ex10-1.htm


    
      
Exhibit 10.1

     

    
      

      

    

     

     

    
      AGREEMENT
AND PLAN OF MERGER

    

    


    


    BY
AND AMONG

    


    


    FIRST
SOLAR, INC.,

    


    FIRST
SOLAR ACQUISITION CORP.,

    


    


    OPTISOLAR
INC.

    


    


    AND

    


    


    OPTISOLAR
HOLDINGS LLC

    


    MARCH
2, 2009

     

     

     

    
      

      

    

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    TABLE OF CONTENTS

    


    


    
      	 
      	 
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              ARTICLE
      1

            	
              THE
      MERGER

            	
              2

            
	 
      	
              1.1

            	
              The
      Merger

            	
              2

            
	 
      	
              1.2

            	
              The
      Closing

            	
              2

            
	 
      	
              1.3

            	
              Effects
      of the Merger

            	
              2

            
	 
      	
              1.4

            	
              Effects
      on Capital Stock

            	
              3

            
	 
      	
              1.5

            	
              [Reserved]

            	
              5

            
	 
      	
              1.6

            	
              Project
      Business Payments

            	
              5

            
	 
      	
              1.7

            	
              Changes
      in Capital Structure

            	
              5

            
	 
      	
              1.8

            	
              Exchange
      of Certificates

            	
              6

            
	 
      	
              1.9

            	
              Fractional
      Shares

            	
              6

            
	 
      	
              1.10

            	
              Dissenting
      Shares

            	
              6

            
	
              ARTICLE
      2

            	
              REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

            	
              7

            
	 
      	
              2.1

            	
              Organization,
      Standing and Power

            	
              7

            
	 
      	
              2.2

            	
              Capital
      Structure

            	
              8

            
	 
      	
              2.3

            	
              Authority;
      Noncontravention; Government Authorization

            	
              10

            
	 
      	
              2.4

            	
              Financial
      Statements.

            	
              12

            
	 
      	
              2.5

            	
              Absence
      of Certain Changes; Undisclosed Liabilities

            	
              13

            
	 
      	
              2.6

            	
              Litigation

            	
              14

            
	 
      	
              2.7

            	
              Restrictions
      on Business Activities

            	
              14

            
	 
      	
              2.8

            	
              Intellectual
      Property

            	
              15

            
	 
      	
              2.9

            	
              Taxes

            	
              16

            
	 
      	
              2.10

            	
              Employee
      Benefit Plans

            	
              20

            
	 
      	
              2.11

            	
              Employee
      Matters

            	
              22

            
	 
      	
              2.12

            	
              Related
      Party Transactions

            	
              23

            
	 
      	
              2.13

            	
              Insurance

            	
              23

            
	 
      	
              2.14

            	
              Contracts

            	
              23

            
	 
      	
              2.15

            	
              Project
      Development

            	
              26

            
	 
      	
              2.16

            	
              Assets

            	
              26

            
	 
      	
              2.17

            	
              Real
      Property

            	
              27

            
	 
      	
              2.18

            	
              Environmental

            	
              29

            
	 
      	
              2.19

            	
              Permits

            	
              31

            
	 
      	
              2.20

            	
              Compliance
      with Laws

            	
              32

            
	 
      	
              2.21

            	
              Topaz

            	
              33

            
	 
      	
              2.22

            	
              Minute
      Books

            	
              33

            
	 
      	
              2.23

            	
              Brokers’
      and Finders’ Fees

            	
              33

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    TABLE
OF CONTENTS

    (continued)

    


    


    
      	 
      	 
      	 	 
      	
              Page

            
	 
      	 
      	 	 
      	 
      
	 
      	 
      	 	 
      	 
      
	 
      	
              2.24

            	Board
      Approvals	
              33

            
	 
      	
              2.25

            	Stockholder
      Vote	
              34

            
	 
      	
              2.26

            	Disclosure	
              35

            
	 
      	
              2.27

            	No
      Other Representations	
              35

            
	
              ARTICLE
      3

            	
              REPRESENTATIONS
      AND WARRANTIES OF PARENT AND MERGER SUB

            	
              36

            
	 
      	
              3.1

            	Organization,
      Standing and Power	
              36

            
	 
      	
              3.2

            	Capital
      Structure	
              36

            
	 
      	
              3.3

            	Authority;
      Noncontravention	
              37

            
	 
      	
              3.4

            	SEC
      Documents; Financial Statements	
              37

            
	 
      	
              3.5

            	Board
      Approval	
              38

            
	 
      	
              3.6

            	Taxes	
              38

            
	 
      	
              3.7

            	Litigation	
              38

            
	 
      	
              3.8

            	Disclosure	
              39

            
	 
      	
              3.9

            	Compliance
      With Laws	
              39

            
	 
      	
              3.10

            	No
      Material Adverse Change	
              39

            
	 
      	
              3.11

            	No
      Other Representations	
              40

            
	
              ARTICLE
      4

            	
              COVENANTS
      AND OTHER AGREEMENTS

            	
              40

            
	 
      	
              4.1

            	Conduct
      of Business of Hold Co, the Company and its Subsidiaries	
              40

            
	 
      	
              4.2

            	Restrictions
      on Conduct of Business of the Company and its Subsidiaries	
              41

            
	 
      	
              4.3

            	Further
      Assurances, Regulatory Matters	
              44

            
	 
      	
              4.4

            	No
      Solicitation	
              47

            
	 
      	
              4.5

            	Securities
      Laws Matters	
              48

            
	 
      	
              4.6

            	Access
      to Information	
              50

            
	 
      	
              4.7

            	Confidentiality	
              51

            
	 
      	
              4.8

            	Public
      Disclosure	
              51

            
	 
      	
              4.9

            	Legal
      Requirements	
              51

            
	 
      	
              4.10

            	Treatment
      as Reorganization	
              51

            
	 
      	
              4.11

            	Tax
      Returns	
              52

            
	 
      	
              4.12

            	Expenses	
              52

            
	 
      	
              4.13

            	Obligations
      of Merger Sub	
              52

            
	 
      	
              4.14

            	Hold
      Co Merger	
              52

            
	 
      	
              4.15

            	The
      Drop Down and the Distribution	
              53

            
	 
      	
              4.16

            	Employment
      Matters	
              53

            
	 
      	
              4.17

            	Changes
      after Signing	
              53

            
	 
      	
              4.18

            	Bridge
      Loan	
              54

            


    

    


    
      
        
           


        

        
          -ii-

          
            

          

        

        
           


        

      

    

    


    TABLE
OF CONTENTS

    (continued)

    


    


    
      	 
      	 
      	 	 
      	
              Page

            
	 
      	 
      	 	 
      	 
      
	 
      	 
      	 	 
      	 
      
	 
      	
              4.19

            	Purchase
      Orders	
              54

            
	 
      	
              4.20

            	Payment
      Lists	
              54

            
	 
      	
              4.21

            	Tax
      Information	
              54

            
	 
      	
              4.22

            	HSR
      Filing Fee	
              54

            
	 
      	
              4.23

            	Closing
      Registration Statement	
              54

            
	 
      	
              4.24

            	Merger
      Sub	
              54

            
	 
      	
              4.25

            	Intercompany
      Arrangements	
              54

            
	
              ARTICLE
      5

            	
              CONDITIONS
      TO THE MERGER

            	
              55

            
	 
      	
              5.1

            	Conditions
      to Obligations of Each Party to Effect the Merger	
              55

            
	 
      	
              5.2

            	Additional
      Conditions to Obligations of Hold Co and the Company	
              56

            
	 
      	
              5.3

            	Additional
      Conditions to the Obligations of Parent and Merger Sub	
              57

            
	
              ARTICLE
      6

            	
              TERMINATION,
      AMENDMENT AND WAIVER

            	
              58

            
	 
      	
              6.1

            	Termination	
              58

            
	 
      	
              6.2

            	Effect
      of Termination	
              59

            
	 
      	
              6.3

            	Amendment	
              59

            
	 
      	
              6.4

            	Extension;
      Waiver	
              59

            
	
              ARTICLE
      7

            	
              ESCROW
      FUND AND INDEMNIFICATION

            	
              60

            
	 
      	
              7.1

            	Escrow
      Fund	
              60

            
	 
      	
              7.2

            	Indemnification	
              60

            
	 
      	
              7.3

            	Limitations
      on Indemnification	
              62

            
	 
      	
              7.4

            	Escrow
      Claim Period	
              63

            
	 
      	
              7.5

            	Claims
      for Indemnification	
              63

            
	 
      	
              7.6

            	Objections
      to and Payment of Claims	
              64

            
	 
      	
              7.7

            	Resolution
      of Objections to Claims	
              65

            
	 
      	
              7.8

            	Third-Party
      Claims	
              65

            
	 
      	
              7.9

            	Stockholders’
      Representative	
              67

            
	 
      	
              7.10

            	Exclusive
      Remedy	
              67

            
	
              ARTICLE
      8

            	
              GENERAL
      PROVISIONS

            	
              68

            
	 
      	
              8.1

            	Survival
      of Representations and Warranties	
              68

            
	 
      	
              8.2

            	Notices	
              68

            
	 
      	
              8.3

            	Terms
      Generally; Interpretation	
              70

            
	 
      	
              8.4

            	Definitions	
              71

            
	 
      	
              8.5

            	Counterparts	
              86

            
	 
      	
              8.6

            	Entire
      Agreement; No Third Party Beneficiaries	
              86

            
	 
      	
              8.7

            	Assignment	
              87

            


    

    


    
      
        
           


        

        
          -iii-

          
            

          

        

        
           


        

      

    

    


    TABLE
OF CONTENTS

    (continued)

    


    


    
      	 
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              8.8

            	
              Severability

            	
              87

            
	 
      	
              8.9

            	
              Failure
      or Indulgence Not Waiver; Remedies Cumulative

            	
              87

            
	 
      	
              8.10

            	
              GOVERNING
      LAW

            	
              87

            
	 
      	
              8.11

            	
              Binding
      Arbitration

            	
              88

            
	 
      	
              8.12

            	
              WAIVER
      OF JURY TRIAL

            	
              89

            
	 
      	
              8.13

            	
              Specific
      Performance

            	
              89

            


    

    


    *   *   *   *   *

    


    
      	
              Exhibit
      A

            	
              Form
      of Support and Consent Agreement

            	
              A-1-1

            
	
              Exhibit
      B

            	
              Form
      of Hold Co Merger Agreement

            	
              B-1

            
	
              Exhibit
      C

            	
              Form
      of Drop Down Agreement

            	
              C-1

            
	
              Exhibit
      D

            	
              Escrow
      Agreement

            	
              D-1

            
	
              Exhibit
      E-1

            	
              Representation
      Agreement

            	
              E-1-1

            
	
              Exhibit
      E-2

            	
              Purchaser
      Representative Agreement

            	
              E-2-1

            
	
              Exhibit
      F-1

            	
              Tax
      Representations of the Company

            	
              F-1-1

            
	
              Exhibit
      F-2

            	
              Tax
      Representations of Parent and Merger Sub

            	
              F-2-1

            
	
              Exhibit
      G

            	
              Closing
      Deliveries

            	
              G-1

            
	
              Exhibit
      H

            	
              Required
      Consents and Novations

            	
              H-1

            
	
              Exhibit
      I

            	
              Matters
      to be Covered in Opinion of Counsel to Parent and Merger
    Sub

            	
              I-1

            
	
              Exhibit
      J

            	
              Matters
      to be Covered in Farella Braun + Martel LLP Opinion

            	
              J-1

            
	
              Exhibit
      K

            	
              Form
      of Registration Rights Agreement

            	
              K-1

            


    

    


    
      
        
           


        

        
          -iv-

          
            

          

        

        
           


        

      

    

    


    AGREEMENT
AND PLAN OF MERGER

    


    This
AGREEMENT AND PLAN OF MERGER, dated as of March 2, 2009 (this “Agreement”),
is by and among First Solar, Inc., a Delaware corporation (“Parent”),
First Solar Acquisition Corp., a Delaware corporation and a direct wholly-owned
subsidiary of Parent (“Merger
Sub”), OptiSolar Inc., a Delaware corporation (the “Company”),
and OptiSolar Holdings, LLC, a Delaware limited liability company and a direct
wholly-owned subsidiary of the Company (“Hold
Co”).1

    


    BACKGROUND

    


    A.            The
board of directors of each of Hold Co, the Company and Parent has determined
that it would be advisable and in the best interests of their respective
stockholders for Parent to acquire the Company by means of the merger of Merger
Sub with and into the Company (the “Merger”),
all on the terms and subject to the conditions set forth in this Agreement, and,
in furtherance thereof, have approved this Agreement and the transactions
contemplated by this Agreement.

    


    B.        
    In order to induce Parent to enter into this Agreement,
concurrently with the execution and delivery of this Agreement, certain Company
Stockholders are executing and delivering Support and Consent Agreements in the
form attached hereto as Exhibit A (each, a
“Support
Agreement”), and certain Company Stockholders are executing and
delivering written consents in the forms attached to the Support Agreement
(each, a “Written
Consent”).

    


    C.        
    Concurrently with the execution and delivery of this
Agreement, Hold Co, the Company and Pincer Merger Subsidiary Inc., a newly
formed, wholly-owned subsidiary of Hold Co (“Newco”),
are entering into an Agreement and Plan of Merger in the form attached hereto as
Exhibit B (the
“Hold Co
Merger Agreement”) pursuant to which, prior to the Merger, Newco will be
merged with and into the Company, with the Company being the surviving
corporation of such merger, and all outstanding shares of Company Capital Stock
will be converted, on a share for membership unit basis, into membership units
in Hold Co having rights, preferences and privileges substantially identical to
those of the Company Capital Stock and all the capital stock of Hold Co held by
the Company will be canceled (the “Hold Co
Merger”).

    


    D.       
     Concurrently with the execution and delivery of
this Agreement, the Company and OptiSolar Technologies Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company, (the “Spin-Off
Subsidiary”) are executing a drop down agreement in the form attached
hereto as Exhibit
C (the “Drop Down
Agreement”) pursuant to which, among other things, the Company will
transfer all of the assets and Liabilities of the Company and its Subsidiaries
which are not Related to the Project Business to the Spin-Off Subsidiary (the
“Drop
Down”).

    
 

    ___________________________ 

      1
Certain provisions of this Agreement have been conformed to reflect amendments
to such provisions pursuant to the Closing Agreement among the parties hereto,
OptiSolar Technologies Inc., First Solar Acquisition Corp. and Pincer Merger
Subsidiary Inc., dated as of April 3, 2009.

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    E.           
  As a condition precedent to the Merger, prior to the Closing, the
Company will distribute all of the issued and outstanding capital stock of the
Spin-Off Subsidiary to Hold Co (the “Distribution”).

    


    F.         
    The Company and Parent intend that the Merger will
qualify as a “reorganization” under Section 368(a) of the Internal Revenue Code
of 1986, as amended (the “Code”) and
Hold Co and the Company intend that the Hold Co Merger will be treated as a
transaction described in Section 721(a) of the Code.

    


    AGREEMENT

    


    In
consideration of the representations, warranties, covenants and other agreements
in this Agreement, the parties hereto, intending to be legally bound, hereby
agree as follows:

    


    ARTICLE
1


    THE
MERGER

    


    1.1        
  The
Merger.  Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the General Corporation Law of the
State of Delaware (the “DGCL”),
Merger Sub shall be merged with and into the Company at the effective time of
the Merger (the “Effective
Time”), which shall be the time at which the Certificate of Merger is
filed with the Delaware Secretary unless otherwise agreed by both parties and
set forth in the certificate of merger, in a form reasonably acceptable to
Parent and the Company (the “Certificate of
Merger”), to be filed with the Secretary of State of the State of
Delaware (the “Delaware
Secretary”), if, as and when the Closing occurs.  The Company
shall be the surviving corporation (sometimes referred to as the “Surviving
Company”) in the Merger and shall succeed to and assume all the rights
and obligations of Merger Sub in accordance with the DGCL.

    


    1.2        
  The
Closing.  The closing of the transactions contemplated by this
Agreement (the “Closing”)
shall take place at 10:00 a.m. Pacific time on the third (3rd)
Business Day after the satisfaction or waiver of each of the conditions set
forth in Article 5 (excluding the Closing Registration Statement Condition and
other conditions that, by their terms, are to be satisfied on the Closing Date
(which include, for avoidance of doubt, those set forth in Section 5.1(e) (The
Hold Co Merger, the Drop Down and the Distribution)), but subject to the
satisfaction or waiver of such conditions) or at such other time as the parties
agree.  Notwithstanding anything to the contrary in this Agreement,
the Closing Registration Statement Condition shall be satisfied after
satisfaction or waiver of all other conditions set forth in Article 5 to the
Merger.  The Closing shall take place at the offices of Covington
& Burling LLP, One Front Street, San Francisco, CA 94111, or at such other
location as the parties agree.  The date on which the Closing actually
occurs is herein referred to as the “Closing
Date.”

    


    1.3       
   Effects of the
Merger.

    


    (a)     
      At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Certificate of Merger and the
applicable provisions of the DGCL.

    


    
      
        
           


        

        
          2

          
            

          

        

        
           


        

      

    

    


    (b)         
  At the Effective Time, the certificate of incorporation of the
Surviving Company, as in effect immediately prior to the Effective Time, shall
be amended so as to contain only those provisions contained in the certificate
of incorporation of Merger Sub until thereafter amended as provided by the DGCL
and such certificate of incorporation; provided, however, that the
name of the Surviving Company shall be the name of the Merger Sub immediately
prior to the Effective Time until otherwise changed as provided by the DGCL and
the certificate of incorporation of the Surviving Company.

    


    (c)        
   At the Effective Time, the by-laws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the by-laws of the Surviving
Company until thereafter amended as provided by the DGCL, the certificate of
incorporation of the Surviving Company and such by-laws; provided, however, that the name of the
Surviving Company shall be the name of the Merger Sub immediately prior to the
Effective Time until otherwise changed as provided by the DGCL, the certificate
of the incorporation of the Surviving Company and such by-laws.

    


    (d)       
    At the Effective Time, the officers and directors of
Merger Sub, as constituted immediately prior to the Effective Time, shall be the
officers and directors of the Surviving Company, for so long as provided under
the DGCL, the certificate of incorporation of the Surviving Company and the
by-laws of the Surviving Company.

    


    (e)       
    At the Effective Time, all property, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the Surviving
Company and all debts, liabilities and duties of the Company and Merger Sub
shall become debts, liabilities and duties of the Surviving
Company.

    


    1.4           Effects on Capital
Stock.  By virtue of the Merger and without any action on the
part of Merger Sub, Parent, the Company or the holders of shares of capital
stock of the Company (the “Company Capital
Stock”), the following shall occur:

    


    (a) 
          As of the Effective
Time, each share of Company Capital Stock that is issued and outstanding
immediately prior to the Effective Time and is owned by the Company, Parent,
Merger Sub or any of their respective Subsidiaries shall automatically be
canceled and shall cease to exist, and no consideration shall be delivered or
deliverable in exchange therefor.

    


    (b)  
         As of the Effective Time,
each share of common stock of Merger Sub (the “Merger Sub Common
Stock”) issued and outstanding immediately prior to the Effective Time
shall be converted into one validly issued, fully paid and nonassessable share
of common stock of the Surviving Company.  Each certificate formerly
representing any such shares of Merger Sub Common Stock shall represent
ownership of shares of common stock of the Surviving Company.

    


    (c)    
       All shares of Company Capital Stock
issued and outstanding immediately prior to the Effective Time (other than
shares to be canceled in accordance with Section 1.4(a)) shall be converted into
the right to receive, at the Effective Time, the Closing Shares as and to the
extent contemplated by Section 1.4(c)(ii) hereof.  As of the Effective
Time, all such shares of Company Capital Stock shall no longer be outstanding
and shall automatically be canceled and cease to exist, and each holder of a
certificate formerly representing any such shares of Company Capital Stock
(“Certificate”)
shall cease to have any rights with respect thereto, except the right to receive
the Merger Consideration in respect of such shares as allocated in this Section
1.4 upon surrender of such Certificate in accordance with Section
1.8.  “Merger
Consideration” means the Closing Shares.

    


    
      
        
           


        

        
          3

          
            

          

        

        
           


        

      

    

    


    (i)             
   The maximum aggregate number of shares of the Common Stock,
par value $0.001 per share, of Parent (the “Parent Common
Stock”) issuable at the Effective Time (the “Closing
Shares”), on account of all shares of Company Capital Stock outstanding
immediately prior to the Closing (other than shares to be cancelled in
accordance with Section 1.4(a)) and all rights (including options and warrants)
to acquire shares of Company Capital Stock outstanding immediately prior to the
Closing shall equal (a) (x) $400,000,000, plus (y) the aggregate amount of the
Closing Project Business Payments plus (z) the French Amount, the Canadian
Amount and the Italian Amount, divided by (b) the Parent Trading
Price.  Twenty five percent (25%) of the Closing Shares to be issued
under clause (i)(a)(x) above (the “Escrow
Amount”) shall be withheld from the Merger Consideration payable pursuant
to this Section 1.4 and shall be deposited at the Closing with an escrow agent
reasonably acceptable to the Company and Parent (the “Escrow
Agent”), in accordance with the Escrow Agreement, dated as of the Closing
Date, substantially in the form attached hereto as Exhibit D (the “Escrow
Agreement”), by and among Parent, the Escrow Agent and Hold
Co.  The fund in which the Escrow Amount is held (the “Escrow
Fund”) will be held and distributed in accordance with the terms of the
Escrow Agreement and Article 7 of this Agreement.  A number of Closing
Shares equal to (i) the Closing Payment Amount divided by (ii) the Parent
Trading Price (the “Holdback
Shares”) shall be withheld from the Merger Consideration by Parent until
the 45th day following the Closing Date (the “Holdback Release
Date”). On the Holdback Release Date, Parent shall issue, or cause to be
issued, to Hold Co, a number of the Holdback Shares equal to (x) the original
number of Holdback Shares minus (y) a number of Holdback Shares equal to (i) the
Closing Payment Amount minus the Hold Co Payments divided by (ii) the Parent
Trading Price.  Any remaining Holdback Shares shall be retained by
Parent and shall not be payable hereunder as Merger Consideration and Parent
shall have no right to seek indemnification for the accounts payable as to which
such shares were retained as Losses pursuant to Article 7 except to the extent
such Losses, with respect to a particular account payable, exceed the product of
(i) the number of shares of Parent Common Stock reserved against such account
payable and (ii) the Parent Trading Price.  With respect to each
Holdback Lease, a number of Closing Shares equal to (i) the applicable Lease
Holdback Amount divided by (ii) the Parent Trading Price (the “Lease Holdback
Shares”) shall be withheld from the Merger Consideration by Parent until
such Holdback Lease is terminated, with no remaining liability to the Company,
or novated, so as to substitute the Spin-Off Subsidiary or Hold Co for the
Company or the applicable Project Company as a party to such Holdback Lease (the
date five (5) Business Days following the receipt by Parent of written notice
and evidence of such termination or novation from the Spin Off Subsidiary under
any such lease, a “Lease Holdback
Release Date”).  On a Lease Holdback Release Date, Parent shall
issue, or cause to be issued, to Hold Co, a number of the Lease Holdback Shares
equal to (i) the Lease Holdback Amount attributable to the applicable Holdback
Lease divided by (ii) the Parent Trading Price.  In the event that any
Holdback Lease with respect to the McClellan properties has not been terminated,
with no remaining liability to the Company, or novated, so as to substitute the
Spin-Off Subsidiary or Hold Co for the Company or the applicable Project Company
as a party to such Holdback Lease, on or prior to the six-month anniversary of
the Closing Date, any remaining Lease Holdback Shares allocable to such
McClellan lease minus an amount of such Lease Holdback Shares equal to (x) any
amounts actually paid by the Spin-Off Subsidiary to the Company between the date
of this Agreement and such six-month anniversary under the Master Sublease in
respect of such McClellan lease divided by (y) the Parent Trading Price shall be
retained by Parent and shall not be payable hereunder as Merger Consideration
and Parent shall have no right to seek indemnification for the aggregate rent
payable under the remaining term of such Holdback Lease as Losses pursuant to
Article 7, and the remainder of the Lease Holdback Shares allocable to such
McClellan lease shall be paid to Hold Co.  Upon the expiration of any
other Holdback Leases, Parent shall deliver to Hold Co a number of Lease
Holdback Shares allocable to such other Holdback Leases minus an amount of such
Lease Holdback Shares equal to (x) any amounts required to be paid by the
Spin-Off Subsidiary to the Company under the Master Sublease in respect of such
other Holdback Leases and not so paid divided by (y) the Parent Trading Price.
If any rent payments are made under the Master Sublease or by the Spin-Off
Subsidiary or Hold Co under a Holdback Lease, then within 10 business days of
receipt of such payment or notice of such payment, as the case may be, a number
of Lease Holdback Shares allocable to the applicable Holdback Lease shall be
released to Hold Co equal to (x) the amount of such rent payments divided by (y)
the Parent Trading Price. In no event shall Parent or the Company have any right
of setoff under this Agreement, the Drop Down Agreement or otherwise with
respect to Parent Common Stock to be issued to Hold Co under this Section
1.4(c)(i).

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    


    (ii)         
     The Merger Consideration shall be allocated as
follows:  All 100 shares of Company Capital Stock outstanding
immediately prior to the Effective Time held by the Company’s sole stockholder
at that time, Hold Co, shall be converted into the right to receive, and shall
become exchangeable for the Closing Shares.

    


    1.5        
  [Intentionally omitted].

    


    1.6          
Project Business
Payments.  At least three but not more than five Business Days
before the Closing, the Company will deliver to Parent a certificate, signed by
the Chief Executive Officer of the Company (the “Project Business
Payments Certificate”), setting forth the Project Business Payments,
including the components thereof and supporting documentation (the “Closing Project
Business Payments “).

    


    1.7          
Changes in Capital
Structure.

    


    (a) 
          If there is a stock
split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into capital stock), reorganization,
reclassification, combination, recapitalization or other like change (other than
the Hold Co Merger, the Drop Down or the Distribution) with respect to shares of
Parent Common Stock occurring after the date of this Agreement and before the
Effective Time, all references in this Agreement to specified numbers of shares
of any class or series affected thereby, and all calculations provided for that
are based upon numbers of shares of any class or series (or trading prices
therefor) affected thereby, shall be equitably adjusted to the extent necessary
to provide to the parties the economic effect contemplated by this Agreement
prior to such stock split, reverse stock split, stock dividend, reorganization,
reclassification, combination, recapitalization or other like
change.

    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    


    (b)       
    If there is a stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into
capital stock), reorganization, reclassification, combination, recapitalization
or other like change with respect to shares of Parent Common Stock occurring
after the Effective Time, all references in this Agreement to the Holdback
Shares and the Lease Holdback Shares shall be equitably adjusted to the extent
necessary to provide to the parties the economic effect contemplated by this
Agreement prior to such stock split, reverse stock split, stock dividend,
reorganization, reclassification, combination, recapitalization or other like
change.

    


    1.8         
 Exchange
of Certificates.

    


    (a) 
          At or prior to the
Closing, Parent shall deliver to Hold Co instructions for use in surrendering
Certificates in exchange for consideration specified and allocated in Section
1.4.  Concurrently with the Closing, Hold Co shall surrender a
Certificate for cancellation and, upon surrender of such Certificate for
cancellation to Parent, and such other documents as may reasonably be required
by Parent, the holder of such Certificate shall receive concurrently with the
Closing in exchange therefor the Merger Consideration for which the shares
formerly held by such holder are to be exchanged in accordance with Section 1.4
(less any shares of Parent Common Stock deposited in the Escrow Fund, less the
Holdback Shares and the Lease Holdback Shares), and the certificates so
surrendered shall be canceled.

    


    (b)  
         All shares of Parent
Common Stock issued in accordance with the terms of this Article 1 (including
shares of Parent Common Stock deposited into the Escrow Fund) shall be deemed to
have been paid in full satisfaction of all rights pertaining to the shares of
Company Capital Stock represented by such certificates, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Company of the shares of Company Capital Stock which were outstanding
immediately prior to the Closing.

    


    1.9          
Fractional
Shares.  No fraction of a share of Parent Common Stock will be
issued in connection with the Merger and in lieu thereof Hold Co shall receive
from Parent an amount of cash equal to the product (rounded upwards or downwards
to the nearest whole cent) of such fraction of a share Hold Co would otherwise
receive at the Parent Trading Price.

    


    1.10        
Dissenting
Shares.

    


    (a) 
          Shares of Company
Capital Stock that are issued and outstanding immediately prior to the effective
time of the Hold Co Merger and that are owned by stockholders who have properly
perfected their appraisal rights in accordance with the provisions of applicable
Law with respect to the Hold Co Merger are referred to herein as “Dissenting
Shares”; provided that each such share shall cease to be a Dissenting
Share if its holder shall have failed to perfect or shall have effectively
withdrawn or lost such appraisal rights.

    


    (b)  
         The Company shall give
Parent (i) prompt notice of any objections to the Hold Co Merger filed in
accordance with applicable Law received by the Company, withdrawals of such
objections and any other instruments served in connection with such objections
in accordance with applicable Law and received by the Company or its
representatives, and (ii) the opportunity to participate in, but not direct, all
negotiations and proceedings with respect to such objections under applicable
Law consistent with the Company’s obligations thereunder.  Following
the Closing, Hold Co shall direct all negotiations and proceedings with respect
to such objections under applicable Law and the Company shall not, except with
the prior written consent of Hold Co (which consent shall not be unreasonably
withheld or delayed), (A) voluntarily make any payment or statement against
interest with respect to any such objection, (B) offer to settle or settle any
such objection, or (C) waive any failure by a former stockholder of the Company
to timely deliver a written objection or to perform any other act perfecting
appraisal rights in accordance with applicable Law.

