BRIDGE LOAN AGREEMENT

BETWEEN

WHEREAS the Lender has agreed to make available to the Borrower the Bridge Loan
in the aggregate amounts set forth in Schedule A, at the times set forth in such
Schedule, and on the terms and conditions set forth herein; and

WHEREAS as security for such Bridge Loan, the Corporations have agreed to grant
certain security and provide certain guarantees in favour of the Lender, the
whole as set forth herein and in the Security Documents.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained
in this Agreement and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the Parties hereto agree as
follows:

1.

INTERPRETATIONS

1.1

Definitions

In this Agreement, unless something in the subject matter or context is
inconsistent therewith:

“Agreement” means this Bridge Loan Agreement, including all schedules hereto, as
same may be amended, supplemented, restated or replaced from time to time;

“Applicable Legislation” means all applicable federal, provincial, municipal,
foreign or other laws, statutes, rules, regulations, by-laws, orders,
judgements, decisions, policies, directives, standards, guidelines,
requirements, injunctions, awards or decrees which are applicable to the
Corporations, their respective property, activities or operations, including the
Environmental Legislation and laws relating to corruption and bribery, all as
the same shall be in effect from time to time;

“Assets” means all of the assets, corporeal and incorporeal, tangible and
intangible, of a Party, of every kind and description and wherever situated;

“Borrower GSA” means the general security agreement between the Borrower and
Lender dated on or about the date hereof;

“Borrower Assignment of Agreements” means the general assignment of agreements
made by the Borrower in favour of the Lender dated on or about the date hereof;

“Bridge Loan” means the amounts loaned to the Borrower in accordance with this
Agreement, as set forth in Schedule A;

“Business Day” means a day other than a Saturday, Sunday or statutory holiday in
the Province of Ontario ;

“Closing” means the execution and delivery of the Definitive Agreements;

“Closing Date” means the date upon which the Closing occurs or such other date
as may be mutually agreed to by the Lender and the Borrower;

  “Definitive Agreements” means those agreements and documents which shall
evidence the Investment, to be executed at Closing;

“Deposit” means the advance of funds to HONI by the Lender as set forth in
Section (i);

“Development Payment” means the advance of funds to Borrower by the Lender as
set forth in Section (ii);

“Environmental Legislation” means all applicable federal, provincial, municipal,
regional or foreign laws, statutes, rules, regulations, by-laws, judgements,
decisions, decrees, guidelines, directives, standards, requirements,
injunctions, awards, orders, policies, permits, notices, approvals, licences,
certificates or other authorisations of any governmental authority in effect
relating to the environment or to occupational health and safety;

“Event of Default” has the meaning ascribed thereto in section ;

“FIT Contract” means the Feed-in Tariff Contract;

“GAAP” means generally accepted accounting principles accepted in Canada as set
out in the Handbook of the Canadian Institute of Chartered Accountants, at the
relevant time, or IFRS, as applicable, in each case consistently applied;

“Governmental Body” means any government, parliament, legislature, regulatory
authority, agency, commission, decision-making authority, board or court or
other law, rule, or regulation-making entity having or purporting to have
jurisdiction on behalf of any nation or state or province or other subdivision
thereof including any municipality or district;

 “HONI” means Hydro One Networks Inc.;

“IFRS” means the International Financing Reporting Standards as issued by the
International Accounting Standard Board;

  “Loan Amounts” has the meaning ascribed thereto in section ;

“Maturity Date” means the Closing Date;

“Option Agreements” means certain option agreements entered into by the Borrower
with the parties and with respect to those properties identified in Schedule “B”
attached hereto;

“Parties” means collectively the Lender and the Corporations;

“Person” means any individual, legal person with or without share capital
(regardless of its jurisdiction of incorporation), partnership, limited
partnership, joint venture, association, trust, unincorporated organisation,
trustee, executor, administrator or other legal personal representative,
regulatory body or agency, government or governmental agency, authority or
entity however designated or constituted;

“Project” means the development, construction, finance, ownership of the Wind
Farm xxx wind energy project in accordance with the FIT Contract;

“Project Agreements” means any material agreement or document entered into by
the Borrower in connection with the Project and includes the FIT Contract;

