PSP
shall have the right, exercisable in its sole discretion and by written notice
to the other parties, to (A) fund the entire Aggregate Purchase Price (including
any

 

20

 

Purchase Price Adjustment) within thirty (30) days following such PEGI Default
or PSP Waiver, as applicable, or as may be reasonably extended for PSP to obtain
financing, additional regulatory approvals or applicable internal consents to
consummate such funding, in which case, following the consummation of such
funding, PSP shall be the sole Purchaser of the Acquired Interests under this
Agreement, (B) decline to fund any amount under this Agreement, or (C) with the
consent of Seller, fund PSP’s Separate Purchase Price (including any Purchase
Price Adjustment) only.

 

(d)               Effect. In the event that either Purchaser funds the entire
Aggregate Purchase Price pursuant to paragraph (b)(A) or (c)(A) above, as
applicable, the other Purchaser (whether or not it is a Defaulting Purchaser)
shall not have any further obligations pursuant to this Agreement and Seller
shall have no claim against such other Purchaser under this Agreement or at Law.
In the event that either Purchaser declines to fund any amount under this
Agreement or funds its Separate Purchase Price pursuant to paragraph (b)(B) or
(C) or paragraph (c)(B) or (C) above, as applicable, the other Purchaser shall
remain subject to all its obligations, and Seller shall retain all its rights
against such other Purchaser, pursuant to this Agreement. For greater certainty,
Seller shall not have any claim against a Purchaser who elects not to waive a
condition to Closing in its favor (or a mutual condition to Closing in favor of
Purchasers and Seller).

 

ARTICLE 6
REMEDIES FOR BREACHES OF THIS AGREEMENT

 

6.1            Indemnification.

 

(a)                By Seller. Subject to the limitations set forth in this
Article 6 and Section 7.14, from and after the Closing, Seller agrees to
indemnify and hold harmless each Purchaser and its Affiliates together with
their respective directors, officers, managers, employees and agents (each a
“Purchaser Indemnified Party”) from and against any and all Losses that any
Purchaser Indemnified Party incurs by reason of or in connection with any of the
following circumstances:

 

(i)any breach by Seller of any representation or warranty made by it in Article
2 (subject to any Updated Disclosure Schedules delivered pursuant to Section
4.1(c) that are deemed to cure a breach of any representation or warranty in
accordance with the last sentence of Section 4.1(c)) or any breach or violation
of any covenant, agreement or obligation of Seller contained herein; and

 

(ii)as set forth in Part VI of Appendix B.

 

(b)               By Purchasers. Subject to the limitations set forth in this
Article 6 and Section 7.14, from and after the Closing, each Purchaser agrees to
indemnify and hold harmless Seller and Seller’s Affiliates together with their
respective directors, officers, managers, employees and agents (each a “Seller
Indemnified Party”) from and against any and all Losses that any Seller
Indemnified Party incurs by reason of or in connection with any of the following
circumstances:

 

21

 

(i)any breach by such Purchaser of any representation or warranty made by it in
Article 3 or any breach or violation of any covenant, agreement or obligation of
such Purchaser contained herein; and

 

(ii)as set forth in Part VI of Appendix B.

 

6.2            Limitations on Seller’s or Purchasers’ Indemnification.

 

(a)              Minimum Limit on Claims. A party required to provide
indemnification under this Article 6 (an “Indemnifying Party”) shall not be
liable under this Article 6 to an Indemnified Party for any Claim for breach of
any representation or warranty unless and until the aggregate amount of all
Claims for which it would, in the absence of this provision, be liable exceeds:
(i) in the event that Seller is the Indemnifying Party, the Basket Amount, and
(ii) in the event that a Purchaser is the Indemnifying Party, such Purchaser’s
pro rata portion (based on its Percentage Portion) of the Basket Amount, and in
each such event the Indemnified Party will be liable for the amount of all
Claims, including the Basket Amount; provided that the foregoing limitation
shall not apply in the case of actual fraud or willful misrepresentation by the
Indemnifying Party.

 

(b)            Maximum Limit on Claims.

 

(i)Limitation on Seller’s Liability. Seller’s maximum aggregate liability for
Claims for breaches of representations and warranties under this Agreement is
limited to Seller’s Maximum Liability set forth in Part VI of Appendix B;
provided that the Seller’s Maximum Liability will not apply to any Claim based
on (A) actual fraud or willful misrepresentation or (B) any breach of the
representations and warranties set forth in Sections 2.1, 2.2, 2.3, 2.5, 2.6,
2.9, 2.11 and 2.18 (solely with respect to the Indebtedness of the Project
Company, the General Partner and their respective Subsidiaries).

 

(ii)Limitation on Purchasers’ Liability. Purchasers’ maximum aggregate liability
for Claims for breaches of representations and warranties under this Agreement
is limited to Purchaser’s Maximum Liability set forth in Part VI of Appendix B;
provided that the Purchaser’s Maximum Liability will not apply to any Claim
based on (A) actual fraud or willful misrepresentation or (B) any breach of the
representations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.5 and
3.10.

 

(c)           Time Limit for Claims. No Indemnified Party may make a Claim for
indemnification under Section 6.1 in respect of any Claim unless notice in
writing of the Claim, incorporating a statement setting out in reasonable detail
the grounds on which the Claim is based, has been given by the Indemnified Party
prior to the expiration of the applicable Survival Period as set forth in Part
VI of Appendix B.

 

22

 

6.3            Reimbursements; Refunds.

 

(a)                Right of Reimbursement. The amount of Losses payable under
Section 6.1 by an Indemnifying Party shall be net of any amounts recovered by
the Indemnified Party under applicable insurance policies or from any other
Person responsible therefor. If the Indemnified Party receives any amounts under
applicable insurance policies, or from any other Person responsible for any
Losses subsequent to an indemnification payment by the Indemnifying Party and
such amounts would result in a duplicative recovery, then such Indemnified Party
shall promptly reimburse the Indemnifying Party for any payment made or expense
incurred by such Indemnifying Party in connection with providing such
indemnification payment up to the amount received by the Indemnified Party, net
of any expenses incurred by such Indemnified Party in collecting such amount.

 

(b)               Other Refund Obligations. In addition to the obligations set
forth in Section 6.3(a), the applicable Indemnified Party shall be obligated to
reimburse or refund to the Indemnifying Party for payments made by it to such
Indemnified Party under this Article 6 as set forth in Part VI of Appendix B.

 

6.4            Right to Control Proceedings for Third Party Claims.

 

(a)                If a third party shall notify any party with respect to any
matter that may give rise to a Claim (a “Third Party Claim”), the Indemnified
Party must give notice to the Indemnifying Party of the Third Party Claim (a
“Third Party Claim Notice”) within twenty (20) Business Days after it becomes
aware of the existence of the Third Party Claim and that it may constitute a
Third Party Claim. The Indemnified Party’s failure to give a Third Party Claim
Notice in compliance with this Section 6.4(a) of any Third Party Claim which may
give rise to a right of indemnification hereunder shall not relieve the
Indemnifying Party of any liability which it may have to the Indemnified Party
unless, and solely to the extent that, the failure to give such notice
materially and adversely prejudiced the Indemnifying Party.

 

(b)               The Indemnifying Party shall have the right to participate in,
or by giving written notice to the Indemnified Party, to assume control of the
defense of any Third Party Claim with the Indemnifying Party’s own counsel, in
each case at the Indemnifying Party’s own cost and expense (provided that prior
to assuming control of such defense, the Indemnifying Party must acknowledge its
indemnity obligations under this Article 6), and the Indemnified Party shall
cooperate in good faith in such defense. The Indemnified Party shall have the
right, at its own cost and expense, to participate in the defense of any Third
Party Claim with separate counsel selected by it, subject to the Indemnifying
Party’s right to control the defense thereof; provided that in such event the
Indemnifying Party shall pay the fees and expenses of such separate counsel (i)
incurred by the Indemnified Party prior to the date the Indemnifying Party
assumes control of the defense of the Third Party Claim, (ii) if such Third
Party Claim would reasonably be expected to be materially detrimental to the
business, reputation or future prospects of any Indemnified Party or (iii) if
representation of both the Indemnifying Party and the Indemnified Party by the
same counsel would create a conflict of interest. If the Indemnifying Party (i)
fails to promptly notify the Indemnified Party in writing of its election to
defend or fails to acknowledge its indemnity obligations under this Article 6 as
provided in this Agreement, (ii) elects not to defend (or compromise at its sole
cost and expense) such Third

 

23

 

Party Claim, (iii) has elected to defend such Third Party Claim but fails to
promptly and diligently pursue the defense such Third Party Claim, (iv)
otherwise breaches any of its obligations under this Article 6 or (v) as set
forth on Schedule 6.4(b) hereto, or if the Third Party Claim is reasonably
expected by the Indemnified Party to result in a payment obligation on the
Indemnified Party in an amount that exceeds the maximum indemnification then
available to the Indemnified Party pursuant to this Article 6, then the
Indemnifying Party shall not be entitled to assume or maintain control of the
defense of such Third Party Claim and the Indemnified Party may (by written
notice to the Indemnifying Party) assume control of such defense (in which case
the Indemnifying Party shall pay the fees and expenses of counsel retained by
the Indemnified Party) and/or compromise such Third Party Claim and seek
indemnification for any and all Losses based upon, arising from or relating to
such Third Party Claim. The parties shall cooperate with each other in all
reasonable respects in connection with the defense of any Third Party Claim.