    


    
      
        
           


        

        
          6

          
            

          

        

        
           


        

      

    

    


    (c)     
      Each holder of Dissenting Shares who,
pursuant to the provisions of the DGCL, becomes entitled to payment of the fair
value of such shares after the closing of the Hold Co Merger shall receive
payment therefor in accordance with Section 262 of the DGCL (but only after the
value therefor shall have been agreed upon or finally determined pursuant to
such provisions), and any such payment shall be referred to herein as “Dissenting Shares
Excess Payments,” and shall constitute “Losses” for purposes of Article
7.

    


    ARTICLE
2

    REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

    


    Subject
to the exceptions set forth in the disclosure letter of the Company addressed to
Parent, dated as of the date hereof and delivered to Parent concurrently with
the parties’ execution of this Agreement (the “Company
Disclosure Letter”) (each of which exceptions, in order to be effective,
shall indicate the section and, if applicable, the subsection of this Article 2
to which it relates (unless and to the extent the relevance to other
representations and warranties is reasonably apparent from the face of the
disclosed exception, in which case such exceptions shall apply to such other
representations and warranties as is reasonably apparent)), the Company
represents and warrants to Parent and Merger Sub as of the date hereof and as of
the Closing Date that as follows:

    


    2.1       
   Organization, Standing and
Power.

    


    (a) 
          Section 2.1(a) of
the Company Disclosure Letter sets forth a true, correct and complete list, as
of the date hereof, of each Project Company and each other Subsidiary of the
Company indicating (i) its jurisdiction of organization, (ii) its officers and
directors, and (iii) the record owners of all of its issued and outstanding
securities.  All of the outstanding securities of each Project Company
are, to the extent applicable, duly authorized, validly issued, fully paid and
nonassessable.

    


    (b)  
         Each of the Company, Hold
Co, Newco, the Spin-Off Subsidiary and each Project Company is a corporation,
partnership or limited liability company and, where applicable, is duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of organization.

    


    (c)    
       Each of the Company, Hold Co, Newco,
the Spin-Off Subsidiary and each Project Company has the corporate power to own,
lease and operate its properties and to conduct its business as currently
conducted and the Company and each Project Company is duly qualified to do
business and is in good standing in each U.S. jurisdiction set forth opposite
the name of  such company in Section 2.1(a) of the Company Disclosure
Letter.  Each of the Company, Hold Co, Newco, the Spin-Off Subsidiary
and each Project Company is duly qualified to do business and is in good
standing in each jurisdiction where the failure to be so qualified and in good
standing, individually or in the aggregate with any such other failures, would
reasonably be expected to have a Company Material Adverse Effect or a Project
Material Adverse Effect.

    


    
      
        
           


        

        
          7

          
            

          

        

        
           


        

      

    

    


    (d)      
     None of the Company, Hold Co, Newco, the Spin-Off
Subsidiary or any Project Company is in violation of any of the provisions of
its organizational documents.

    


    (e)        
   Section 2.1(e) of the Company Disclosure Letter sets forth a
list of the Company’s officers and directors.

    


    (f)        
    Other than the Project Companies listed on Section
2.1(a) of the Company Disclosure Letter, Newco, Hold Co and the Spin-Off
Subsidiary, the Company does not (and has not) directly or indirectly own any
equity or similar interest in, or any interest convertible or exchangeable or
exercisable for, any equity or similar interest in, any Person.

    


    (g)        
   There are no Contracts, to which any Project Company is a
party or by which it is bound obligating any Project Company to issue, deliver,
sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased
or redeemed, any shares of the capital stock of such Project Company or
obligating such Project Company to grant, extend, accelerate the vesting of,
change the price of, otherwise amend or enter into any such
Contract.  There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or other similar rights with respect to any
Project Company.

    


    (h)        
   With respect to each Project Company, since the formation date
of such Project Company, such Project Company has engaged solely in the business
of developing, financing, constructing and/or operating the Project for which it
was formed (such Project Company’s “Project Company
Business”), and no Project Company has engaged in any other business,
incurred any capital expense or acquired any real or personal property other
than specifically Related to the Project Business.

    


    2.2       
   Capital
Structure.

    


    (a)     
      As of the date hereof and until immediately
prior to the closing of the Hold Co Merger, the authorized capital stock of the
Company shall consist of (i) 325,000,000 shares of Company Common Stock, (ii)
29,075,000 shares of Senior Convertible Preferred Stock, 3,750,000 shares of
which have been designated “Senior Preferred A-1 Stock,” 1,125,000 shares of
which have been designated “Senior Preferred A-2 Stock” and 24,200,000 shares of
which have been designated “Senior Preferred B-1 Stock,” and (iii) 13,810,000
shares of Junior Convertible Preferred Stock, 4,000,000 shares of which have
been designated “Junior Preferred A-1 Stock,” 5,325,000 shares of which have
been designated “Junior Preferred A-2 Stock,” 525,000 shares of which have been
designated “Junior Preferred A-3 Stock,” 350,000 shares of which have been
designated “Junior Preferred A-4 Stock,” 450,000 shares of which have been
designated “Junior Preferred A-5 Stock,” 760,000 shares of which have been
designated “Junior Preferred A-6 Stock” and 2,400,000 shares of which have been
designated “Junior Preferred A-7 Stock.”  As of the date hereof and
until immediately prior to the closing of the Hold Co Merger, there shall be
issued and outstanding 55,898,640 shares of Company Common Stock, 3,750,000
shares of the Company’s Senior Preferred A-1 Stock, 1,125,000 shares of the
Company’s Senior Preferred A-2 Stock, 15,785,932 shares of the Company’s Senior
Preferred B-1 Stock, 3,966,437 shares of the Company’s Junior Preferred A-1
Stock, 5,322,382 shares of the Company’s Junior Preferred A-2 Stock, 525,000
shares of the Company’s Junior Preferred A-3 Stock, 350,000 shares of the
Company’s Junior Preferred A-4 Stock, 450,000 shares of the Company’s Junior
Preferred A-5 Stock, 722,665 shares of the Company’s Junior Preferred A-6 Stock
and 2,400,000 shares of the Company’s Junior Preferred A-7 Stock.  As
of immediately prior to the Closing and following the closing of the Hold Co
Merger, (i) the authorized capital stock of the Company will consist of 100
shares of Company Common Stock, all of which will be issued and outstanding and
held by Hold Co and (ii) there will exist no (w) options, warrants, calls,
subscription rights or other rights, convertible securities, agreements or
commitments of any character obligating the Company or any of its Subsidiaries
to issue, transfer or sell any shares of capital stock or other equity interests
in, the Company or securities convertible into or exchangeable for such shares
or other equity interests, (x) contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any capital stock of
the Company or (y) voting trusts or similar agreements to which the Company or
any of its Subsidiaries is a party with respect to the voting of the capital
stock of the Company.

    


    
      
        
           


        

        
          8

          
            

          

        

        
           


        

      

    

    


    (b)     
      As of immediately prior to Closing, the
outstanding membership units of Hold Co will consist of 55,898,640 common
membership units, 3,750,000 Senior Preferred A-1 membership units, 1,125,000
Senior Preferred A-2 membership units, 15,785,932 Senior Preferred B-1
membership units, 3,966,437 Junior Preferred A-1 membership units, 5,322,382
Junior Preferred A-2 membership units, 525,000 Junior Preferred A-3 membership
units, 350,000 Junior Preferred A-4 membership units, 450,000 Junior Preferred
A-5 membership units, 722,665 Junior Preferred A-6 membership interests and
4,000,000  Junior Preferred A-7 membership units.

    


    (c)       
    There are no declared or accrued but unpaid dividends
with respect to any shares of Company Common Stock or Company Preferred
Stock.  Each share of Company Preferred Stock is convertible into
Company Common Stock on a one-to-ten basis except for the Senior Preferred B-1
Stock which is convertible into Company Common Stock on a one-to-one
basis.  There are not outstanding any adjustments made or required to
be made to the conversion rates applicable to Company Preferred Stock set forth
in Company’s Eleventh Amended and Restated Certificate of Incorporation (the
“Certificate of
Incorporation”).  Section 2.2(c) of the Company Disclosure
Letter sets forth a true, correct and complete list (with names and addresses)
of (i) all of the Company’s record holders as of the date hereof, the number of
shares, warrants, options or other rights owned of record by each and the total
number of shares of Company Common Stock reserved and available for future grant
under the Company’s 2006 Incentive Stock Plan (the “Company Stock
Plan”), and (ii) any Persons with rights to acquire Company securities
(including all holders of outstanding Company Options, whether or not granted
under the Company Stock Plan), the exercise or vesting schedule, exercise price,
and tax status of such options under Section 422 of the Code.

    


    (d)     
      All issued and outstanding shares of Company
Capital Stock are duly authorized, validly issued, fully paid and non-assessable
and are free of any Encumbrances created by statute, the Company’s
organizational documents or any Contract to which the Company or any of its
Subsidiaries is a party or by which it is bound.  Except for (A)
outstanding Company Options to purchase 17,916,770 shares of Company Common
Stock under the Company Stock Plan, (B) outstanding Company Options to purchase
11,385,000 shares of Company Common Stock issued outside of the Company Stock
Plan, and (C) outstanding shares Company Preferred Stock, there are no Contracts
to which the Company or any of its Subsidiaries is a party, or by which it is
bound, obligating the Company or any of its Subsidiaries to issue, deliver,
sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased
or redeemed, any shares of Company Capital Stock and/or Company Options or
obligating the Company to grant, extend, accelerate the vesting and/or waive any
repurchase rights of, change the price of or otherwise amend or enter into any
such Contract.  Except as set forth in Section 2.2(d) of the Company
Disclosure Letter and to the knowledge of the Company, there are no Contracts
relating to voting, purchase or sale of any Company Capital Stock other than
this Agreement and the Support Agreements.  All outstanding Company
securities were issued in compliance with all applicable securities
Laws.

    


    
      
        
           


        

        
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    (e)       
    Except for the Company Stock Plan and outside the plan
options, the Company has never adopted or maintained any stock option plan or
other plan providing for equity compensation of any Person.  The
Company has reserved as of the date hereof 40,000,000 shares of Company Common
Stock for issuance to employees and directors of, and consultants to, the
Company, upon the exercise of options granted under the Company Stock Plan, of
which 3,244,000 shares are issuable, as of the date hereof, upon the exercise of
outstanding, unexercised, vested options.  The Company Stockholders
have properly approved the Company Stock Plan and the grants made
thereunder.

    


    (f)         
   As of the date hereof, the authorized capital stock of Hold Co
consists of 100 membership units, all of which are issued and outstanding and
owned beneficially and of record by the Company.  As of the date
hereof, the authorized capital stock of Newco consists of 100 shares of common
stock, all of which are issued and outstanding and owned beneficially and of
record by Hold Co.  As of the date hereof, the authorized capital
stock of the Spin-Off Subsidiary consists of 100 shares of common stock, all of
which are issued and outstanding and owned beneficially and of record by the
Company.  Hold Co and Newco were formed for the purpose of effecting
the Hold Co Merger. Neither Hold Co nor Newco owns any asset or is subject to
any Liability other than those necessary to effect the Hold Co
Merger.

    


    2.3        
  Authority;
Noncontravention; Government Authorization.

    


    (a)  
         Except for the Required
Hold Co Merger Vote and the Required Vote, the Company has all requisite
corporate power and authority to enter into this Agreement, the Hold Co Merger
Agreement and the Drop Down Agreement, to perform its obligations hereunder and
thereunder, including entering into and performing any additional Contracts
contemplated hereby or thereby to which it is a party, to consummate the
transactions contemplated hereby and thereby and to consummate the
Distribution.  The execution and delivery of this Agreement, the Hold
Co Merger Agreement, the Drop Down Agreement, and any additional Contracts
contemplated hereby or thereby to which it is a party, the consummation of the
transactions contemplated hereby and thereby by the Company and the consummation
of the Distribution have been duly authorized by all necessary corporate action
on the part of the Company.  This Agreement, the Hold Co Merger
Agreement and the Drop Down Agreement, and any additional Contracts being
delivered herewith or therewith to which the Company is a party, have been duly
executed and delivered by the Company and, assuming due authorization, execution
and delivery by the other parties thereto, each constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
their terms, subject to the effect of (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws now or hereafter in effect relating
to rights of creditors generally, and (ii) rules of Law and equity governing
specific performance, injunctive relief and other equitable
remedies.

    


    
      
        
           


        

        
          10

          
            

          

        

        
           


        

      

    

    


    (b)       
    Except for the Required Hold Co Merger Vote, Hold Co and
Newco, with respect to the Hold Co Merger Agreement, have all requisite
corporate power and authority to enter into this Agreement and the Hold Co
Merger Agreement, to perform their obligations hereunder and thereunder,
including entering into and performing any additional Contracts contemplated
hereby or thereby to which either is a party and to consummate the transactions
contemplated hereby and thereby.  The execution and delivery of this
Agreement, the Hold Co Merger Agreement, and any additional Contracts
contemplated hereby or thereby to which either is a party and the consummation
of the transactions contemplated hereby and thereby by Hold Co and Newco have
been duly authorized by all necessary corporate action on the part of Hold Co
and Newco.  This Agreement and the Hold Co Merger Agreement, and any
additional Contracts being delivered herewith or therewith to which the Company
is a party, have been or will be duly executed and delivered by Hold Co and
Newco, with respect to the Hold Co Merger Agreement, and, assuming due
authorization, execution and delivery by the other parties thereto, each
constitute the valid and binding obligation of Hold Co and Newco, with respect
to the Hold Co Merger Agreement, enforceable against Hold Co and Newco, with
respect to the Hold Co Merger Agreement, in accordance with their terms, subject
to the effect of (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws now or hereafter in effect relating to rights of
creditors generally, and (ii) rules of Law and equity governing specific
performance, injunctive relief and other equitable remedies.

    


    (c)      
     The execution and delivery by the Company, Newco
and Hold Co of this Agreement, the Drop Down Agreement, the Hold Co Merger
Agreement (to the extent each is a party to such agreement) and any additional
Contracts contemplated hereby or thereby to which the Company, Newco or Hold Co
are or will be party do not, and the consummation of the transactions
contemplated hereby and thereby by the Company, Newco or Hold Co will not, (i)
result in the creation of an Encumbrance on any properties or assets of Hold Co,
the Company or any of their respective Subsidiaries, or (ii) conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation,
renegotiation or acceleration of any obligation or loss of any benefit under, or
require any consent, approval or waiver from any Person in accordance with, (A)
any provision of the organizational documents of Hold Co, Newco, the Company or
any of their respective Subsidiaries, or (B) any Permit or Law applicable to
Hold Co, Newco the Company or any of their respective Subsidiaries or any of
their respective properties or assets.  No consent, approval, order or
authorization of, or registration, declaration or filing with, any government,
court, tribunal, arbitrator, administrative agency, commission or other
governmental official, authority or instrumentality, in each case whether
domestic or foreign, any stock exchange or similar self-regulatory organization
or any quasi-governmental or private body exercising any regulatory, taxing or
other governmental or quasi-governmental authority (each a “Governmental
Entity”) is required by or with respect to the Company, Newco, Hold Co or
any of their respective Subsidiaries in connection with the execution and
delivery of this Agreement, the Drop Down Agreement, the Hold Co Merger
Agreement, any additional Contracts contemplated hereby or thereby or the
consummation of the transactions contemplated hereby or thereby, except for (w)
the filing of the Certificate of Merger and the certificate of merger effecting
the Hold Co Merger, (x) such filings as may be required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”)
and any required foreign antitrust filing, and (y) compliance with any
applicable requirements of the Securities Act, the Exchange Act, state
securities and “blue sky” laws.

    


    
      
        
           


        

        
          11

          
            

          

        

        
           


        

      

    

    


    (d)        
   The execution and delivery by the Company, Newco and Hold Co
of this Agreement, the Drop Down Agreement, the Hold Co Merger Agreement and any
additional Contracts contemplated hereby or thereby to which the Company, Newco
or Hold Co are or will be a party do not, and the consummation of the
transactions contemplated hereby and thereby by the Company, Newco or Hold Co
will not conflict with, or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a right of
termination, cancellation, renegotiation, payment of additional amounts or
acceleration of any obligation or loss of any benefit under, or require any
consent, approval or waiver from any Person in accordance with any Contract to
which Hold Co, Newco, the Company or any of their respective Subsidiaries is a
party.

    


    2.4           Financial
Statements.

    


    (a)     
      The Company has delivered to Parent its
consolidated financial statements audited by PriceWaterhouseCoopers as at and
for the years ended December 31, 2006 and 2007 and its unaudited consolidated
balance sheet and statement of operations as at and for the twelve-month period
ended December 31, 2008 (the “Financial
Statements”).  The Financial Statements (a) have been prepared
in accordance with United States generally accepted accounting principles
(“GAAP”)
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of the unaudited financial
statements, as permitted by GAAP), and (b) present fairly, in all material
respects, the consolidated financial condition and results of operations and
cash flows of the Company and each of its Subsidiaries as of the dates, and for
the periods, indicated therein, except as otherwise noted therein (subject, in
the case of unaudited financial statements, to (i) the absence of footnotes and
(ii) year-end adjustments, which may be material).  The Company has
made no Accounting Change (as defined in Section 8.4(a)) since December 31,
2007, except as described in the Financial Statements or required by
GAAP.

    


    (b)     
      Section 2.4(b) of the Company Disclosure
Letter contains a true and complete list, as of the date hereof, of all
pre-payments, deposits, payments for land rights, permits, letters of credit in
support of PPA’s, and similar payments made by the Company or any of its
Subsidiaries Related to the Project Business (collectively, the “Project
Pre-Payments”).

    


    (c)     
      Section 2.4(c) of the Company Disclosure
Letter sets forth a good faith estimate of any Project Business Payments made
between January 1, 2009 and the date hereof.

    


    
      
        
           


        

        
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    2.5           Absence of Certain Changes;
Undisclosed Liabilities.

    


    (a)      
     Other than with respect to the Drop Down, the
Distribution and the Hold Co Merger, since December 31, 2008 (the “December 31
Balance Sheet Date”) the Company and each of its Subsidiaries has
conducted its business only in the ordinary course of business, and there has
not occurred any change, event or condition (whether or not covered by
insurance) that, individually or in the aggregate with any other changes, events
and conditions, has resulted in, or would reasonably be expected to result in, a
Company Material Adverse Effect or a Project Material Adverse
Effect.  In addition, from the December 31 Balance Sheet Date until
the date hereof neither the Company nor any of its Subsidiaries
has:

    


    (i)            
   Caused or permitted any amendments to its organizational
documents;

    


    (ii)           
   Declared or paid any dividends on or made any other
distributions, other than cash dividends between the Company and its
Subsidiaries (whether in cash, stock or property) in respect of any of its
capital stock, or split, combined or reclassified any of its capital stock or
issued or authorized the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock, except in accordance with
the ordinary course of business under the Company Stock Plan;

    


    (iii)       
      Made any loans or advances (including
prepayments) to, or any investments in or capital contributions to, or forgiven
or discharged in whole or in part any outstanding loans or advances of, any
Person;

    


    (iv)          
   Granted any exclusive rights of any type or scope with respect
to the Project Business;

    


    (v)              
Sold, leased, licensed or otherwise disposed of or encumbered any of the Project
Assets; or

    


    (vi)             
Taken or agreed in writing or otherwise to take, any of the actions described in
the foregoing clauses of this Section 2.5(a).

    


    (b)       
    Neither the Company nor any of its Subsidiaries has any
material Financial Liabilities of any nature, whether matured or unmatured,
fixed or contingent, determined or undetermined, known or unknown (whether or
not required to be reflected in accordance with GAAP) other than (i) those set
forth or adequately provided for in the balance sheet as of December 31, 2008
included in the Financial Statements, (ii) those incurred in the ordinary course
of business since the December 31 Balance Sheet Date and (iii) those pursuant to
the terms of Contracts disclosed in the Company Disclosure Letter or incurred
pursuant to the terms of Contracts that are not required to be disclosed in the
Company Disclosure Letter.

    


    (c)        
   Immediately following the Closing, neither the Surviving
Company nor any Project Company will have any Financial Liabilities of any
nature, whether matured or unmatured, fixed or contingent, determined or
undetermined, known or unknown (whether or not required to be reflected in
accordance with GAAP) other than those (i) permitted to be incurred in
compliance with Section 4.2 and Related to the Project Business, (ii) that
Parent and the Company together have agreed in writing should be retained by the
Surviving Company or its Subsidiaries (those described in subsection (ii) the
“Permitted
Retained Liabilities”) and (iii)  those pursuant to the terms
of Project Contracts disclosed in the Company Disclosure Letter or incurred
pursuant to the terms of Projects Contracts that are not required to be
disclosed in the Company Disclosure Letter; provided that, in each case
specified in clause (iii), neither the Company nor any of its Subsidiaries is in
breach of, or default under, any such Contracts.  For the avoidance of
doubt, nothing in this Section 2.5(c) shall limit, adjust or impair the
inclusion of Project Business Payments in the calculation of the Merger
Consideration as set forth in Section 1.4(c).

    


    
      
        
           


        

        
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    (d)        
   Section 2.5(b) and Section 2.5(c) do not relate to litigation
or environmental matters, which are the subjects of Section 2.6 and Section
2.18, respectively.

    


    2.6           Litigation.  There
is no private or governmental action, suit, proceeding, claim, arbitration or,
to the knowledge of the Company, investigation pending before any Governmental
Entity or arbitrator, or, to the knowledge of the Company, threatened against
the Company, any of its Subsidiaries or any of the Project Assets or other
assets of the Company or any of its Subsidiaries, or, to the knowledge of the
Company, any of their respective officers or directors (in their capacities as
such).  There is no judgment, decree or order against the Company or
any of its Subsidiaries, any of the Project Assets, or, to the knowledge of the
Company, any of the directors or officers of the Company or any of its
Subsidiaries (in their capacities as such), that would reasonably be expected to
prevent, enjoin, or alter or delay any of the transactions contemplated by this
Agreement, the Drop Down Agreement, the Distribution or the Hold Co Merger, or
that, individually or in the aggregate with any such other judgments, decrees
and orders, would reasonably be expected to have a Company Material Adverse
Effect or a Project Material Adverse Effect.  This section does not
relate to matters with respect to Taxes, which are the subject of Section 2.9,
or to employee matters, which are the subject of Section 2.10 and
2.11.

    


    2.7           Restrictions on Business
Activities.  There is no Project Contract (including covenants
not to compete), judgment, injunction, order or decree binding upon the Company
or any of its Subsidiaries that has or would reasonably be expected to have,
whether before or after consummation of the Merger, the effect of prohibiting or
expressly restricting (i) any current or currently proposed future business
practice of the Company or any Project Company, any acquisition of property
(tangible or intangible) by the Company or any Project Company or the conduct of
business of the Company or any Project Company, in each case, as currently
conducted or as currently proposed to be conducted by the Company or any Project
Company, or (ii) the conduct by the Company or any of the Project Companies
after the Closing of their respective businesses as conducted as of the date
immediately prior to the date hereof, or (iii) the conduct of Parent or any of
its Subsidiaries after the Closing of their respective businesses as currently
conducted.  Without limiting the generality of the foregoing, neither
the Company nor any Project Company has entered into any Contract that includes
a “most favored pricing” or similar clause restricting the right of the Company
or any Project Company to operate their respective business or that in any
manner restricts Company or any Project Company from selling, licensing or
otherwise distributing any of their respective technology or products to, or
from providing services to, customers or currently proposed customers or any
class of customers, in any geographic area, during any period of time or in any
segment of the market.

    


    
      
        
           


        

        
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    2.8           Intellectual
Property.

    


    (a)      
     The Company or one of its Subsidiaries, other than
the Spin-Off Subsidiary and its Subsidiaries, owns, licenses or otherwise has
sufficient rights to use all Intellectual Property used in or necessary for the
conduct of the Project Business and each Project Company Business, both as
currently conducted (the “Project IP
Rights”).  Except as set forth in Section 2.8(b) of the Company
Disclosure Letter or provided for under Section 4.8 of the Drop Down Agreement,
all Project IP Rights that are owned by the Company or any of its Subsidiaries
are owned solely and exclusively and free and clear of any and all
Encumbrances.

    


    (b)        
   Section 2.8(b) of the Company Disclosure Letter sets forth a
complete and accurate list, as of the date hereof, of (1) all Intellectual
Property that is registered with or issued by a Governmental Entity (or a
registrar of domain names) or that is subject to an application for registration
with or issuance by a Governmental Entity and included among the Project IP
Rights (the “Project
Registered Intellectual Property”) and (2) all material unregistered
Trademarks included among the Project IP Rights.  For each listed
item, Section 2.8(b) of the Company Disclosure Letter indicates, as applicable,
the owner of such Intellectual Property, the countries in which such
Intellectual Property is registered or application for registration has been
filed, registration or application number, and the filing and expiration dates
thereof.

    


    (c)      
     Neither the execution, delivery or performance of
this Agreement nor the consummation of the Merger, the Drop Down, the
Distribution, the Hold Co Merger or the other transactions contemplated by this
Agreement, the Hold Co Merger Agreement or the Drop Down Agreement will impair
the rights of the Company or any of its Subsidiaries in any Project IP Right or
portion thereof.  Neither the Company nor any of its Subsidiaries is
paying any royalties, honoraria, fees or other payments to any third person
(other than salaries payable to employees and independent contractors not
contingent on or related to use of their work product) as a result of the
ownership, use, possession, license-in, sale, marketing, advertising or
disposition of any Project IP Rights, and none shall become payable as a result
of the consummation of the transactions contemplated by this Agreement or the
Drop Down Agreement.

    


    (d)        
   The operation of the Project Business and each Project Company
Business as currently conducted does not (i) violate any Contract between the
Company or any of its Subsidiaries and any third party, (ii) infringe or
misappropriate any Intellectual Property right of any third party or (iii)
constitute unfair competition or trade practices under applicable Law, nor does
there exist any Basis therefor.  Neither the Company nor any of its
Subsidiaries has received any written notice (or, to the knowledge of the
Company, any oral notice) asserting that any of the Project IP Rights or the
conduct of the Project Business or any Project Company Business conflicts with
or infringes, or would conflict with or infringe, the Intellectual Property of
any third party, and neither the Company nor any of its Subsidiaries has
received any written notice (or, to the knowledge of the Company, any oral
notice) from any third party offering a license under any such third party
Intellectual Property or other right to avoid litigation or other
claims.  To the knowledge of the Company, there is no unauthorized
use, disclosure, infringement or misappropriation of any Project IP Rights owned
by the Company or any of its Subsidiaries by any third party, including any
employee or former employee of the Company or any of its
Subsidiaries.

    


    
      
        
           


        

        
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    (e)        
   The Company and its Subsidiaries have taken all commercially
reasonable steps consistent with industry standard practices to (i) protect,
preserve and maintain the secrecy and confidentiality of Trade Secrets in the
Project IP Rights, and (ii) preserve and maintain all of the Company’s and its
Subsidiaries’ proprietary rights included among Project IP Rights.

    


    (f)        
    All current employees of the Company and each of its
Subsidiaries who contributed to the creation or the development of any Project
IP Rights or have access to the same have executed confidentiality agreements
for the benefit of the Company or any of its Subsidiaries, as applicable,
substantially in the form of the Company’s standard form(s) for the relevant
jurisdiction, which forms are attached to Section 2.8(f) of the Company
Disclosure Letter (an “IP
Agreement”), and all former employees of the Company and each of its
Subsidiaries who contributed to, the creation or the development of any Project
IP Rights have executed such an agreement in substantially such standard
form(s).  No current or former employee, officer, director, consultant
or advisor of the Company or any of its Subsidiaries (i) has any right, license,
claim or interest whatsoever in or with respect to any Project IP Rights, or
(ii) to the knowledge of the Company, is in material violation of any material
term of any IP Agreement entered into with the Company or any of its
Subsidiaries.  To the knowledge of the Company, no employee, officer,
director, consultant or advisor of the Company or any of its Subsidiaries is in
material violation of any term of any employment Contract or any other Contract,
or any restrictive covenant, relating to the right to use Trade Secrets or
proprietary information of others, and the employment of any such Person by the
Company or any of its Subsidiaries does not subject any of the Company or any of
its Subsidiaries to any Liability to any third party.

    


    (g)       
    No Governmental Entity, university, college or other
education institution or research center has any right to, ownership of or right
to royalties for any Project IP Rights.

    


    (h)      
     No Project IP Rights have been acquired by the
Company or any of the Project Companies from any third party.

    


    (i)        
    To the knowledge of the Company, the Project Registered
Intellectual Property (other than applications for Patents or Trademarks) are
valid and enforceable, and, to the knowledge of the Company, none of the Project
IP Rights has been adjudicated invalid or unenforceable, in whole or in
part.  None of the Project IP Rights are subject to any outstanding
injunction, judgment, order, decree, ruling, charge, settlement or other
disposition of any dispute where the Company or any of its Subsidiaries is a
party.  There are no actions that must be taken by the Company or any
of its Subsidiaries with any Governmental Entity with respect to any of the
Project Registered Intellectual Property within 60 days of the date hereof,
including the payment of any registration, maintenance or renewal fees or the
filing of any documents, applications or articles, for the purposes of
maintaining, preserving or renewing any Project Registered Intellectual
Property.