“Security Documents” means collectively the GSA, Borrower Assignment of
Agreements, ZEP Guarantee, ZEP SPA and WWPC Guarantee;

“Security Interest” means any hypothec, prior claim, mortgage, pledge,
assignment, charge, security, lease intended as security, trust intended as
security, reservation of or right to redeem title to property, seizure,
attachment, garnishment or other similar encumbrance and includes any
contractual restriction which, if contravened, may give rise to a Security
Interest;

“Subsidiary” means any legal entity presently or in the future Controlled by a
Corporation;

“Taxes” means any tax, duty, fee, royalty, levy, impost, assessment, deduction,
charge or withholding, any installments and all liabilities with respect thereto
including any penalty and interest payable with respect thereto, levied, imposed
or assessed from time to time by any Governmental Body, domestic or foreign, and
shall include all stamp, documentary, property, added value, severance, gross
income, gross receipt, gross profits, production, commodity, occupation, excise,
sales including goods and services, franchise, income, capital, payroll,
unemployment insurance, Canada, United States or provincial or state pension
plan payments, employer health, workers' compensation payments, custom, land
transfer and other taxes and assessments of any kind whatsoever imposed on or
assessed with respect to or measured by or charged against or attributable to
any Person, together with any interest, penalties, additions to tax or
additional amounts imposed by any Governmental Body;

“WWPC Guarantee” means the guarantee from WWPC in favour of the Lender dated on
or about the date hereof;

“ZEP Guarantee” means the guarantee from ZEP in favour of the Lender dated on or
about the date hereof; and

“ZEP SPA” means the securities pledge agreement between ZEP and the Lender dated
on or about the date hereof regarding the pledge by ZEP of all of its securities
in the capital of

1.2

Recitals and Schedules

The recitals and the Schedules herein form an integral part of this Agreement.

1.3

Headings

The inclusion of headings in this Agreement is for convenience of reference only
and shall not affect its construction or interpretation.

1.4

Gender and Number

In this Agreement, unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing gender include
all genders.

1.5

Time Periods

Unless otherwise specified, time periods within or following which any payment
is to be made or act is to be done shall be calculated by excluding the day on
which the period commences and including the day on which the period ends and by
extending the period to the next Business Day if the last day of the period is
not a Business Day.

1.6

Including

Where the word “including” or “includes” is used in this Agreement, it means
“including (or includes) without limitation”.

1.7

Currency

Except where otherwise expressly provided, all amounts in this Agreement are
stated and shall be paid in Canadian Dollars.

1.8

Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and
a declaration of invalidity or unenforceability of any such provision or part
thereof by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof.

1.9

Entire Agreement

This Agreement constitutes the entire agreement between the Parties pertaining
to the subject matter hereof. This Agreement supersedes and replaces all prior
contracts, agreements, commitments and undertakings relating to the subject
matter hereof, including any term sheet accepted and agreed to by the
Corporations and the Lender relating to the matters contemplated herein.

1.10

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein. Any action,
suit or proceeding arising out of or relating to this Agreement shall be brought
before a court of the City of Toronto and each of the Parties hereby irrevocably
submits to the non-exclusive jurisdiction of such courts.

2.

BRIDGE LOAN

2.1

Bridge Loan

In consideration of the covenants, representations, warranties and undertakings
set out herein, the Lender hereby agrees to make available to the Borrower on
the dates indicated in subparagraphs (i) and (ii) below the amounts indicated in
Schedule “A” hereto in respect of the Deposit and Development Payment. Such
obligation shall be fully satisfied, at the Lender’s discretion, by:

(i)

in respect of the Deposit, the delivery by the Lender to HONI, a letter of
credit satisfying the obligation of the Borrower to make a deposit in accordance
with the Agreement entered into by and between the Borrower and HONI; and

(ii)

in respect of the Development Payment, the delivery to Borrower concurrently
with the signature of this Agreement and against acknowledgement of receipt by
Borrower of the Development Payment amount by way of certified cheque or wire
transfer;

the whole subject to the terms and conditions of this Agreement and all such
Deposit and Development Payment amounts being hereinafter sometimes collectively
referred to as the “Loan Amounts”.