 

(c)                Notwithstanding any other provision of this Agreement, the
Indemnifying Party shall not enter into any settlement of any Third Party Claim
without the prior written consent of the Indemnified Party (which consent shall
not be unreasonably withheld or delayed), except as provided in this Section
6.4(c). If a firm offer is made to settle a Third Party Claim that (i) does not
(A) result in any liability or create any financial or other obligation on the
part of the Indemnified Party and (B) result in the loss of any right or benefit
on the part of any Indemnified Party, (ii) does not impose injunctive or other
equitable relief against any Indemnified Party, and (iii) provides, in customary
form, for the unconditional release of each Indemnified Party from all
liabilities and obligations in connection with such Third Party Claim, and the
Indemnifying Party desires to accept and agree to such firm offer, then the
Indemnifying Party shall give written notice to that effect to the Indemnified
Party. If the Indemnified Party fails to consent to such firm offer within
twenty (20) days after its receipt of such notice, the Indemnified Party may
continue to contest or defend such Third Party Claim and in such event, the
maximum liability of the Indemnifying Party as to such Third Party Claim shall
not exceed the amount of such settlement offer. If the Indemnified Party fails
to consent to such firm offer within such twenty (20) day period and also fails
to assume defense of such Third Party Claim, the Indemnifying Party may settle
the Third Party Claim upon the terms set forth in such firm offer to settle such
Third Party Claim. If the Indemnified Party has assumed the defense pursuant to
Section 6.4(b), it may settle the Third Party Claim; provided that if the
settlement is made without the prior written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld or delayed), the Indemnifying
Party shall have no indemnity obligation pursuant to this Article 6 with respect
to such Third Party Claim.

 

6.5           Mitigation; Treatment of Indemnification.

 

(a)                The Indemnified Party shall use commercially reasonable
efforts to mitigate all Losses relating to a Claim for which indemnification is
sought under this Article 6.

 

(b)               All indemnification payments under this Article 6 shall be
deemed adjustments to the Aggregate Purchase Price.

 

6.6           Exclusive Remedy. Seller and Purchasers acknowledge and agree
that, should the Closing occur, and excluding liability for actual fraud or
willful misrepresentation, the foregoing

 

24

 

indemnification provisions of this Article 6 and the provisions of Section 7.15
shall be the sole and exclusive remedy of Seller and Purchasers with respect to
any misrepresentation, breach of warranty, covenant or other agreement (other
than any Purchase Price Adjustment set forth in Part I of Appendix B) or other
claim arising out of this Agreement or the transactions contemplated hereby.
Without limiting the generality of the foregoing, effective as of the Closing
each of the Purchasers and Seller covenants to the other party that in respect
of any matters under or contemplated in this Agreement, it will not make any
Claim whatsoever against any Affiliate of the other party or the directors,
officers, managers, shareholders, member, controlling persons, employees and
agents of any of the foregoing, in each case in their capacities as such, and
its rights in respect of any such Claim for breach of any provision of this
Agreement are limited solely to such rights as it may have against Seller or
Purchasers, as the case may be, under this Agreement.

 

6.7              Purchaser Indemnification Decisions. Each Purchaser may bring a
Claim for indemnification pursuant to this Article 6. If both Purchasers
initiate substantially the same Claim (a “Joint Claim”), PEGI shall have the
right to assume control of the prosecution of such Joint Claim but may not enter
into any settlement with the Indemnifying Party that purports to bind PSP with
respect to such Joint Claim without the prior written consent of PSP (such
consent not to be unreasonably withheld, conditioned or delayed). If PEGI has
elected to prosecute such Joint Claim but fails to promptly and diligently
pursue the same, then PSP may (by written notice to PEGI) assume control of the
prosecution of such Joint Claim but may not enter into any settlement with the
Indemnifying Party with respect to such Joint Claim that purports to bind PEGI
without the prior written consent of PEGI (such consent not to be unreasonably
withheld, conditioned or delayed). Neither Purchaser may enter into any
settlement with respect to any Joint Claim solely for itself (i.e., any
settlement that does not purport to bind the other Purchaser) without first
notifying the other Purchaser and giving the other Purchaser a reasonable
opportunity to participate in such settlement. The expenses of the prosecution
of any Joint Claim shall be borne by both Purchasers pro rata in accordance with
their Percentage Portion.

 

ARTICLE 7
MISCELLANEOUS

 

7.1              Entire Agreement. This Agreement and the Schedules and
Appendices hereto, each of which is hereby incorporated herein, set forth all of
the promises, covenants, agreements, conditions, undertakings, representations
and warranties between the parties hereto with respect to the subject matter
hereof and supersede all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written.

 

7.2              Notices. All notices, requests, demands and other
communications hereunder shall be in writing (including facsimile transmission
and electronic mail (“email”) transmission and shall be deemed to have been duly
given if personally delivered, telefaxed (with confirmation of transmission),
e-mailed (so long as confirmation of receipt is requested and received) or, if
mailed, when mailed by United States first-class or Canadian Lettermail or
Letter-post (as the case may be), certified or registered mail, postage prepaid,
or by any international or national overnight delivery service, to the other
party at the addresses as set forth in Part VII of Appendix B (or at such other
address as shall be given in writing by any party to the other). All such
notices, requests, demands and other communications shall be deemed

 

25

 

received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding Business Day in the place of
receipt.

 

7.3            Successors and Assigns.

 

(a)                No party shall assign this Agreement or any of its rights or
obligations herein without the prior written consent of the other parties, in
their sole discretion, except as provided herein and except that any party may
assign this Agreement or any of its rights or obligations herein to an Affiliate
of such party but the assigning party shall continue to be liable for all of its
obligations hereunder following any such assignment. Subject to the foregoing,
this Agreement, and all rights and powers granted hereby, will bind and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.

 

(b)               Notwithstanding Section 7.3(a), each of Seller and each
Purchaser may assign this Agreement without the consent of the other parties as
specified in Part VII of Appendix B.

 

7.4            Jurisdiction; Service of Process; Waiver of Jury Trial.

 

(a)                EACH OF THE PARTIES HERETO WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

(b)               Any and all claims, counterclaims, demands, causes of action,
disputes, controversies, and other matters in question arising out of or
relating to this Agreement, or the alleged breach hereof, or in any way relating
to the subject matter of this Agreement or the relationship between the parties
created by this Agreement (hereafter, a “Dispute”), except for any claims for
specific performance as set forth in Section 7.15, shall be finally resolved by
binding arbitration administered by the American Arbitration Association (“AAA”)
under the AAA Commercial Arbitration Rules, including the Procedures for Large,
Complex Commercial Disputes (the “Rules”) then in force to the extent such Rules
are not inconsistent with the provisions of this Agreement. The party or parties
commencing arbitration shall deliver to the other party or parties a written
notice of intent to arbitrate (a “Demand”) in accordance with Rule R-4. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et
seq.

 

(i)Selection of Arbitrators. Disputes shall be resolved by a panel of three
independent and impartial arbitrators, (the “Arbitrators”). The party or parties
initiating the arbitration shall appoint an arbitrator in its or their Demand;
the responding party or parties shall appoint an arbitrator in its or their
answering statement, which is due thirty (30) days after receipt of the Demand.
If any party fails or refuses to timely nominate an arbitrator within the time
permitted, such arbitrator shall be appointed by the AAA from individuals with
significant experience in renewable energy

 

26

 

projects from its Large, Complex Commercial Case Panel. Within thirty (30) days
of the appointment of the second arbitrator, the two party-appointed arbitrators
shall appoint the third arbitrator, who shall act as the chair of the
arbitration panel. If the two party-appointed arbitrators fail or refuse to
appoint the third arbitrator within such thirty (30)-day period, the third
arbitrator shall be appointed by the AAA from individuals with significant
experience in renewable energy projects from its Large, Complex Commercial Case
Panel in accordance with Rule R-12. The Arbitrators, acting by majority vote,
shall resolve all Disputes.

 

(ii)Confidentiality. To the fullest extent permitted by law, the arbitration
proceedings and award shall be maintained in confidence by the parties.

 

(iii)Place of Arbitration. The place of arbitration shall be New York, New York.
Any action in connection therewith shall be brought in the United States
District Court for the Southern District of New York or, if that court does not
have jurisdiction, any New York state court in New York County. Each party
consents to the exclusive jurisdiction of such courts in any such suit, action
or proceeding, and irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Each party further agrees to accept service of process out
of any of the before mentioned courts in any such dispute by registered or
certified mail addressed to the party at the address set forth in Part VII of
Appendix B.

 

(iv)Conduct of the Arbitration. The arbitration shall be conducted in accordance
with the Rules and in a manner that effectuates the parties’ intent that
Disputes be resolved expeditiously and with minimal expense. The Arbitrators
shall endeavor to commence the arbitration hearing within one hundred and eighty
(180) days of the third arbitrator’s appointment.

 

(v)Interim Relief. Any party may apply to the Arbitrators seeking injunctive
relief until the arbitration award is rendered or the controversy is otherwise
resolved. Any party also may, without waiving any remedy under this Agreement,
seek from any court having jurisdiction any interim or provisional relief that
is necessary to protect the rights or property of that party, pending the
establishment of the arbitral tribunal (or pending the Arbitrators’
determination of the merits of the controversy).