    


    2.9           Taxes.

    


    (a)        
   “Tax” means
(i) any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, estimated, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit tax, custom duty
or other tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or any penalty, addition to tax or
additional amount imposed by any Governmental Entity responsible for the
imposition of any such tax (domestic or foreign) (each, a “Tax
Authority”), (ii) any Liability for the payment of any amounts of the
type described in clause (i) of this sentence as a result of being a member of
an affiliated, consolidated, combined, unitary or aggregate group for any
taxable period, and (iii) any Liability for the payment of any amounts of the
type described in clause (i) or (ii) of this sentence as a result of being a
transferee of or successor to any Person or as a result of any obligation to
indemnify any other Person.  “Tax
Return” means any return, statement, report or form (including estimated
Tax Returns and reports, withholding Tax Returns and reports and information
returns and reports) required to be filed with respect to Taxes.

    


    
      
        
           


        

        
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    (b)     
      The Company and each of its Subsidiaries,
and any consolidated, combined, unitary, aggregate or affiliated group for Tax
purposes of which the Company or any of its Subsidiaries is or has been a
member, have properly completed and timely filed all income, franchise and other
Tax Returns required to be filed by them.  All such Tax Returns are
true and correct in all respects and have been completed in accordance with
applicable Law and the Company and each of its Subsidiaries have paid or
withheld and paid to the appropriate Tax Authority all Taxes due (whether or not
shown to be due on such Tax Returns).  The Company has never filed,
and is not obligated to file, any consolidated, combined, unitary, aggregate or
affiliated Tax return for U.S. federal income Tax or any other Tax
purpose.

    


    (c)      
     The balance sheet as of December 31, 2008 included
in the Financial Statements reflects all unpaid Taxes of the Company and/or any
of its Subsidiaries for periods (or portions of periods) through the December 31
Balance Sheet Date.  Neither the Company nor any of its Subsidiaries
has any Liability for unpaid Taxes accruing after the December 31 Balance Sheet
Date except for Taxes arising in the ordinary course of business subsequent to
the December 31 Balance Sheet Date.

    


    (d)    
       There is (i) no claim for Taxes being
asserted against the Company or any of its Subsidiaries that has resulted in an
Encumbrance against the property of the Company or any of its Subsidiaries, and
there is no such Encumbrance for Taxes outstanding, other than Encumbrances for
Taxes not yet due and payable, (ii) no audit of any Tax Return of the Company or
any of its Subsidiaries being conducted by a Tax Authority and no written notice
(and, to the knowledge of the Company, no oral notice) of any such audit being
commenced that has been received by the Company or any of its Subsidiaries, and
(iii) no extension of any statute of limitations on the assessment of any Taxes
granted by the Company or any of its Subsidiaries currently in
effect.  Neither the Company nor any of its Subsidiaries has been
informed by any jurisdiction that the jurisdiction believes that such entity was
required to file any Tax Return that was not filed.

    


    (e)    
       Neither the Company nor any of its
Subsidiaries has (i) been or will be required to include any adjustment in
Taxable income for any Tax period (or portion thereof) in accordance with
Section 481 or Section 108(i) of the Code or any comparable provision under
state or foreign Tax Laws as a result of transactions, events or accounting
methods employed prior to the Merger, (ii) filed, or was required to file, any
disclosures under Section 6662 of the Code or comparable provisions of state,
local or foreign Law to prevent the imposition of penalties with respect to any
Tax reporting position taken on any Tax Return, (iii) engaged in a “reportable
transaction,” as set forth in Treasury Regulation Section 1.6011-4(b), (iv) ever
been a member of a consolidated, combined, unitary aggregate or affiliated group
of which the Company was not the ultimate parent company, (v) been the
“distributing corporation” or the “controlled corporation” (in each case, within
the meaning of Section 355(a)(1) of the Code) with respect to a transaction
described in Section 355 of the Code (A) within the two-year period ending as of
the date of this Agreement, or (B) in a distribution that could otherwise
constitute part of a “plan” or “series of related transactions” (within the
meaning of Section 355(e) of the Code) that includes the transactions
contemplated by this Agreement, (vi) ever been a “United States real property
holding corporation” within the meaning of Section 897 of the Code, (vii) any
actual or potential Liability under Treasury Regulations Section 1.1502-6 (or
any comparable or similar provision of federal, state, local or foreign Law) or
otherwise, as a transferee or successor, in accordance with any contractual
obligation, or otherwise for any Taxes of any person other than the Company or
any of its Subsidiaries, or (viii) taken or agreed to take any action not
provided for in this Agreement (nor does the Company or any of its Subsidiaries
have knowledge of any fact or circumstance whether or not specified or provided
for in this Agreement) that is reasonably likely to prevent the Merger from
qualifying as a “reorganization” within the meaning of Section 368(a) of the
Code.

    


    
      
        
           


        

        
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    (f)      
      Neither the Company nor any of its
Subsidiaries is a party to or bound by any Tax sharing or Tax allocation
agreement with any party, nor does the Company or any of its Subsidiaries have
any Liability or potential Liability to another party under any such
agreement.

    


    (g)        
   Each of the Company and each of its Subsidiaries has withheld
or collected and timely paid over to the appropriate Tax Authorities (or are
properly holding for such timely payment) all Taxes required by Law to be
withheld or collected.

    


    (h)       
    Neither the Company nor any of its Subsidiaries will be
required to include any item of income in, or exclude any item of deduction
from, taxable income for any period (or any portion thereof) ending after the
Closing Date as a result of any: (i) installment sale or other open transaction
disposition made on or prior to the Closing Date, (ii) prepaid amount received
on or prior to the Closing Date, (iii) closing agreement described in Section
7121 of the Code or any corresponding provision of state or foreign Law executed
on or prior to the Closing Date, or (iv) change in method of accounting to a
taxable period ending on or prior to the Closing Date.

    


    (i)       
     Section 2.9(i) of the Company Disclosure Letter
lists all income, franchise and similar Tax Returns (federal, state, local and
foreign) filed with respect to each of the Company and its Subsidiaries for
taxable periods ended on or after January 1, 2005, indicates the most recent
income, franchise or similar Tax Return for each relevant jurisdiction for which
an audit has been completed or the statute of limitations has lapsed and
indicates all Tax Returns that currently are the subject of audit.

    


    (j)      
      None of the assets of the Company or any of
its Subsidiaries is “tax-exempt use property” within the meaning of Section
168(h) of the Code.

    


    
      
        
           


        

        
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    (k)            None
of the Real Property as to which the Company or any of its Subsidiaries is
obligated, contractually or by Law, to pay ad valorem taxes, (i) is subject to
rollback Taxes, Tax penalties, or Tax assessment increases, or (ii) has been or
is entitled to a preferential or special real estate Tax assessment or Tax
treatment.

    


    (l)       
     Neither the Company nor any of its Subsidiaries
will realize any gain for U.S. federal income Tax purposes or any other Tax
purposes, nor will any other Taxes arise, as a result of the Distribution, the
Hold Co Merger, any of the transactions contemplated by the Drop Down Agreement
or any transfer of assets that is undertaken in order to separate the assets
that will be held, directly or indirectly, by the Company or any Project Company
following the Distribution from the assets that will not be so
held.

    


    (m)           There
are no circumstances existing which could result in the application of section
78, section 79, or sections 80 to 80.04 of the Canadian Tax Act, or any
equivalent provision under applicable provincial Law, to the Company or any
Project Company.  The Company and its Subsidiaries have not claimed
nor will they claim any reserve under any provision of the Canadian Tax Act or
any equivalent provincial provision, if any amount could be included in the
income of the Company or any of its Subsidiaries for any period ending after the
Closing Date.

    


    (n)      
     For all transactions between the Company or any of
its Subsidiaries, on the one hand, and any non-resident Person with whom the
Company or any of its Subsidiaries were not dealing at arm’s length, for the
purposes of the Canadian Tax Act, on the other hand, during a taxation year
commencing after 1998 and ending on or before the Closing Date, the Company or
any of its Subsidiaries have made or obtained records or documents that satisfy
the requirements of paragraphs 247(4)(a) to (c) of the Canadian Tax
Act.

    


    (o)      
     Neither the Company nor any of its Subsidiaries
are subject to any joint venture, partnership or other arrangement or contract
that is treated as a partnership for Tax purposes in any
jurisdiction.

    


    (p)        
   To the knowledge of the Company and its Subsidiaries, no
inquiry or claim has ever been made by a Government Entity in respect of Taxes
in a jurisdiction where the Company or its Subsidiaries does not file Tax
Returns that the Company or its Subsidiaries are or may be subject to Tax in
that jurisdiction.

    


    (q)       
    The Company and the Project Companies have not, and have
not been deemed to have for purposes of the Canadian Tax Act, acquired or had
the use of property for proceeds greater than the fair market value thereof
from, or disposed of property for proceeds less than the fair market value
thereof to, or received or performed services for other than the fair market
value from or to, or paid or received interest or any other amount other than at
a fair market value rate to or from, any Person, firm or company with whom it
does not deal at arm’s length within the meaning of the Canadian Tax
Act.

    


    (r)       
     No stock in the Company is owned by any Subsidiary
of the Company.

    


    (s)       
    Section 351(a) of the Code shall apply to the Drop
Down.

    


    
      
        
           


        

        
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    (t)           
 All U.S. domestic Subsidiaries of the Company are, and have always been
disregarded entities for U.S. federal income tax purposes, and no election has
been made to change the default classification for U.S. federal income tax
purposes of any non-U.S. Subsidiary of the Company.

    


    2.10         Employee Benefit
Plans.

    


    (a)      
     Section 2.10(a) of the Company Disclosure Letter
sets forth a complete list, as of the date hereof, of (i) all “employee benefit
plans,” as defined in Section 3(3) of ERISA (as defined in Section 8.4), (ii)
all other currently effective severance pay, salary continuation, bonus,
incentive, stock option, retirement, pension, profit sharing or deferred
compensation plans, Contracts, programs, funds or arrangements of any kind, and
(iii) all other employee benefit plans, Contracts, programs, funds or
arrangements (whether written or oral, qualified or nonqualified, funded or
unfunded, foreign or domestic) and any trust, escrow or similar Contract related
thereto, whether or not funded, in respect of any present or former employees,
directors, officers, stockholders, consultants or independent contractors of the
Company or any of its Subsidiaries that are sponsored or maintained by the
Company or any of its Subsidiaries or with respect to which the Company or any
of its Subsidiaries has made or is required to make payments, transfers or
contributions (all of the above being hereinafter individually or collectively
referred to as “Employee
Plan” or “Employee
Plans,” respectively).  The Company has no Liability with
respect to any plan, arrangement or practice of the type described in the
preceding sentence other than the Employee Plans.  All Employee Plans
will be terminated in accordance with their terms or transferred to the Spin-Off
Subsidiary at or prior to the Closing, without any Liability to the Company or
any of its Subsidiaries (other than the Spin-Off Subsidiary and its
Subsidiaries).

    


    (b)       
    Neither the Company nor any of its Subsidiaries
currently has, and at no time in the past has had, an obligation to contribute
to a “defined benefit plan” as defined in Section 3(35) of ERISA, a pension plan
subject to the funding standards of Section 302 of ERISA or Section 412 of the
Code,  a “multiemployer plan” as defined in Section 3(37) of ERISA or
Section 414(f) of the Code or a “multiple employer plan” within the meaning of
Section 210(a) of ERISA or Section 413(c) of the Code.

    


    (c)       
    No Employee Plan is or at any time was funded through a
“welfare benefit fund” as defined in Section 419(e) of the Code, and no benefits
under any Employee Plan are or at any time have been provided through a
voluntary employees’ beneficiary association (within the meaning of subsection
501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the
meaning of Section 501(c)(17) of the Code).

    


    (d)        
   Except for the Company’s Subsidiaries, no other entity or
trade or business is, or at any time within the past six years has been,
treated, together with the Company, as a single employer under Section 414 of
the Code or as a controlled group under Section 4001 of ERISA.

    


    (e)        
   Copies of the following materials have been delivered to
Parent:  (i) all current plan documents for each Employee Plan or, in
the case of an unwritten Employee Plan, a written description thereof, (ii) the
most recent determination letter or opinion letter from the IRS with respect to
any of the Employee Plans that have received a determination letter or opinion
letter, (iii) all current summary plan descriptions, summaries of material
modifications, annual reports, and summary annual reports, and (iv) all current
trust agreements, insurance contracts, and other documents relating to the
funding or payment of benefits under any Employee Plan.

    


    
      
        
           


        

        
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    (f)      
      Each Employee Plan has been maintained,
operated, and administered in material compliance with its terms and any related
documents or agreements and in material compliance with all applicable
Laws.

    


    (g)       
    Each Employee Plan intended to be qualified under
Section 401(a) of the Code has been determined by the IRS to be so qualified,
and each trust created thereunder has been determined by the IRS to be exempt
from tax under the provisions of Section 501(a) of the Code, and nothing has
occurred since the date of any such determination that would reasonably be
expected to give the IRS grounds to revoke such determination.

    


    (h)        
   With respect to each group health plan benefiting any current
or former employee of the Company or its Subsidiaries that is subject to Section
4980B of the Code, the Company and each Subsidiary has complied in all material
respects with the continuation coverage requirements of Section 4980B of the
Code and Part 6 of Subtitle B of Title I of ERISA.

    


    (i)         
   There is no pending or, to the Company’s knowledge, threatened
assessment, complaint, proceeding, or, to the knowledge of the Company,
investigation of any kind in any court or government agency with respect to any
Employee Plan (other than routine claims for benefits).

    


    (j)        
    Neither the execution and delivery of this Agreement or
the Drop Down Agreement nor the consummation of the transactions contemplated
hereby or thereby or the consummation of the Distribution or the Hold Co Merger
will, alone or in connection with any other event, (i) result in any payment
(including severance, unemployment compensation or golden parachute) becoming
due under any Employee Plan, (ii) increase any compensation or benefits
(including severance, deferred compensation and equity benefits) otherwise
payable under any Employee Plan, (iii) result in the acceleration of the time of
payment or vesting of any benefits to any extent under any Employee Plan, or
(iv) result in the forgiveness in whole or in part of any outstanding loans made
by the Company or any of its Subsidiaries to any Person.  No benefit
or payment under any Employee Plan or other severance or compensation
arrangement that is “contingent” (within the meaning of Section 280G(b)(2)(i) of
the Code) on this Agreement, the Drop Down Agreement or the transactions
contemplated by this Agreement, the Drop Down Agreement, the Distribution or the
Hold Co Merger will, either independently or when aggregated with all other
amounts payable to any individual, constitute an “excess parachute payment” (as
defined under Section 280G(b)(1) of the Code).

    


    (k)     
      The term “Foreign Plan” shall mean any
Employee Plan that is maintained outside of the United States.  Each
Foreign Plan complies with all applicable Law (including, without limitation,
applicable Law regarding the form, funding and operation of the Foreign Plan) in
all material respects.  All contributions required to have been made
to all Foreign Plans as of the Closing will have been made as of the
Closing.  There are no actions, suits or claims pending or threatened
with respect to the Foreign Plans (other than routine claims for
benefits).

    


    
      
        
           


        

        
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    2.11         Employee Matters.

    


    (a)         
  Neither the Company nor any of its Subsidiaries is liable for any
payment to any trust or other fund or to any Governmental Entity, with respect
to unemployment compensation benefits, social security or other benefits or
obligations for employees (other than routine payments to be made in the normal
course of business and consistently with past practice).  The Company
has not received written notice (or, to the knowledge of the Company, any oral
notice) of any pending claims against the Company and/or any of its Subsidiaries
under any workers compensation plan or policy or for long term
disability.

    


    (b)        
   Neither the Company nor any of its Subsidiaries is a party to
or bound by any collective bargaining agreement, neutrality agreement,
card-check agreement or other labor union Contract, no collective bargaining
agreement, neutrality agreement, card-check agreement or other labor union
Contract is being negotiated by the Company or any of its Subsidiaries and
neither the Company nor any of its Subsidiaries has any duty to bargain with any
labor organization.  Neither the Company nor any of its Subsidiaries
is aware of any activities or proceedings of any labor union or to organize
their respective employees.  To the knowledge of the Company, there is
no labor dispute, threatened strike or work stoppage against the Company or any
of its Subsidiaries pending or threatened which may interfere with the
respective business activities of the Company or any of its
Subsidiaries.

    


    (c)        
   The Company has provided Parent a true, correct and complete
list of the names, positions and rates of compensation of each of the employees
of the Company or its Subsidiaries whose responsibilities are primarily Related
to the Project Business (the “Project
Employees”), showing each such person’s name, position, employer,
location of employment, status as exempt/non-exempt, bonuses and fringe benefits
for the current fiscal year and the most recently completed fiscal year and
whether that person has an employment contract with the Company or any of its
Subsidiaries.  Copies of all employment contracts entered into by the
Company or any of its Subsidiaries have been delivered to
Parent.  Except as contemplated by this Agreement or the Drop Down
Agreement, no employee of the Company or any of its Subsidiaries has given
written notice (or, to the knowledge of the Company, any oral notice) to the
Company or any of its Subsidiaries, nor is the Company otherwise aware, that any
such employee intends to terminate his or her employment with the Company, any
of its Subsidiaries or the Surviving Corporation.  The employment of
each of the employees of the Company or any of its Subsidiaries is “at will” and
neither the Company nor any of its Subsidiaries has any obligation to provide
any particular form or period of notice prior to terminating the employment of
any of their respective employees.

    


    (d)       
    All individuals employed by the Company and its
Subsidiaries as of the Closing in the United States will be, and all former
employees of the Company and its Subsidiaries in the United States whose
employment terminated, voluntarily or involuntarily, within three years prior to
the date of this Agreement, were, legally authorized to work in the United
States.  The Company has completed and retained the necessary
employment verification paperwork under the Immigration Reform and Control Act
of 1986 (“IRCA”) for
the employees hired prior to the date of this Agreement, and the Company has
complied with anti-discrimination provisions of the IRCA.  Further,
except to the extent that the statute of limitations under IRCA has lapsed, at
all times prior to the date of this Agreement, the Company was in compliance
with both the employment verification provisions (including without limitation
the paperwork and documentation requirements) and the anti-discrimination
provisions of IRCA.

    


    
      
        
           


        

        
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    2.12         Related Party
Transactions.  No officer or director or, to the knowledge of
the Company, any Company Stockholder (nor, to the knowledge of the Company, any
immediate family member of any of such Persons; any trust, partnership or
company in which any of such Persons has or has had an interest; or any
Affiliated investment fund of any director), has since January 1, 2006, directly
or indirectly, any financial interest in (a) any Person that furnished or sold,
or furnishes or sells, services, products, land or technology to the Company or
any Project Company for use in the Project Business or any Project Company
Business, (b) any Person that purchases from or sells or furnishes to the
Company or any of its Subsidiaries any goods or services used in the Project
Business or any Project Company Business, or (c) any Project Contract, provided, however, that ownership of no
more than one percent (1%) of the outstanding voting stock of a publicly traded
company shall not be deemed to be an “financial interest in any Person” for
purposes of this Section 2.12.  No member, officer or director of the
Company or any of the Project Companies is an officer or employee of any
Governmental Entity.

    


    2.13         Insurance.  Section
2.13 of the Company Disclosure Letter is a true, correct and complete listing as
of the date hereof of all policies of insurance and bonds Related to the Project
Business currently in effect and issued at the request or for the benefit of the
Company or any of the Project Companies.  As of the date hereof, there
is no material claim pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds.  The Company and each of its Subsidiaries is in
compliance with the terms of such policies and bonds.  The Company has
no knowledge of any threatened termination of, or premium increase in an amount
greater than 20% of the current annual premium paid with respect to, any of such
policies.

    


    2.14         Contracts.

    


    (a)  
         Section 2.14(a) of the
Company Disclosure Letter (as identified in the applicable subsection thereof)
contains a complete and accurate list as of the date hereof of each Project
Contract of the following types which have not been fully
performed:

    


    (i)         
      any supply Contract, including all purchaser
orders other than those in amounts less than $10,000 individually;

    


    (ii)            
  any power purchase Contract for the sale of the electricity and
Environmental Attributes of a Project;

    


    (iii)            
 any Real Property Agreements;

    


    (iv)             any
Contract for the purchase or sale of assets or securities, goods or services,
financing agreements, interconnection agreements, applications for
interconnection of any Project evidencing an interconnection queue position,
equipment supply agreements, consulting agreements, employment and labor
agreements, guarantees and bonds (other than purchase orders);

    


    
      
        
           


        

        
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    (v)        
     any trust indenture, mortgage, promissory note,
loan agreement or other Contract for the borrowing of money, any currency
exchange, commodities or other hedging arrangement or any leasing
transaction;

    


    (vi)             any
Contract in accordance with which the Company or any of its Subsidiaries is a
lessor or lessee of any machinery, equipment, motor vehicles, office furniture,
fixtures or other personal property requiring rental payments in excess of
$10,000 annually;

    


    (vii)            any
license or other Contract providing rights to, or based upon, any Project IP
Rights;

    


    (viii)           any
Contract not resulting from arm’s length negotiations;

    


    (ix)            
 any agreement of guarantee, support, indemnification, assumption or
endorsement of, or any similar commitment with respect to, the Liabilities of
any other Person;

    


    (x)          
    any government grants Contract;

    


    (xi)    
         any Contract with any
Governmental Entity;

    


    (xii)     
       any Contract relating to the
disposition or acquisition of assets or any interest in any business
enterprise;

    


    (xiii)     
      any employment Contract (excluding offer
letters that have no severance or acceleration provisions triggered by any
event) with current employees of the Company or any of the Project Companies as
of the date hereof; or

    


    (xiv)           any
other Contracts requiring annual payments of more than $10,000 individually or
$100,000 in the aggregate.

    


    (b)           
Section 2.14(b) of the Company Disclosure Letter (as identified in the
applicable subsection thereof) contains a complete and accurate list as of the
date hereof of each Transfer Contract of the following types which have not been
fully performed:

    


    (i)       
        any supply Contract, including
all purchaser orders other than those in amounts less than $10,000
individually;

    


    (ii)          
    any trust indenture, mortgage, promissory note, loan
agreement or other Contract for the borrowing of money, any currency exchange,
commodities or other hedging arrangement or any leasing
transaction;

    


    
      
        
           


        

        
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    (iii)       
      any Contract in accordance with which the
Company or any of its Subsidiaries is a lessor or lessee of any machinery,
equipment, motor vehicles, office furniture, fixtures or other personal property
requiring rental payments in excess of $50,000 annually;

    


    (iv)         
    any Contract with any Person with whom the Company or
any of its Subsidiaries does not deal at arms length;

    


    (v)          
    except as otherwise set forth on Section 2.14(b) of the
Company Disclosure Letter, any agreement of guarantee, support, indemnification
(other than Contracts containing ordinary course indemnification provisions),
assumption or endorsement of, or any similar commitment with respect to, the
Liabilities of any other Person;

    


    (vi)       
      any government grants Contract;

    


    (vii)        
    any Contract relating to the disposition or acquisition
of assets of or any interest in any business enterprise;

    


    (viii)           any
employment Contract (excluding offer letters that have no severance or
acceleration provisions triggered by any event under which neither the Company
nor any Project Company has any Liabilities) with current employees of the
Company as of the date hereof; or

    


    (ix)              any
other Contract requiring annual payments of more than $10,000 individually or
aggregate payments of more than $100,000.

    


    (c)       
    All Project Contracts are in executed written form, and
the Company or the applicable Project Company has performed all of the
obligations therefor required to be performed by it and, subject to the effect
of (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar
Laws now or hereafter in effect relating to rights of creditors generally, and
(b) rules of Law and equity governing specific performance, injunctive relief
and other equitable remedies, is entitled to all benefits under, and is not
alleged to be in default in respect of, any Project Contract.  Each of
the Project Contracts is in full force and effect, and the Company, or the
applicable Project Company, and to the knowledge of the Company, any other party
to each Project Contract, are not in default of any Project
Contract.

    


    (d)        
   Immediately following the Effective Time, the Surviving
Company and each of its Subsidiaries will have no rights or Liabilities under
any Contract (other than a Delayed Transferred Asset (as defined in the Drop
Down Agreement)) that is not Related to the Project Business.

    


    (e)         
  Immediately following the Effective Time, the Spin-Off Subsidiary
and each of its Subsidiaries will have no rights or Liabilities under any
Project Contract.

    


    (f)       
     Section 2.14(f) of the Company Disclosure Letter
contains a true, complete and correct list of all land and power purchase
agreements that are under negotiation as of the date hereof, Related to the
Project Business (the “Pending
Agreements”). As of the date hereof, neither the Company nor any of its
Subsidiaries has received any written notice, nor does the Company otherwise
have knowledge that, the potential counterparty under any Pending Agreement has
terminated or intends to terminate such negotiations or, if a power purchase
agreement, has materially delayed or intends to materially delay such
negotiation.

    


    
      
        
           


        

        
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    (g)        
   Without any representation or warranty with respect to the
actions or intentions of any counterparty, immediately following the Closing,
the Company shall retain the same rights with respect to negotiations regarding
the Pending Agreements and the other agreements under negotiation set forth in
Section 2.14(f) of the Company Disclosure Letter that it possessed immediately
prior to the Closing.

    


    2.15         Project
Development.   The interconnection queue positions held by
the Company and any Project Company in respect of a Project, and all written
agreements, studies and reports entered into or issued by the Cal-ISO or any
applicable interconnection provider in connection with such queue positions, are
as listed on Section 2.15 of the Company Disclosure Letter.  Other
than as disclosed in the documents listed on Section 2.15 of the Company
Disclosure Letter, neither the Company nor any Project Company has received
written notice (or, to the knowledge of the Company, any oral notice) from the
Cal-ISO or any applicable interconnection provider, specific to a Project, that
the Cal-ISO or such interconnection provider has taken or has determined to take
any action with respect to termination of such queue positions.  The
Company or a Project Company, as applicable, has timely made all deposits and
other payments, and filed all reports and other information, required in order
to maintain such interconnection queue positions.

    


    2.16        
Assets.

    


    (a)       
    Section 2.16(a) of the Company Disclosure Letter
contains a true and complete list as of the date hereof of the (i) fixed assets
Related to the Project Business with a value greater than $10,000 owned or
leased by, in the possession of, or used by the Company or any Project Company
and (ii) each other tangible asset Related to the Project Business with a value
greater than $20,000 owned or leased by, in the possession of, or used by the
Company or any Project Company as of the date hereof (the “Project Fixed
Assets”).

    


    (b)      
     Other than the Project Contracts, the Real
Property Rights, the Retained Permit Rights, the Project IP Rights, equity
interests in the Project Companies, the Project Pre-Payments, the Project Fixed
Assets, the Project Business Information and the assets, properties and rights
set forth on Section 2.16(b) of the Company Disclosure Letter, the Company and
its Subsidiaries do not, as of the date hereof, have any right, title or
interest in, to or under any assets, properties or rights, real or personal,
tangible or intangible with an individual value greater than $25,000 or an
aggregate value greater than $100,000 that is Related to the Project Business
(the “Other
Project Assets”).  The Company’s right title and interest in
the Projects, Project Contracts, the Real Property Rights, the Retained Permit
Rights, the Project IP Rights, equity interests in the Project Companies, the
Project Pre-Payments, the Project Fixed Assets, cash held as collateral against
the letters of credit set forth on Section 2.14(a)(v) of the Company Disclosure
Letter, the Other Project Assets and the Project Business Information, in the
case of each such defined term ignoring any monetary limits set forth therein
are referred to collectively herein as the “Project
Assets.”  The Project Assets shall exclude the Cal-ISO
Deposit.

    


    
      
        
           


        

        
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    (c)        
   Section 2.16(c) of the Company Disclosure Letter contains an
accurate and complete list as of the date hereof of each fixed and tangible
assets and property with an individual value greater than $10,000 in which the
Company or any of its Subsidiaries have, as of the date hereof, any right, title
or interest as of the date hereof (collectively, along with real or personal,
tangible or intangible assets with an individual value greater than $10,000,
other than the Project Assets, the “Non-Project
Assets”).

    


    (d)       
    No Non-Project Asset is Related to the Project
Business

    


    (e)       
    Except as set forth in the reports set forth in Section
2.16(e) of the Company Disclosure Letter, the Company or the applicable Project
Company has good title to all Project Fixed Assets, and the Other Project
Assets.  All Project Fixed Assets and the Other Project Assets are
free and clear of any and all Encumbrances other than Permitted
Encumbrances.  The representations set forth in this Section 2.16(e)
shall not apply to Real Property Rights, which are separately addressed in
Section 2.17 below.

    


    2.17         Real
Property.

    


    (a)       
    Section 2.17(a) of the Company Disclosure Letter lists
all Contracts Related to the Project Business (the “Real Property
Agreements”) providing the Company or any of its Subsidiaries with rights
in the nature of leases, easements (including BLM Easements), rights-of-way,
restrictive covenants, options to purchase or lease any interests in real
property, or other material interests in real property and any Contracts
materially limiting the rights of the Company or its Subsidiaries against owners
of real property in which the Company and its Subsidiaries have any interest
necessary for the development, construction or operation of a Project as of the
date hereof (collectively, the “Real Property
Rights”), and the real property subject to such rights (the “Real
Property”).  Neither the Company nor any of its Subsidiaries
own any real property that is Related to the Project Business.