i.1

Interest and Fees

The Loan Amounts shall bear interest..

i.2

Term

The Bridge Loan shall be due and payable on the earlier of (a) the Maturity Date
and (b) the occurrence of an Event of Default, subject to the terms of this
Agreement, and shall not be pre-payable. Repayment of the Bridge Loan on the
Closing Date shall take place in accordance with the provisions of the term
sheet prepared in respect of the subscription by Lender for convertible
debentures, regardless of whether or not such term sheet has been executed by
the date hereof.

i.3

Place and Manner of Payment

All repayments of principal by the Borrower under this Agreement will be made by
the Borrower at the Lender’s address as specified in Article , or at such other
place as may be designated, from time to time, in writing by the Lender to the
Borrower in accordance with Article , no later than 5:00 p.m. (Toronto time) on
a Business Day on the due date therefor. Any payments received by the Lender
after 5:00 p.m. on a Business Day shall be deemed to have been received on the
next Business Day unless the Lender otherwise agrees in writing. Where payments
are to be made in cash, they shall be made in immediately available funds. Where
the Deposit has been effected by issuance of a letter of credit, return of such
letter of credit, undrawn in whole, to Lender shall be deemed to be repayment in
full of the Deposit.

i.4

Judgement Currency

If, for the purpose of obtaining judgement in any court in any jurisdiction with
respect to this Agreement, it is necessary to convert into the currency of such
jurisdiction (the “Judgement Currency”) any amount due under this Agreement in
any currency other than the Judgement Currency, then conversion shall be made at
the rate of exchange prevailing on the Business Day before the day on which
judgement is given. For this purpose “rate of exchange” means the rate at which
the Lender would, on the relevant date, be prepared to sell a similar amount of
such currency in the Toronto foreign exchange market, against the Judgement
Currency, in accordance with normal banking procedures.

In the event that there is a change in the rate of exchange prevailing between
the Business Day before the day on which judgement is given and the date of
payment of the amount due, the Borrower will, on the date of payment, pay such
additional amounts as may be necessary to ensure that the amount paid on such
date is the amount in the Judgement Currency which, when converted at the rate
of exchange prevailing on the date of payment, is the amount then due under this
Agreement in such other currency together with interest. Any additional amount
due from the Borrower under this section will be due as a separate debt and
shall not be affected by judgement being obtained for any other sums due under
or in respect of this Agreement.

i.5

Withholding Taxes

All repayment of principal, costs or fees made under this Agreement shall be
made free and clear of and without withholding or deduction for or on account of
any present or future tax, duty, levy, impost, assessment or other governmental
charge imposed or levied by or on behalf of any Governmental Authority in
Canada, the United States of America or any political subdivision thereof, or by
any authority or agency thereof or therein having power to tax (collectively,
the “Withholding Taxes”), unless the Borrower or a Corporation guaranteeing the
obligations of the Borrower is required to withhold or deduct Withholding Taxes
by Applicable Legislation or by the interpretation or administration thereof by
the relevant governmental authority.

If the Borrower or a Corporation guaranteeing the obligations of the Borrower is
required to withhold or deduct any amount for or on account of Withholding Taxes
from any payment made or deemed to be made under this Agreement, the Borrower or
such other Corporation will make such withholding or deduction and will remit
the full amount withheld or deducted to the relevant governmental authority as
and when required by Applicable Legislation. The Borrower or such other
Corporation will pay to the Lender such additional amounts under this section 
(the “Additional Amounts”) as may be necessary so that the net amount received
by the Lender after such withholding or deduction referred to in the preceding
sentence, if any, will not be less than the amount the Lender would have
received if such Withholding Taxes (including any Withholding Taxes applicable
to any Additional Amounts payable under this paragraph) had not been withheld or
deducted.

The Borrower and/or any Corporation guaranteeing the obligations of the Borrower
will indemnify and hold harmless the Lender, and upon written request reimburse
the Lender, for the amount of any Withholding Taxes (including any Withholding
Taxes applicable to any Additional Amounts payable under the preceding
paragraph) levied or imposed on and paid by the Lender as a result of payments
made or deemed to be made under this Agreement.