 

27

 

(vi)Discovery. The Arbitrators, upon a showing of good cause, may require and
facilitate such limited discovery as it shall determine is appropriate in the
circumstances, taking into account the needs of the parties, the burden on the
parties, and the desirability of making discovery limited, expeditious, and
cost-effective. The Arbitrators shall issue orders to protect the
confidentiality of proprietary information, trade secrets and other sensitive
information disclosed in discovery.

 

(vii)Arbitration Award. The Arbitrators shall endeavor to issue a reasoned,
written award within thirty (30) days of the conclusion of the arbitration
hearing. The Arbitrators shall have the authority to assess some or all of the
costs and expenses of the arbitration proceeding (including the Arbitrators’
fees and expenses) against any party. The Arbitrators shall also have the
authority to award attorneys’ fees and expenses to the prevailing party or
parties. In assessing the costs and expenses of the arbitration and/or awarding
attorneys’ fee and expenses, the Arbitrators shall consider the relative extent
to which each party has prevailed on the disputed issues and the relative
importance of those issues. The limitations of Section 7.14 shall apply to any
award by the Arbitrators.

 

7.5              Headings; Construction; and Interpretation. The headings
preceding the text of the sections and subsections hereof are inserted solely
for convenience of reference and shall not constitute a part of this Agreement,
nor shall they affect its meaning, construction or effect. Except as otherwise
expressly provided, the rules of construction set forth in Appendix A-2 shall
apply to this Agreement. The parties agree that any rule of law or any legal
decision that would require interpretation of any claimed ambiguities in this
Agreement against the party that drafted it has no application and is expressly
waived.

 

7.6              Further Assurances. Each party shall cooperate and take such
action as may be reasonably requested by the other party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby.

 

7.7              Amendment and Waiver. The parties may by mutual agreement amend
this Agreement in any respect, and any party, as to such party, may (a) extend
the time for the performance of any of the obligations of any other party,
(b) waive any inaccuracies in representations by any other party, (c) waive
compliance by any other party with any of the agreements contained herein and
performance of any obligations by such other party, and (d) waive the
fulfillment of any condition that is precedent to the performance by such party
of any of its obligations under this Agreement. To be effective, any such
amendment or waiver must be in writing and be signed by the party against whom
enforcement of the same is sought.

 

7.8              No Other Beneficiaries. This Agreement is being made and
entered into solely for the benefit of Purchasers and Seller, and neither
Purchasers nor Seller intends hereby to create any rights in favor of any other
Person as a third party beneficiary of this Agreement or otherwise.

 

28

 

7.9              Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the jurisdiction specified in Part VII
of Appendix B.

 

7.10          Schedules. References to a Schedule shall include any disclosure
expressly set forth on the face of any other Schedule even if not specifically
cross-referenced to such other Schedule to the extent that the relevance of such
matter is reasonably apparent on the face thereof. The fact that any item of
information is contained in a disclosure schedule shall not be construed as an
admission of liability under any Governmental Rule, or to mean that such
information is material. Such information shall not be used as the basis for
interpreting the term “material”, “materially” or any similar qualification in
this Agreement.

 

7.11          Limitation of Representations and Warranties. Purchasers
acknowledge that except as expressly provided in Article 2 of this Agreement,
Seller has not made, and Seller hereby expressly disclaims and negates, and each
of the Purchasers hereby expressly waive, any other representation or warranty,
express, implied, at Law or otherwise relating to the Acquired Interests, Seller
or Seller Affiliates, the Project Company, the Wind Project or this Agreement.

 

7.12          Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument. A facsimile or electronically
imaged version of this Agreement may be executed by one or more parties hereto
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or “PDF” electronic mail pursuant to which the signature of
or on behalf of such party can be seen, and such execution and delivery shall be
considered valid, binding and effective for all purposes.

 

7.13          Severability. If any provision of this Agreement or any other
agreement entered into pursuant hereto is contrary to, prohibited by or deemed
invalid under applicable law or regulation, such provision shall be inapplicable
and deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a determination, the parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.

 

7.14          Limit on Damages. Each party hereto acknowledges and agrees that
neither party shall be liable to the other party for any punitive damages
(except to the extent paid to a third party in respect of a Third Party Claim)
or damages that were not reasonably foreseeable.

 

7.15          Specific Performance. The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof in any court of
competent jurisdiction, in addition to any other remedy to which they are
entitled at law or in equity.

29

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale
Agreement as of the day and year first above written.

 

 

 

Pattern Energy Group Inc.             By:   /s/ Esben Pedersen   Its: Esben
Pedersen       Chief Investment Officer    

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to the Meikle Purchase and Sale Agreement]

 

 

 

VERTUOUS ENERGY CANADA INC.           By: /s/ Guthrie Stewart   Its: Guthrie
Stewart     Vice-President               By: /s/ Patrick Samson   Its: Patrick
Samson     Vice President    

 

 

 

 

      
 

 

 

 

 

 

 

 

 

 

 

[Signature Page to the Meikle Purchase and Sale Agreement]

 

 

Pattern Energy Group LP           By: /s/ Daniel M. Elkort   Its: Daniel M.
Elkort     Vice President  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to the Meikle Purchase and Sale Agreement]

 

 

APPENDIX A-1: GENERAL DEFINITIONS
(as applicable and to the extent used in the final Agreement)

 

“AAA” shall have the meaning set forth in Section 7.4(b).

 

“Accounting Referee” shall have the meaning set forth in Section 4.2(f).

 

“Acquired Interests” shall have the meaning set forth in the recitals, as more
fully described in Part I of Appendix C.

 

“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by or
is under common control with the Person specified, or who holds or beneficially
owns 50% or more of the equity interest in the Person specified or 50% or more
of any class of voting securities of the Person specified; provided that
notwithstanding the foregoing (a) Purchasers and their respective Subsidiaries
shall not be deemed to be Affiliates of Seller and (b) Seller and its Affiliates
(other than Purchasers and their respective Subsidiaries) shall not be deemed to
be Affiliates of any Purchaser.

 

“Aggregate Purchase Price” shall have the meaning set forth in Section 1.1, and
is more particularly described in Part I of Appendix B.

 

“Agreement” shall have the meaning set forth in the preamble to this Agreement.

 

“Amended and Restated Limited Partnership Agreement” means the Amended and
Restated Limited Partnership Agreement in respect of the Project Company, made
as of the date of Closing, among the General Partner and the Purchasers,
substantially in the form attached hereto as Exhibit A.

 

“Arbitrators” shall have the meaning set forth in Section 7.4(b).

 

“ARC” means an advance ruling certificate issued by the Commissioner of
Competition pursuant to subsection 102(1) of the Competition Act with respect to
the transactions contemplated by this Agreement.

 

“Basket Amount” shall have the meaning set forth in Part VI of Appendix B.

 

“Books and Records” means books, Tax Returns, contracts, commitments, and
records of a Person.

 

“Business Day” means any day other than a Saturday, a Sunday or any other day on
which banks are authorized to be closed in New York, New York or Montreal,
Québec.

 

“Canadian Tax Act” shall have the meaning set forth in Section 2.9(a).

 

“Centrica Energy” shall have the meaning set forth in Part II of Appendix C.

 

“Claim” means a claim by an Indemnified Party for indemnification pursuant to
Section 6.1.

 

App. A-1 - 1

 

“Closing” shall have the meaning set forth in Section 1.4.

 

“Closing Date” shall mean the date a Closing occurs.

 

“Closing Notice” shall have the meaning set forth in Section 5.5(a).

 

“Commissioner of Competition” means the Commissioner of Competition appointed
pursuant to the Competition Act or a Person designated or authorized pursuant to
the Competition Act to exercise the powers and perform the duties of the
Commissioner of Competition.

 

“Competition Act” means the Competition Act (Canada).

 

“Competition Act Approval” means any of: (a) the issuance of an ARC and such ARC
has not been rescinded prior to Closing, or (b)  Purchasers and the Seller have
given the notice required under Section 114 of the Competition Act with respect
to the transactions contemplated by this Agreement and the applicable waiting
period under Section 123 of the Competition Act has expired or has been
terminated in accordance with the Competition Act, or (c) the obligation to give
the requisite notice has been waived pursuant to paragraph 113(c) of the
Competition Act, and in the case of (b) and (c), Purchasers have been advised in
writing by the Commissioner of Competition that the Commissioner of Competition,
at that time, does not intend to make an application under Section 92 of the
Competition Act in respect of the transactions contemplated by this Agreement,
and such advice has not been rescinded prior to Closing.

 

“Consent” means any consent, approval, order or Permit of or from, or
registration, declaration or filing with or exemption by any Person, including a
Governmental Authority.

 

“Contract” means any agreement, lease, license, obligation, plan, arrangement,
purchase order, commitment, evidence of indebtedness, mortgage, indenture,
security agreement or other contract (whether written or oral) entered into by a
Person or by which a Person or any of its assets are bound.

 

“Defaulting Purchaser” shall have the meaning set forth in Section 5.5(a).

 

“Demand” shall have the meaning set forth in Section 7.4(b).

 

“Dispute” shall have the meaning set forth in Section 7.4(b).

 

“Dollars” or “$” means the lawful currency of the United States of America or
Canada, as identified in Part I of Appendix B.

 

“Environmental Claim” means any suit, action, demand, directive, claim, Lien,
written notice of noncompliance or violation, allegation of liability or
potential liability, or proceeding made or brought by any Person in each case
(a) alleging any liability under or violation of or noncompliance with any
applicable Environmental Law, (b) with respect to the release of or exposure to
Hazardous Substances, or (c) with respect to noise pollution or visual impacts,
including shadow flicker.