    


    (b)      
     Each of the Real Property Agreements constitutes
the valid and binding obligation of the Company or its Subsidiary and, to the
knowledge of the Company, the other parties thereto, enforceable against the
Company or its Subsidiary and, to the knowledge of the Company, the other
parties thereto in accordance with their terms, subject to the effect of (i)
applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws
now or hereafter in effect relating to rights of creditors generally, and (ii)
rules of Law and equity governing specific performance, injunctive relief and
other equitable remedies.

    


    (c)        
   The Company and the Project Companies are not and, to the
knowledge of the Company, no other party to any of the Real Property Agreements
is, in breach or default of the Real Property Agreements, and neither the
Company nor any of the Project Companies has failed to cure an event, upon
receiving notice that such an event has occurred which, with the giving of
notice or lapse of time, or both, would constitute a breach or default by the
Company or the Project Companies or permit termination, modification or
acceleration under such Real Property Agreement.

    


    (d)        
   True and correct copies as of the date hereof of the Real
Property Agreements (including all amendments thereto) have been delivered to
Parent;

    


    
      
        
           


        

        
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    (e)     
      All amounts currently due under each Real
Property Agreement have been paid.

    


    (f)        
    No party to any of the Real Property Agreements has
provided written notice (or, to the knowledge of the Company, any oral notice)
to the Company or any of its Subsidiaries that it has repudiated any provision
thereof.

    


    (g)       
    The Company has not received written notice (or to the
Company’s knowledge, any oral notice) of any material disputes, and there are no
oral agreements, or forbearance programs, to which the Company is a party in
effect, as to any of the Real Property Agreements.

    


    (h)       
    Except for the Permitted Encumbrances (disregarding
subsection (ii) of the definition of Permitted Encumbrances with respect to the
Shortlisted Projects), the Company has not received written notice (or, to the
knowledge of the Company, any oral notice) that, with respect to any Project,
any of the following exist which would materially and adversely affect the use
and operation of the Real Property Rights, Real Property, or the proposed
Project sites for the use currently proposed to be made thereof in connection
with any Project:

    


    (i)             
  any pending or threatened proceedings in eminent domain, for
rezoning, or any pending or threatened proceedings in land use or for existing
or required entitlements;

    


    (ii)        
      any plan, study or effort by any
Governmental Entity to widen, modify or realign any street or road providing
access to the Real Property or any proposed Project site, or any portion
thereof;

    


    (iii)       
      any encroachments of substations,
transmission facilities, other improvements, personal property or fixtures
located on the Real Property or any proposed Project site on adjoining lands,
any easements, or other interest in favor of third parties, nor any
encroachments onto the Real Property or any proposed Project site of any
substations, transmission facilities, improvements or other personal property or
fixtures located on adjoining lands;

    


    (iv)             any
mining, mineral or water extraction or development projects in progress or
planned or permitted to commence on or under the Real Property or any proposed
Project site, or any portion thereof;

    


    (v)        
     any pending or threatened native land claims;
and

    


    (vi)             any
commitments or agreements with any Governmental Entity or public or private
utility affecting the Real Property or any proposed Project site, or any portion
thereof.

    


    (i)       
     Except as set forth in the Real Property
Agreements, there are no rents, royalties, fees or other amounts greater than
$100,000 annually payable or receivable by the Company or any Project Company in
connection with any Real Property Agreement.

    


    
      
        
           


        

        
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    (j)         
   This Section 2.17 does not relate to environmental matters,
which are the subject of Section 2.18 hereof.

    


    2.18         Environmental.

    


    (a)       
    With respect to the Project Business:

    


    (i)         
      The Company and its Subsidiaries have
not Released Hazardous Materials at, on, about or under any  proposed
Project sites in a manner that has created a condition that has or could require
remediation, investigation or other response activity under Environmental
Law.  The Company and its Subsidiaries have not generated,
transported, treated, stored, or arranged to be disposed of Hazardous Materials
on, from, or under any proposed Project site in violation of, or in a manner or
to a location that could give rise to Liability under any Environmental Law or
Permit.  To the knowledge of the Company, there have been no Hazardous
Materials Released on, upon, from, or into any real property in the vicinity of
any real property owned, leased or used, currently or in the past, by the
Company or any of its Subsidiaries or on a proposed Project site which may be
come to be located on such real property owned, leased or used, currently or in
the past, by the Company or any of its Subsidiaries or on a proposed Project
site.

    


    (ii)           
  (A) Each of the Company and its Subsidiaries has materially complied
with all Environmental Laws, and the Company has not received written notice of
any action, suit, proceeding, hearing, charge, complaint, claim, demand, notice
or, to the knowledge of the Company, investigation filed or commenced or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries alleging any failure to comply with any applicable Environmental
Law, and, to the Company’s knowledge, the real property owned, leased or
used, now or in the past, by the Company or any of its Subsidiaries, to the
knowledge of the Company, is currently in
compliance with all Environmental Laws and (B) the Company and each of its
Subsidiaries are in material compliance with all of the terms and conditions of
any Permits and other authorizations that have already been obtained under
applicable Environmental Laws.

    


    (iii)          
   To the knowledge of the Company, there is no event that has
occurred that would reasonably be expected to result in material noncompliance
by the Company or any of its Subsidiaries with any Environmental Laws with
respect to the real property owned, leased or used, now or in the past,
by the Company or any of its Subsidiaries.

    


    (iv)        
    Part I of Section
2.18(a)(iv) of the Company Disclosure Letter sets forth a complete list of all
reports, studies and assessments commissioned by the Company or any of its
Subsidiaries concerning the Environmental Condition of any real property
owned, leased or used, currently or in the past, by the Company or any of its
Subsidiaries, wildlife habitat, threatened and
endangered species, wetlands and cultural resources at the sites, visual impacts
of developing solar energy projects at the sites, potential interference of such
development with civil and military aviation and radar, archeological resources,
historical properties/structures, environmental justice, storm water, traffic
impacts, noise impacts, and recreation impacts.  Part II of Section
2.18(a)(iv) of the Company Disclosure Letter sets forth a complete list of all
such reports commissioned, but not yet received by the Company or any of its
Subsidiaries.  The reports, studies and assessments listed on Parts I
and II of Section 2.18(a)(iv) of the Company Disclosure Letter constitute the
“Project Environmental
Reports.”  Neither the Company
nor any Project Company has received written notice of any event, circumstance
or condition that would render any information or conclusions in the Project
Environmental Reports untrue or materially misleading.  For purposes
of this Section 2.18(a)(iv), “Environmental
Condition” shall mean the condition of the
real property owned, leased or used, now or in the past, by the Company
or any of its Subsidiaries as it relates to the
compliance or non-compliance of suchwith
Environmental Laws.

    


    
      
        
           


        

        
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    (b)       
    With respect to any operation or business of the Company
or its Subsidiaries other than the Project Business, except as disclosed in the
Tech Environmental Reports:

    


    (i)             
  No Hazardous Materials have been Released at, on, about or under any
real property, owned, leased or used, currently or in the past, by the Company
or any of its Subsidiaries in a manner that has created a condition that has or
could require remediation, investigation or other response activity under
Environmental Law.  Hazardous Materials have not been generated,
transported, treated, stored, or arranged to be disposed of on, from, or under
any real property, owned, leased or used, currently or in the past, by the
Company or any of its Subsidiaries in violation of, or in a manner or to a
location that could give rise to Liability under any Environmental Law or
Environmental Permit (as defined below).  There have been no Hazardous
Materials Released on, upon, from, or into any real property in the vicinity of
any real property, owned, leased or used, currently or in the past, by the
Company or any of its Subsidiaries which may be come to be located on such real
property owned, leased or used, currently or in the past, by the Company or any
of its Subsidiaries.

    


    (ii)          
    Each of the Company and its Subsidiaries has complied
with all Environmental Laws, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand or notice has been filed or
commenced or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries alleging any failure to comply with any applicable
Environmental Law, and the real property owned, leased or used, now or in the
past, by the Company or any of its Subsidiaries is currently in compliance with
all Environmental Laws.

    


    (iii)        
     As of the date hereof, there have been no
environmental investigations, studies, audits, material tests, reviews or other
analyses conducted on behalf of or that are in the possession of the Company or
any of its Subsidiaries in relation to the real property owned, leased or used,
now or in the past, by the Company or any of its Subsidiaries that have not been
delivered to Parent.

    


    (iv)        
     To the knowledge of the Company there is no event
that has occurred that would reasonably be expected to result in noncompliance
with any Environmental Laws with respect to the real property owned, leased or
used, now or in the past, by the Company or any of its Subsidiaries.

    


    (v)         
     Each of the Company and its Subsidiaries possesses
all permits, licenses, variances, exemptions, orders and approvals necessary
under Environmental Laws to conduct the business as previously or currently
being conducted (“Environmental Permits”), and have complied with all
Environmental Permits.

    


    
      
        
           


        

        
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    (vi)          
   Except in the ordinary course of business, neither the Company
nor its Subsidiaries has assumed, by Contract, any liabilities or obligations
arising under any Environmental Law .

    


    (vii)         
   Neither the Company or its Subsidiaries is currently
performing any investigation, response or other corrective action under any
Environmental Law nor is the Company or its Subsidiaries currently obligated to
do so.

    


    (viii)           Part
I of Section 2.18(b)(viii) of the Company Disclosure Letter sets forth a
complete list of all reports, studies and assessments held by the Company or any
of its Subsidiaries concerning the Environmental Condition of any real property
owned, leased or used, now or in the past, by the Company or any of its
Subsidiaries.  The reports, studies and assessments listed on Part I
of Section 2.18(b)(viii) of the Company Disclosure Letter constitute the
“Tech Environmental Reports.”  To the knowledge of the Company,
no event, circumstance or condition at any of the real property, owned, leased
or used, now or in the past, by the Company or any of its Subsidiaries would
render any of the information or conclusions contained in the Tech Environmental
Reports untrue or misleading.  For purposes of this Section 2.18(b),
“Environmental Condition” shall mean the condition of the real property owned,
leased or used, now or in the past, by the Company or any of its Subsidiaries as
it relates to the compliance or non-compliance of suchwith Environmental
Laws.

    


    2.19         Permits. 

    


    (a)       
    Part I of Section 2.19 of the Company Disclosure Letter
sets forth a true, correct and complete list of all Permits relating to the
Project Business that have been obtained by the Company or any of its
Subsidiaries as of the date hereof.  Part II of Section 2.19 of the
Company Disclosure Letter sets forth a true, correct and complete list of all
Permits relating to the Project Business that the Company or any of its
Subsidiaries has, as of the date hereof, applied for from a Governmental Entity,
including all BLM Permit Applications (the “Permit
Applications,” and, together with the Permits listed on Part I, the
“Retained
Permit Rights”).

    


    (b)      
     Each of the Company or its Subsidiaries (1) owns
or validly holds all Permits listed in Part I of Section 2.19 of the Company
Disclosure Letter, (2) each such Permit is valid, binding, non-appealable and in
full force and effect and has not been terminated, revoked or modified; and (3)
no written notice (or, to the Company’s knowledge, oral notice) of noncompliance
or default has been received by the Company or any of its Subsidiaries, and the
holder of such Permit is in compliance with the requirements
thereof.

    


    (c)       
    The Company has delivered to Parent a true and correct
copy of (i) each Permit Application, (ii) all material documents, reports and,
to the Company’s knowledge, correspondence of the Company and its Subsidiaries
with respect to each Permit Application and, to the extent obtained by the
Company or any of its Subsidiaries as of the Closing Date, Required Permits,
(iii) all material documents and, to the Company’s knowledge, correspondence
provided by the Company or any of its Subsidiaries to any Governmental Entity
with respect to the Permit Applications and, to the extent obtained by the
Company or any of its Subsidiaries as of the date hereof, Required Permits, and
(iv) all material documents and, to the Company’s knowledge, correspondence
received by the Company or any of its Subsidiaries from any Governmental Entity,
with respect to the Permit Applications and the Required Permits.  To
the Company’s knowledge, it has timely filed and submitted all required
applications and supporting information, and timely responded to all requests
for information from applicable Governmental Entities, necessary to process and
maintain the priority of the Permit Applications.  In instances where
Governmental Entities have imposed specific and material time deadlines for
filings or submitting applications and supporting documentation, the Company has
timely filed, submitted and responded to the same.

    


    
      
        
           


        

        
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    (d)       
    All fees and other charges relating to the
Permits and Permit Applications have been paid currently, and there are no fees,
charges or other commitments or other arrangements in effect with respect to
such Permits and Permit Applications other than the fees and charges normally
charged by the Governmental Entity with responsibility for the issuance
thereof.

    


    (e)       
    The Company has not received written notice (or, to the
Company’s knowledge, any oral notice) that the rights of the Company or the
applicable Project Company to seek Permits on real property administered by the
BLM are not prior in time and right to the rights of any other Person seeking
Permits on such real property for the development, construction and operation of
solar energy generating facilities, and, the Company has not received written
notice (or, to the Company’s knowledge, any oral notice) that, as of the date
hereof, such real property is subject to any existing Permit or right of way,
providing rights to any other Person to develop, construct or operate solar
facilities that will or would reasonably be expected to cause a Project Material
Adverse Effect.

    


    (f)        
    Neither the Company nor any Project Company has received
written notice (or, to the knowledge of the Company, oral notice) specific to
any Project from any Governmental Entity or Person, indicating that such
Governmental Entity or Person has taken or intends to take any action with
respect to such Project, that would result in a revocation of any Permit or a
rejection, withdrawal, termination or material modification of any Permit
Application.

    


    (g)       
    This Section 2.19 does not relate to matters with
respect to environmental matters, which are the subject of Section 2.18
hereof.

    


    2.20         Compliance with
Laws.

    


    (a)       
    Each of the Company and each of its Subsidiaries has
complied with in all material respects, is not in material violation of, and has
not received any written notices (or to the Company’s knowledge, oral notices)
of violation with respect to, any federal, state, local or foreign
Law.  Each of the Company and its Subsidiaries has complied with in
all material respects, is not in material violation of, and has not received any
written (or to the Company’s knowledge, oral) notices of material violation with
respect to all Laws relating to the Projects.

    


    
      
        
           


        

        
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    (b)       
    Neither the Company nor any of its Subsidiaries is
subject to regulation under PUHCA as a “public utility company” or a “holding
company,” or a “subsidiary company” or “affiliate” or “associate company” of a
“holding company” within the meaning of PUHCA.  None of the directors,
officers, agents or employees of the Company or any of its Subsidiaries has made
for the benefit of the Company any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns, or made any bribes or kickback payments.  Neither the
Company nor any of its Subsidiaries is a “public utility” under Section 201 of
the FPA.  In addition, none of the Projects will be capable of
producing power at or before the Effective Time, or will otherwise constitute an
“existing generation facility” under Section 203(a) of the FPA.

    


    (c)       
    This Section 2.20 does not relate to matters with
respect to environmental matters and permits, which are the subject of Section
2.18 and 2.19, respectively.

    


    2.21         Topaz.  All amounts
required to be deposited by or on behalf of the Topaz Project Company under the
Topaz PPA have been deposited.  The Topaz Project Company (or the
Company on behalf of the Topaz Project Company) has met and satisfied the
requirements of all “Milestone Dates” scheduled to occur under the Topaz PPA as
of the date hereof.  Neither the Company, the Topaz Project Company
nor any other Subsidiary of the Company has received written notice (or, to the
Company’s knowledge, oral notice) from PG&E or the Cal-ISO of the existence
of any fact or circumstance specific to the Topaz Project that will result in
the Topaz Company’s failure or inability to satisfy or otherwise achieve any
Milestone Date scheduled to occur under the Topaz PPA after the date
hereof.  Neither the Company nor any of its Subsidiaries has sold or
transferred, agreed or committed to sell or transfer, or granted any options or
rights to purchase Environmental Attributes related to the electric power to be
generated by any Project except as and to the extent provided in the Topaz PPA
and any other power purchase agreement included in the Project Contracts and set
forth in Section 2.21 of the Company Disclosure Letter.

    


    2.22         Minute Books.  The
minute books of the Company and the Project Companies delivered to Parent
contain a complete and accurate summary of all meetings of directors, managers,
members and stockholders, as applicable, or actions by written consent by the
same since the time of incorporation of the Company and the Project
Companies.

    


    2.23         Brokers’ and Finders’
Fees.  Except for the fees payable to Morgan Stanley, the
Company has not incurred, nor will it incur, directly or indirectly, any
Liability for brokerage or finders’ fees or agents’ commissions or investment
bankers’ fees or any similar charges in connection with this Agreement or any
transaction contemplated hereby.

    


    2.24         Board Approvals.

    


    (a)         
  The Company’s board of directors, by resolutions duly adopted (and
not thereafter modified or rescinded) by unanimous vote (with no abstentions) at
a meeting duly called and held, has (a) approved this Agreement, the Hold Co
Merger Agreement and the Drop Down Agreement, and, to the extent applicable, the
documents to be entered into in connection therewith, the Merger, the Drop Down,
the Distribution and the Hold Co Merger, (b) determined that this Agreement, the
Drop Down Agreement, the Hold Co Merger Agreement and the terms and conditions
of the Merger, the Drop Down, the Distribution and the Hold Co Merger are fair,
advisable and in the best interests of the Company and the Company Stockholders,
and (c) directed that the adoption of this Agreement and the Hold Co Merger
Agreement and the approval of the Merger and the Hold Co Merger be submitted to
the Company Stockholders for consideration and recommended that all of the
Company Stockholders adopt this Agreement and approve the Merger.

    


    
      
        
           


        

        
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    (b)        
   Hold Co’s board of directors, by resolutions duly adopted (and
not thereafter modified or rescinded) by unanimous vote (with no abstentions) at
a meeting duly called and held, has (a) approved this Agreement and the Hold Co
Merger Agreement, and, to the extent applicable, the documents to be entered
into in connection therewith and the Merger and the Hold Co Merger, (b)
determined that this Agreement and the Hold Co Merger and the terms and
conditions of the Merger and Hold Co Merger are fair, advisable and in the best
interest of Hold Co and its members, and (c) directed that the adoption of this
Agreement and the Hold Co Merger Agreement and the approval of the Merger and
the Hold Co Merger be submitted to its members for consideration and recommended
that all of its members adopt this Agreement and the Hold Co Merger Agreement
and approve the Merger and the Hold Co Merger (to the extent required by
applicable Law).

    


    (c)        
   Newco’s board of directors, by resolutions duly adopted (and
not thereafter modified or rescinded) by unanimous vote (with no abstentions) at
a meeting duly called and held, has (a) approved the Hold Co Merger Agreement,
and, to the extent applicable, the documents to be entered into in connection
therewith and the Hold Co Merger, (b) determined that the Hold Co Merger
Agreement and the terms and conditions of the Hold Co Merger are fair, advisable
and in the best interest of Newco and its stockholders, and (c) directed that
the adoption of the Hold Co Merger Agreement and the approval of the Hold Co
Merger be submitted to its stockholders for consideration and recommended that
all of its stockholders adopt the Hold Co Merger Agreement and approve the Hold
Co Merger (to the extent required by applicable Law).

    


    2.25         Stockholder
Vote.  (a)  The affirmative votes of the holders of
shares of Company Capital Stock representing a majority of the outstanding
shares of Company Common Stock and Company Preferred Stock issued and
outstanding on the record date set for the meeting of the Company Stockholders
to adopt the Hold Co Merger Agreement and approve the Hold Co Merger (the “Company
Stockholders Meeting”) or any consent solicitation conducted in lieu
thereof with each Class and Series of Company Capital Stock voting together as a
single class (with the Company Preferred Stock voting on an as converted to
Company Common Stock basis), (the “Required Hold Co
Merger Vote”), is the only vote of the holders of Company Capital Stock
necessary to adopt the Hold Co Merger Agreement and approve the Hold Co Merger,
assuming Hold Co is a limited liability company.  No vote of the
holders of Company Capital Stock is required to approve the Hold Co Merger if
Hold Co is a corporation.  The Company Stockholders representing the
Required Hold Co Merger Vote have executed Support Agreements and Written
Consents adopting the Hold Co Merger Agreement and approving the Hold Co
Merger.  No Company Stockholder vote is required in order for the
Company to adopt the Drop Down Agreement or effect the Drop Down or the
Distribution.

    


    
      
        
           


        

        
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    (b)       
    Following the effective time of the Hold Co Merger, the
affirmative votes of the holders of the membership units in Hold Co (i) that
were exchanged in the Hold Co Merger for shares of Company Preferred Stock
representing seventy-five percent (75%) of the shares of Company Preferred Stock
issued and outstanding on the record date set for the meeting of the holders of
membership units of Hold Co to approve the Merger as a sale of substantially all
the assets of Hold Co or of a Subsidiary of Hold Co holding substantially all
the assets of Hold Co and its Subsidiaries (the “Hold Co
Interestholder Meeting”) or any consent solicitation conducted in lieu
thereof, with all membership units that were exchanged for a class or series of
Company Preferred Stock voting together as a single class and on an as converted
to Company Common Stock basis and (ii) representing the combined voting power of
a majority of the outstanding membership units issued and outstanding on the
record date set for the Hold Co Interestholder Meeting or any consent
solicitation conducted in lieu thereof with each class and series of membership
unit voting together as a single class (with the membership units exchanged for
the Company Preferred Stock voting on an as converted basis), (the “Required
Vote”), are the only votes of the holders of the membership units of Hold
Co after the effective time of the Hold Co Merger necessary to adopt this
Agreement and approve the Merger.  The Company Stockholders
representing the Required Vote have executed Support Agreements and Written
Consents approving the Merger as a sale of substantially all the assets of Hold
Co or of a Subsidiary of Hold Co holding substantially all the assets of Hold Co
and its Subsidiaries in accordance with its operating agreement or certificate
of incorporation, as applicable, and applicable Law.

    


    2.26         Disclosure.  The
information supplied by or on behalf of the Company or any of its Subsidiaries
for inclusion or incorporation by reference in the Private Placement Information
Statement, if a Private Placement Information Statement is mailed to the Company
Stockholders and prospective holders of membership units of Hold Co in
accordance with Section 4.5, will not, (i) at the time, if any, that the Private
Placement Information Statement (or any amendment thereof or supplement thereto)
is mailed to the Company Stockholders and prospective holders of membership
units of Hold Co, (ii) the time of the Company Stockholders Meeting, if any, or
the time at which written consent of the Company Stockholders to the Hold Co
Merger Agreement is obtained, (iii) the time of the Hold Co Interestholder
Meeting, if any, or the time at which proxies to vote in favor of this Agreement
and the Merger are obtained from prospective holders of membership units of Hold
Co, (iv) the effective time of the Hold Co Merger, or (v) the Effective Time,
contain any untrue statement of a material fact or fail to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  Notwithstanding the foregoing, no representation or
warranty is made by the Company with respect to statements made or incorporated
by reference in the Private Placement Information Statement based on information
supplied by or on behalf of Parent for inclusion or incorporation by reference
in the Private Placement Information Statement.

    


    2.27         No Other
Representations.  Hold Co and the Company acknowledge that
Parent makes no representation or warranty with respect to (i) any projections,
estimates or budgets delivered to or made available to Hold Co or the Company of
future revenues, future results of operations (or any component thereof), future
cash flows or future financial condition (or any component thereof) of Parent
and its Subsidiaries or the future business and operations of Parent and its
Subsidiaries or (ii) any other information or documents made available to Hold
Co or the Company or its counsel, accountants or advisors with respect to Parent
or any of its Subsidiaries or their respective businesses or operations, except
as expressly set forth in this Agreement.

    


    
      
        
           


        

        
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    ARTICLE
3

    REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB

    


    Parent
represents and warrants to the Company and Hold Co as of the date hereof and as
of the Closing Date as follows:

    


    3.1           Organization, Standing and
Power.

    


    (a)        
   Parent and Merger Sub are duly organized, validly existing and
in good standing under the Laws of the State of Delaware.  Neither
Parent nor Merger Sub is in violation of any of the provisions of its
organizational documents.  Merger Sub was formed by Parent to effect
the Merger and, since its date of formation, Merger Sub has not owned any assets
or engaged in any activities other than in connection with the transactions
contemplated hereby.

    


    (b)    
       Each of Parent and Merger Sub has the
power to own, lease and operate its properties and to conduct its business as
currently conducted and is duly qualified to do business and is in good standing
in each jurisdiction where the failure to be so qualified and in good standing,
individually or in the aggregate with any such other failures, would reasonably
be expected to have a Parent Material Adverse Effect.

    


    3.2           Capital
Structure.

    


    (a)        
   The authorized capital stock of Parent consists of 500,000,000
shares of Parent Common Stock, and 30,000,000 shares of Preferred Stock of
Parent, par value $0.001 per share (the “Parent Preferred Stock” and,
together with the Parent Common Stock, the “Parent Capital
Stock”).  As of February 18, 2009, 81,643,905 shares of Parent
Common Stock were outstanding and no shares of Parent Preferred Stock
outstanding.  All shares of Parent Common Stock have been duly
authorized, and all issued and outstanding shares of Parent Common Stock have
been validly issued and are fully paid and nonassessable.  As of
December 27, 2008 there were an aggregate of 5,291,725 shares of Parent Common
Stock available for issuance to employees and directors of, and consultants to
Parent under Parent’s 2003 Unit Option Plan and 2006 Omnibus Incentive
Compensation Plan (the “Parent Stock
Plan”).  As of December 27, 2008, 510,204 shares of Parent
Common Stock were issuable upon the exercise of outstanding, unexercised, vested
options, including options issued under the Parent Stock Plan, options issued
under Parent’s other equity incentive plans and non-plan options.  All
outstanding Parent securities and all options issued under the Parent Stock Plan
were issued in compliance with all applicable federal and state securities
Laws.

    


    (b)       
    The shares of Parent to be issued in accordance with
this Agreement will, upon such issuance, be duly authorized, validly issued,
fully paid and non-assessable, free of any Encumbrances and not subject to any
preemptive rights or rights of first refusal created by statute, the
organizational documents of Parent or Merger Sub or any Contract to which Parent
or Merger Sub is a party or is bound.

    


    
      
        
           


        

        
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    3.3           Authority;
Noncontravention.

    


    (a)      
     Each of Parent and Merger Sub has all requisite
power and authority to enter into this Agreement, to perform its obligations
hereunder and consummate the transactions contemplated hereby.  The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Merger Sub.  This Agreement
has been duly executed and delivered by Parent and Merger Sub and, assuming due
authorization, execution and delivery by the Company and Hold Co, constitutes
the valid and binding obligation of Parent and Merger Sub enforceable against
Parent and Merger Sub, as applicable, in accordance with its terms, subject to
the effect of (a) applicable bankruptcy, insolvency, reorganization, moratorium
or similar Laws now or hereafter in effect relating to rights of creditors
generally, and (b) rules of Law and equity governing specific performance,
injunctive relief and other equitable remedies.

    


    (b)      
     The execution and delivery of this Agreement by
Parent and Merger Sub does not, and the consummation of the transactions
contemplated hereby will not, (i) result in the creation of an Encumbrance on
the properties or assets of Parent or Merger Sub, (ii) conflict with, or result
in any violation of, or default under (with or without notice or lapse of time,
or both), or give rise to a right of termination, cancellation, renegotiation or
acceleration of any obligation or loss of any benefit under, or require any
consent, approval or waiver from any Person in accordance with, (a) any
provision of the organizational documents of Parent or Merger Sub, (b) any
Contract, to which Parent or Merger Sub or any of their respective subsidiaries
is a party to or (c) any Law applicable to Parent, Merger Sub or any of their
respective Subsidiaries, properties or assets, except, in the case of clauses
(ii)(b) and (c), as would not have or would not reasonably be expected to have a
Parent Material Adverse Effect.  No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Parent and Merger Sub in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (A) the filing of the Certificate
of Merger, (B) such filings as may be required under the HSR Act and any
required foreign antitrust filing, and (C) applicable requirements if any, of
the Securities Act, the Exchange Act, state securities or the Blue Sky
Laws.  The execution and delivery of this Agreement by Parent and
Merger Sub does not, as of the date hereof, and the consummation of the
transactions contemplated hereby will not, as of the Closing Date (i) require
any consent or the delivery of any legal opinion under the Tax Sharing Agreement
between Parent and Cypress Semiconductor Corporation, as amended or (ii)
constitute a change in control under any employment agreement, offer letter or
the management career transition plan with or involving any senior executive
officer of Parent.