2.

EVENTS OF DEFAULT

2.1

Events of Default

The occurrence of any one or more of the following events shall constitute an
event of default (each an “Event of Default”):

2.1.1

Closing fails to occur on or prior toXXX, or such other date as may be mutually
agreed to by the Lender and the Borrower;

2.1.2

the Borrower fails to pay any amount which become due and payable hereunder, and
such failure continues for a period of five (5) Business Days following receipt
by the Borrower of written notice from the Lender requesting that the Borrower
remedy such breach; or

2.1.3

a Corporation is in breach of a covenant hereunder, and such failure continues
for a period of five (5) Business Days following receipt by such Corporation of
written notice from the Lender requesting that such Corporation remedy such
breach; or

2.1.4

proceedings are commenced for the dissolution, liquidation or winding up of a
Corporation, or for the suspension of the operations of a Corporation, unless
such proceedings are actively and diligently contested in good faith on a timely
basis and no judgment or order is rendered by a court of competent jurisdiction
against a Corporation in connection therewith; or

2.1.5

a Corporation becomes insolvent, makes an assignment in bankruptcy or makes any
other assignment for the benefit of its creditors, makes any proposal under the
Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act
(Canada) ), any bankruptcy or similar law of the United States, or any
comparable law, is adjudged bankrupt, files a petition or proposal to take
advantage of any act of insolvency, consents to or acquiesces in the appointment
of a trustee, receiver, receiver-manager, interim receiver, custodian,
sequestrator or other Person with similar powers of a Corporation or all or any
substantial portion of its assets, or files a petition or otherwise commences
any proceeding seeking any reorganization, arrangement, composition or
readjustment under any applicable bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting creditors’ rights, or consents to,
or acquiesces in the filing of such a petition; or

2.1.6

if a trustee, receiver, receiver-manager, interim receiver, custodian,
sequestrator or any other Person with similar powers is appointed of the
Corporation or of all or any substantial portion of its assets, a judgment or an
order is made by a court of competent jurisdiction restraining the ability of a
Corporation to deal with all or any substantial portion of its assets or a
judgment or order is made by a court of competent jurisdiction approving any
reorganization, arrangement, composition or readjustment under any applicable
bankruptcy, insolvency, moratorium, reorganization or other similar law
affecting creditors’ rights and such appointment, judgment or order is not
vacated, stayed or set aside within sixty (60) days of the date thereof;

2.1.7

any material representation or warranty contained hereunder is revealed to be
false or misleading at the time it was made in any material respect;

2.1.8

the security granted in favour of the Lender by any of the Corporations in
connection with this Agreement and the Security Documents is or becomes void,
ineffective, invalid, non-enforceable, not effective as against third parties,
or loses its priority, in whole or in part, or is not accepted by the Ontario
Power Authority (if required) by the date which is 60 days from the date hereof,
or such other date as the Lender may agree to;

2.1.9

if the Borrower breaches or defaults under any material term, condition,
provision, covenant, representation or warranty contained in the FIT Contract or
any other Project Agreement and such breach or default shall continue unremedied
for a period of time equal to the applicable cure period provided in the FIT
Contract or the Project Agreement (as applicable);

2.1.10

if the Borrower undergoes a change of Control without first obtaining the
written consent of the Lender, not to be unreasonably withheld, and the Ontario
Power Authority if required under the FIT Contract; or

2.1.11

if any of the Completion and Performance Security (as defined in the FIT
Contract), including any letters of credit or other security required to be
delivered or maintained in connection with the FIT Contract is not delivered or
maintained pursuant to the terms thereof.

2.2

Effect of an Event of Default

If an Event of Default occurs under Subsection , the Bridge Loan shall
immediately become due and payable, without presentation, demand, protest or
other notice of any nature, to which the Borrower and the Corporations hereby
expressly renounce. If any other Event of Default occurs, the Lender may, by
written notice to the Borrower, declare the Bridge Loan and all other amounts
payable by the Borrower under or pursuant to this Agreement due and payable,
whereupon the Bridge Loan and all such other amounts shall become and be due and
payable on the date which is thirty (30) days after such written notice of
Lender, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower.