 

App. A-1 - 2

 

“Environmental Law” means any Law pertaining to the environment, natural
resources, human health and safety in connection with exposure to Hazardous
Substances, and physical and biological natural resources, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. § 9601 et seq.), and the Superfund Amendments and
Reauthorization Act of 1986, the Emergency Planning and Community Right to Know
Act (42 U.S.C. §§ 11001 et seq.), the Resource Conservation and Recovery Act of
1976 (42 U.S.C. §§ 6901 et seq.), and the Hazardous and Solid Waste Amendments
Act of 1984, the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Federal Water
Pollution Control Act (also known as the Clean Water Act) (33 U.S.C. §§ 1251 et
seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Safe
Drinking Water Act (42 U.S.C. §§ 300f et seq.), the Endangered Species Act (16
U.S.C. §§ 1531 et seq.), the Migratory Bird Treaty Act (16 U.S.C. §§ 703 et
seq.), the Bald and Golden Eagle Protection Act (16 U.S.C. §§ 668 et seq.), the
Oil Pollution Act of 1990 (33 U.S.C. §§ 2701 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. §§ 1801 et seq.), and any similar or analogous
state, provincial, local and municipal Laws, in effect as of the date hereof or
the Closing Date, as applicable.

 

“EPA” shall have the meaning set forth in Part I of Appendix D.

 

“Expected Closing Date” shall have the meaning set forth in Part III of Appendix
B.

 

“Financial Model” means the financial model for the Wind Project.

 

“Financial Statements” means (a) the annual unaudited unconsolidated financial
statements of income and cash flows of the Project Company for the year ended
December 31, 2016 and the related balance sheet as at December 31, 2016, in each
case setting forth in comparative form the corresponding figures for the
preceding year; and (b) the unaudited unconsolidated financial statements of
income and cash flows and the related balance sheet of the Project Company to be
delivered prior to the Closing Date pursuant to Appendix B-1, in each case
prepared in accordance with GAAP.

 

“First Nations” means any governing body of any first nations, Métis and/or
indigenous and/or aboriginal tribe(s) and/or band(s).

 

“GAAP” means generally accepted accounting principles used by the Project
Company to prepare the Financial Statements, consistently applied throughout the
specified period and in the immediately prior comparable period.

 

“General Partner” shall have the meaning set forth in Section 2.9(a).

 

“Governmental Authority” means any federal or national, state, provincial,
county, municipal or local government or regulatory or supervisory department,
body, political subdivision, commission, agency, instrumentality, ministry,
court, judicial or administrative body, taxing authority, or other authority
thereof (including any corporation or other entity owned or controlled by any of
the foregoing) having jurisdiction over the matter or Person in question.

 

App. A-1 - 3

 

“Governmental Rule” means, with respect to any Person, any applicable law,
statute, treaty, rule, regulation, ordinance, order, code, judgment, decree,
injunction or writ issued by any Governmental Authority.

 

“GP Interest” shall have the meaning set forth in Part I of Appendix C.

 

“GST/HST” means taxes imposed under the GST/HST Legislation.

 

“GST/HST Legislation” means Part IX of the Excise Tax Act (Canada) and any
provincial or territorial equivalent.

 

“Hazardous Substances” means all substances, materials, chemicals, wastes or
pollutants that are defined, regulated, listed or prohibited under Environmental
Law, including without limitation, (i) asbestos or asbestos containing
materials, radioactive materials, lead, and polychlorinated biphenyls, any
petroleum or petroleum product, solid waste, mold, mycotoxin, urea formaldehyde
foam insulation and radon gas; (ii) any waste or substance that is listed,
defined, designated or classified as, or otherwise determined by any
Environmental Law to be, ignitable, corrosive, radioactive, dangerous, toxic,
explosive, infectious, radioactive, mutagenic or otherwise hazardous; (iii) any
pollutant, contaminant, waste, chemical, deleterious substances or other
material or substance (whether solid, liquid or gas) that is defined as a “solid
waste,” “hazardous waste,” “hazardous material,” “hazardous substance,”
“extremely hazardous waste,” “restricted hazardous waste,” “pollutant,”
“contaminant,” “hazardous constituent,” “special waste,” “toxic substance,” or a
word, term, or phrase of similar meaning or regulatory effect under any
Environmental Law.

 

“HSR Act Approval” means that the applicable waiting period under the HSR Act
will have expired or been terminated.

 

“Indebtedness” means all obligations of a Person (a) for borrowed money
(including principal, accrued and unpaid interest, fees due, and any other
amounts due), whether or not contingent, (b) evidenced by notes, bonds,
debentures, mortgages or similar instruments or debt securities, (c) for the
deferred purchase price of property, goods or services (other than trade
payables or accruals incurred in the ordinary course of business and not past
due), including all seller notes and “earn out” payments, (d) under capital
leases, (e) secured by a Lien on the assets of such Person, whether or not such
obligation has been assumed by such Person, (f) with respect to reimbursement
obligations for letters of credit, performance bonds and other similar
instruments (whether or not drawn), (g) under any interest rate, currency or
other hedging agreement (including collars) or commitment therefor, (h) to repay
deposits or other amounts advanced by and owing to third parties, (i) under
conditional sale or other title retention agreements relating to property
purchased by such Person, (j) in the nature of guaranties of the obligations
described in clauses (a) through (i) above of any other Person or as to which
such Person has an obligation substantially the economic equivalent of a
guaranty, or (k) in respect of any other amount properly characterized as
indebtedness in accordance with GAAP.

 

“Indemnified Party” means either a Purchaser Indemnified Party or a Seller
Indemnified Party, as the case may be.

 

“Indemnifying Party” shall have the meaning set forth in Section 6.2(c).

 

App. A-1 - 4

 

“Intellectual Property” means all intellectual property rights, including,
without limitation, (a) patents, patent applications, patent disclosures and
inventions, (b) Internet domain names, trademarks, trade names, service marks,
trade dress, trade names, logos and corporate names and registration and
applications for registration of any item listed in clause (b), together with
all of the goodwill associated therewith, (c) copyrights (registered or
unregistered), works of authorship and copyrightable works, and registrations
and applications for registration of any item in this clause (c), (d) computer
software (whether in source code, object code or other form), data, databases
and any documentation related to any item listed in this clause, (e) trade
secrets and other confidential information (including confidential and
proprietary know how, ideas, formulas, compositions, recipes, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
manufacturing and production processes, procedures and techniques, research and
development information, drawings, blueprints, specifications, designs, plans,
proposals, technical data, financial and marketing plans and customer and
supplier lists and information), (f) all rights of privacy and publicity, (g)
other intellectual property rights and (h) copies and tangible embodiments
thereof (in whatever form or medium).

 

“Interconnection Agreement” shall have the meaning set forth in Part I of
Appendix D.

 

“Joint Claim” shall have the meaning set forth in Section 6.7.

 

“Knowledge” means (a) with respect to Seller, the actual knowledge of the
persons identified in Part VII of Appendix B, which shall include at a minimum
(i) the senior developer responsible for the Wind Project, (ii) the construction
manager responsible for the Wind Project, (iii) the transaction counsel
responsible for the financing of the Wind Project and (iv) the finance manager
responsible for the financing of the Wind Project and (b) with respect to each
Purchaser, the actual knowledge of the persons identified in Part VII of
Appendix B opposite the name of such Purchaser.

 

“Laws” means all common law, laws, by-laws, statutes, treaties, rules, Orders,
rulings, decisions, judgments, injunctions, awards, decrees, codes, ordinances,
standards, regulations, restrictions, official guidelines, policies, directives,
interpretations, Permits or like action having the effect of law of any
Governmental Authority.

 

“Lease” means a lease, ground lease, sublease, license, concession, easement,
right of way, encroachment agreement, municipal right of way agreements, and
road user agreements or other written agreement, including any option relating
thereto, in each case, governing real property, to which the Project Company,
the General Partner or any of their respective Subsidiaries is a party.

 

“Lien” on any asset means any mortgage, deed of trust, lien, hypothec, pledge,
charge, security interest, restrictive covenant, right of first refusal, right
of first offer, easement or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected or effective under
applicable law, as well as the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.

 

“Loss” means any and all losses (including loss of profit and loss of expected
profit), claims, actions, liabilities, damages, expenses, diminution in value or
deficiencies of any kind or character including all interest and other amounts
payable to third parties, all liabilities on

 

App. A-1 - 5

 

account of Taxes and all reasonable legal fees and expenses and other expenses
reasonably incurred in connection with investigating or defending any claims or
actions, whether or not resulting in any liability.

 

“Material Adverse Effect” means any circumstance, matter, condition,
development, change, event, occurrence, state of affairs, or effect that,
individually or in the aggregate, is or would reasonably be expected to have a
material adverse effect on (a) the business, results of operations, assets or
liabilities, financial condition or properties of the Project Company and its
Subsidiaries, taken as a whole, or (b) the ability of Seller to consummate the
transactions contemplated by this Agreement or otherwise perform any of its
obligations under this Agreement; provided, however, none of the following shall
be deemed (either alone or in combination) to constitute, and none of the
following shall be taken into account in determining whether there has been, a
Material Adverse Effect:

 

(a)                any change in general economic, political or business
conditions;

 

(b)               changes resulting from acts of war or terrorism or any
escalation or worsening of any such acts of war or terrorism threatened or
underway as of the date of this Agreement;

 

(c)                changes or developments generally affecting the power
services industry;

 

(d)               any changes in accounting requirements or principles imposed
by GAAP after the date of this Agreement;

 

(e)                any changes in applicable Law after the date of this
Agreement;

 

(f)                changes in the wind power industry that, in each case,
generally affect companies in such industry;

 

provided that the incremental extent of any disproportionate change, event,
occurrence, development, effect, condition, circumstance or matter described in
clauses (a) through (f) with respect to the Project Company and its
Subsidiaries, taken as a whole, relative to other similarly situated businesses
in the wind power industry may be considered and taken into account in
determining whether there has been a Material Adverse Effect.