    


    3.4           SEC Documents; Financial
Statements.  Parent has filed all forms, reports and documents
required to be filed by it with the SEC from November 17, 2006 until the date of
this Agreement (collectively, the “Parent SEC
Documents”) and has made available to the Company a true and complete
copy of all of the Parent SEC Documents.  As of their respective
filing dates, each Parent SEC Document complied (and each document filed with
the SEC by Parent after the date hereof and before the Closing Date (“Subsequent SEC
Documents”) will comply) in all material respects with the requirements
of the Securities Exchange Act of 1934 (the “Exchange
Act”) or the Securities Act, as applicable, and each Parent SEC Document,
as of its respective filing date and taken together with all other Parent SEC
Documents filed prior to such date, did not contain (and each Subsequent SEC
Document will not, as of its filing date and taken together with the Parent SEC
Documents and Subsequent SEC Documents filed prior to such date, will not
contain) any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except to the extent modified or corrected in a subsequently filed
Parent SEC Document or Subsequent SEC Document, and to the extent based on
information (financial or otherwise) provided by the Company or any of its
stockholders.  Parent has timely filed and made available to the
Company all certifications and statements required by (a) Rule 13a-14 or Rule
15d-14 under the Exchange Act, or (b) Section 906 of the Sarbanes-Oxley Act of
2002 with respect to any Parent SEC Document.  Parent maintains
disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under
the Exchange Act; such controls and procedures are effective to ensure that all
material information concerning Parent and its Subsidiaries are made known on a
timely basis to the individuals responsible for preparation of Parent SEC
Documents and other public disclosure documents.  The Parent SEC
Documents contain an audited consolidated balance sheet of Parent as of December
27, 2008 and the related audited consolidated statements of income and cash flow
for the year then ended (the “Parent Balance
Sheet”) and the related unaudited consolidated statements of income and
cash flow for the year then ended (collectively, the “Parent
Financials”).  The Parent Financials (i) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto), and (ii) present
fairly, in all material respects, the consolidated financial condition and
results of operations and cash flows of Parent and each of its Subsidiaries as
of the dates, and for the periods, indicated therein, except as otherwise noted
therein.  Parent has made no Accounting Changes since December 27,
2008,     except as described in the notes to the
Parent Financials or required by GAAP. As of the date hereof, Parent is a
“well-known seasoned issuer” and is not an “ineligible issuer” as such terms are
defined in Rule 405 under the Securities Act.

    


    
      
        
           


        

        
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    3.5           Board Approval.  The
Board of Directors of Parent, by resolutions duly adopted (and not thereafter
modified or rescinded) by unanimous vote (with no abstentions) at a meeting duly
called and held, has (a) approved this Agreement and the Merger, and (b)
determined that this Agreement and the terms and conditions of the Merger are
fair, advisable and in the best interest of Parent and its
stockholders.  No vote of Parent’s stockholders is required in order
to consummate the transactions contemplated by this Agreement.

    


    3.6           Taxes.  Neither
Parent nor any of its Subsidiaries has taken or agreed to take any action not
provided for in this Agreement, or has knowledge of any fact or circumstance
whether or not provided for in this Agreement, that is reasonably likely to
prevent the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code.  Parent has no intention to liquidate the
Company, convert the Company to a limited liability company or otherwise engage
in any transaction that would be treated as a liquidation of the Company for
U.S. federal income Tax purposes.

    


    3.7           Litigation.  Except
as set forth in Parent’s 10-K filed on February 25, 2009 (excluding the risk
factors contained therein the “10-K”) or
subsequent filings by Parent with the SEC made on or prior to the date hereof,
there is no private or governmental action, suit, proceeding, claim or
arbitration or, to the knowledge of Parent, investigation, pending before any
Governmental Entity or arbitrator, or, to the knowledge of Parent, threatened
against Parent, any of its Subsidiaries or assets of the Parent or any of its
Subsidiaries, or, to the knowledge of Parent, any of their respective officers
or directors (in their capacities as such) that would reasonably be expected to
have a Parent Material Adverse Effect.  Except as set forth in the
10-K or subsequent filings by Parent with the SEC made on or prior to the date
immediately prior to the date hereof, there is no judgment, decree or order
against Parent or any of its Subsidiaries or, to the knowledge of Parent, any of
the directors or officers of Parent or any of its Subsidiaries (in their
capacities as such), that would reasonably be expected to prevent, enjoin, or
alter or delay any of the transactions contemplated by this Agreement or that,
individually or in the aggregate with any such other judgments, decrees and
orders, would reasonably be expected to have a Parent Material Adverse
Effect.

    


    
      
        
           


        

        
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    3.8           Disclosure.  The
information supplied by or on behalf of Parent or any of its Subsidiaries for
inclusion or incorporation by reference in the Private Placement Information
Statement, if a Private Placement Information Statement is mailed to the Company
Stockholders and prospective holders of membership units of Hold Co in
accordance with Section 4.5, will not, (i) at the time, if any, that the Private
Placement Information Statement (or any amendment thereof or supplement thereto)
is mailed to the Company Stockholders and prospective holders of membership
units of Hold Co, (ii) the time of the Company Stockholders Meeting, if any, or
the time at which written consent of the Company Stockholders to the Hold Co
Merger Agreement is obtained, (iii) the time of the Hold Co Interestholder
Meeting, if any, or the time at which written consents to this Agreement and the
Merger are obtained from prospective holders of membership units of Hold Co,
(iv) the effective time of the Hold Co Merger, or (v) the Effective Time,
contain any untrue statement of a material fact or fail to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.   Notwithstanding the foregoing, no representation or
warranty is made by Parent with respect to statements made or incorporated by
reference in the Private Placement Information Statement based on information
supplied by or on behalf of Hold Co or the Company for inclusion or
incorporation by reference in the Private Placement Information
Statement.

    


    3.9           Compliance With
Laws.  Except as would not be required to be disclosed in the
10-K if it were filed on the date hereof or the Closing Date and as disclosed in
filings by Parent with the SEC subsequent to the 10-K and on or prior to the
date immediately prior to the date hereof, and except as would not reasonably be
expected to have a Parent Material Adverse Effect, each of Parent and each of
its Subsidiaries has complied (and, in the case of Subsequent SEC Documents,
will comply) with in all material respects, has not been in material violation
of, and has not received any notices of material violation with respect to, any
federal, state, local or foreign statute, Law, regulation or Permit issued under
such Law.  None of Parent, Merger Sub, or any of their affiliates,
subsidiaries or associate companies (within the meaning of the FPA) is a public
utility within the meaning of the FPA.  None of Parent, Merger Sub, or
any of their affiliates, subsidiaries or associate companies is a holding
company in a holding company system that includes a transmitting utility or
electric utility within the meaning of section 203(a)(2) of the
FPA.

    


    3.10         No Material Adverse
Change.  Since February 25, 2009, Parent and each of its
Subsidiaries has conducted its business only in the ordinary course of business
and there has not occurred: (a) any change, event or condition (whether or not
covered by insurance) that, individually or in the aggregate with any other
changes, events and conditions, has had, or would reasonably be expected to
have, a Parent Material Adverse Effect, (b) any amendment or change in the
certificate of incorporation or bylaws of Parent or (c) any damage to,
destruction or loss of any assets of Parent (whether or not covered by
insurance) that has had or would reasonably be expected to have a Parent
Material Adverse Effect, except in each case, as would not be required to be
disclosed in the 10-K if filed on the date hereof or on the Closing
Date.

    


    
      
        
           


        

        
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    3.11         No Other
Representations.  Parent agrees to accept the Company and the
Project Companies without reliance on any express or implied representations or
warranties of any nature made by or on behalf or imputed to the Company, except
as expressly set forth in Article 2 of this Agreement or by the Spin-Off
Subsidiary in the Drop Down Agreement.  Without limiting the
generality of the foregoing, Parent acknowledges that the Company makes no
representation or warranty with respect to (i) any projections, estimates or
budgets delivered to or made available to Parent of future revenues, future
results of operations (or any component thereof), future cash flows or future
financial condition (or any component thereof) of the Company and its
Subsidiaries or the future business and operations of the Company and its
Subsidiaries or (ii) any other information or documents made available to Parent
or its counsel, accountants or advisors with respect to the Company or any of
its Subsidiaries or their respective businesses or operations, except as
expressly set forth in this Agreement.

    


    ARTICLE
4

    COVENANTS
AND OTHER AGREEMENTS

    


    4.1           Conduct of Business of Hold Co, the
Company and its Subsidiaries.  During the period from the date
hereof and continuing until the earlier of the termination of this Agreement and
the Effective Time:

    


    (a)       
    Other than as required by the Drop Down Agreement and
the Hold Co Merger Agreement, Hold Co and the Company shall, and shall cause
each of their Subsidiaries (other than the Spin-Off Subsidiary and its
Subsidiaries) to, (i) use their commercially reasonable efforts to conduct the
Project Business and each Project Company Business in the ordinary course of
business (except to the extent expressly provided otherwise in this Agreement or
as consented to in writing by Parent); (ii) (x) use commercially reasonable
efforts to pay all of its debts and Taxes when due, subject to good faith
disputes over such debts or Taxes, and (y) to pay or perform its other
obligations when due, except, with respect to obligations not Related to the
Project Business, to the extent there are negotiations to modify the payment
terms of such obligations; and (iii) use commercially reasonable efforts to
preserve intact its present business organizations, keep available the services
of the Project Employees, preserve its relationships with customers, development
partners, suppliers, distributors, licensors, licensees and others having
business dealings with it and, subject to compliance with Sections 4.1(d) and
4.1(e), avoid any Project Contract lapses or terminations as a result of a
failure of Hold Co, the Company or any of their respective Subsidiaries to take
appropriate action in the ordinary course of business;

    


    (b)        
   The Company shall promptly notify Parent of any event or
development, which, individually or in the aggregate with any other event or
development, is reasonably likely to cause any of the conditions to closing set
forth in Article 5 not to be satisfied; provided that in no event
shall Parent be entitled to make a claim for indemnification under Section
7.2(a)(ii) for a breach of this Section 4.1(b) after Closing;

    


    
      
        
           


        

        
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    (c)        
   Hold Co shall not, and Hold Co and the Company shall cause the
Spin-Off Subsidiary not to, enter into any Contract, conduct any business,
acquire any asset or incur any Liability that is Related to the Project
Business;

    


    (d)         
  Hold Co and the Company shall not, and shall cause the Spin-Off
Subsidiary and its Subsidiaries not to, do, cause or permit any act, including
entering into any Contract, that would reasonably be expected to cause the
Company, any of its Subsidiaries (other than the Spin-Off Subsidiary and its
Subsidiaries) or any of their respective officers, directors or employees to be
subject to or responsible for any Liability, other than (i) the Excluded
Liabilities (as defined in the Drop Down Agreement) and (ii) with respect to
performance obligations pursuant to Contracts (other than Project Contracts)
that contain provisions for automatic novation upon the Drop Down Closing so as
to substitute the Spin-Off Subsidiary or Hold Co for the Company or the
applicable Project Company as a party to such Contracts;

    


    (e)        
   Hold Co and the Company shall, and shall cause each of their
respective Subsidiaries to, cause each Contract entered into by the Company or
any of its Subsidiaries on or after the date hereof until the earlier of the
termination of this Agreement and the Effective Time to (i) in the case of
Contracts that are not Related to the Project Business, contain provisions for
automatic novation upon the Drop Down Closing so as to substitute the Spin-Off
Subsidiary or Hold Co for the Company or the applicable Project Company as a
party to such Contracts and (ii) cause each such Contract that is Related to the
Project Business to provide for the prevention of any material change in the
rights or obligations of any party in connection with, or termination rights as
a result of, the consummation of the transactions contemplated by this
Agreement, the Drop Down Agreement, the Distribution or the Hold Co Merger;
and

    


    (f)       
    Neither Hold Co nor the Company will file or become
obligated to file any consolidated, combined, unitary, aggregate or affiliated
Tax Return for U.S. Federal income Tax or any other Tax purposes.

    


    4.2           Restrictions on Conduct of Business
of the Company and its Subsidiaries.

    


    (a)     
      Without limiting the generality or effect of
the provisions of Section 4.1, during the period from the date hereof and
continuing until the earlier of the termination of this Agreement and the
Effective Time, the Company shall not, and shall cause each of the Project
Companies and Newco not to, and Hold Co shall cause the Company not to, do,
cause or permit any of the following (except to the extent (w) expressly
provided otherwise herein (including on Section 4.2 of the Company Disclosure
Letter) or in the Drop Down Agreement, the Hold Co Merger Agreement or the
budget provided to Parent prior to the date hereof and as attached in Schedule
8.4(mmmmmm) to this Agreement, (x) as required by applicable Law (in which case
the Company will notify Parent before taking any such action to the extent
reasonably practicable) or (y) consented to in writing by Parent, such consent
not to be unreasonably withheld or delayed, for any of the following that are
not Related to the Project Business):

    


    (i)         
      Cause or permit any amendments to its
organizational documents;

    


    
      
        
           


        

        
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    (ii)         
     Declare or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any of its
capital stock (except for distributions of cash to the Company or any other
Subsidiary of the Company), or split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock, except the
issuance of shares of Company Common Stock upon the conversion of Company
Preferred Stock issued and outstanding on the date hereof or upon the exercise
of Company Options outstanding on the date hereof, or repurchase, redeem or
otherwise acquire, directly or indirectly, any shares of its capital stock
except from former employees, non-employee directors and consultants in
accordance with agreements existing at the date hereof providing for the
repurchase of shares in connection with any termination of service;

    


    (iii)       
      (A) Enter into any Project Contract that if
entered into prior to the date hereof would have been required to be reflected
on Section 2.14(a) of the Company Disclosure Letter, or (B) amend or otherwise
modify in any material respect or waive any of the material terms of
any  Project Contract (except for Project Contracts not required to be
set forth on Section 2.14(a) of the Company Disclosure Letter but only to the
extent such amendment, had it occurred prior to the date hereof, would not have
required such Project Contract (as so amended) to be listed on Section 2.14(a)
of the Company Disclosure Letter;

    


    (iv)          
   Enter into any Contract that is not Related to the Project
Business other than (A) Contracts containing provisions for automatic novation
upon the Drop Down Closing so as to substitute Hold Co or the Spin-Off
Subsidiary for the Company or the applicable Project Company as a party to such
Contracts or (B) the Master Sublease;

    


    (v)           
   Issue or grant any equity-linked securities or agree to issue
or grant any equity-linked securities other than (i) the issuance of shares of
Company Common Stock upon the conversion of Company Preferred Stock issued and
outstanding on the date hereof, and (ii) the issuance of shares of Company
Common Stock in accordance with the exercise of stock options outstanding on the
date hereof;

    


    (vi)         
    Make any loans or advances (other than Project Business
Payments) to, or any investments in or capital contributions to, or forgive or
discharge in whole or in part any outstanding loans or advances of, any Person
(other than the Company or a Project Company) other than in the ordinary course
of business consistent with current practices as of immediately prior to the
date hereof;

    


    (vii)        
    Transfer or license to any Person any rights to any
Project IP Rights;

    


    (viii)     
      Enter into any employment Contract with a
Project Employee or any collective bargaining agreement, unless such contains
provisions for automatic consent, waiver or novation and prevention of any
material change in the obligations of any party in connection with, or
termination rights as a result of the consummation of, the transactions
contemplated by this Agreement, the Drop Down Agreement, the Distribution or the
Hold Co Merger, or transfer any Project Employee to the Spin-Off Subsidiary or
any of its Subsidiaries;

    


    
      
        
           


        

        
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    (ix)        
     Modify the salary of any Project Employee, grant
any severance or termination pay to any Project Employee, or amend or modify any
existing severance or termination agreement with any Project
Employee;

    


    (x)         
     Other than in the ordinary course of business
consistent with current practices as of immediately prior to the date hereof,
adopt or amend any employee or compensation benefit plan, including any stock
purchase, stock issuance or stock option plan, or amend any compensation,
benefit, entitlement, grant or award provided or made under any such plan,
except in each case as required under ERISA or as necessary to maintain the
qualified status of such plan under the Code or in a manner that does not apply
to any Project Employees, or pay any special bonus or special remuneration to,
or increase the salaries or wage rates of, any Project Employee;

    


    (xi)         
    Grant any exclusive rights of any type or scope that
would have any adverse impact or adverse effect on the Company or any of the
Project Companies after the Closing;

    


    (xii)             Sell,
lease, license or otherwise dispose of or encumber any of the Project
Assets;

    


    (xiii)      
     Incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others, in each case unless such indebtedness,
debt securities or guarantee would be repaid and terminated, or automatically
novated to Hold Co, as of the Closing, provided that in no event shall the
principal amount of the Bridge Loan exceed $75,000,000;

    


    (xiv)       
    Enter into any material operating lease that would
constitute a Project Contract or that does not provide for automatic novation
upon the Drop Down Closing so as to substitute Hold Co or the Spin-Off
Subsidiary for the Company or the applicable Project Company as a party to
such;

    


    (xv)       
     Other than Project Business Payments, make any
capital commitments or enter into any capital leases except for capital leases
that are not Related to the Project Business and, if made by the Company or any
Project Company, that contain provisions for automatic novation upon the Drop
Down Closing so as to substitute Hold Co or the Spin-Off Subsidiary for the
Company or the applicable Project Company as a party to such;

    


    (xvi)       
    Reduce the amount of any insurance coverage, including
by way of termination or lapse of coverage, provided by existing insurance
policies, other than in the ordinary course of business consistent with current
practices as of immediately prior to the date hereof;

    


    (xvii)           Terminate
or waive any right or claim of substantial value Related to the Project
Business;

    


    (xviii)          Commence
a lawsuit other than for a breach of this Agreement;

    


    
      
        
           


        

        
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    (xix)       
     Acquire or agree to acquire by merging or
consolidating with, or by purchasing the assets of, or by any other manner, any
business or any company, partnership, association or other business organization
or division thereof, or otherwise acquire or agree to acquire any assets outside
the ordinary course of business except pursuant to a Contract that provides for
automatic novation upon the Drop Down Closing so as to substitute the Spin-Off
Subsidiary or Hold Co for the Company or the applicable Project Company as a
party to such Contracts;

    


    (xx)         
    Make or change any election in respect of Taxes, adopt
of change an accounting method in respect of Taxes, file any amendment to a Tax
Return, enter into any Tax-related closing agreement, settle any claim or
assessment in respect of Taxes, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of
Taxes;

    


    (xxi)       
     Enter into any agreement or transaction Related to
the Project Business in which any officer or non-employee director of the
Company or any of its Subsidiaries (or any member of the immediate family of
such officer or director) has an interest; and

    


    (xxii)        
   Take or agree in writing or otherwise to take, any of the
actions described in the foregoing clauses of this Section 4.2.

    


    (b)      
     Notwithstanding anything to the contrary herein,
none of the Company, Hold Co, Newco or the Spin-off Subsidiary shall have any
liability hereunder for failure to take any action that results in any breach of
a representation, warranty, agreement or covenant herein and for which the
Company has made a reasonable request for consent required under Section 4.2 if
Parent has unreasonably refused to consent to, or has unreasonably delayed its
consent for, such action under Section 4.2, and such breach shall be disregarded
for purposes of Article 7 herein (but not for purposes of Articles 5 and 6
herein).

    


    4.3           Further Assurances, Regulatory
Matters.  During the period from the date hereof and continuing
until the earlier of the termination of this Agreement and the Effective
Time:

    


    (a)            On
the terms and subject to the conditions set forth in this Agreement, each of the
parties hereto shall use commercially reasonable efforts, and shall cooperate
with each other party hereto, to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, appropriate or desirable to
consummate and make effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated hereby, including the
satisfaction of the respective conditions set forth in ‎Article 5
(provided that no party shall be required to waive any condition for its
benefit).

    


    (b)            Each
of Parent, Merger Sub, Hold Co and the Company shall promptly after the
execution of this Agreement apply for or otherwise seek, and use commercially
reasonable efforts to obtain, all consents, novations and approvals required to
be obtained by it for the consummation of the transactions contemplated by this
Agreement and the Drop Down Agreement, including the Merger, the Drop Down, the
Distribution and the Hold Co Merger.

    


    
      
        
           


        

        
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    (c)       
    Hold Co, the Company and Parent shall, and shall cause
their respective Subsidiaries to: (i) cooperate and consult with each other in
connection with the making of all filings, notifications and any other material
actions pursuant to this Section 4.3 including, subject to applicable Law, by
regulatory and/or permitting counsel, as applicable for the other Parties to
review reasonably in advance, and consider in good faith the views of the other
Parties in connection with, any proposed written communication to any
Governmental Entity and by providing counsel for the other Parties with copies
of all filings and submissions made by such Party and all correspondence between
such Party (and its advisors) with any Governmental Entity and any other
information supplied by such Party and such Party’s subsidiaries to a
Governmental Entity or received from such a Governmental Entity in connection
with the transactions contemplated by this Agreement; (ii) furnish to the other
Parties such information and assistance as such Parties reasonably may request
in connection with the preparation of any submissions to, or agency proceedings
by, any Governmental Entity; (iii) promptly inform the other Parties of any
communications with, and inquiries or requests for information from, such
Governmental Entities in connection with the transactions contemplated by this
Agreement; and (iv) consult with the other Parties in advance of any meeting or
conference, whether in person or by telephone, with any such Governmental Entity
or, in connection with any proceeding by a private party related to the Merger,
the Hold Co Merger, the Drop Down or the Distribution, with any other Person,
and to the extent permitted by such applicable Governmental Entity or other
Person, give the other Parties the opportunity to attend and participate in such
meetings and conferences.

    


    (d)       
    Each of Parent, Merger Sub, Hold Co and the Company
shall, as soon as practicable, and in any event no later than 15 Business Days
from the date of this Agreement, make any initial filings required under the HSR
Act.  The parties hereto shall consult and cooperate with one another,
and consider in good faith the views of one another, in connection with any
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party hereto in connection
with proceedings under or relating to the HSR Act or any other federal or state
antitrust or fair trade Law.

    


    (e)       
    Hold Co, the Company and Parent shall cooperate to
determine the necessity for (1) any applications, reports or other filings
required under any state or local Governmental Rule relating to the ownership
and control of the Project Assets or the conduct of the Project Business and
each Project Company Business and (2) any further filings that may be necessary,
proper or advisable in connection with the matters referred to in clause (1)
above; and upon any such determination the Company or Parent, as applicable,
shall, or the Company shall cause the applicable Project Company to, file the
same.

    


    (f)       
     Each of Parent, Merger Sub, Hold Co and the
Company shall use commercially reasonable efforts to resolve such objections, if
any, as may be asserted by any Governmental Entity with respect to the
transactions contemplated by this Agreement under the HSR Act, or any other
federal, state or foreign statutes, rules, regulations, orders or decrees that
are designed to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade (collectively, “Antitrust
Laws”).  Neither Parent, Hold Co nor the Company shall have any
obligation to litigate or contest any administrative or judicial action,
proceeding or order beyond the earliest of (i) the Termination Date, (ii) the
date of a ruling in favor of a Governmental Entity preliminarily enjoining the
Merger (excluding temporary restraining orders) issued by a court of competent
jurisdiction, or (iii) the date of a ruling in favor of a third party
permanently enjoining the Merger issued by a court of competent
jurisdiction.  Each of Parent, Hold Co and the Company shall use
commercially reasonable efforts to take such action as may be required to cause
the expiration of the notice periods under the Antitrust Laws with respect to
such transactions as promptly as possible after the execution of this
Agreement.  Parent, Hold Co and the Company shall take any and all of
the following actions to the extent necessary or appropriate to obtain the
approval of any Governmental Entity with jurisdiction over the enforcement of
any applicable Antitrust Laws or other Laws regarding the transactions
contemplated hereby:  (i) entering into negotiations; (ii) providing
information required by Law or governmental regulation; and (iii) substantially
complying with any second request for information in accordance with the
Antitrust Laws.

    


    
      
        
           


        

        
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    (g)        
   Following consultation with Parent, the Company and Hold Co
will determine strategy, lead all proceedings and coordinate all activities with
respect to seeking any actions, consents, approvals or waivers of any
Governmental Entity as contemplated pursuant to this Section 4.3, and Parent
will reasonably cooperate with the Company and Hold Co in connection with Hold
Co and the Company’s activities to obtain such consents, approvals or
waivers.  Notwithstanding Hold Co and the Company’s rights to lead all
proceedings as provided in the prior sentence, Hold Co and the Company shall not
require Parent to, and Parent shall not be required to, take any action with
respect to satisfying the closing conditions in this Agreement which would bind
Parent irrespective of whether the Closing occurs.

    


    (h)      
     The Company and Hold Co on one hand and Parent on
the other shall keep the other reasonably informed with respect to their
knowledge of any private or governmental action, suit, proceeding, claim,
arbitration, or investigation that arises relating to the matters described
under this Section 4.3, except to the extent necessary to preserve any
applicable attorney-client privilege or confidentiality
obligations.

    


    (i)       
     In no event will Parent be obligated to (i) divest
any of its or any of its Subsidiaries’ businesses, product lines or assets, or
to agree to any divestiture of the Company’s businesses, product lines or
assets, or (ii) take or agree to take any other action or agree to any
limitation that individually or in the aggregate could reasonably be expected to
have a Project Material Adverse Effect or a Parent Material Adverse Effect,
before or after the Effective Time.  Neither Hold Co nor the Company
nor any of their respective Subsidiaries shall be required to (A) divest or
agree to divest any of their respective businesses, product lines or assets, or
(B) to take or agree to take any other action or agree to any limitation that
individually or in the aggregate could reasonably be expected to have a Project
Material Adverse Effect or a material adverse effect on the business of the
Company related to the Non-Project Assets.

    


    (j)        
    Nothing in this Section 4.3 shall (i) limit either
Parent’s or the Company’s right to terminate this Agreement pursuant to Section
6.1 so long as such Party has complied in all material respects with its
obligations under this Section 4.3, or (ii) require any Party to amend this
Agreement or to waive or forbear from exercising any of its rights or remedies
hereunder or under this Agreement.

    


    
      
        
           


        

        
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    4.4           No Solicitation.

    


    (a)       
    From the date hereof until termination of this Agreement
pursuant to its terms, Hold Co and the Company shall not, and shall cause each
of their respective officers, directors, employees, financial advisors,
representatives, agents, Subsidiaries and Affiliates not to, directly or
indirectly: (i) solicit, facilitate or encourage any inquiry, proposal or offer
from any Person (other than Parent or Merger Sub) in respect of an Acquisition
Transaction; (ii) participate in any discussions or negotiations or enter into
any agreement with, or provide any non-public information to, any person (other
than Parent or Merger Sub) in respect of an Acquisition Transaction; or (iii)
accept any proposal or offer from any Person (other than Parent or Merger Sub)
in respect of an Acquisition Transaction.  Upon execution of this
Agreement, the Company shall immediately cease and cause to be terminated any
existing direct or indirect discussions with any Person (other than Parent or
Merger Sub) that are in respect of an Acquisition Transaction.  Hold
Co and the Company shall promptly (and in no event later than 24 hours after
receipt thereof) notify Parent, orally and in writing, of any proposal or offer
concerning an Acquisition Transaction, or any request for information from a
Person in respect of an Acquisition Transaction (including the identity of the
Person making or submitting such proposal, offer or request, and the material
terms thereof (including a copy of any written proposal, offer or request)) that
is received by the Company or any Affiliate or representative of the
Company.  Hold Co and the Company shall keep Parent informed on a
reasonably current basis (and, in any event, within 24 hours) of the status and
details of any material modifications to any such proposal, offer or
request.  “Acquisition
Transaction” means any transaction (excluding the Drop Down, the
Distribution and the Hold Co Merger, or, as contemplated hereby, by the Drop
Down Agreement or by the Hold Co Merger Agreement) involving:  (x) the
sale, license, disposition or acquisition of any of the Project Assets, or of
all or a substantial portion of the business or assets of Hold Co, the Company
or any of their respective Subsidiaries; (y) the issuance, disposition or
acquisition of (A) any capital stock or other equity security of Hold Co or the
Company (other than Company Capital Stock issued upon exercise of Company
Options or conversion of Company Preferred Stock or the equivalent equity
interests exchanged therefor in the Hold Co Merger), (B) any option, call,
warrant or right (whether or not immediately exercisable) to acquire any capital
stock or other equity security of Hold Co or the Company (other than Company
Options issued in the ordinary course of business under the Company Stock Plan
or the equivalent equity interests exchanged therefor in the Hold Co Merger), or
(C) any security, instrument or obligation that is or may become convertible
into or exchangeable for any capital stock or other equity security of Hold Co
or the Company; or (z) any merger, consolidation, share exchange, business
combination, reorganization, recapitalization or similar transaction involving
Hold Co or the Company; provided that Acquisition
Transaction shall exclude any transaction involving the sale of the Spin-Off
Subsidiary, Hold Co, or any or all or substantially all of the Non-Project
Assets, so long as:

    


    (i)            
   such transaction does not include the sale of any of the
Project Assets or involve any equity interests in Hold Co or the
Company;

    


    (ii)        
      such transaction does not involve the entry
by the Company into any Contract that does not contain a provision for the
automatic novation of such Contract to either Hold Co or the Spin-Off Subsidiary
as of the Closing, or the imposition of any Liability upon the Company following
the Closing; and

    


    
      
        
           


        

        
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    (iii)          
   no activity that is required or reasonably likely to occur in
connection with seeking or consummating such transaction would prevent,
interfere with, delay or impede in any material respect the transactions
contemplated hereby.

    


    A
transaction meeting the description set forth in the preceding proviso is
referred to herein as a “Permitted Tech
Sale.”  The Company shall not cause or permit any proposed or
consummated Permitted Tech Sale to fail or cease to meet the definition of a
Permitted Tech Sale in any respect.  Subject to the foregoing, nothing
in this Agreement or any Contract executed in connection herewith shall prevent
or limit the Company’s or Hold Co’s ability prior to the Effective Time to
solicit, negotiate or consummate a Permitted Tech Sale, including providing a
copy of this Agreement, the Drop Down Agreement and the Hold Co Merger Agreement
to any potential purchaser.