2.3

Additional Remedies

At any time after the date which is five (5) days after the Bridge Loan becomes
due and payable in accordance with section  (except as a result of a default
under section ), the Lender may (a) exercise the security granted by the
Corporations pursuant to the Security Documents, in whole or in part, and/or
(b) require the Borrower to provide HONI and Ontario Power Authority with notice
of cancellation of the Project and request the reimbursement by HONI of the
Deposit paid or otherwise supplied by the Lender.  All funds reimbursed or other
security returned by HONI shall be paid over forthwith to the Lender, without
any deduction or withholding. Any funds or other security not paid over to the
Lender within three (3) Business Days of release by HONI or receipt by the
Borrower shall become a debt owed to the Lender, secured by the Security
Documents, and bear interest at the rate of ten percent (10%) per annum,
calculated quarterly. For clarity, in the event of the default contemplated in
section , the Lender may exercise its remedies under this section  immediately.

2.4

Security

The security evidenced by the Security Documents shall apply, with such
modifications as are necessary in the circumstances, to the Loan Amounts made in
accordance with section  of this Agreement.

3.

SECURITY

3.1

Security Documents

The obligations of the Borrower hereunder and under any other Loan Document,
towards the Lender, present and future, direct and indirect, will be secured by:

(a)

the grant, by WWPC in favour of the Lender, of a guarantee of the obligations of
the Borrower hereunder pursuant to the WWPC Guarantee;

(b)

the grant, by ZEP in favour of the Lender, of a guarantee of all of obligations
of the Borrower hereunder pursuant to the ZEP Guarantee, and the grant by ZEP of
a first ranking security interest in favour of the Lender in all of the
securities pursuant to the ZEP SPA;

(c)

the grant, by the Borrower in favour of the Lender, of a first ranking security
interest in all of the Borrower’s assets pursuant to the Borrower GSA and the
assignment of all Project Agreements of the Borrower pursuant to the Borrower
Assignment of Agreements.

3.2

Insurance

The Borrower shall maintain, in respect of itself and each of its Subsidiaries,
insurance at all times with responsible insurance carriers in such amounts and
covering such risks as are usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower or any such Subsidiaries, as the case may be, operate.

3.3

Effectiveness and Contents of Security Documents

The security granted pursuant to the Security Documents must be at all times
effective against third parties, and first-ranking with respect to all property
intended to be covered thereby. Each Security Document must be in form and
substance satisfactory to the Lender and remain valid and in force at all times.
The Security Documents will include such legal opinions, lien searches and
certificates as the Lender may reasonably require.

4.

COVENANTS

4.1

Positive Covenants of the Corporations

As of the date of this Agreement, and for so long as the Bridge Loan remains
outstanding, the Corporations covenant and agree as follows, and acknowledge
that the Lender are relying on these covenants for the purpose of granting the
Loan Amounts:

4.1.1

The Borrower shall use the Deposit made available to it exclusively for the
purposes of making deposits in accordance with the Connection and Cost Recovery
Agreement entered into between the Borrower and HONI and shall use the
Development Payment made available to it exclusively for the purposes of
satisfying ongoing development costs relating to the Project.

4.1.2

The Borrower shall duly pay to the Lender all sums of money due under the terms
of this Agreement at the time and place and in the manner provided for by this
Agreement (or such other time, place and manner as are accepted by Lender) and
shall duly and punctually perform and observe all other obligations on its part
to be performed or observed hereunder at the times and in the manner provided
for herein.

4.1.3

Each Corporation shall (i) comply in all material respects with the Applicable
Legislation and, in respect of the Borrower, with the FIT Contract, (ii) duly
observe and conform to all valid requirements of any Governmental Body relative
to the conduct of its business or to its properties or assets, (iii) maintain
and keep in full force and effect its corporate existence and all licences and
permits necessary to ensure the proper conduct of its business, (iv) promptly
pay when due all of its obligations and liabilities, including without
limitation, all taxes, assessments and governmental charges levied or imposed
upon it or upon its income or profits or upon its properties or assets, except
if contested in good faith and (v) keep true and complete books and records and
accounts in accordance with GAAP.

