Exhibit 10.5

SUPPORT AGREEMENT

This Support Agreement is dated November 9, 2006 among Environmental Power
Corporation (“EPC”), Microgy Holdings LLC (“Holdings”), MST Production Ltd.
(“MST”), Mission Biogas, L.L.C. (“Mission”), Hereford Biogas, L.L.C.
(“Hereford”), Rio Leche Estates, L.L.C. (“Rio Leche”) (each, a “Project Company”
and, together, the “Project Companies”) and Wells Fargo Bank, National
Association, as trustee (the “Trustee”) under the Trust Indenture dated as of
October 1, 2006 (the “Indenture”) with Gulf Coast Industrial Development
Authority (the “Issuer”).

WHEREAS, Holdings is an indirect, wholly-owned subsidiary of EPC, and Holdings
owns all of ownership interests in the Project Companies; and

WHEREAS, each of the Project Companies is engaged in the construction,
development and operation of certain facilities to be constructed for the
recycling of dairy cow manure into pipeline quality renewable natural gas (each
a “Facility” and, together, the “Facilities”); and

WHEREAS, Holdings is the obligor with respect to $60,000,000 Gulf Coast
Industrial Development Authority Environmental Facilities Revenue Bonds (Microgy
Holdings Project) Series 2006 (the “Bonds”) issued under the Indenture; and

WHEREAS, the proceeds of the Bonds are held by the Trustee to be applied to the
costs of construction of the Facilities; and

WHEREAS, to induce the purchasers of the Bonds and all who may become holders of
the Bonds to purchase and hold the Bonds, EPC has agreed to enter into this
Agreement;

NOW, THEREFORE, in consideration of the agreements contained herein and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:

1. Funding.

(a) EPC will advance funds, as equity contributions or as subordinated debt, to
Holdings from time to time as may be required to fully pay all costs of
construction of each Facility, as well as to fund operating costs of each
Facility incurred prior to the Date of Completion of such Facility, to the
extent that funds are not available therefor under the Construction Fund
established pursuant to the Indenture or otherwise available from Holdings or
from the respective Project Company.

(b) Holdings agrees to advance funds to the respective Project Company as equity
contributions at the times and in the amounts necessary to fully pay all costs
of construction of each Facility, as well as to fund operating costs of each
Facility incurred prior to the Date of Completion of such Facility, to the
extent such costs are not paid by Holdings.

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2. Determination of Date of Completion. The Date of Completion of each Facility
will be established by a certificate of R.W. Beck as independent engineer, or
such other firm as may at the time be acting as independent engineer under the
Indenture, delivered at the request of Holdings to the Trustee as the
“Completion Certificate” delivered under the Indenture accompanied by the
certifications delivered under the Drawing Agreement dated November 9, 2006
among the Trustee, Holdings and R.W. Beck (the “Drawing Agreement”).

3. Subordination of Payments. The parties hereto agree that to the extent funds
advanced by EPC pursuant to paragraph (a) hereof are evidenced by debt
instruments (“EPC Loans”), the repayment of all amounts due to EPC in respect of
such EPC Loans (collectively, the “Subordinated Debt”) are and will be
subordinate, to the extent and in the manner hereinafter set forth, to payments
by Holdings under the Loan Agreement between Holdings and the Issuer dated as of
October 1, 2006 related to the Bonds and to payments by Holdings under the
Guarantee Agreement dated as of October 1, 2006 among Holdings, the Subsidiary
Guarantors named therein and Wells Fargo Bank, National Association, as
Collateral Trustee (the “Guarantee”). Payments of Subordinated Debt may be made
only as provided in the Guarantee.

4. In Furtherance of Subordination. EPC agrees that all payments or
distributions upon or with respect to the Subordinated Debt which are received
by EPC contrary to the provisions of this Agreement and the Guarantee shall be
received in trust for the benefit of the holders of the Secured Obligations
under the Guarantee (as defined therein), shall be segregated from other funds
and property held by EPC and shall be forthwith paid over to the Collateral
Trustee for application in accordance with the Collateral Trust Indenture and
the Guarantee.