    


    4.5           Securities Laws
Matters.

    


    (a)     
      As soon as practicable after the date
hereof, the Company and Hold Co shall use their commercially reasonable efforts
to arrange for a purchaser representative (as contemplated by Regulation D under
the Securities Act) reasonably satisfactory to Parent (the “Purchaser
Representative”) to represent each stockholder of the Company and
prospective holder of membership units of Hold Co that is an Unaccredited
Investor in connection with the transactions contemplated by the Hold Co Merger
Agreement and this Agreement.  The Company and Hold Co shall use their
commercially reasonable efforts to obtain a written agreement in a form attached
hereto as Exhibit
E-1 (a “Stockholders
Representation Agreement”) from each Company Stockholder, in which each
such stockholder represents in writing that such stockholder either (i) is an
“accredited investor” within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act, or (ii) has appointed the Purchaser Representative as
contemplated by Rule 501 of Regulation D promulgated under the Securities Act by
executing and delivering an agreement in a form attached hereto as Exhibit E-2 (a “Purchaser
Representative Agreement”).  The Company must obtain a
Purchaser Representative Agreement from each Unaccredited Investor prior to 20
Business Days after the Solicitation Date (the “Purchaser
Representative Condition”) in order to fulfill the Purchaser
Representative Condition.

    


    (b)       
    As soon as practicable after the date hereof, the
parties shall prepare, and, within seven Business Days after the date hereof,
deliver to all of the holders of Company Capital Stock and prospective holders
of membership units of Hold Co, the Stockholders Representation Agreement, the
Purchaser Representative Agreement and an information statement relating to the
Hold Co Merger Agreement, this Agreement and the transactions contemplated
hereby and thereby (the “Private Placement
Information Statement”) (the date of such distribution being referred to
herein as the “Solicitation
Date”).  Each of Hold Co, the Company, Parent and Merger Sub
shall use commercially reasonable efforts to cause the Private Placement
Information Statement to comply with all requirements of applicable federal and
state securities laws including the requirements of Rules 502 and 506 of
Regulation D promulgated under the Securities Act.  The Private
Placement Information Statement shall constitute a disclosure document for the
offer and issuance of (i) the membership units of Hold Co to be issued in the
Hold Co Merger and (ii) the shares of Parent Common Stock to be issued in
accordance with this Agreement.  Whenever any event occurs that is
required to be set forth in an amendment or supplement to the Private Placement
Information Statement, Hold Co, the Company, Parent and Merger Sub shall
cooperate in delivering any such amendment or supplement to all the holders of
Company Capital Stock and prospective holders of membership units of Hold
Co.  Anything to the contrary contained herein notwithstanding, (x)
the Company and Hold Co shall not include in the Private Placement Information
Statement any information with respect to Parent, Merger Sub or their respective
Affiliates or associates, the form and content of which information shall not
have been approved by Parent prior to such inclusion; provided, however, that
Parent shall not withhold approval of any information required to be included by
federal or state law, and (y) Parent shall not include in the Private Placement
Information Statement any information with respect to Hold Co, the Company or
their respective Affiliates or associates, the form and content of which
information shall not have been approved by the Company prior to such inclusion;
provided, however, that
the Company shall not withhold approval of any information required to be
included by federal or state law.  The Private Placement Information
Statement shall include the unqualified and unanimous recommendation of Hold
Co’s board of directors and the Company’s board of directors (together with Hold
Co’s board of directors, the “Company
Board”) in favor of adoption of the Hold Co Merger Agreement and this
Agreement and approval of the Merger and the Hold Co Merger and the unqualified
and unanimous recommendation of the Company Board that the terms and conditions
of the Hold Co Merger, the Drop Down, the Distribution, the Merger, the Drop
Down Agreement, the Hold Co Merger Agreement and this Agreement are fair,
advisable and in the best interests of the Company and its stockholders, Hold Co
and the holders of its membership units (the “Company Board
Recommendation”).  The Company Board Recommendation shall not
be withdrawn or modified in a manner adverse to Parent, and no resolution by the
Company Board or any committee thereof to withdraw or modify the Company Board
Recommendation in a manner adverse to Parent shall be adopted or
proposed.

    


    
      
        
           


        

        
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    (c)     
      Each of Parent (for itself and Merger Sub),
Hold Co and the Company shall provide promptly to the other such information
concerning its business and financial statements and affairs as in the
reasonable judgment of the providing party or its counsel, may be required or
appropriate for inclusion in the Private Placement Information Statement or in
any amendments or supplements thereto, and to cause its counsel, auditors and
other representatives to cooperate with the other party’s counsel, auditors and
other representatives in the preparation of the Private Placement Information
Statement.

    


    (d)       
    If the Purchaser Representative Condition has not been
satisfied prior to 20 Business Days after the Solicitation Date, then the
Company shall, on the 21st
Business Day following the Solicitation Date or such earlier date as may be
agreed by Parent and the Company, (i) cause Hold Co to be converted into a
Delaware corporation pursuant to the applicable provisions of the DGCL and
thereafter (ii) cause the Hold Co Merger to be consummated without any vote of
the Company Stockholders pursuant to section 251(g) of the DGCL upon
satisfaction of the conditions to closing of the Hold Co Merger set forth in the
Hold Co Merger Agreement.  From and after any such conversion, all
references to Hold Co, its members, membership units and board of directors in
this Agreement shall be deemed to refer to the converted corporation, its
stockholders, corresponding capital stock and board of directors,
respectively.

    


    
      
        
           


        

        
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    (e)     
      Following any failure of the Purchaser
Representative Condition to be satisfied prior to 20 Business Days after the
Solicitation Date, Parent, Merger Sub, Hold Co and the Company shall use
commercially reasonable efforts to cause the issuance of Parent Common Stock to
Hold Co in the Merger to be exempt from the registration requirements of the
Securities Act by reason of Rule 506 of Regulation D
promulgated under Section 4(2) of the Securities Act and otherwise to
comply with all requirements of applicable federal and state securities
laws.

    


    (f)        
    Parent shall prepare and submit to NASDAQ a notification
of listing of additional shares covering the shares of Parent Common Stock to be
issued in the Merger and shall use commercially reasonable efforts to obtain,
prior to the Effective Time, approval for the quotation of such Parent Common
Stock, subject to official notice of issuance to NASDAQ.

    


    (g)       
    Prior to the Effective Time, Parent shall use
commercially reasonable efforts to obtain all regulatory approvals needed to
ensure that the Parent Common Stock to be issued in the Merger (to the extent
required) is registered or qualified or exempt from registration or
qualification under the securities law of every state of the United States and
in every foreign jurisdiction in which any registered holder of Company Capital
Stock has an address of record on the record date for determining the
stockholders entitled to notice of and to vote on the Merger; provided, however,
that Parent shall not be required: (i) to qualify to do business as a foreign
corporation in any jurisdiction in which it is not now qualified; or (ii) to
file a general consent to service of process in any jurisdiction.

    


    (h)      
     The Company and Hold Co shall take all other
action reasonably necessary or advisable in connection with seeking the consent
of the Company Stockholders (other than those delivering Written Consents) and
Hold Co’s members (other than those delivering Written Consents) required to
effect the transactions contemplated by the Hold Co Merger Agreement, this
Agreement and the Drop Down Agreement.

    


    4.6           Access to
Information.

    


    (a)      
     Until the earlier of the termination of this
Agreement and the Effective Time, (i) the Company shall afford Parent and its
accountants, counsel and other representatives, reasonable access during normal
business hours to (A) all of the Company’s and each of its Subsidiaries’
properties, books, Contracts, and records, and (B) all other information
concerning the business, properties and personnel of the Company or any of its
Subsidiaries as Parent may reasonably request, and (ii) the Company shall
provide to Parent and its accountants, counsel and other representatives true,
correct and complete copies of such internal financial statements as Parent
shall reasonably request.

    


    (b)       
    Subject to compliance with applicable Law, until the
earlier of the termination of this Agreement and the Effective Time, the Company
shall confer from time to time as requested by Parent with one or more
representatives of Parent to discuss any material changes or developments in the
operational matters of the Company and each of its Subsidiaries and the general
status of the ongoing business and operations of the Company and each of its
Subsidiaries.

    


    
      
        
           


        

        
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    (c)    
       No information or knowledge obtained
in any investigation in accordance with this Section 4.6 shall affect or be
deemed to modify any representation or warranty contained herein or the
conditions to the obligations of the parties hereto to consummate the
Merger.

    


    4.7           Confidentiality.  The
parties acknowledge that Parent and the Company have previously executed a
non-disclosure agreement dated as of January 6, 2009 and that Parent, the
Company, Hold Co and Spin-Off Subsidiary have executed a non-disclosure
agreement dated March 9, 2009 (together, the “Confidentiality
Agreement”), each of which shall continue in full force and effect in
accordance with its terms.

    


    4.8           Public
Disclosure.  Prior to the Effective Time, neither Parent nor
the Company shall issue any press release or otherwise make any public statement
with respect to the Merger, this Agreement or any material transaction involving
Parent or the Company without the consent of the other, except as may be
required by Law, under this Agreement or any listing agreement with a national
securities exchange, as would be required to be disclosed in a registration
statement under the Securities Act for the issuance of Parent Common Stock in
the Merger, or by Parent or the Company in connection with financing activities
permitted, in the case of the Company, by Section 4.2.  With respect
to the initial press release announcing the Merger and this Agreement, the
parties have agreed to the text of the press release and will announce the
Merger and this Agreement.  Parent shall not communicate with any
Project customers regarding any Project without the prior consent of the
Company, such consent not to be unreasonably withheld or delayed.

    


    4.9           Legal
Requirements.  Each of Parent, Merger Sub and the Company
shall, and shall cause its Subsidiaries, if any, to, (a) use commercially
reasonable efforts to comply promptly with all legal requirements which may be
imposed on it with respect to the consummation of the transactions contemplated
by this Agreement, the Drop Down Agreement, the Distribution or the Hold Co
Merger Agreement, (b) promptly cooperate with and furnish information to any
party hereto necessary in connection with any such requirements imposed upon
such other party in connection with the consummation of the transactions
contemplated by this Agreement, the Drop Down Agreement, the Distribution or the
Hold Co Merger Agreement, and (c) subject to Section 4.3, use commercially
reasonable efforts to obtain (and shall cooperate with the other parties hereto
in obtaining) any consent, approval, order or authorization of, or any
registration, declaration or filing with, any Governmental Entity, required to
be obtained or made in connection with the taking of any action contemplated by
this Agreement.

    


    4.10         Treatment as
Reorganization.  Each of Parent, Merger Sub, Hold Co and the
Company (and their Affiliates) will use commercially reasonable efforts, and
each party agrees to cooperate with the other parties and to provide to the
other parties such information and documentation as may be necessary, proper or
advisable, to cause the Merger to qualify, and will not knowingly take any
action not provided for or contemplated in this Agreement that would cause the
Merger to fail to qualify, as a reorganization within the meaning of section
368(a) of the Code.  Each of Parent, Merger Sub, Hold Co and the
Company will use commercially reasonable efforts to make the representations to
Covington & Burling LLP and Cravath, Swaine & Moore LLP, as applicable,
referred to in Section 5.2(c) and Section 5.3(c) respectively.

    


    
      
        
           


        

        
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    4.11         Tax Returns.  Parent
shall prepare (or cause the preparation of) all Tax Returns of the Company and
its Subsidiaries, other than the Spin-off Subsidiary and its Subsidiaries, whose
due date (including extensions) is after the Closing Date and that are with
respect to any Tax period, or portion thereof, that ends on or before the
Closing Date.  All such Tax Returns shall be prepared in good faith in
a manner consistent with the past practices of the Company and its Subsidiaries,
unless otherwise required by applicable Law as reasonably determined by Parent
in good faith.  Hold Co shall and shall cause the Spin-off Subsidiary
and their respective employees shall cooperate with Parent in the preparation of
such Tax Returns, including by providing information related to the Spin-Off
Subsidiary that is requested by Parent and that is relevant, in the judgment of
Parent, to the preparation of such Tax Returns.  Parent shall deliver
any Tax Returns based on net income prepared pursuant to this Section 4.11 to
Hold Co at least fifteen Business Days before the due date thereof (with
extensions) for comment by Hold Co.  Parent shall consider any Hold Co
comments in good faith, provided, however, that, subject to the other
requirements of this Section 4.11, Parent shall have no obligation to accept any
such comments; provided
further that the Company shall make an election under Section 362(e)(2)(C) on
its Tax Return for the tax year that ends on the Closing Date with respect to
the Drop Down.   The Company shall not file a consolidated return
with the Spin-Off Subsidiary for the period it owns the Spin-off
Subsidiary.

    


    4.12         Expenses.  If the
Merger is not consummated, all costs and expenses incurred in connection with
this Agreement, the Drop Down Agreement, the Hold Co Merger Agreement and the
transactions contemplated hereby and thereby and the Distribution (including the
fees and expenses of its advisers, accountants and legal counsel) shall be paid
by the party incurring such expense.  If the Merger is consummated
Hold Co shall be responsible for all fees,  expenses and Taxes of the
Company (including the fees and expenses of its advisers, accountants and legal
counsel) incurred in connection with this Agreement, the Drop Down Agreement,
the Hold Co Merger Agreement and the transactions contemplated hereby and
thereby and the Distribution (the “Company
Transaction Expenses”).  To the extent that any Company
Transaction Expenses have not been either (i) paid prior to the Closing or (ii)
assumed by Hold Co or the Spin-Off Subsidiary, Parent shall be entitled to
recover such Company Transaction Expenses, beginning with dollar one, and
disregarding the Indemnification Threshold provided for in Section 7.3(a), in
accordance with Article 7.

    


    4.13         Obligations of Merger
Sub.  Subject to the terms of this Agreement, Parent shall take
all action necessary to cause Merger Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and subject to the
conditions set forth in this Agreement.

    


    4.14         Hold Co
Merger.  Following the date upon which the Hold Co Merger is
approved by the stockholders of the Company, and prior to the Closing, the
Company and Hold Co shall, and shall cause Newco to, effect the Hold Co Merger
pursuant to the Hold Co Merger Agreement (as executed and delivered on the date
hereof) and applicable Law.  So long as Hold Co is a limited liability
company, Hold Co shall ensure that the issuance of its membership interests in
the Hold Co Merger is a transaction exempt from
registration under the Securities Act by reason of Rule 506 of Regulation D
promulgated under Section 4(2) of the Securities
Act.  Following the Hold Co Merger, Hold Co shall cause the
Company to perform all of its obligations under this Agreement and the Drop Down
Agreement and Hold Co shall, subject to Section 7.10 hereof, be jointly and
severally liable for any failure by the Company to perform such obligations and
for any other breach by the Company of this Agreement.

    


    
      
        
           


        

        
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    4.15         The Drop Down and the
Distribution.

    


    (a)         
  Without any action required by Parent, within three Business Days of
the satisfaction or waiver of each of the conditions to the Closing set forth in
Section 5.1, other than those set forth in Section 5.1(e) and those that by
their nature are to be satisfied at the Closing, the Company shall effect and
cause the Spin-Off Subsidiary to effect the consummation of the Drop Down and
the Distribution in accordance with the Drop Down Agreement (as executed and
delivered on the date hereof).

    


    (b)      
     Without limiting the generality of the foregoing,
the Company shall:

    


    (i)            
   use commercially reasonable efforts to obtain, as soon as
reasonably practicable after the date hereof, each of the consents set forth on
Sections 2.3 of the Company Disclosure Letter and each of the consents and
novations set forth on Exhibit H; and

    


    (ii)         
     submit, and shall cause the Spin-Off Subsidiary to
submit, all UCC (as such term is defined in the Drop Down Agreement) or other
governmental filings necessary under applicable Law to (a) change the identity
of the debtor on any Contributed Assets (as such term is defined in the Drop
Down Agreement) subject to a recorded Encumbrance from the Company or a Project
Company to the Spin-Off Subsidiary or one of its Subsidiaries and (b) terminate
all Encumbrances other than Permitted Encumbrances (disregarding subsection (ii)
of the definition of Permitted Encumbrances) recorded in any jurisdiction on any
Retained Assets.

    


    4.16         Employment
Matters.  (a)  The Company shall, and shall cause
each of the Project Companies, to cause the transfer of the employment of each
of its respective employees, other than the Project Employees, to the Spin-Off
Subsidiary prior to the Closing in a manner designed to minimize any Liability,
cost and payments arising under applicable Law; in the event any non-Project
Employee refuses to be transferred to the Spin-Off Subsidiary, such employees
shall be terminated by the Company in a manner designed to minimize any
Liability, cost and payments arising under applicable Law.

    


    (b)          
 The Company and Parent shall in good faith endeavor to identify and agree
prior to the Closing which employees of the Company constitute Project Employees
for purposes of this Agreement, notwithstanding the definition thereof in
Section 2.11(c) of this Agreement.

    


    4.17         Changes after
Signing.  Parent shall promptly notify the Company of any
change, occurrence or event, which, individually or in the aggregate with any
other changes, occurrences and events, is reasonably likely to cause any of the
conditions to Closing set forth in Article 5 not to be satisfied; provided that in no event
shall Hold Co be entitled to make a claim for indemnification under Section
7.2(c)(ii) for a breach of this Section 4.17 after Closing.

    


    
      
        
           


        

        
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    4.18         Bridge Loan.  On or
prior to the Closing Date, Hold Co shall repay all amounts outstanding under the
Bridge Loan in full or novate the Bridge Loan to Hold Co in a form reasonably
acceptable to Parent, and cause all Encumbrances placed on the assets of the
Company and any of the Project Companies in connection with the Bridge Loan to
be released.

    


    4.19         Purchase
Orders.  Prior to Closing, the Company shall cause to be
canceled, all purchase orders which (i) are not Project Contracts, (ii) have not
have not been novated to the Spin-Off Subsidiary prior to the Drop Down Closing,
and (iii) are not fully reflected as accounts payable on the Closing Payment
List (the “Open Purchase
Orders”).

    


    4.20         Payment Lists.  At
least three but no more than five Business Days prior to the Closing Date, the
Company shall deliver the Closing Payment List to Parent.  At lease
three but no more than five Business Days prior to the Holdback Release Date,
Hold Co shall provide the Hold Co Payment List to Parent.  The Closing
Payment List need not include any accounts payable for which payment in full
shall have been sent or otherwise transmitted by the close of business on the
Closing Date.

    


    4.21         Tax
Information.  The Company and Hold Co will give Parent
reasonable access during regular business hours to the Company’s relevant
employees and relevant books and records to assist in Parent’s review of, (i)
the limitations, if any, to which the Company’s net operating losses are subject
under Section 382 of the Code, (ii) the amount of the Company’s research credits
under Section 41 of the Code, and (iii) any other tax positions or attributes of
the Company and its Subsidiaries.

    


    4.22         HSR Filing
Fee.  Parent shall pay on behalf of the Company its filing fee
under the HSR Act.

    


    4.23         Closing Registration
Statement.  Parent shall prepare an "automatic shelf
registration statement" (as defined in Rule 405 of the Securities Act) on Form
S-3 for the purpose of registering under the Securities Act all of the shares of
Parent Common Stock issued or issuable in the Merger (other than Escrow Shares)
for resale by, and for the account of, Hold Co as the selling stockholder
thereunder (the "Closing
Registration Statement").  Parent shall ensure that the Closing
Registration Statement conforms in all respects to the requirements of the
Securities Act and the Rules and Regulations thereunder.  At least
three (3) Business Days prior to the Closing, Parent shall furnish to the
Company and Hold Co a draft of the Closing Registration Statement, which will be
subject to the reasonable review and comment of the Company, Hold Co and their
counsel.  Parent shall also cause the Parent Common Stock covered by
the Closing Registration Statement to be listed on each securities exchange or
quotation system on which similar securities issued by Parent are listed or
traded.

    


    4.24         Merger
Sub.  Promptly following the execution of this Agreement,
Parent shall form Merger Sub and shall cause Merger Sub to, and Merger Sub
shall, sign a joiner agreement to this Agreement which shall bind Merger Sub to
all of the terms and conditions of this Agreement and the transactions
contemplated hereby.

    


    4.25         IntercompanyArrangements.  Parent,
Hold Co and the Company acknowledge and agree after the Closing that there shall
not exist any intercompany arrangement between Hold Co, the Spin-Off Subsidiary,
and their respective Subsidiaries, on the one hand, and the Company and its
Subsidiaries, on the other hand, that was entered into prior to the Closing,
other than the Drop Down Agreement and the other agreements contemplated hereby
and thereby.

    


    
      
        
           


        

        
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    ARTICLE
5

    CONDITIONS
TO THE MERGER

    


    5.1           Conditions to Obligations of Each
Party to Effect the Merger.  The respective obligations of each
party to consummate the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Closing of each of the following conditions,
which to the maximum extent permitted by Law may be waived in a written
agreement of the Company (for itself and Hold Co) and Parent (for itself and
Merger Sub) (each such condition is solely for the benefit of the parties hereto
and may be waived without notice, Liability or obligation to any
Person):

    


    (a)      
     Time Since
Solicitation.  At least ten (10) days shall have lapsed since
the Solicitation Date.

    


    (b)       
    No Injunctions or
Restraints; Illegality.  No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint or prohibition
preventing the consummation of the Merger, the Hold Co Merger, the Distribution
or the Drop Down shall be in effect, nor shall any proceeding brought by a
Governmental Entity seeking any of the foregoing be pending.  No
action taken by any Governmental Entity, and no statute, rule, regulation or
order shall have been enacted, entered or enforced, which makes the consummation
of the transactions contemplated by this Agreement
illegal.  Notwithstanding the foregoing, no party may assert the
foregoing condition unless such party shall have used commercially reasonable
efforts to (i) prevent the entry of any such injunction or order and to appeal
as promptly as possible any such injunction or order that may be entered and
(ii) oppose such Governmental Entity’s action or the enactment, entering into or
enforcement of such statute, rule, regulation or order, as
applicable.

    


    (c)       
    Antitrust
Approvals.  All applicable waiting periods under the HSR Act or
required foreign antitrust Laws shall have expired or been
terminated.

    


    (d)      
     NASDAQ
Quotation.  The shares of Parent Common Stock to be issued in
the Merger shall have been authorized for quotation on NASDAQ, subject to
official notice of issuance.

    


    (e)      
     The Hold Co Merger, the Drop
Down and the Distribution.  The Hold Co Merger shall have been
consummated pursuant to the Hold Co Merger Agreement as executed and delivered
on the date hereof (and which agreement has not been amended, modified or
supplemented since such date).  The Drop Down and the Distribution
shall have been consummated in accordance with the Drop Down Agreement as
executed and delivered on the date hereof (and which agreement has not been
amended, modified or supplemented since such date).  The Drop Down
Agreement shall be in full force and effect.

    


    
      
        
           


        

        
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    5.2           Additional Conditions to Obligations
of Hold Co and the Company.  The obligations of Hold Co and the
Company to consummate the transactions contemplated hereby shall be subject to
the satisfaction at or prior to the Closing of each of the following conditions,
any of which may be waived, in writing, by the Company (each such condition is
solely for the benefit of Hold Co and the Company and may be waived in the
Company’s sole discretion (on behalf of itself and Hold Co) without notice,
Liability or obligation to any Person):

    


    (a)            Representations, Warranties
and Covenants.  Each of the representations and warranties made
by each of Parent and Merger Sub in this Agreement (excluding the
representations and warranties of Parent and Merger Sub contained in Sections
3.3(a) (Authority) and 3.5 (Board Approval) which will be true and correct in
all respects, in each case as of the date of this Agreement and at and as of the
Closing Date) will be true and correct in all respects (without giving effect to
any limitations as to materiality or Parent Material Adverse Effect as set forth
therein), in each case as of the date of this Agreement and at and as of the
Closing Date as if made on that date (except in any case that representations
and warranties that expressly speak as of a specified date or time need only be
true and correct as of such specified date or time), except for such failures to
be true and correct as would not, in the aggregate, have or reasonably be
expected to have a Parent Material Adverse Effect.  Parent shall have
performed and complied in all material respects with all covenants and other
obligations of this Agreement required to be performed and complied with by it
at or before the Closing.

    


    (b)    
       Receipt of Closing
Deliveries.  The Company shall have received each of the
agreements, instruments and other documents required to have been delivered to
the Company at or prior to the Closing as set forth in Exhibit G and none of such
agreements, instruments and other documents shall have been rescinded, amended
or revoked.

    


    (c)        
   Tax
Opinion.  The Company shall have received the opinion of
Covington & Burling LLP, counsel to the Company, dated the Closing Date, to
the effect that, on the basis of the facts, representations and assumptions set
forth in such opinion, the Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Code, and each of Parent and the Company will
be treated as a party to the reorganization within the meaning of Section 368(b)
of the Code.  In rendering such opinion, Covington & Burling LLP
may require and rely on customary representations and covenants, including those
in Exhibit F-1
and Exhibit
F-2, reasonably satisfactory in form and substance to Covington &
Burling LLP.

    


    (d)      
     No Material Adverse
Change.  Since the date of this Agreement there shall not have
occurred any events or developments of any character that, individually or in
the aggregate, has had or is reasonably likely to have a Parent Material Adverse
Effect.

    


    (e)       
    NASDAQ
Listing.  Parent shall have caused the Parent Common Stock
covered by the Closing Registration Statement to be listed on each securities
exchange or quotation system on which similar securities issued by Parent are
listed or traded.

    


    (f)         
   Registration Statement
Effective.  The Closing Registration Statement shall have been
filed by Parent in conformity with the requirements of the Securities Act and
the rules and regulations thereunder, and shall be effective (the "Closing
Registration Statement Condition").

    


    
      
        
           


        

        
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    5.3           Additional Conditions to the
Obligations of Parent and Merger Sub.  The obligations of
Parent and Merger Sub to consummate the transactions contemplated hereby shall
be subject to the satisfaction at or prior to the Closing of each of the
following conditions, any of which may be waived, in writing, by Parent (each
such condition is solely for the benefit of Parent and Merger Sub and may be
waived by Parent in its sole discretion without notice, Liability or obligation
to any Person):

    


    (a)         
  Representations, Warranties
and Covenants.  Each of the representations and warranties made
by the Company in this Agreement (excluding the representations and warranties
of the Company contained in Sections 2.3(a) and (b) (Authority), 2.24 (Board
Approvals) and 2.25 (Stockholder Vote) which will be true and correct in all
respects, in each case as of the date of this Agreement and at and as of the
Closing Date) will be true and correct in all respects (without giving effect to
any limitations as to materiality, Project Material Adverse Effect or Company
Material Adverse Effect as set forth therein), in each case as of the date of
this Agreement and at and as of the Closing Date (except in any case that
representations and warranties that expressly speak as of a specified date or
time need only be true and correct as of such specified date or time), except
for such failures to be true and correct as would not, in the aggregate, have or
reasonably be expected to have a Project Material Adverse Effect or a Company
Material Adverse Effect.  Each of the representations and warranties
made by the Company or the Spin-Off Subsidiary in the Drop Down Agreement
(excluding the representations and warranties of the Company contained in
Section 3.3 of the Drop Down Agreement which will be true and correct in all
respects, as of the date of this Agreement and at and as of the Closing Date)
will be true and correct in all respects (without giving effect to any
limitations as to materiality, Project Material Adverse Effect or Company
Material Adverse Effect as set forth therein), in each case as of the date of
this Agreement and as of the date of the Drop Down Closing, as if made on that
date (except in any case that representations and warranties that expressly
speak as of a specified date or time need only be true and correct as of such
specified date or time), except for such failures to be true and correct as
would not, in the aggregate, have or reasonably be expected to have a Project
Material Adverse Effect or a Company Material Adverse Effect.  The
Company and Hold Co shall have performed and complied in all material respects
with all covenants and other obligations of this Agreement required to be
performed and complied with by it at or before the Closing.

    


    (b)    
       Receipt of Closing
Deliveries.  Parent and Merger Sub shall have received each of
the agreements, instruments and other documents required to have been delivered
to Parent and Merger Sub at or prior to the Closing as set forth in Exhibit G and none of
such agreements, instruments and other documents shall have been rescinded,
amended or revoked.

    


    (c)     
      Tax
Opinion.  Parent shall have received the opinion of Cravath,
Swaine & Moore LLP, counsel to Parent, dated the Closing Date, to the effect
that, on the basis of the facts, representations and assumptions set forth in
such opinion, the Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code, and each of Parent and the Company will be treated
as a party to the reorganization within the meaning of Section 368(b) of the
Code.  In rendering such opinion, Cravath, Swaine & Moore LLP may
require and rely on customary representations and covenants, including those in
Exhibit F-1 and
Exhibit F-2,
reasonably satisfactory in form and substance to Cravath, Swaine & Moore
LLP.

    


    
      
        
           


        

        
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    (d)       
    No Material Adverse
Change.  Since the date of this Agreement there shall not have
occurred any event or development of any character that has had or is reasonably
likely to have a Company Material Adverse Effect or a Project Material Adverse
Effect.

    


    (e)       
    Appraisal
Rights.  If Hold Co is a limited liability company, holders, in
the aggregate, of not greater than five (5) percent of the outstanding voting
power of the Company Capital Stock, on an as converted to Company Common Stock
basis, shall have exercised and/or hold the right to exercise any appraisal
rights under the DGCL with respect to the Hold Co Merger Agreement or the Hold
Co Merger.

    


    (f)        
    Company
Capitalization.    The Company shall have no
outstanding securities other than 100 shares of Company Common Stock that are
owned beneficially and of record by Hold Co.  There shall exist no (i)
options, warrants, calls, subscriptions or other rights, convertible securities,
agreements or commitments of any character obligating the Company or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock or other
equity interest in, the Company or securities convertible into or exchangeable
for such shares or equity interests, (ii) contractual obligations of the Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
capital stock of the Company or (iii) voting trusts or similar agreements to
which the Company or any of its Subsidiaries is a party with respect to the
voting of the capital stock of the Company.