If the Corporations fail to perform any covenant contained in Subsections  to
 inclusively or any other provisions in this Agreement, the Lender may, in its
discretion, perform any such covenant capable of being performed by them and if
any such covenant requires the payment of money, the Lender may make such
payments.

4.2

Negative Covenants of the Corporations

As of the date of this Agreement, and for so long as the Bridge Loan remains
outstanding, the Corporations covenant and agree not to do the following,
without the prior written consent of the Lender, and acknowledge that the Lender
is relying on these covenants for the purpose of granting the Loan Amounts:

4.2.1

None of the Corporations will create, incur, assume or suffer to exist any
Security Interest on the collateral and property used to secure the Loan Amount
pursuant to the Security Agreements, other than the security evidenced by the
Security Documents.

4.2.2

None of the Corporations will create, incur, assume or permit to exist any debt,
other than obligations to reimburse expenses incurred in the ordinary course of
business, and other than the existing obligations of WWPC toward its debenture
holders.

4.2.3

The Borrower will not (a) lease, transfer, assign, sale or dispose of any of its
material Assets, except for sale of inventory in the ordinary course of business
or in respect of obsolete or damaged equipment or inventory and except where
such lease, transfer, assignment, sale or disposition is made to a wholly-owned
subsidiary, (b) assign or purport to assign the Project Agreements, the Option
Agreements or the letter of credit issued to HONI pursuant to the Deposit, if
returned by HONI to the Borrower, or (c) execute or permit the execution of any
agreement controlling or purporting to control the use of any funds deposited in
its bank accounts.

4.2.4

None of the Corporations will remove any of its corporeal (tangible) Assets or
any books of account or other records of the Corporations from the jurisdictions
where same are presently located.

4.3

Right of the First Refusal

If the Borrower enters into any discussion or correspondence with any third
party concerning the assignment, sale or other transfer of the Project, the
Project Agreements, the Option Agreements or any of its other Assets (in each
case, a “Sale”), it shall not enter into any agreement, written or oral, to
consummate any such Sale without first offering Lender the opportunity to
acquire such Project, the Project Agreements, the Option Agreements or its other
Assets, at the same price, and subject to substantially the same terms, as those
offered to or by such third party.

5.

REPRESENTATIONS AND WARRANTIES OF THE CORPORATIONS

Each Corporation represents and warrants to the Lender as follows as of the date
hereof. It is acknowledged that the Lender are relying upon said representations
and warranties for the purpose of consummating the transactions herein
contemplated, and that each of these representations and warranties constitutes
an essential condition to the granting of the Loan Amounts.

5.1

Each Corporation is a legal person duly constituted, organized and validly
subsisting under the laws of its jurisdiction of incorporation and has all
requisite power and capacity to execute and deliver this Agreement and the
Security Documents to which it is a party and to perform its obligations
thereunder. Each Corporation is duly qualified to own or lease its assets and to
carry on its business as it presently does.

5.2

Each Corporation has taken all corporate action necessary to authorize the
execution and delivery of, its performance of its obligations under, and its
consummation of the transactions contemplated by, this Agreement and the
Security Documents to which it is a party. This Agreement and the Security
Documents has been executed and delivered by an authorized representative of
each Corporation, in accordance with that authorization.

5.3

This Agreement and each of the Security Documents constitute legally valid and
binding obligations of the Corporations enforceable against each of them in
accordance with their respective terms subject to applicable bankruptcy,
insolvency or other laws of general application affecting the enforcement of
creditors' rights generally and to general equitable principles.

5.4

The execution and delivery of this Agreement and the Security Documents and the
consummation of the transactions contemplated thereunder (a) will not violate or
conflict with the Corporations’ articles, certificate of incorporation or
by-laws or other charter or constituting documents, (b) require any consents or
approvals, except such as have been obtained, nor (c) violate any Applicable
Legislation.

5.5

Each Corporation has good, valid and marketable title to all of its properties
and assets, free and clear of any Security Interest, other than the security
evidenced by the Security Documents (and other than existing security granted by
WWPC to secure its obligations toward its debenture holders). The only
Affiliates of the Corporations are those listed in Schedule .