 

“Material Contract” means (i) any Material Lease, (ii) the Contracts set forth
in Part I of Appendix D, (iii) the Term Loan Agreement, and (iv) any other
Contract not otherwise set forth in Part I of Appendix D that affects the
Operating Period to which the Project Company, the General Partner or any of
their respective Subsidiaries is a party or by which the Project Company, the
General Partner or any of their respective Subsidiaries, or any of their
respective assets, is bound (A) providing for past or future payments by or to
the Project Company, the General Partner or any of their respective Subsidiaries
in excess of $500,000 annually or $1,000,000 in the aggregate, (B) relating to
any partnership, joint venture or other similar arrangement, (C) relating to any
Indebtedness, (D) limiting the freedom of the Project Company, the General
Partner or any of their respective Subsidiaries to compete in any line of
business or with any Person or in any area or granting “most favored nation” or
similar status, (E) with Seller or any of its Affiliates, (F) with either
Purchaser or any of its Affiliates, (G) relating to the

 

App. A-1 - 6

 

acquisition or disposition of any business or material portion thereof (whether
by merger, sale of stock, sale of assets or otherwise), (H) that was not entered
into in the ordinary course of business of the Project Company or any of its
Subsidiaries, (I) with any First Nations; or (J) the loss of which would result
in a Material Adverse Effect.

 

“Material Contract Change” shall have the meaning set forth in Section 4.1(a).

 

“Material Leases” means all Leases related to the Wind Project (i) the loss of
which would result in a reduction in production of the Wind Project or in its
ability to deliver energy to the point of interconnection or would otherwise
result in a Material Adverse Effect, or (ii) that are otherwise material to the
operations of the Wind Project.

 

“Multi-Tenure Agreement” shall have the meaning set forth in Part II of Appendix
C.

 

“Operating Period” means, in respect of the Wind Project, the period commencing
on the Commercial Operation Date (however titled) under any power purchase
agreement to which the Project Company is a party.

 

“Order” means any writ, judgment, injunction, ruling, decision, order or similar
direction of any Governmental Authority, whether preliminary or final.

 

“Organization Documents” means, with respect to (a) any corporation, its
articles or certificate of incorporation and by-laws, (b) any limited
partnership, its certificate or declaration of limited partnership and its
partnership agreement, (c) any limited liability company, its articles or
certificate of organization or formation and its operating agreement or limited
liability company agreement, or (d) any other Person, documents of similar
substance.

 

“Outside Closing Date” shall have the meaning set forth in Part III of Appendix
B.

 

“PCFC” shall have the meaning set forth in Part I of Appendix C.

 

“PEGI Default” shall have the meaning set forth in Section 5.5(c).

 

“PEGI Waiver” shall have the meaning set forth in Section 5.5(a).

 

“Percentage Portion” shall have the meaning set forth in the recitals to this
Agreement, and is more particularly described in Part I of Appendix C.

 

“Permitted Lien” means any of the following: (a) Liens for Taxes either not yet
due and payable or being contested in good faith through appropriate proceedings
and for which adequate reserves have been established in the Project Company’s
balance sheet in accordance with GAAP; (b) inchoate mechanics’ and materialmen’s
Liens for work in progress and workmen’s, repairmen’s, warehousemen’s and
carrier’s Liens arising in the ordinary course of business either for amounts
not yet due or which have not been perfected, filed or registered in accordance
with applicable Law against the Project Company, the General Partner or any of
their respective Subsidiaries, the Wind Project or the Project Company Real
Property; (c) as to any Project Company Real Property, title defects, easements,
rights of first refusal, restrictions, irregularities, encumbrances (other than
for borrowed money), encroachments, servitudes, rights of way and

 

App. A-1 - 7

 

statutory Liens that do not or would not reasonably be expected to materially
impair the value or use by the Project Company, the General Partner or any of
their respective Subsidiaries of the Project Company Real Property; (d)
reservations, limitations, provisos and conditions expressed in (x) any original
grant from the Crown or (y) or other grants of real or immovable property that
do not or would not reasonably be expected to materially impair the value or use
by the Project Company, the General Partner or any of their respective
Subsidiaries of such real or immovable property; (e) security given to a public
utility or any Governmental Authority when required by such utility or authority
in connection with the operations of the Project Company in the ordinary course
of business; and (f) Liens granted pursuant to the Term Loan Agreement.

 

“Permit” means filings, registrations, licenses, permits, notices, technical
assistance letters, decrees, certificates, approvals, consents, waivers, Orders,
authorizations, agreements, directions, instructions, grants, easements,
exemptions, exceptions, variances and authorizations to or from any Governmental
Authority.

 

“Person” means any individual, corporation, partnership, limited partnership,
limited liability partnership, trust, business trust, estate, joint venture,
unincorporated association, limited liability company, cooperative, Governmental
Authority or other entity.

 

“Personal Property” means all office equipment, machinery, equipment, supplies,
vehicles, tractors, trailers, tools, spare parts, production supplies, furniture
and fixtures and other items of tangible personal property owned by any of the
Project Company, the General Partner or any of their respective Subsidiaries
used primarily in connection with ownership, maintenance or operation of the
Wind Project.

 

“Post-Closing Contingency Receipt” shall have the meaning set forth in Part I of
Appendix B.

 

“Project Agreement” shall have the meaning set forth in Part IV of Appendix D.

 

“Project Company” shall have the meaning set forth in the recitals to this
Agreement, and is more particularly described in Part I of Appendix C of the
Agreement.

 

“Project Company Real Property” means all real property of the Project Company,
the General Partner or any of their respective Subsidiaries, together with all
buildings, structures, improvements and fixtures of the Wind Project thereon,
(i) held pursuant to a Material Lease or (ii) required to be set forth on Part
II of Appendix C.

 

“PSP Default” shall have the meaning set forth in Section 5.5(a).

 

“PSP Waiver” shall have the meaning set forth in Section 5.5(c).

 

“Purchase Price Adjustment” shall have the meaning set forth in Part I of
Appendix B.

 

“Purchase Rights Agreements” means, collectively, (a) that certain Amended and
Restated Purchase Rights Agreement dated as of June 16, 2017 by and among
Seller, Pattern Energy Group Inc. and, solely with respect to Article IV
thereof, Pattern Energy Group Holdings LP and Pattern Energy GP LLC, as such
agreement is amended, modified or supplemented in accordance with its terms and
(b) that certain Amended and Restated Purchase Rights Agreement

 

App. A-1 - 8

 

dated as of June 16, 2017 by and among Pattern Energy Group 2 LP, Pattern Energy
Group Inc. and, solely with respect to Article III thereof, Pattern Energy Group
Holdings 2 LP and Pattern Energy Group Holdings 2 GP LLC, as such agreement is
amended, modified or supplemented in accordance with its terms.

 

“Purchaser” shall have the meaning set forth in the preamble to this Agreement.

 

“Purchaser Indemnified Party” shall have the meaning set forth in Section
6.1(a).

 

“Purchaser’s Maximum Liability” shall have the meaning set forth in Part VI of
Appendix B.

 

“Rules” shall have the meaning set forth in Section 7.4(b).

 

“Securities Act” shall have the meaning set forth in Section 2.10.

 

“Seller” shall have the meaning set forth in the preamble to this Agreement.

 

“Seller Affiliate” shall have the meaning set forth in the recitals to this
Agreement.

 

“Seller Indemnified Party” shall have the meaning set forth in Section 6.1(b).

 

“Seller Receipt” shall have the meaning set forth in Part I of Appendix B.

 

“Seller’s Maximum Liability” shall have the meaning set forth in Part VI of
Appendix B.

 

“Separate Purchase Price” shall have the meaning set forth in Section 1.1, and
is more particularly described in Part I of Appendix B.

 

“Shareholder Agreement” means the Unanimous Shareholder Agreement in respect of
the General Partner, made as of the date of Closing, among the General Partner
and the Purchasers, substantially in the form attached hereto as Exhibit B.

 

“Subsidiary” means, with respect to any Person, any entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person.

 

“Subsidiary Transferor” shall have the meaning set forth in Part I of Appendix
C.

 

“Survival Period” shall have the meaning set forth in Part VI of Appendix B.

 

“Tax” or “Taxes” means, collectively all federal, provincial, territorial, state
and local or foreign income, estimated, payroll, withholding, excise, sales,
goods and services, harmonized, value-added, use, real and personal property,
corporation, use and occupancy, business and occupation, mercantile, transfer,
capital stock and franchise or other taxes, levies, duties, assessments,
reassessments or other charges of any kind whatsoever (including interest,
additions and penalties thereon) , whether disputed or not, and for greater
certainty includes Canada Pension Plan, Québec Pension Plan and employment
insurance premiums.