    


    (g)      
     Bridge
Loan.  All amounts outstanding under the Bridge Loan shall have
been repaid in full by, or novated to, Hold Co, and all Encumbrances placed on
the assets of the Company and any of the Project Companies in connection with
the Bridge Loan shall have been released.

    


    (h)     
      Master
Sublease.  In the event that any of the Contracts set forth in
Schedule 8.4(gggg) shall not have been terminated or novated to Hold Co or one
of its Subsidiaries, other than the Company and any Project Companies, prior to
the Drop Down Closing, the Company and the Spin-Off Subsidiary shall have
entered into the Master Sublease.

    


    ARTICLE
6

    TERMINATION,
AMENDMENT AND WAIVER

    


    6.1           Termination.  At any
time prior to the Effective Time, this Agreement may be terminated:

    


    (a)      
     by mutual written consent duly authorized by the
respective boards of directors of Parent (or a committee thereof) and the
Company;

    


    (b)       
    by either Parent or the Company, pursuant to a written
notice, if the Closing shall not have occurred on or before July 31, 2009 (the
“Termination
Date”); provided,
however, that the right to terminate this Agreement under this Section
6.1(b) shall not be available to any party whose breach of this Agreement has
resulted in the failure of the Closing to occur on or before the Termination
Date;

    


    (c)     
      by either the Company or Parent, pursuant to
a written notice, if any permanent injunction or other order of a court or other
competent Government Entity preventing the consummation of the transactions
contemplated by this Agreement shall have become final and
nonappealable;

    


    
      
        
           


        

        
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    (d)         
  by Parent, pursuant to a written notice, if the Company shall have
breached any representation, warranty or covenant contained herein and (i) such
breach shall not have been cured prior to the Termination Date (provided, however, that no
such cure period shall be available or applicable to any such breach which by
its nature cannot be cured) and (ii) if not cured at or prior to the Closing,
such breach would result in the failure of any of the conditions set forth in
Section 5.1 or Section 5.3(a) or (d) to be satisfied (provided, however, that the
termination right under this Section 6.1(d) shall not be available to Parent if
Parent or Merger Sub is at that time in material breach of this Agreement);
or

    


    (e)     
      by the Company, pursuant to a written
notice, if Parent or Merger Sub shall have breached any representation, warranty
or covenant contained herein and (i) such breach shall not have been cured prior
to the Termination Date (provided, however, that no such cure
period shall be available or applicable to any such breach which by its nature
cannot be cured) and (ii) if not cured at or prior to the Closing, such breach
would result in the failure of any of the conditions set forth in Section 5.1 or
Section 5.2(a) or (d) to be satisfied; provided, however, that the
right to terminate this Agreement under this Section 6.1(e) shall not be
available to the Company if the Company or Hold Co is at that time in material
breach of this Agreement).

    


    6.2           Effect of
Termination.  If this Agreement is terminated in accordance
with Section 6.1, this Agreement shall forthwith become void and there shall be
no Liability on the part of Parent, Merger Sub, Hold Co or the Company or their
respective officers, directors, stockholders or Affiliates hereunder; provided, however, that each party
hereto shall remain liable for any willful breaches of any representations or
warranties under this Agreement and for any willful breaches of covenants or
other obligations under this Agreement so long as the party claiming such
liability is not in material breach of this Agreement; and provided, further, that the
Confidentiality Agreement and the provisions of Sections 4.7, 4.8, 4.12, 6.2 and
Article 8 (but excluding Section 8.1) shall remain in full force and effect and
survive any termination of this Agreement.

    


    6.3           Amendment.  Subject
to the provisions of applicable Law, Parent and Hold Co may amend this Agreement
at any time prior to or after the Effective Time in accordance with an
instrument in writing signed on behalf of each such party, and such amendment
shall be binding on each party hereto; provided, however, that no
such amendment shall alter or change the amount or kind of consideration to be
received on conversion of the Company Capital Stock in the Merger in accordance
with Section 1.4.

    


    6.4           Extension;
Waiver.  Any party hereto may, to the extent legally allowed,
(a) extend the time for the performance of any of the obligations or other acts
of the other parties, (b) waive any inaccuracies in the representations and
warranties made to such party herein or in any document delivered pursuant
hereto, and (c) waive compliance with any of the agreements or conditions for
the benefit of such party contained herein.  Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such
party.  Without limiting the generality or effect of the preceding
sentence, no delay in exercising any right under this Agreement shall constitute
a waiver of such right, and no waiver of any breach or default shall be deemed a
waiver of any other breach or default of the same or any other provision in this
Agreement.

    


    
      
        
           


        

        
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    ARTICLE
7

    ESCROW
FUND AND INDEMNIFICATION

    


    7.1           Escrow
Fund.  Subject to Section 7.10 hereof, from and after the
Closing, the Escrow Fund will be the sole and exclusive remedy available to
compensate Parent (on behalf of itself or any other Indemnified Person) for
Losses in accordance with this ‎Article 7; it
being understood and agreed and the Company and any Company Indemnified Person
shall have all rights set forth in the Drop Down Agreement and the Master
Sublease and that this Article 7 shall not affect the rights of the Company or
of any Company Indemnified Person thereunder, except as set forth in Section
7.2(d).  The value of any given share of Parent Common Stock held in
the Escrow Fund shall, for purposes of this ‎Article 7, be as
set forth in the Escrow Agreement.

    


    7.2           Indemnification.

    


    (a)       
    From and after the Closing, subject to this ‎Article 7, Hold Co
shall, out of the Escrow Fund, indemnify and hold harmless Parent, the Surviving
Company, the Subsidiaries of Parent and the Surviving Company, their respective
officers, directors, agents and employees, and each Person who Controls or may
Control Parent and the Surviving Company (each of the foregoing, a “Parent
Indemnified Person”) from and against any and all losses, liabilities,
damages, claims, suits, settlements, reductions in value, costs and expenses,
including reasonable costs of investigation, settlement, and defense and
reasonable legal fees, court costs, and any interest costs or penalties
(collectively, “Losses”),
arising out of, related to or otherwise by virtue of:

    


    (i)          
     any failure of any representation or warranty made
by the Company in ‎Article 2 to be
true and correct as of the date of this Agreement and as of the Closing Date (as
though such representation or warranty were made on the Closing Date), provided that in the case of
any such representation or warranty (other than those contained in Sections 2.1
(Organization, Standing and Power), 2.2 (a) (Capital Structure), 2.4(a) and (b)
(Financial Statements), 2.5(a) (Absence of Changes), 2.15 (Project Development),
2.17 (Real Property), 2.18(a) (Environmental), 2.19 (Permits) and 2.26
(Disclosures)) that is limited by “material,” “in all material respects,”
“Project Material Adverse Effect” or “Company Material Adverse Effect” or any
similar term or limitation (excluding the definition of Permitted Encumbrances),
the breach or inaccuracy of such representation or warranty and the amount of
such Losses will be determined as if “material,” “in all material respects,”
“Project Material Adverse Effect,” “Company Material Adverse Effect” or such
similar terms (excluding the definition of Permitted Encumbrances) were not
included therein;

    


    (ii)         
     any breach of any of the covenants or agreements
made by the Company or Hold Co in this Agreement;

    


    (iii)      
       any Taxes of the Company or any of its
Subsidiaries attributable to any period on or before the Closing, including any
Taxes incurred in connection with (x) the Drop Down, the Distribution or the
Hold Co Merger that are not paid before the Closing, or (y) the repayment of the
Bridge Loan (collectively, the “Pre-Closing Tax
Liabilities”);

    


    
      
        
           


        

        
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    (iv)             any
failure of any representation or warranty made by the Spin-Off Subsidiary in the
Drop Down Agreement to be true and correct in all respects when made and as of
the Drop Down Closing (as though such representation, warranty or certification
were made at the Drop Down Closing Date);

    


    (v)              any
breach of any of the covenants or agreements made by the Company and to be
performed prior to the completion of the Drop Down, or by the Spin-Off
Subsidiary or Hold Co, in each case under the Drop Down Agreement;

    


    (vi)       
     any Dissenting Shares Excess
Payments;

    


    (vii)      
     any Pre-Closing Project Liabilities;

    


    (viii)           any
Assumed Liabilities under the Drop Down Agreement; or

    


    (ix)         
    any inaccuracy, including by way of exclusion, of the
amounts set forth on either the Closing Payment List, the Hold Co Payment List
or the Lease Holdback Amount Certificate.

    


    (b)         
  In the case of any Taxable period that includes but does not end on
the Closing Date (a “Straddle
Period”), the amount of Pre-Closing Tax Liabilities based on or measured
by income or receipts will be determined based on an interim closing of the
books as of the close of business on the Closing Date, and the amount of any
Pre-Closing Tax Liabilities not based on or measured by income or receipts for a
Straddle Period will be deemed to be the amount of such Tax for the entire
period multiplied by a fraction, the numerator of which is the number of days in
the portion of the Straddle Period ending at the end of the day that is the
Closing Date and the denominator of which is the number of days in such Straddle
Period; provided,
however, that any and all Tax Liabilities related to, associated with or
arising out of or in connection with the Hold Co Merger, the Drop Down, the
Distribution (including for this purpose all Tax Liabilities arising as a result
of any transfer of assets that is undertaken in order to separate the assets
that are held, directly or indirectly, by the Company or any Project Company
following the Distribution from the assets that will not be so held), the assets
not held by the Company or any Project Company after the Distribution, or the
repayment of the Bridge Loan shall be considered to be Pre-Closing Tax
Liabilities.  Any compensation-related Taxes for employees that do not
remain employees of the Company after the Merger and any employment-related
Taxes on the cash out of all equity compensation on or before the Merger, shall
be considered Pre-Closing Tax Liabilities.

    


    (c)       
    From and after the Closing, subject to this ‎Article 7, Parent
shall indemnify and hold harmless Hold Co or, after the assignment contemplated
by Section 7.9, the Stockholders’ Representative, and Hold Co’s respective
officers, directors, agents and employees, and each Person who Controls or may
Control Hold Co (each, a “Company
Indemnified Person”, and along with the Parent Indemnified Persons, the
“Indemnified
Persons”) from and against any and all Losses arising out of, related to
or otherwise by virtue of:

    


    
      
        
           


        

        
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    (i)            
   any failure of any representation or warranty made by Parent
in Article 3, to be true and correct as of the date of this Agreement and as of
the Closing Date (as though such representation or warranty were made on the
Closing Date);

    


    (ii)            
  any breach of any of the covenants or agreements made by Parent in
this Agreement; and

    


    (iii)          
   any Excluded Liabilities under the Drop Down Agreement (except
for the Pre-Closing Project Liabilities).

    


    (d)         
  If, at any time when a Liability Claim for Alternative Recovery
Losses is resolved in accordance with this Article 7, at least seventy five
percent (75%) of the shares of Parent Common Stock together with the Escrow Cash
then remain in the Escrow Fund (the “Escrow
Threshold”) and are not subject to any pending Liability Claims (the
excess of any such shares over the Escrow Threshold, the “Available
Shares”), such Alternative Recovery Losses shall be satisfied first with
Available Shares.  In the event that the amount of Alternative
Recovery Losses awarded cannot be fully satisfied with Available Shares, Parent
may elect to recover such excess Alternative Recovery Losses under this
Agreement or from the Spin-Off Subsidiary under the Drop Down Agreement, but
without duplicating any such recovery.  Nothing herein shall limit the
ability of Parent Indemnified Parties to seek indemnification under the Drop
Down Agreement at any time, so long as Alternative Recovery Losses, when finally
determined, are satisfied in accordance with this Section 7.2(d).

    


    7.3           Limitations on
Indemnification.

    


    (a)        
   Subject to the following sentence, each of the Parent
Indemnified Persons and the Company Indemnified Persons may not recover Losses
from the Escrow Fund or Parent, respectively, in respect of any claim for
indemnification under ‎Section 7.2(a)(i),
7.2(a)(iv), 7.2(a)(vii) or 7.2(c)(i), respectively, (A) unless and until Losses
have been incurred, paid or properly accrued in an aggregate amount greater than
$3,200,000 (the “Indemnification
Threshold”) and (B) unless each such claim (when aggregated with all
claims arising out of the same facts and circumstances) is in excess of $35,000
(and no claims below such amount shall be included when determining whether the
Indemnification Threshold has been met).  Notwithstanding the
foregoing sentence, (i) the Parent Indemnified Persons will be entitled to
recover for, and the Indemnification Threshold and per-claim threshold will not
apply to, any claim for indemnification (x) under ‎Section 7.2(a)(i)
or 7.2(a)(iv) for any Losses with respect to any failure of any representation
or warranty made by the Company in ‎Section 2.1(a)-(g)
(Organization, Standing and Power), 2.2(a) (Capital Structure), 2.3(a) and (b)
(Authority), 2.9 (Taxes), 2.24 (Board Approval), or 2.25 (Stockholder Vote) or
by the Spin-Off Subsidiary in Section 3.1 (Organization, Standing and Power) and
Section 3.3 (Validity and Enforceability) of the Drop Down Agreement to be true,
or (y) under Section 7.2(a)(iii), and (ii) the Company Indemnified Persons will
be entitled to recover for, and the Indemnification Threshold and per-claim
threshold will not apply to, any claim for indemnification under ‎Section 7.2(c)(i)
for any Losses with respect to failure of any representation or warranty made by
the Parent in ‎Sections 3.1
(Organization, Standing and Power),  3.3(a) (Authority) and 3.5 (Board
Approval) to be true.  Once the applicable Indemnification Threshold
has been exceeded, the Indemnified Persons will be entitled to recover for all
such Losses exceeding the Indemnification Threshold, subject to this ‎Article
7.

    


    
      
        
           


        

        
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    (b)      
     Subject to Section 7.2(d) and as provided in the
Drop Down Agreement, the sole source of recovery by Parent Indemnified Parties
for Losses under Section 7.2(a) and (b) shall be the Escrow Fund.  The
aggregate liability of Parent for Losses under Section 7.2(c) shall not exceed
$80,000,000.

    


    (c)       
    Hold Co shall not have any right of contribution, right
of indemnity or other right or remedy against the Surviving
Company,  the Project Companies or any of the Project Employees in
connection with any indemnification obligation or any other Liability to which
Hold Co may become subject under or in connection with this
Agreement.

    


    (d)        
   No Indemnified Person’s rights under this ‎Article 7 shall be
adversely affected by any investigation conducted, or any knowledge acquired or
capable of being acquired, by such Indemnified Person at any time, whether
before or after the execution or delivery of this Agreement or the Closing, or
by the waiver of any condition to Closing.

    


    (e)        
   The Indemnified Persons shall mitigate, to the extent
expressly required by applicable Law, any Losses for which such Indemnified
Persons seek indemnification under this ‎Article 7 and
shall use commercially reasonable efforts to seek any amounts available under
insurance coverage or from any other person alleged to be responsible for any
Losses payable under this Article 7; it being understood that making a written
request for payment from any such insurer or other party shall constitute
compliance with this Section 7.3(e) and that no further efforts, including,
without limitation, litigation against such insurer or other party, shall be
necessary.

    


    (f)        
    The amount of any Losses payable under this ‎Article 7 shall be
net of any amounts actually recovered under applicable insurance
policies.

    


    7.4           Escrow Claim
Period.  The period during which claims for indemnification
from the Escrow Fund may be initiated (the “Claim
Period”) shall commence at the Closing Date and terminate at 11:59 p.m.
Pacific time on the second anniversary of the Closing
Date.  Notwithstanding anything contained in this Agreement to the
contrary, at the conclusion of the Claim Period such portion of the Escrow Fund
as may be necessary in the reasonable judgment of Parent to satisfy any
unresolved or unsatisfied claims for Losses specified in any Claims Notice
delivered to the Escrow Agent prior to expiration of the Claim Period shall
remain in the Escrow Fund until such claims for Losses have been resolved or
satisfied.

    


    7.5           Claims for
Indemnification.  At any time that an Indemnified Person has a
claim that has resulted or would reasonably be expected to result in a Loss (a
“Liability
Claim”) that is indemnifiable under ‎Section 7.2, such
Indemnified Person shall promptly deliver a notice of such Liability Claim (a
“Claims
Notice”) to Hold Co (in the case of a claim by a Parent Indemnified
Person) or to Parent (in the case of a claim by a Company Indemnified
Person).  With respect to a Liability Claim under ‎Section 7.2(a)
against the Escrow Fund, at the same time Parent delivers a Claims Notice to
Hold Co, Parent shall deliver a Claims Notice to the Escrow Agent.  A
Claims Notice shall (A) be signed by an officer of Parent or by Hold Co, as
applicable, (B) describe the Liability Claim in reasonable detail (based upon
the information then possessed by Parent or Hold Co, as applicable) and (C)
indicate the amount (or a good faith estimate of the amount, if necessary) of
the Loss that has been or is reasonably likely to be suffered by the Indemnified
Persons.  No delay in or failure to give a Claims Notice by an
Indemnified Person to Parent or Hold Co and the Escrow Agent, as applicable,
pursuant to this ‎Section 7.5 shall
adversely affect any of the other rights or remedies that the Indemnified Person
has under this Agreement or alter or relieve any parties to this Agreement of
their obligations to indemnify the Indemnified Persons pursuant to this ‎Article 7, except
and to the extent that such delay or failure has materially prejudiced such
parties.

    


    
      
        
           


        

        
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    7.6           Objections
to and Payment of Claims.

    


    (a)         
  Hold Co or Parent, as applicable, may object to any Liability Claim
set forth in such Claims Notice by delivering written notice to Parent or Hold
Co, respectively, (with a copy to the Escrow Agent if a Claims Notice was
delivered to the Escrow Agent) of any objection (an “Objection
Notice”).  Such Objection Notice must describe the grounds for
such objection in reasonable detail.

    


    (b)         
  If an Objection Notice is not delivered by Hold Co to Parent (with a
copy of the Escrow Agent if a Claims Notice was delivered to the Escrow Agent)
or by Parent to Hold Co, in each case within 30 days after delivery of the
Claims Notice, such failure to so object shall be an irrevocable acknowledgment
by each party to this Agreement that the Indemnified Persons are entitled to
indemnification under ‎Section 7.2 for
the Losses set forth in such Claims Notice in accordance with this ‎Article
7.

    


    (c)     
      If the Claims Notice was delivered to the
Escrow Agent and no Objection Notice was delivered to the Escrow Agent within 30
days of the delivery of the Claims Notice with respect to all or a portion of
the Losses claimed in the Claims Notice, the Escrow Agent shall deliver to
Parent, as soon as practicable, shares of Parent Common Stock and Escrow Cash
from the Escrow Fund, as provided for in the Escrow Agreement, having a value
equal to the amount of the Losses set forth in such Claims Notice to which no
objection was made; provided that, to the extent
that the amount of the Losses set forth in the Claims Notice (or portion
thereof) is an estimate, Parent (on behalf of itself or any other Parent
Indemnified Person) shall not be so entitled to receive any of the amounts set
forth above in respect of such portions of such estimated Losses unless and
until the amount of such estimated Losses are finally determined.  If
the Claims Notice was delivered to Parent and no Objection Notice was delivered
to Hold Co within 30 days of the delivery of the Claims Notice with respect to
all or a portion of the Losses claimed in the Claims Notice, Parent shall
promptly pay Hold Co, on behalf of the Company Indemnified Persons, cash equal
to the amount of the Losses set forth in such Claims Notice to which no
objection was made); provided that, to the extent
that the amount of the Losses set forth in the Claims Notice (or portion
thereof) is an estimate, Hold Co (on behalf of itself or any other Company
Indemnified Person) shall not be so entitled to receive any of the amounts set
forth above in respect of such portions of such estimated Losses unless and
until the amount of such estimated Losses are finally determined.

    


    (d)      
     Notwithstanding anything to the contrary in this
Agreement, Indemnified Persons, other than Parent and Hold Co, do not have any
individual right to object to any claim made in a Claims Notice under this ‎Article 7 and,
except as aforesaid, any and all claims made in Claims Notice on behalf of the
Indemnified Persons may be objected to only by Parent or Hold Co, as
applicable.

    


    
      
        
           


        

        
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    7.7           Resolution of Objections to
Claims.

    


    (a)        
   If Hold Co or Parent, as applicable, objects in writing to any
Liability Claim made in any Claims Notice within 30 days after delivery of such
Claims Notice, Hold Co and Parent shall attempt in good faith to agree upon the
rights of the respective parties with respect to each of such
claims.  If Hold Co and Parent should so agree, a memorandum setting
forth such agreement shall be prepared and signed by both parties and, with
respect to a Loss suffered by any Company Indemnified Person, within 10 days of
entering into such memorandum, Parent shall pay Hold Co in cash (on behalf of
the Company Indemnified Persons) for the agreed upon amount of Losses in
accordance with Section 7.6(c) as if such Losses had not been objected
to.  To the that extent a Liability Claim will be satisfied by the
Escrow Fund, a copy of the memorandum setting forth the agreement shall be
delivered to the Escrow Agent and the Escrow Agent shall be entitled to rely on
any such memorandum and shall distribute the shares of Parent Common Stock and
Escrow Cash, if any, as soon as practicable from the Escrow Fund in accordance
with the terms thereof.

    


    (b)       
    If no such agreement can be reached after good-faith
negotiation and after 30 days after delivery of an Objection Notice, either
Parent or Hold Co may institute arbitration proceedings to resolve such dispute
in accordance with Section 8.11.  Upon the final decision by the
arbitrator, a memorandum setting forth such decision shall be prepared and
signed by both parties and within 30 days of such decision, (i) if any Losses
were determined to be suffered by a Company Indemnified Person, Parent shall pay
Hold Co in cash (on behalf of the Company Indemnified Persons) for the
determined amount of Losses in accordance with Section 7.6(c) as if such Losses
had not been objected to and (ii) if any Losses were determined to be suffered
by a Parent Indemnified Person, a copy of such memorandum shall be delivered to
the Escrow Agent and the Escrow Agent shall be entitled to rely on any such
memorandum and shall distribute the shares of Parent Common Stock and Escrow
Cash, if any, as soon as practicable from the Escrow Fund in accordance with the
terms thereof.

    


    (c)       
    During the period from the giving of any Claims Notice
through the institution of binding arbitration in accordance with Section
7.7(b), each party will be entitled to the timely production by the other party
of relevant, non-privileged and non-confidential documents or copies
thereof.

    


    7.8           Third-Party
Claims.

    


    (a)        
   If Parent receives written notice of a third-party claim that
Parent believes is reasonably likely to result in a claim for indemnification in
accordance with Section 7.2 by or on behalf of a Parent Indemnified Person,
Parent shall promptly notify Hold Co of such third-party claim and provide Hold
Co the opportunity to direct, through counsel of its own choosing (who shall be
reasonably acceptable to Parent), at its own cost, the defense or settlement of
such claim; provided,
that (a) the claim or proceeding solely seeks (and continues to seek) monetary
damages; (b) Parent reasonably determines in good faith that there is no
reasonable likelihood that such claim will cause the Parent Indemnified Persons
to suffer Losses in excess of the amount held in the Escrow Fund from time to
time during the pendency of the claim, excluding any amount subject to any other
claim; and (c) Hold Co agrees in writing that the Escrow Fund is available to
cover any amounts paid in resolution or settlement of the claim subject to the
limitations set forth in Section 7.3 (the conditions set forth in clauses (a)
through (c) are, collectively, the “Parent Litigation
Conditions”).  If the Parent Litigation Conditions are met and
Hold Co elects to assume the defense of any such claim or proceeding, Hold Co
shall allow Parent to participate in such defense, but in such case the expenses
of Parent shall be paid by Parent.  A Parent Indemnified Person shall
provide Hold Co and its counsel with reasonable access to its records and
personnel relating to any such claim, assertion, event or proceeding during
normal business hours and shall otherwise cooperate with Hold Co in the defense
or settlement thereof, and the Parent Indemnified Persons shall be reimbursed
from the Escrow Fund for all of their reasonable out-of-pocket expenses in
connection therewith.  If Hold Co elects to direct the defense of any
such claim or proceeding, the Parent Indemnified Persons shall not pay, or
permit to be paid, any part of any claim or demand arising from such asserted
liability unless (i) Hold Co consents in writing to such payment, (ii) Hold Co
withdraws from the defense of such asserted liability and Parent undertakes the
defense or settlement of such claim or proceeding and settles such claim or
proceeding in accordance with this Section 7.8 or (iii) a final judgment from
which no appeal may be taken by or on behalf of Hold Co is entered against
Parent Indemnified Persons for such liability.  If Hold Co fails to
defend or if, after commencing or undertaking any such defense, Hold Co fails to
prosecute or withdraws from such defense, or if any of the Parent Litigation
Conditions cease to be met, Parent shall have the right to undertake the defense
or settlement thereof (which shall be conducted by Parent diligently and in good
faith), and retain counsel, reasonably satisfactory to Hold Co, at Hold Co’s
expense; provided,
however, that Hold Co
shall not be required to pay the fees and expenses of more than one counsel for
the Parent Indemnified Persons in any single action, except to the extent that
two or more such Parent Indemnified Persons shall have conflicting interests in
the outcome of such action and, without the consent of Hold Co in writing, no
settlement any such claim with third-party claimants shall be determinative of
the amount of Losses relating to such matter.  If Hold Co consents to
any such settlement, Hold Co shall not have any power or authority to object to
the amount or validity of any claim by or on behalf of any Parent Indemnified
Person for indemnity with respect to such settlement except to the extent the
limits set forth in Section 7.3 apply.  Notwithstanding any other
provision of this Agreement, any costs and expenses of defense and
investigation, including court costs and reasonable attorneys fees incurred or
suffered by the Parent Indemnified Persons in connection with the defense of any
third party claim that, if adversely determined against the Parent Indemnified
Person, would be indemnifiable hereunder, shall constitute Losses that shall be
indemnifiable under Section 7.2.

    


    
      
        
           


        

        
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    (b)      
     If Hold Co receives written notice of a
third-party claim that Hold Co believes is reasonably likely to result in a
claim for indemnification in accordance with Section 7.2 by or on behalf of a
Company Indemnified Person, Hold Co shall promptly notify Parent of such
third-party claim and provide Parent the opportunity to direct, through counsel
of its own choosing (who shall be reasonably acceptable to Hold Co), at its own
cost, the defense or settlement of such claim; provided that (a) the claim
or proceeding solely seeks (and continues to seek) monetary damages; (b) Hold Co
reasonably determines in good faith that there is no reasonable likelihood that
such claim will cause the Company Indemnified Persons to suffer Losses in excess
of the aggregate liability of Parent for Losses under Section 7.2(c) as set
forth in Section 7.3(b), excluding any amount subject to any other claim; and
(c) Parent agrees in writing to be liable for any amounts paid in resolution or
settlement of the claim subject to the limitations set forth in Section 7.3 (the
conditions set forth in clauses (a) through (c) are, collectively, the “Hold Co
Litigation Conditions”).  If the Hold Co Litigation Conditions
are met and Parent elects to assume the defense of any such claim or proceeding,
Parent shall allow Hold Co to participate in such defense, but in such case the
expenses of Hold Co shall be paid by Hold Co.  The Company Indemnified
Persons shall provide Parent and its counsel with reasonable access to its
records and personnel relating to any such claim, assertion, event or proceeding
during normal business hours and shall otherwise cooperate with Parent in the
defense or settlement thereof, and the Company Indemnified Persons shall be
reimbursed for all of their reasonable out-of-pocket expenses in connection
therewith.  If Parent elects to direct the defense of any such claim
or proceeding, the Company Indemnified Persons shall not pay, or permit to be
paid, any part of any claim or demand arising from such asserted liability
unless (i) Parent consents in writing to such payment, (ii) Parent withdraws
from the defense of such asserted liability and Hold Co undertakes the defense
or settlement of such claim or proceeding and settles such claim or proceeding
in accordance with this Section 7.8 or (iii) a final judgment from which no
appeal may be taken by or on behalf of Hold Co is entered against a Company
Indemnified Person for such liability.  If Parent fails to defend or
if, after commencing or undertaking any such defense, Parent fails to prosecute
or withdraws from such defense, or if any of the Hold Co Litigation Conditions
are met, Hold Co shall have the right to undertake the defense or settlement
thereof (which shall be conducted by Hold Co diligently and in good faith), and
retain counsel, reasonably satisfactory to Parent, at Parent’s expense; provided, however, that Parent shall
not be required to pay the fees and expenses of more than one counsel for the
Company Indemnified Persons in any single action, except to the extent that two
or more such Company Indemnified Persons shall have conflicting interests in the
outcome of such action and, without the consent of Parent in writing, no
settlement of any such claim with third-party claimants shall be determinative
of the amount of Losses relating to such matter.  If Parent consents
to any such settlement, Parent shall not have any power or authority to object
to the amount or validity of any claim by or on behalf of any Company
Indemnified Person for indemnity with respect to such settlement except to the
extent the limits set forth in Section 7.3 apply.  Notwithstanding any
other provision of this Agreement, any costs and expenses of defense and
investigation, including court costs and reasonable attorneys fees incurred or
suffered by the Company Indemnified Persons in connection with the defense of
any third party claim that, if adversely determined against the Company
Indemnified Person, would be indemnifiable hereunder, shall constitute Losses
that shall be indemnifiable under Section 7.2.