5.6

There is no claim, action, prosecution or other proceeding of any kind pending
or to its knowledge threatened against the Corporations or any of their property
or assets before any court or administrative agency and there are no
circumstances of which a Corporation is aware which might give rise to any such
proceeding which it has not fully disclosed to the Lender.

5.7

No Event of Default exists.

5.8

The Corporations have timely paid when due all Taxes required to be paid by them
through the date hereof and the Corporations have made adequate provision in
accordance with GAAP in their financial statements for all Taxes payable by the
Corporations that are not then due and payable.

5.9

None of the Corporations is delinquent in the payment of any Taxes. There are no
pending tax audits of any returns of Taxes. No deficiency or addition to any
Taxes or interest or penalty for any Taxes has been proposed, asserted or
assessed against any of the Corporations for which the Corporation has not made
adequate reserves.

5.10

The Corporations have withheld or collected and remitted all amounts required to
be withheld or collected and remitted by it in respect of any Taxes,
governmental charges or assessments.

5.11

All tax loss carry forwards appearing in the Corporations’ financial statements
are valid and useable by the Corporations as set forth therein, assuming income
against which same may be deducted.

5.12

The Corporations have timely filed or caused to be filed on their behalf within
the times and in the manner prescribed by law, all federal, provincial, state,
local and foreign Tax returns and reports that are required to be filed by or
with respect to the Corporations.

5.13

No claim has ever been made by a Tax authority in a jurisdiction where either of
the Corporations does not file Tax returns that either of the Corporations is or
may be subject to Tax in that jurisdiction.

5.14

The Borrower has not (a) assigned or purported to assign the Project Agreements
or the Option Agreements, or (b) executed any agreement controlling, or
purporting to control, the use of any funds deposited in any of its bank
accounts.

6.

REPRESENTATIONS AND WARRANTIES OF THE LENDER

The Lender hereby represents and warrants to each Corporation as follows as of
the date hereof (and acknowledges that each Corporation is relying upon these
representations and warranties in connection with its execution and delivery of
this Agreement and the consummation of the transactions contemplated hereunder):

6.1

the Lender is a corporation established.  The Lender has been duly constituted
and is validly existing and has all requisite, power and capacity to execute and
deliver this Agreement and each of the Security Documents, to perform its
obligations hereunder;

6.2

the Lender has taken all corporate action necessary to authorize the execution
and delivery of, its performance of its obligations under, and its consummation
of the transactions contemplated by, this Agreement or any of the Security
Documents;

6.3

this Agreement constitutes a legally valid and binding obligation of the Lender,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency or other laws of general application affecting the
enforcement of creditors' rights generally and to general equitable principles;
and

6.4

the execution and delivery by the Lender of this Agreement and each of the
Security Documents and its consummation of the transactions contemplated hereby
and its compliance with the provisions hereof, will not violate or conflict with
the Lender’s articles or by-laws or other charter or constituting documents.

7.

INDEMNIFICATION

7.1

The representations and warranties contained in Subsections  to  inclusively
shall survive the execution of this Agreement and shall remain in full force and
effect until the expiration of all applicable limitation periods and all other
applicable legislation respecting Taxes.

7.2

The Corporations will jointly and severally indemnify, defend and hold the
Lender and their affiliates, attorneys, members’ agents, employees, officers,
representatives, directors and partners (collectively, the “Indemnified
Parties”) harmless against all liability, loss or damage, obligation, claim or
charge, together with all reasonable costs and expenses related thereto
(including the reasonable legal fees and expenses resulting from any suits,
actions, enquiries, investigations, notices, claims or proceedings, which legal
fees and expenses shall be payable in advance for the amounts expected to be
incurred) (“Damages”), relating to or arising from the untruth, inaccuracy or
breach of any of the representations or warranties of the Corporations contained
in this Agreement and from any breach of any of the Corporations’ respective
obligations hereunder.

7.3

If the indemnification provided for in section  is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
Damage, then the indemnifying party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and of the Indemnified Party, on the other,
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.

8.