 

App. A-1 - 9

 

“Tax Returns” means any return, declaration, notice, form, report, claim for
refund or information return or statement relating to the determination,
assessment, collection or payment of Taxes or to the administration,
implementation or enforcement of or compliance with any legal requirement
pertaining to Taxes, including, for greater certainty, any schedule or
attachment thereto.

 

“Term Conversion” has the meaning set forth in Term Loan Agreement.

 

“Term Loan Agreement” shall have the meaning described in Part III of Appendix
D.

 

“Third Party Claim” shall have the meaning set forth in Section 6.5(a).

 

“Third Party Claim Notice” shall have the meaning set forth in Section 6.5(a).

 

“TSA” shall have the meaning set forth in Part I of Appendix D.

 

“Wind Project” shall have the meaning set forth in the recitals to this
Agreement, and is more particularly described in Part II of Appendix C of the
Agreement.

 

App. A-1 - 10

 

APPENDIX A-2: RULES OF CONSTRUCTION

 

1.The singular includes the plural and the plural includes the singular.

 

2.The word “or” is not exclusive.

 

3.A reference to a Governmental Rule includes any amendment or modification to
such Governmental Rule, and all regulations, rulings and other Governmental
Rules promulgated under such Governmental Rule.

 

4.A reference to a Person includes its successors and permitted assigns.

 

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

 

6.The words “include,” “includes” and “including” are not limiting and shall be
deemed to mean “include, without limitation”, “includes, without limitation” or
“including, without limitation”.

 

7.A reference to an Article, Section, Exhibit, Schedule or Appendix is to the
Article, Section, Exhibit, Schedule or Appendix of this Agreement unless
otherwise indicated.

 

8.Any reference to “this Agreement”, “hereof,” “herein” and “hereunder” and
words of similar import used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement.

 

9.Any reference to another agreement or document shall be construed as a
reference to that other agreement or document as the same may have been, or may
from time to time be, varied, amended, supplemented, substituted, novated,
assigned or otherwise transferred.

 

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

 

11.This Agreement is the result of negotiations among, and has been reviewed by,
Seller, Purchaser, and their respective counsel. Accordingly, this Agreement
shall be deemed to be the product of the parties thereto, and no ambiguity shall
be construed in favor of or against either Seller or Purchaser.

 

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

 

App. A-2 - 11

 

Appendix B: Transaction Terms and Conditions

 

Meikle Transaction

I.            Purchase Price

 

“Aggregate Purchase Price”:

 

$167,500,000

 

“Separate Purchase Price”:

PEGI: $85,425,000

 

PSP: $82,075,000

 

Currency:

Canadian Dollar, and all references to Dollar or $ or CAD$ shall refer to such
currency.

 

“Purchase Price Adjustment”:

 

The Purchase Price Adjustment at Closing shall be calculated to maintain the 25
year after tax IRR (assuming internal use of any tax benefits) of the Purchasers
based on the updated Financial Model delivered pursuant to Section 1.5(a)(iii),
which has been updated solely to reflect the following:

 

(i)    change in the timing of Closing and the amount and date of the initial
distribution to the Purchasers (considering any distributions received by the
Seller prior to Closing, and with the Seller leaving a reasonable amount of
working capital in the project to fund near-term payables);

 

(ii)   changes to reflect amendments to or new Material Contracts that have an
economic impact on the Operating Period (including the terms of any project debt
and tax equity financing and changes to the length of the term of any power
purchase agreement);

 

(iii)   changes in the amounts and timing of material acquired assets and
liabilities not associated with operating the business in the ordinary course
(including post-construction refunds, reserve amounts, outstanding debt
balances, capital expenditures, etc); and

 

(iv)   manifest errors.

 

Payment Mechanics and Payee Information:

 

Bank Name: HSBC Bank Canada

Bank Address: 885 West Georgia St.

Vancouver, BC V6C 3Gl

Canada

Bank No.: 016

Transit No. 10270

Swift Code: HKBCCATT

Account Name: Pattern Renewable Holdings Canada ULC

Account Type: Business Checking Account

Account Number : 270 -215956-001

Currency: Canadian Dollar 

 

App. B - 1

 

 

II.            Signing Date Deliverables

 

Seller’s Signing Date Deliverables:

 

Not applicable

 

Purchaser’s Signing Date Deliverables: Not applicable

III.            Closing

 

Closing Location:

 

At the offices of PEGI:

Pier 1, Bay 3

San Francisco, CA 94111

 

Expected Closing Date:

August 14, 2017

 

Outside Closing Date:

 

October 13, 2017

 

IV.            Closing Deliverables & Conditions Precedent to Closing

 

Additional Closing Deliverables of Seller:

In addition to the closing deliverables set forth in Section 1.5(a) of the
Agreement, Seller shall deliver, or cause to be delivered, to Purchasers the
additional closing deliverables set forth in Appendix B-1.

 

Additional Closing Deliverables of Purchasers:

In addition to the closing deliverables set forth in Section 1.5(b) of the
Agreement, Purchasers shall deliver, or cause to be delivered, to Seller the
additional closing deliverables set forth in Appendix B-2.

 

Additional Conditions Precedent to Each Party’s Obligations to Close:

In addition to the conditions precedent set forth in Section 5.1 of the
Agreement, the obligation of Purchasers and Seller to Close is subject to the
additional conditions precedent set forth in Appendix B-3.

 

V.            Additional Termination Rights

 

By Either Party:

 

Not applicable

By Purchasers:

 

Not applicable

By Seller:

 

Not applicable

VI.            Indemnification Provisions

 

Additional Seller Indemnity Obligations:

 

For a period from the Closing Date until the date that is three years after the
Closing Date, the Seller agrees to indemnify each Purchaser, and each
Purchaser’s successors and assigns, in respect of, and hold each of them
harmless from and against, any Losses suffered by such Purchaser in respect of
any actual reimbursement costs paid to BC Hydro pursuant to Section 4.4 of the
EPA that are in excess of the established $6 million reserve account, up to a
limit of $8,100,000. For greater certainty, the foregoing indemnity is not
subject to the limitations contained in

 

 

App. B - 2

 

 

 

Sections 6.2(a) or 6.2(b)(i).

 

Additional Purchasers Indemnity Obligations:

 

Not applicable

 

Survival Period:

 

Until the date that is 12 months after the Closing, except for (i) the
representations and warranties in Sections 2.1, 2.2, 2.3(a), 2.6 and 2.11 and
any claim for any breach of any representation or warranty involving actual
fraud or willful misrepresentation, which shall survive until the expiration of
the relevant statute of limitations, (ii) the representation and warranty in
Section 2.18 with respect to the Indebtedness of the Project Company, the
General Partner and their respective Subsidiaries, which shall survive until the
date that is the later of: (A) 6 months after the Closing; and (B) 3 months
following the completion of the Project Company's first annual audited financial
statements, and (iii) the representations and warranties in Section 2.9, which
shall survive until the date that is 60 days after the expiration of the period,
if any, during which an assessment, reassessment or other form of recognized
written demand assessing liability for Tax, interest or penalties under
applicable Law in respect of any taxation year to which such representations and
warranties relate could be issued to the Project Company or the General Partner,
as applicable (the “Survival Period”).

 

Limitation on Liability:

“Basket Amount”:

 

1% of the Aggregate Purchase Price

 

“Seller’s Maximum Liability”:

11% of the Aggregate Purchase Price

 

“Purchaser’s Maximum Liability”:

 

11% of the Aggregate Purchase Price

 

Additional Refund or Reimbursement Obligations:

 

By Purchasers or Purchaser Indemnified Party:

1.      None

 

By Seller or Seller Indemnified Party:

 

1.      None

VII.            Additional Transaction Terms

 

Required Governmental Approvals:

1.      By Closing, the Competition Act Approval shall have been obtained.

 

Persons with Knowledge:

Seller’s Persons with Knowledge: Michael Thompson, Amy Smolen, John Bodt, Daniel
Elkort and Andrew Collingwood

 

PEGI’s Persons with Knowledge: Esben Pederson, Michael Lyon and Dyann Blaine

 

PSP’s Persons with Knowledge: Guthrie Stewart and Patrick Samson

 

 

 

App. B - 3

 

 

Additional Assignment Rights:

 

Assignment Rights of Seller: None

 

Assignment Rights of Purchaser: None

 

Governing Law:

New York

 

Notice Information:

To Seller:

 

c/o Pattern Energy Group LP

Pier 1, Bay 3

San Francisco, CA 94111

Attention: General Counsel

Phone: 415-283-4000

Fax: 415-362-7900

 

To PEGI:

c/o Pattern Energy Group Inc.

Pier 1, Bay 3

San Francisco, CA 94111

Attention: General Counsel

Phone: 415-283-4000

Fax: 415-362-7900

To PSP:

 

c/o Public Sector Pension Investment Board
1250 René-Lévesque Blvd. West.
Suite 1400
Montréal, Québec
Canada H3B 5E9

 

Attention: Managing Director,

Infrastructure Investments
Facsimile: (514) 937-0403
E-mail:           vertuousenergy@investpsp.ca

and legalnotices@investpsp.ca

 

with a copy to:

 

Davies Ward Phillips & Vineberg LLP
1501, avenue McGill College
26th Floor
Montreal, Québec
Canada H3A 3N9

 

Attention:         Franziska Ruf
Facsimile:         (514) 841-6499
E-mail:              fruf@dwpv.com

 

 

 

App. B - 4

 

Appendix B-1:

 

1.To the extent available, unaudited consolidated financial statements of income
and cash flows and related balance sheet of the Project Company for the most
recent fiscal quarter of the Project Company ending prior to the Closing Date
(but in any event after the date of this Agreement), in each case prepared in
accordance with GAAP.