5. Rights of Subrogation. EPC agrees that no payment or distribution pursuant to
the provisions of this Agreement shall entitle EPC to exercise any right of
subrogation in respect thereof until the Secured Obligations (as defined in the
Guarantee) shall have been paid in full.

6. Agreement in Respect of Subordinated Debt. EPC will not sell, assign, pledge,
encumber or otherwise dispose of any of the Subordinated Debt unless in each
case the assignee acknowledges in writing that such assigned Subordinated Debt
is subject to the provisions of this Agreement.

7. Redemption of Equity. The parties agree that, to the extent that amounts
contributed by Holdings to the Project Companies both as an initial equity
contribution and under paragraph 1(b) hereof exceeds 20% of the costs of all of
the Facilities as completed (such costs to be determined on the same basis as
the budgeted costs in the Drawing Agreement (the “Excess Equity”), such Excess
Equity may be repaid by the Project Companies to Holdings and by Holdings to
EPC, subject only to the limitations of the Guarantee.

8. Further Assurances. Each of the parties will, at their own expense and at any
time and from time to time, promptly execute and deliver all further instruments
and documents, and take all further action, that may be reasonably necessary or
desirable or that the Trustee may reasonably request in order the protect any
right or interest granted or purported to be granted hereby or to enable the
Trustee to exercise and enforce its rights and remedies hereunder.

 

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9. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of Texas.

10. Notices. All notices, requests and other communications to any party under
this Agreement shall be mailed, sent or delivered at its address specified below
or to such other address as it may hereafter designate by notice to the other
parties hereto.

 

Environmental Power Corporation

4 Cate Street

Fourth Floor

Portsmouth, NH 03801

 

Microgy Holdings, LLC

4 Cate Street

Fourth Floor

Portsmouth, NH 03801

MST Production Ltd.

c/o Microgy Holdings, LLC

4 Cate Street

Portsmouth, NH 03801

 

Mission Biogas, L.L.C.

c/o Microgy Holdings, LLC

4 Cate Street

Portsmouth, NH 03801

Hereford Biogas, L.L.C

c/o Microgy Holdings, LLC

4 Cate Street

Portsmouth, NH 03801

 

Rio Leche Estates, L.L.C.

c/o Microgy Holdings, LLC

4 Cate Street

Portsmouth, NH 03801

11. Severability. Any provision of this Agreement that shall be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereto waive any provision of law that renders any provision hereof prohibited
or unenforceable in any respect.

12. Amendment. Neither this Agreement nor any of the terms hereof may be
amended, changed or modified except by an instrument in writing signed by each
of the parties hereto; provided, however, that no amendment, change or
modification shall be made to this Agreement without the prior consent of
Majority Holders (as defined in the Indenture).

13. Trustee as Beneficiary. The parties agree that the Trustee is an express
beneficiary of this Agreement and, during the continuation of a Default under
the Indenture, the Trustee shall have the right to demand and receive payments
hereunder for application in accordance with this Agreement.

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Support
Agreement as of the date first written above.

 

ENVIRONMENTAL POWER CORPORATION By:  

/s/ John F. O’Neill

Title:   Chief Financial Officer MICROGY HOLDINGS LLC By:  

/s/ John F. O’Neill

Title:   Vice President and Treasurer MST PRODUCTION LTD. By:  

/s/ John F. O’Neill

Title:   Vice President and Treasurer MISSION BIOGAS, L.L.C. By:  

/s/ John F. O’Neill

Title:   Vice President and Treasurer HEREFORD BIOGAS, L.L.C. By:  

/s/ John F. O’Neill

Title:   Vice President and Treasurer RIO LECHE ESTATES, L.L.C. By:  

/s/ John F. O’Neill

Title:   Vice President and Treasurer WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Trustee By:  

/s/ Marvin Kierstead

Title:   Vice President

 

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