NOTICES

8.1

Any notice or other communication required herein shall be given in writing and
transmitted by facsimile (provided that a copy is subsequently sent by messenger
and its receipt confirmed) or delivered by hand:

(a)

if to the Corporations:

(b)

if to the Lender:

or to such other address or facsimile number which may be designated by such
Party in a written notice transmitted to the other Parties in accordance with
this section .

8.2

The notices or communications provided in section  shall be presumed to have
been received the day they are sent, if delivered by hand or transmitted by
facsimile; failing this, the facsimile transmission shall be deemed to have been
received the next Business Day.

8.3

All notices must specify the delay in which a decision or an act must be made
and must set forth all of the elements on which a decision or an act is to be
made.

9.

GENERAL MATTERS

9.1

Public Notices

All public notices to third parties and all other publicity concerning the
transactions contemplated by this Agreement shall be jointly planned and
co-ordinated by the Lender and the Corporations and no Party shall act
unilaterally in this regard without the prior approval of the other Parties
(such approval not to be unreasonably withheld). The transactions contemplated
by this Agreement are confidential and the Corporations agree not to disclose
same to any third party other than its professional advisers, except with the
prior approval of the Lender.

9.2

Assignment

No Party may assign its rights or benefits under this Agreement without the
prior written approval of the other Parties. UNLESS PERMITTED UNDER THE
APPLICABLE SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE
THIS SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF
(I) THE DATE HEREOF, AND (II) THE DATE THE LENDER BECAME A REPORTING ISSUER IN
ANY CANADIAN PROVINCE OR TERRITORY.

9.3

Further Assurances

Each of the Parties shall promptly do, make, execute, deliver, or cause to be
done, made, executed or delivered, all such further acts, documents and things
as the other Parties hereto may reasonably require from time to time for the
purpose of giving effect to this Agreement and shall use reasonable efforts and
take all such steps as may be reasonably within its power to implement to their
full extent the provisions of this Agreement.

9.4

Survival of Obligations

Except as otherwise provided herein, all of the obligations of this Agreement
shall survive in favour of the Party to whom they are made for so long as the
Corporations are indebted towards the Lender under this Agreement.

9.5

Amendments

No modification or amendments to this Agreement shall be valid or binding unless
set forth in writing and duly executed by the Corporations and the Lender, and
no waiver of any breach of any term or provision of this Agreement shall be
effective or binding unless made in writing and signed by the Corporations
and/or the Lender, as the case may be, and, unless otherwise provided, shall be
limited to the specific breach waived.

9.6

Waivers

No waiver by any of the Parties hereto of the conditions, or of the breach of
any term, covenant, representation or warranty contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be or construed as a further or continuing waiver of any such condition or
breach or as a waiver of any condition nor of the breach of any other term,
covenant, representation or warranty contained in this Agreement.

9.7

Successors and Assigns

This Agreement will enure to the benefit of and be binding upon the respective
successors and permitted assigns of the Parties hereto.

9.8

Time of the Essence

Time is of the essence in this Agreement. Each Party shall be in default by the
mere lapse of time for the performance of any of its obligations hereunder
without the necessity of any notice to that effect.

9.9

Injunctive Relief

Any breach of any provisions of this Agreement, without prejudice to any other
recourse or remedy provided by this Agreement or by law, shall give rise to a
recourse for injunctive relief or to any other recourse intended to stop the
breach which the Parties recognize to be an appropriate recourse and to which
they expressly and irrevocably consent, if the conditions required for such
recourse are met.

9.10

Counterparts

This Agreement may be executed by facsimile or any other electronic means and
may be executed in counterparts and each such counterpart shall constitute an
original document and such counterparts, taken together, shall constitute one
and the same instrument.

9.11

Risk of Force Majeure

The Corporations expressly assume all risks of force majeure, such that the
Corporations shall be bound to timely execute each and every of its obligations
under this Agreement notwithstanding the existence or occurrence of any event or
circumstance constituting a force majeure within the meaning given to such term
under the laws of Ontario.

(Signature page follows)

IN WITNESS WHEREOF THIS AGREEMENT HAS BEEN EXECUTED BY THE PARTIES HERETO