 

App. B -1 - 1

 

Appendix B-2:

 

Additional Closing Deliverables of purchasers

 

In the case of PEGI:

 

1.A counterpart signature page to the Shareholder Agreement, executed by the
General Partner and PCFC.

 

2.A counterpart signature page to the Amended and Restated Limited Partnership
Agreement, executed by the General Partner and PCFC.

 

In the case of PSP:

 

1.A counterpart signature page to the Shareholder Agreement, executed by PSP.

 

2.A counterpart signature page to the Amended and Restated Limited Partnership
Agreement, executed by PSP.

 

App. B - 2 - 2

 

Appendix B-3:

 

Additional Conditions Precedent to

Each Party’s Obligations to Close

 

 

1.Receipt of all necessary Governmental Approvals set forth on Part VII of
Appendix B.

 

App. B - 3 - 3

 

 Appendix C: Acquired Interests; Ownership Structure;

 

and Wind Project Information

 

Meikle Transaction

 

I.            Acquired Interests & Ownership Structure

 

Project Company:

 

Meikle Wind Energy Limited Partnership Purchasers:

PSP and Pattern Canada Finance Company ULC (“PCFC”)

 

Acquired Interests:

 

PEGI (indirectly acquired by PCFC):

 

50.99% limited partner interest in the Project Company

 

70% of the issued and outstanding shares of the General Partner (which owns a
0.02% general partner interest in the Project Company)

 

PSP:

 

48.99% limited partner interest in the Project Company

 

30% of the issued and outstanding shares of the General Partner (which owns a
0.02% general partner interest in the Project Company)

 

“Subsidiary Transferor(s)”:

PRHC Holdings LP

 

Direct or Indirect Co-Owners of Project Company:

Immediately prior to the Closing:

 

1.      PRHC Holdings LP will hold (a) a 99.98% limited partner interest in
Pattern Meikle LP Holdings LP and (b) 100% of the issued and outstanding shares
in the capital of Pattern Meikle GP Holdings Inc.;

 

2.      Pattern Meikle GP Holdings Inc. will hold (a) 100% of the issued and
outstanding shares in the capital of the General Partner and (b) 0.02% general
partner interest in Pattern Meikle LP Holdings LP;

 

3.      The General Partner will hold a 0.02% general partnership interest in
the Project Company; and

 

4.      Pattern Meikle LP Holdings LP will hold a 99.98% limited partnership
interest in the Project Company.

 

At Closing:

 

1.      Pattern Meikle LP Holdings LP is dissolved, in accordance with the terms
of its limited partnership agreement, and its assets will be transferred as
follows:

 

 

 

App. C - 1

 

 

 

(a)    0.02% of a 99.98% limited partnership interest in the Project Company
(the “GP Interest”) will be transferred to Pattern Meikle GP Holdings Inc.; and

 

(b)   99.98% of a 99.98% limited partnership interest in the Project Company
will be transferred to PRHC Holdings LP.

 

2.      Pattern Meikle GP Holdings Inc. will then transfer the GP Interest to
PRHC Holdings LP, such that PRHC Holdings LP will own a 99.98% limited
partnership interest in the Project Company.

 

3.      Pattern Meikle GP Holdings Inc. will be dissolved and its assets will be
distributed to its sole shareholder PRHC Holdings LP, such that PRHC Holdings LP
will own 100% of the shares in the capital of the General Partner.

 

4.      PRHC Holdings LP will then:

 

(a)    sell to PEGI (indirectly through PCFC) a 50.99% limited partnership
interest in the Project Company and 70% of the shares in the capital of the
General Partner; and

 

(b)   sell to PSP a 48.99% limited partnership interest in the Project Company
and 30% of the shares in the capital of the General Partner.

 

Consequently, immediately following the Closing:

 

1.      PEGI will indirectly hold a 50.99% limited partnership interest in the
Project Company;

 

2.      PEGI will hold 70% of the shares in the capital of the General Partner;

 

3.      PSP will indirectly hold a 48.99% limited partnership interest in the
Project Company; and

 

4.      PSP will hold 30% of the shares in the capital of the General Partner.

 

II.            Wind Project Information

 

Wind Project:

 

Expected nameplate capacity: 178.8 MW

 

Location: Peace River Regional District of the Province of British Columbia

 

Turbine type and manufacturer: General Electric Canada

 

Number of turbines: 61

 

Commercial Operation Date (or Expected

 

January 31, 2017

 

 

App. C - 2

 

 

Commercial Operation Date) of Wind Project:

 

 

Permits & Governmental Approvals:

 

1.     BC Hydro Interconnection System Impact Study dated November 2015.

 

2.     BC Hydro Interconnection Facilities Study and Project Plan dated March
25, 2015, as amended by an amendment dated March 3, 2016.

 

3.     EAO Environmental Assessment Certificate #E14-01, issued by the Minister
of Environment and Minister of Energy and Mines and Minister response for Core
review, dated June 24, 2014, as amended by Amendment #1 to Certificate E14-01,
dated January 15, 2015.

 

4.     Land Use Proposal Approval from NAV Canada dated June 23, 2015.

 

5.    Transport Canada Aeronautical Assessment Form for Obstruction Marking and
Lighting from Transport Canada, dated February 24, 2015.

 

6.     Occupant License to Cut L49747, issued by the British Columbia Ministry
of Forests, Lands and National Resource Operations, dated October 8, 2013, as
amended by Amendment Number 1, dated October 14, 2014.

 

7.    Authorization for Vegetation Clearing under Section 52 of the Forest Act,
British Columbia Ministry of Forests, Land and National Resource Operations and
Ministry of Transportation and Infrastructure, dated March 27, 2015.

 

8.    License for the use of explosives under Section 7 of the Explosives Act,
Government of Canada, Department of Natural Resources.

 

9.    Section 9 Notifications re Culverts (#145979) and Installation of
Underground Collector Line Cables (#156862-167043) under the Water Act,
submitted to the British Columbia Ministry of Forests, Lands and National
Resource Operations and dated August 27, 2014 and February 17, 2015.

 

10.   Inspection Permit for Archeological Investigation under the Heritage
Conservation Act, issued by the British Columbia Ministry of Forests, Lands and
National Resource Operations (as required by applicable Governmental Authority).

 

App. C - 3

 

 

Real Property Interests:

 

1.    Multi-tenure agreement referenced as File No. 8015444 (Disposition No.
893356) dated September 30, 2014, and as amended on May 19, 2015 and June 19,
2015, between the Project Company and the Crown (the “Multi-Tenure Agreement”)

 

2.     License of occupation (Licence No. 815640) dated June 1, 2015 between the
Project Company and the Crown.

 

3.     Crossing agreement (File X-208.5) dated April 14, 2015 between the
Project Company and CQ Energy Canada Resources Partnership, by its manager,
Direct Energy Marketing Limited, operating as Centrica Energy (“Centrica
Energy”).

 

4.     Crossing agreement (File X-208.6) dated April 14, 2015 between the
Project Company and Centrica Energy.

 

5.     Reciprocal master road use agreement dated April 14, 2015 between the
Project Company and Centrica Energy.

 

6.     Mutual existence agreement dated October 15, 2014 between the Project
Company and Doug Connors.

 

Legal Description as set out in the Multi-Tenure Agreement: That parcel or tract
of unsurveyed Crown land in the vicinity of Meikle Creek (within Block A,
93-P-05 and Block D, 93-P-06), Peace River District containing 1,382.4 hectares
more or less and shown on the sketch attached to the Multi-Tenure Agreement.

 

App. C - 4

 

Appendix D: Documents & Key Counterparties

 

I.            Material Project Agreements

 

Certain documents referenced in the Term Loan Agreement:

1.       A balance of plant agreement dated as of June 29, 2015 between Borea
Construction ULC and the Project Company.

 

2.      A guarantee agreement dated as of June 29, 2015 by Blattner Holding
Company and Pomerleau, Inc., in favour of the Project Company.

 

3.      A contract for the sale of power generation equipment and related
services agreement dated as of June 29, 2015 between the General Electric
Company and the Project Company (the “TSA”).

 

4.       A full service agreement dated as of June 29, 2015 between the General
Electric Company and the Project Company.

 

5.       A guarantee provided by the General Electric Company.

 

6.       A letter of credit issued to the Project Company and the Administrative
Agent (as defined in the Term Loan Agreement) as co-beneficiaries, in an amount
equal to at least 10% of the amounts invoiced and paid to General Electric
Canada by the Project Company pursuant to the TSA and issued to secure the
Project Company’s Builders’ Lien Act (British Columbia) holdback requirements

 

7.       The Multi-Tenure Agreement (as defined in Part II of Appendix C).

 

8.       A management, operation and maintenance services agreement dated as of
June 29, 2015 between the Project Company and Pattern Operators Canada ULC with
respect to the Wind Project.

 

9.       A project administration agreement between the Project Company and
Pattern Operators Canada ULC dated as of June 29, 2015.

 

10.     The Project Agreement (as defined in Part IV below)

 

11.    An electricity purchase agreement dated on April 22, 2010 between BC
Hydro and the Project Company, as transferred from Finavera Renewables Inc. to
the Project Company pursuant to the Asset Purchase Agreement (as defined in the
Term Loan Agreement), as amended on March 14, 2014 between BC Hydro and the
Project Company (the “EPA”).

 

12.     A mutual benefit agreement between the Project Company and Saulteau
First Nation dated September 18, 2014.

 

13.     A community benefits agreement between the Project Company and

 

 

App. D

 

 

 

   McLeod Lake Indian Band dated January 16, 2014.

 

14.    A benefits agreement between Finavera Wind Energy Inc., the Project
Company and Halfway River First Nation dated October 14, 2011, as amended by an
amending agreement between the Project Company and Halfway River First Nation
dated April 10, 2015.

 

15.    A benefits agreement between Finavera Wind Energy Inc., the Project
Company and West Moberly First Nations dated December 7, 2012, as amended by an
amending agreement between the Project Company and West Moberly First Nations
dated June 25, 2015.

 

16.     A memorandum of understanding between Finavera Wind Energy Inc., the
Project Company and Doig River First Nation, dated January 14, 2012, as amended
by an amending agreement between the Project Company and Doig River First Nation
dated May 11, 2015.

 

17.     A “Standard Generator Interconnection Agreement” entered into between
the Project Company, as transferred from Finavera Renewables Inc. to the Project
Company pursuant to the Asset Purchase Agreement (as defined in the Term Loan
Agreement) and BC Hydro on June 28, 2011, as amended on April 27, 2015 and July
1, 2016 (the “Interconnection Agreement”).

 

18.    A purchase agreement for the main power transformers dated as of April
20, 2016 between the Project Company and Hyosung Corporation.

Certain other documents:

 

Nil.

 

II.            Reports, Other .Deliverables and Consultants

 

Environmental Consultant:

 

TerraWest Environmental Inc.

Environmental Reports:

 

Phase 1 Environmental Site Assessment dated March 31, 2015

Independent Engineer:

 

GL Garrad Hassan Canada, Inc.

Independent Engineer’s Report:

 

Independent Engineer Closing Report dated June 26, 2015, as supplemented by
Construction Supplement dated April 21, 2017

Title Company:

 

Not applicable

Title Policy:

 

Not applicable

Wind Consultant:

 

GL Garrad Hassan Canada, Inc.

Wind Energy and Resource Assessment Report:

Energy Production Assessment of the Proposed Meikle Wind Farm dated June 5, 2015

 

App. D

 

 

Insurance Consultant: Moore-McNeil, LLC

Insurance Consultant’s Report:

 

Insurance Consultant’s Report dated June 26, 2015 Insurance Policies:

General Liability CAD (Part of Master CAD Program), Policy Number CGL324204

 

Umbrella Liability CAD (Part of Master CAD Program), Policy Number WXBC324811

 

Property & Business Interruption for Canada Ops Wind & MET Tower, Policy Number
PER 16 WPO0067

 

Pollution Liability Policy for Canada, Policy Number 0310-1573

 

An insurers reservation of right was submitted in the ordinary course in
connection with a construction period contractor claim (Boreo Construction, date
of loss 6/26/2-16, total estimated loss $2,910,259)

 

Local Content Consultant:

 

Not Applicable

Local Content Report:

 

Not Applicable

Transmission Consultant:

 

Not Applicable

Transmission Consultant’s Report:

 

Not Applicable Cost Segregation Consultant: Not Applicable

Cost Segregation Report:

 

Not Applicable

Accountant:

 

Not Applicable

III.            Financing Arrangements

Term Loan Agreement:

 

Credit Agreement dated June 29, 2015 between Meikle Wind Energy Limited
Partnership, as borrower, Meikle Wind Energy Corp., as guarantor, Bank of
Montreal, as administrative agent, Bank of Montreal, as collateral agent and
account bank, and Bank of Montreal, Crédit Agricole Corporate and Investment
Bank, KeyBank National Association, National Bank of Canada, Royal Bank of
Canada, Société Générale, Sumitomo Mitsui Banking Corporation of Canada, as
lenders (as amended in accordance with this Agreement, the “Term Loan
Agreement”)

 

Other Financing Arrangements:

 

1.      The documents listed in clauses (a) through (n) of the definition of
“Loan Documents” in the Term Loan Agreement, in each case without any amendments
thereto.

 

2.      The documents listed in clauses (a) through (g) of Section 10.01(1) of
the Term Loan Agreement.

 

 

 

App. D

 

 

 

3.     1992 ISDA Master Agreement (Multicurrency–Cross Border) and related
Schedule between Bank of Montreal and the General Partner, in its capacity as
general partner of the Borrower, dated as of June 29, 2015.

 

4.    1992 ISDA Master Agreement (Multicurrency–Cross Border) and related
Schedule between Crédit Agricole Corporate and Investment Bank and the General
Partner, in its capacity as general partner of the Borrower, dated as of June
29, 2015.

 

5.     1992 ISDA Master Agreement (Multicurrency–Cross Border) and related
Schedule between KeyBank National Association and the General Partner, in its
capacity as general partner of the Borrower, dated as of June 29, 2015.

 

6.     1992 ISDA Master Agreement (Multicurrency–Cross Border) and related
Schedule between National Bank of Canada and the General Partner, in its
capacity as general partner of the Borrower, dated as of June 29, 2015.

 

7.     1992 ISDA Master Agreement (Multicurrency–Cross Border) and related
Schedule between Royal Bank of Canada and the General Partner, in its capacity
as general partner of the Borrower, dated as of June 29, 2015.

 

8.     1992 ISDA Master Agreement (Multicurrency–Cross Border) and related
Schedule between Société Générale and the General Partner, in its capacity as
general partner of the Borrower, dated as of June 29, 2015.

 

9.     1992 ISDA Master Agreement (Multicurrency–Cross Border) and related
Schedule between Sumitomo Mitsui Banking Corporation, New York Branch and the
General Partner, in its capacity as general partner of the Borrower, dated as of
June 29, 2015.

 

Indirect Financing Arrangements:

 

Not applicable.

 

Amendments to any document in this Part III of Appendix D

 

An Amendment to the Term Loan Agreement is in the process of being drafted.

IV.            Equity and Co-Ownership Arrangements & Key Counterparties

 

Equity Capital Contribution Agreement (“ECCA”):

 

Not Applicable

Tax Equity Investors:

 

Not Applicable

 

 

App. D

 

 

Project Agreement:

 

Amended and Restated Limited Partnership Agreement of Meikle Wind Energy Limited
Partnership dated April 15, 2014 (as amended in accordance with its terms, and
together with any counterparts and acknowledgements related thereto, the
“Project Agreement”)

 

V.            First Nations Matters

 

Agreements with First Nations:

1.      A mutual benefit agreement between the Project Company and Saulteau
First Nation dated September 18, 2014.

 

2.       A community benefits agreement between the Project Company and McLeod
Lake Indian Band dated January 16, 2014.

 

3.       A benefits agreement between Finavera Wind Energy Inc., the Project
Company and Halfway River First Nation dated October 14, 2011, as amended by an
amending agreement between the Project Company and Halfway River First Nation
dated April 10, 2015.

 

4.      A benefits agreement between Finavera Wind Energy Inc., the Project
Company and West Moberly First Nations dated December 7, 2012, as amended by an
amending agreement between the Project Company and West Moberly First Nations
dated June 25, 2015.

 

5.       A memorandum of understanding between Finavera Wind Energy Inc., the
Project Company and Doig River First Nation, dated January 14, 2012, as amended
by an amending agreement between the Project Company and Doig River First Nation
dated May 11, 2015.

 

First Nations with which the Project Company or its Subsidiaries has had active
consultation in developing the Wind Project:

 

Salteau First Nation

McLeod Lake Indian Band

Halfway River First Nation
West Morbley First Nations
Doig River First Nation

 

First Nations with which the Project Company or its Subsidiaries has had limited
consultation in developing the Wind Project:

The Project Company consulted in a limited manner with the Kelly Lake Cree
Nation, to a similar extent to which it has consulted with other third party
stakeholders. The Project Company was had no duty to consult with the Kelly Lake
Cree Nation by any Governmental Authority. There are no agreements between the
Kelly Lake Cree Nation and Project Company and Project Company has not agreed to
provide any future benefits to the Kelly Lake Cree Nation.

 

App. D

 

Appendix E:

 

Affiliate Transactions

 

None.

 

 

 

 

 

App. E

 

Schedule 2.5

 

Seller Consents and Approvals

 

1.Consent from BC Hydro under the EPA (as defined in Part I of Appendix D).

 

2.Notice to the Administrative Agent (as defined in the Term Loan Agreement)
regarding Permitted Transfer (as defined in the Term Loan Agreement) of the Term
Loan Agreement.

 

Schedule 2.5

 

Schedule 3.5

 

Purchaser Consents and Approvals

 

1.Competition Act Approval.

 

Schedule 3.5

 

Schedule 4.2(f)

 

Tax Allocation

 

 

Acquired Interests   Allocation % Allocation $ 99.98% Limited Partnership
Interest in Meikle Wind Energy Limited Partnership 99.98% $167,466,500        
0.02% General Partnership Interest in Meikle Wind Energy Limited Partnership
0.02% $33,500

 

 

 

Schedule 6.4(b)

 

Schedule  6.4(b)

 

Control of Defense of Third Party Claims

 

Not applicable.

 

Schedule 6.4(b)