    


    
      
        
           


        

        
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    7.9           Stockholders’
Representative.  In the event that, after Closing, Hold Co will
no longer be able to exercise it rights or perform its obligations under this
Agreement, Hold Co shall, in connection with such event, appoint a stockholders’
representative and/or a trustee or other agent acting for the benefit of the
equity holders of Hold Co, reasonably acceptable to Parent, that shall have the
right to act on its behalf from and after such appointment for all purposes
under this Agreement, including this Article 7 (the “Stockholders’
Representative”).  In no event shall the appointment of the
Stockholders’ Representative confer any right upon the Company Stockholders that
they would not have absent such appointment.

    


    7.10         Exclusive
Remedy.  Except as otherwise provided in Section 7.1 in
relation to rights under the Drop Down Agreement and Section 7.2(d), this
Article 7 will provide the exclusive remedy for any misrepresentation, breach of
warranty, covenant or other agreement or other claim arising out of this
Agreement.  Notwithstanding anything to the contrary contained in this
Agreement, nothing herein shall prevent any Indemnified Person from bringing a
claim for fraud or intentional misrepresentation against any Person whose
intentional misrepresentation in connection with a representation or warranty
contained herein, or whose fraud, has caused such Indemnified Person to incur
Losses or has limited the Losses recoverable by such Indemnified
Person.  If the Merger is not consummated the parties’ Liability with
respect to breaches of this Agreement, including breaches of representations and
warranties or failure to perform covenants, shall be governed by Section
6.2.  Nothing in this Agreement shall in any way limit the right to
recover Losses under the Drop Down Agreement.

    


    
      
        
           


        

        
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    ARTICLE
8

    GENERAL
PROVISIONS

    


    8.1           Survival of Representations and
Warranties.  The representations and warranties made by the
Company shall survive the Closing and remain in full force and effect until the
second anniversary of the Closing Date, and no claim for indemnification
pursuant to Article 7 for breach thereof may be made at any time
thereafter.  The representations and warranties made by Parent and
Merger Sub in this Agreement shall survive the Closing and remain in full force
and effect until the 6 month anniversary of the Closing Date, and no claim for
indemnification pursuant to Article 7 for breach thereof may be made at any time
thereafter.  The covenants of each party that are to be performed
prior to the Closing shall not survive the Closing but the indemnification for
breaches of any such covenants shall survive the Closing  until the
second anniversary of the Closing Date, and no claim for indemnification
pursuant to Article 7 for breach thereof may be made at any time thereafter.
Notwithstanding any other provision of this Agreement, no right to
indemnification in accordance with Article 7 in respect of any claim based upon
any misrepresentation or breach of a representation, warranty or covenant that
is set forth in a valid Claim Notice delivered prior to the survival period for
such representation, warranty or covenant shall be affected by the expiration of
such representations, warranty or covenant.

    


    8.2           Notices.  All
notices and other communications hereunder shall be in writing and shall be
deemed given when delivered personally, one Business Day after having been
dispatched by a nationally recognized overnight courier service or when sent via
facsimile (with acknowledgement of complete transmission) to the parties hereto
at the following address (or at such other addresses for a party as shall be
specified by like notice):

    


    
      
        
           


        

        
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    (i)              
 if to Parent, Merger Sub or the Company (after the Effective Time),
to:

    


    First
Solar, Inc.

    620
Eighth Avenue, Floor 44

    New York,
NY 10018

    Attention:
Vice President, General Counsel

    Facsimile:
646-366-2248

    


    with a
copy (which shall not constitute notice) to:

    


    Cravath,
Swaine & Moore LLP

    Worldwide
Plaza

    825
Eighth Avenue

    New York,
NY 10019

    Attention:
Erik R. Tavzel, Esq.

    Facsimile
No.:  (212) 474-3700

    


    (ii)              
if to the Company (prior to the Effective Time), to:

    


    OptiSolar
Inc.

    31302
Huntwood Avenue

    Hayward,
CA 94544

    Attention:
Lisa Bodensteiner

    Facsimile:
(510) 401-5160

    


    with a
copy (which shall not constitute notice) to:

    


    Covington
& Burling LLP

    The New
York Times Building

    620
Eighth Avenue

    New York,
NY 10018

    Attention:  William
Collins

    Jack
Bodner

    Facsimile
No.: 212.841.1010

    


    and

    


    Farella
Braun + Martel LLP

    Russ
Building

    235
Montgomery Street, 17th floor

    San
Francisco, CA 94104

    Attention:
Sam Dibble

    Facsimile
No.: 415.954.4480

    


    
      
        
           


        

        
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    (iii)        
     if to the Hold Co, to:

    


    OptiSolar
Holdings LLC

    c/o
OptiSolar Inc.

    31302
Huntwood Avenue

    Hayward,
CA 94544

    Attention:
Lisa Bodensteiner

    Facsimile:
(510) 401-5160

    


    with a
copy (which shall not constitute notice) to:

    


    Covington
& Burling LLP

    The New
York Times Building

    620
Eighth Avenue

    New York,
NY 10018

    Attention:  William
Collins

    Jack
Bodner

    Facsimile
No.: 212.841.1010

    


    and

    


    Farella
Braun + Martel LLP

    Russ
Building

    235
Montgomery Street, 17th floor

    San
Francisco, CA 94104

    Attention:
Sam Dibble

    Facsimile
No.: 415.954.4480

    


    8.3           Terms Generally;
Interpretation.  Except to the extent that the context
otherwise requires:

    


    (a)      
     when a reference is made in this Agreement to an
Article, Section, Subsection, Exhibit, Schedule or Recitals, such reference is
to an Article, Section or Subsection of, an Exhibit or Schedule or the Recitals
to, this Agreement unless otherwise indicated;

    


    (b)         
  the table of contents and headings for this Agreement are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement;

    


    (c)        
   the words “include,” “includes” or “including” (or similar
terms) are deemed to be followed by the words “without limitation”;

    


    (d)        
   the words “hereof,” “herein” and “hereunder” and words of
similar import, when used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this Agreement;

    


    (e)        
   any gender-specific reference in this Agreement include all
genders;

    


    
      
        
           


        

        
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    (f)      
      the definitions contained in this Agreement
are applicable to the other grammatical forms of such terms;

    


    (g)       
    a reference to any legislation or to any provision of
any legislation will include any modification, amendment or re-enactment
thereof, any legislative provision substituted therefor and all rules,
regulations and statutory instruments issued or related to such
legislation.

    


    (h)      
     references to a Person are also to its permitted
successors and assigns;

    


    (i)        
    unless indicated otherwise, mathematical calculations
contemplated hereby will be made to the fifth decimal place, but payments will
be rounded to the nearest whole cent;

    


    (j)       
     the parties have participated jointly in the
negotiation and drafting hereof; if any ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties, and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any provision hereof; no
prior draft of this Agreement nor any course of performance or course of dealing
will be used in the interpretation or construction hereof;

    


    (k)        
   the contents of the Company Disclosure Letter and the
Schedules to this Agreement form an integral part of this Agreement and shall
have as full effect as if they were incorporated in the body of this Agreement,
and any reference to “this Agreement” or described in ‎Section 8.3(d)
shall be deemed to include the Schedules to this Agreement, provided that,
reference to or disclosure of any item or other matter in the Company Disclosure
Letter (including the attachments thereto) is not intended to broaden the scope
of any representation or warranty of the Company or Hold Co contained in this
Agreement or to create any covenant on the part of the Company or Hold
Co;

    


    (l)        
    no parol evidence will be introduced in the construction
or interpretation of this Agreement unless the ambiguity or uncertainty at issue
is plainly discernable from a reading of this Agreement without consideration of
any extrinsic evidence; and

    


    (m)           the
doctrine of election of remedies will not apply in constructing or interpreting
the remedies provisions of this Agreement or the equitable power of a court
considering this Agreement or the Merger.

    


    8.4           Definitions.

    


    For
purposes of this Agreement:

    


    (a)       
    “Accounting
Change” has the meaning set forth in the Financial Accounting Standard
Board’s Statement of Financial Accounting Standards No. 154;

    


    (b)            “Acquisition
Transaction” has the meaning set forth in Section 4.4(a);

    


    
      
        
           


        

        
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    (c)       
    an “Affiliate,”
when used with reference to any Person, means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with such first Person;

    


    (d)       
    “Agreement”
has the meaning set forth in the Preamble;

    
 

    (e)        
   “Alternative
Recovery Losses” means Losses for which indemnification is available both
under this Agreement and under the Drop Down Agreement;

    


    (f)        
    “Antitrust
Laws” has the meaning set forth in Section 4.3(f);

    


    (g)      
     “BLM” means
the Bureau of Land Management of the United States Department of the Interior,
or any successor agency thereto;

    


    (h)       
    “BLM
Easements” means all easements and land use rights Related to the Project
Business granted to the Company or its Subsidiaries by the BLM;

    


    (i)         
   “BLM Permit
Applications” means Form SF-299’s, Plans of Development, Cost Recovery
Agreements, and all other related materials submitted to the BLM, or materials
supporting such documents but not submitted to the BLM, for the purpose of
obtaining rights-of-way grants for each of the Projects;

    


    (j)         
   “Bridge
Loan” means that certain note offering by and between the Company and
certain investors closed as of February 10, 2009 and any further indebtedness
incurred by the Company during the period from the date hereof through the
Closing;

    


    (k)       
    “Business
Day” means any day on which banks are not required or authorized to be
closed in San Francisco, California;

    


    (l)        
    “Canadian Tax
Act” means the Income Tax Act (Canada) and regulations thereunder, as
amended;

    


    (m)           “CAL ISO”
means the California Independent System Operator;

    


    (n)     
      “CAL ISO
Deposit” means the deposit in the amount of $500,000 plus interest made
by the Company or its Subsidiaries with CAL ISO relating to the interconnection
applications for the Garnet and Jasper projects.

    


    (o)      
     “CAMD” has
the meaning set forth in Section 8.4(ggg);

    


    (p)      
     “Certificate”
has the meaning set forth in Section 1.4(c);

    


    (q)       
    “Certificate of
Incorporation” has the meaning set forth in Section 2.2(c);

    


    (r)         
   “Certificate of
Merger” has the meaning set forth in Section 1.1;

    


    (s)      
     “Claim
Period” has the meaning set forth in Section 7.4;

    


    (t)         
   “Claims
Notice” has the meaning set forth in Section 7.5;

    


    
      
        
           


        

        
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    (u)        
   “Closing”
has the meaning set forth in Section 1.2;

    
 

    (v)        
   “Closing
Date” has the meaning set forth in Section 1.2;

    


    (w)           Closing Payment
Amount” means the aggregate amount of liabilities set forth on the
Closing Payment List to be delivered by the Company to Parent at least three (3)
Business Days prior to the Closing Date;

    


    (x)       
    “Closing Payment
List” means a list of all accounts payable of the Company and its
Subsidiaries that are not in respect of Project Contracts and are past due
pursuant to the terms under which they were incurred that shall not have been
paid by the close of business on the Closing Date;

    


    (y)       
    “Closing Project
Business Payments” has the meaning set forth in Section 1.6;

    


    (z)        
   “Closing
Shares” has the meaning set forth in Section 1.4(c)(i);

    


    (aa)          “Code” has
the meaning set forth in the Recitals;

    


    (bb)          “Commercial
Operation” means, with respect to any Project, that the inverters, solar
panels and other equipment and facilities aggregating to the Minimum Installed
Capacity of such Project have been installed, are interconnected to a
transmission system and are capable of generating and transmitting electrical
energy continuously and reliably in accordance with Prudent Industry Practices
to such transmission system in connection with commercial sales, excluding,
however, electric energy delivered to such transmission system in connection
with testing, start-up or commissioning;  provided, however, that
Commercial Operation shall not occur before the occurrence of (a) “commercial
operation”  (or any similar term or concept) under any Contract
consisting of a power purchase agreement, other off-take agreement or
contractual arrangement for the sale of energy from such Project, or (b) if
there is no such Contract as described in clause (a), then “substantial
completion” (or any similar term or concept) under the Contract for installation
of the material equipment and balance of plant for such Project;

    


    (cc)          “Company”
has the meaning set forth in the Preamble;

    


    (dd)          “Company
Board” has the meaning set forth in Section 4.5(b);

    


    (ee)          “Company Board
Recommendation” has the meaning set forth in Section 4.5(b);

    


    (ff)         
  “Company Capital
Stock” has the meaning set forth in Section 1.4;

    


    (gg)          “Company Common
Stock” means the common stock of the Company par value $0.001 per
share;

    


    (hh)          “Company
Disclosure Letter” has the meaning set forth in Section 2;

    


    
      
        
           


        

        
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    (ii)       
    “Company
Indemnified Person” has the meaning set forth in Section
7.2(c);

    


    (jj)       
    “CompanyMaterial Adverse
Effect” means any effect that is materially adverse in relation to the
condition (financial or otherwise), properties, assets, Liabilities, business,
operations or results of operations of the Company and its Subsidiaries, taken
as a whole; provided,
however, that in no
event shall any of the following be deemed, either alone or in combination, to
constitute, nor shall any of the following be taken into account in determining
whether there has been, a Company Material Adverse Effect:  (i) any
effect arising from or relating to changes in general business, economic, or
securities markets conditions, (ii) any acts of war or other hostilities or
terrorism, (iii) any changes affecting the solar power industry generally, (iv)
any effect that results from any action taken pursuant to the express provisions
of this Agreement (other than the Drop Down or the Distribution), including any
action taken with the written consent or at the written direction of Parent or
Merger Sub, or (v) any effect that results from a change in Law or
GAAP;

    


    (kk)          “Company
Options” means all options exercisable for Company Capital
Stock;

    


    (ll)       
    “Company Preferred
Stock” means the preferred stock of the Company par value $0.001
consisting of Senior Preferred A-1 Stock, Senior Preferred A-2 Stock, Senior
Preferred B-1 Stock, Junior Preferred A-1 Stock, Junior Preferred A-2 Stock,
Junior Preferred A-3 Stock, Junior Preferred A-4 Stock, Junior Preferred A-5
Stock, Junior Preferred A-6 Stock and Junior Preferred A-7 Stock;

    


    (mm)        “Company Stock
Plan” has the meaning set forth in Section 2.2(c);

    


    (nn)          “Company
Stockholders” means the holders of Company Capital Stock as of the date
hereof;

    


    (oo)          “Company
Stockholders Meeting” has the meaning set forth in Section
2.25;

    


    (pp)     
    “Company
Transaction Expenses” has the meaning set forth in Section
4.11;

    


    (qq)          “Confidentiality
Agreement” has the meaning set forth in Section 4.7;

    


    (rr)        
   “Contract”
means options, warrants, calls, rights, commitments or (written or oral)
contracts, agreements, instruments, arrangements, understandings, commitments or
undertakings, including leases, licenses, guarantees, sublicenses and
subcontracts;

    


    (ss)          “Control”
means, as to any Person, the possession of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by Contract or otherwise.  The verb
“Control”
and the term “Controlled”
have correlative meanings;

    


    
      
        
           


        

        
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    (tt)       
    “December 31
Balance Sheet Date” has the meaning set forth in Section
2.5(a);

    


    (uu)         “Delaware
Secretary” has the meaning set forth in Section 1.1;

    


    (vv)         “DGCL” has
the meaning set forth in Section 1.1;

    


    (ww)        “DLLCA”
means the Delaware Limited Liability Company Act, as amended form time to
time.

    


    (xx)           “Dissenting
Shares” has the meaning set forth in Section 1.10(a);

    


    (yy)       
  “Dissenting Shares
Excess Payments” has the meaning set forth in Section
1.10(c);

    


    (zz)           “Distribution”
has the meaning set forth in the Recitals;

    


    (aaa)        “Drop Down”
has the meaning set forth in the Recitals;

    


    (bbb)       “Drop Down
Agreement” has the meaning set forth in the Recitals;

    


    (ccc)        “Effective
Time” has the meaning set forth in Section 1.1;

    


    (ddd)        “Employee
Plan” has the meaning set forth in Section 2.10(a);

    


    (eee)        “Encumbrances”
means any mortgage, lien, pledge, hypothecation, right of others, encumbrance,
title defect, title retention, retention agreement, interest, option, security
interest of any kind, claim, charge, easements, covenants, pledges, licenses,
preemptive rights, rights of first refusal or first offer, proxies, levies,
voting trusts or agreements, restrictions on title or transfer of any nature
whatsoever or any other similar restriction or limitation;

    


    (fff)          “Environment”
means all types of soil (saturated or otherwise), surface waters, groundwater,
land, stream or other aquatic sediments, surface or subsurface strata, wetlands,
ambient air and indoor air;

    


    (ggg)       “Environmental
Attributes” means all current attributes of an environmental or other
nature that are created or otherwise arise from the generation of electricity
from an eligible electric generating facility or the electric energy capacity or
other generation-based products produced therefrom.  Forms of such
attributes include any and all environmental air quality credits, green credits,
including carbon credits, emissions reduction credits, certificates, tags,
offsets, allowances, or similar products or rights, howsoever entitled,
resulting from the avoidance of the emission of any gas, chemical, or other
substance, including mercury, nitrogen oxide, sulfur dioxide, carbon dioxide,
carbon monoxide, particulate matter or similar pollutants or contaminants of
air, water or soil gas, chemical, or other substance.  Environmental
Attributes include those currently existing under local, state, regional,
federal, or international legislation or regulation relevant to the avoidance of
any emission described in this definition under any governmental, regulatory or
voluntary program, including the United Nations Framework Convention on Climate
Change (“UNFCCC”)
and related Kyoto Protocol or other programs, Laws or regulations involving or
administered by the Clean Air Markets Division of the Environmental Protection
Agency or successor administrator (collectively with any local, state, regional,
or federal entity given jurisdiction over a program involving transferability of
Environmental Attributes, the “CAMD”);

    


    
      
        
           


        

        
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    (hhh)       “Environmental
Condition” has the meaning set forth in Section 2.18(b);

    


    (iii)           “Environmental
Law” means all applicable Laws concerning pollution, protection of human
health (as it relates to non-occupational exposures to Hazardous Materials),
protection of historic and archaeological resources, protection of natural or
wildlife resources, or protection of the Environment including Laws relating to
emission, discharges, released, or threatened Releases of Hazardous Materials
into the air, surface water, ground water, or lands or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Hazardous Materials, including, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act, the
Resource Conservation and Recovery Act , the Clean Air Act, the Endangered
Species Act and the Clean Water Act, each as amended and in effect on the
Closing Date;

    


    (jjj)           “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended;

    


    (kkk)        “Escrow
Agent” has the meaning set forth in Section 1.4(c)(i);

    


    (lll)           “Escrow
Agreement” has the meaning set forth in Section 1.4(c)(i);

    


    (mmm)     “Escrow
Amount” has the meaning set forth in Section 1.4(c)(i);

    


    (nnn)       “Escrow
Cash” has the meaning set forth in the Escrow Agreement.

    


    (ooo)       “Escrow
Fund” has the meaning set forth in Section 1.4(c)(i);

    


    (ppp)       “Exchange
Act” has the meaning set forth in Section 3.4;

    


    (qqq)       “Excluded
Liabilities” shall have the meaning set forth in the Drop Down
Agreement;

    


    (rrr)          “Financial
Liabilities” means liabilities that require or may require settlement in
cash, excluding any impairment or defect in the quality of any
asset;

    


    (sss)        “Financial
Statements” has the meaning set forth in Section 2.4(a);

    


    (ttt)          “Foreign
Plan” has the meaning set forth in Section 2.10(f);

    


    (uuu)       “FPA” means
the Federal Power Act, as amended from time to time;

    


    
      
        
           


        

        
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    (vvv)       “French
Amount” means the US dollar equivalent, using the exchange rate published
in the Wall Street Journal for the Business Day prior to the Closing Date, of
the aggregate amount in the accounts at BNP Paribas of all Subsidiaries of the
Company organized in France as of the Closing, as set forth on the certificate
delivered pursuant to Exhibit G,
Item12.

    


    (www)     “GAAP” has
the meaning set forth in Section 2.4(a);

    


    (xxx)         “Governmental
Entity” has the meaning set forth in Section 2.3(c);

    


    (yyy)       “Hazardous
Material” means (a) any petroleum or petroleum products, flammable
explosives, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated biphenyls,
paint, mine tailings or other by-products or waste products resulting from
mining- and beneficiation-related activities, (b) any chemicals or other
materials or substances which are defined as or included in the definition of
“hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely
hazardous wastes, “ “restricted hazardous wastes,” “toxic substances,” “toxic
pollutants” or words of similar import under any Environmental Law, and (c) any
other chemical or other material or substance, exposure to which is prohibited,
limited or regulated by any Governmental Entity under any Environmental Law as
of the Effective Time;

    


    (zzz)         “Hold Co”
has the meaning set forth in the Preamble;

    


    (aaaa)      “Hold Co
Interestholder Meeting” has
the meaning set forth in Section 2.25(b);

    


    (bbbb)     “Hold Co
Litigation Conditions” has the meaning set forth in Section
7.8(b);

    


    (cccc)      “Hold Co
Merger” has the meaning set forth in the Recitals;

    


    (dddd)     “Hold Co Merger
Agreement” has the meaning set forth in the Recitals;

    


    (eeee)      “Hold Co Payment
Certificate” means the list of all payments made by Hold Co or any of its
Subsidiaries between the Closing Date and the Holdback Release Date against any
of the accounts payable set forth on the Closing Payment List;

    


    (ffff)         “Hold Co
Payments” means the aggregate amount of payments made by Hold Co or any
of its Subsidiaries set forth on the Hold Co Payment Certificate;

    


    (gggg)     “Holdback
Leases” means each of the Contracts set forth on Schedule 8.4(gggg) that
(i) is assigned to Spin-Off Subsidiary or Hold Co, but without releasing the
Company from its obligations thereunder, or (ii) has not been terminated or
novated, so as to substitute the Spin-Off Subsidiary or Hold Co for the Company
or the applicable Project Company as a party to such Contract, in each case
prior to the Drop Down Closing.

    


    (hhhh)     “HSR Act”
has the meaning set forth in Section 2.3(c);

    


    
      
        
           


        

        
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    (iiii)          “Indemnified
Person” has the meaning set forth in Section 7.2(c)

    


    (jjjj)          “Indemnification
Threshold” has the meaning set forth in Section 7.3(a);

    


    (kkkk)      “Intellectual
Property” means the rights associated with or arising out of any of the
following:  (i) domestic and foreign patents and patent applications,
together with all reissuances, divisionals, continuations,
continuations-in-part, revisions, renewals, extensions, and reexaminations
thereof, (“Patents”);
(ii) trade secret rights and corresponding rights in other non-public
proprietary information (whether or not patentable), including ideas, formulas,
compositions, inventor’s notes, discoveries and improvements, know-how,
manufacturing and production processes and techniques, testing information,
research and development information, inventions, invention disclosures,
blueprints, drawings, specifications, designs, plans, proposals and technical
data, business and marketing plans, market surveys, market know-how and customer
lists and information (“Trade
Secrets”); (iii) all copyrights, copyrightable works, rights in
databases, data collections, “moral” rights, mask works, copyright registrations
and applications therefor and corresponding rights in works of authorship; (iv)
all trademarks, service marks, logos, trade dress and trade names indicating the
source of goods or services, and other indicia of commercial source or origin
(whether registered, common Law, statutory or otherwise), all registrations and
applications to register the foregoing anywhere in the world and all goodwill
associated therewith (“Trademarks”);
(v) all computer software and code, including assemblers, applets, compilers,
source code, object code, development tools, design tools, user interfaces and
data, in any form or format, however fixed; and (vi) all domain names, Internet
electronic addresses, uniform resource locators and alphanumeric designations
associated therewith and all registrations for any of the
foregoing;

    


    (llll)          “IP
Agreement” has the meaning set forth in Section 2.8(f);

    


    (mmmm)  “IRCA” has
the meaning set forth in Section 2.11(d);

    


    (nnnn)     any
reference to a Person’s “knowledge”
means the actual knowledge, of such Person’s executive officers after due
inquiry of their direct reports, provided that with respect to
the Company, executive officers shall mean Randall Goldstein, Phil Rettger,
Darien Spencer and Lisa Bodensteiner and direct reports shall
mean (i) with respect to Randy Goldstein:  Nam Nguyen, Lisa
Bodensteiner, Stephen Shulman and Arun Banskota, (ii) with respect to Phil
Rettger:  Monica Lamb, Jim Tyler, Michael Garey, John Sakers, Alan
Bernheimer and Darien Spencer, (iii) with respect to Darien
Spencer:  Stephen Rush, Frank Lazo and Gautam Ganguly, and (iv) with
respect to Lisa Bodensteiner:  Gregory Blue and Liz Nevis (it being
understood that any representations and warranties given in this Agreement are
not given by any such persons, and that such persons shall have no individual
Liability whatsoever to any person with respect to any such representations and
warranties, and Parent and Merger Sub hereby waive any and all claims they may
have against such persons with respect thereto);

    


    (oooo)     “Law” means
the law of any jurisdiction, whether international, multilateral, multinational,
national, federal, state, provincial, local or common law, act, statute,
ordinance, regulation, rule, code, order, judgment, injunction, decree,
directive, treaty or official directive promulgated by a Governmental
Entity;

    


    
      
        
           


        

        
          78

          
            

          

        

        
           


        

      

    

    


    (pppp)     “Lease Holdback
Amount” means the aggregate amount of rent, including interest, late fees
and any other charges accrued under the applicable Holdback Lease, including any
remaining Liability under or related to such Holdback Lease after termination of
the same, as of Closing, due over the term of the Contract for each of the
Holdback Leases, as set forth in a certificate from the Company delivered to
Parent at Closing (the “Lease Holdback
Amount Certificate”) it being understood that the aggregate amount of
rent due over the term of each potential Holdback Lease as of the date hereof is
set forth in Section 2.14(b)(x) of the Company Disclosure Letter;

    


    (qqqq)     “Lease Holdback
Amount Certificate” shall have the meaning set forth in Section
8.4(pppp).

    


    (rrrr)         “Lease Holdback
Release Date” shall have the meaning set forth in Section
1.4(c)(i).

    


    (ssss)      “Lease Holdback
Shares” shall have the meaning set forth in Section
1.4(c)(i).

    


    (tttt)         “Liability”
means any and all debts, liabilities and obligations of any kind, whether
accrued or fixed, absolute or contingent, matured or unmatured, determined or
undetermined or on- or off-balance sheet, known or unknown;

    


    (uuuu)     “Liability
Claim” has the meaning set forth in Section 7.5;

    


    (vvvv)     “Losses”
has the meaning set forth in Section 7.2(a);

    


    (wwww)  “Master
Sublease” has the meaning set forth in the Drop Down
Agreement.

    


    (xxxx)        any
reference to an event, change, condition or effect being “material”
with respect to any Person means any event, change, condition or effect that is
material in relation to the condition (financial or otherwise), properties,
assets (including intangible assets), Liabilities, business, operations or
results of operations of such Person and its Subsidiaries, taken as a
whole;

    


    (yyyy)     “Merger”
has the meaning set forth in the Recitals;

    


    (zzzz)       
“Merger
Consideration” has the meaning set forth in Section 1.4(c);

    


    (aaaaa)    “Merger
Sub” has the meaning set forth in the Recitals;

    


    (bbbbb)  “Merger Sub Common
Stock” has the meaning set forth in Section 1.4(b);

    


    (ccccc)    “Minimum Installed
Capacity” means the installed capacity in MW for each
Project;

    


    (ddddd)  “MW” means
megawatt(s) AC.

    


    
      
        
           


        

        
          79

          
            

          

        

        
           


        

      

    

    


    (eeeee)    “Newco” has
the meaning set forth in the Recitals;

    


    (fffff)        “Non-Project
Assets” has the meaning set forth in Section 2.16(c);

    


    (ggggg)   [Intentionally
Omitted];

    


    (hhhhh)  
“Objection
Notice” has the meaning set forth in Section 7.6(a);

    


    (iiiii)         “Other Project
Assets” has the meaning set forth in Section 2.16(b);

    


    (jjjjj)         “Parent”
has the meaning set forth in the Preamble;

    


    (kkkkk)    “Parent Balance
Sheet” has the meaning set forth in Section 3.4;

    


    (lllll)         “Parent Common
Stock” has the meaning set forth in Section 1.4(c)(i);

    


    (mmmmm)
“Parent
Capital Stock” means the Parent Common Stock and the Parent Preferred
Stock;

    


    (nnnnn)  
“Parent
Financials” has the meaning set forth in Section 3.4;

    


    (ooooo)   “Parent
Indemnified Person” has the meaning set forth in Section
7.2(a);

    


    (ppppp)  
“Parent
Litigation Conditions” has the meaning set forth in Section
7.8(a);

    


    (qqqqq)   “Parent Material
Adverse Effect” means any effect that is materially adverse in relation
to the condition (financial or otherwise), properties, assets, Liabilities,
business, operations or results of operations of Parent and its Subsidiaries,
taken as a whole; provided, however, that in no event
shall any of the following be deemed, either alone or in combination, to
constitute, nor shall any of the following be taken into account in determining
whether there has been, a Parent Material Adverse Effect: (i) any effect arising
from or relating to changes in general business, economic or securities markets
conditions, (ii) any acts of war or other hostilities or terrorism, (iii) any
changes affecting the solar power industry generally, (iv) any effect that
results from any action taken pursuant to the express provisions of this
Agreement, including any action taken with the written consent or at the written
direction of the Company or Hold Co, hereby, (v) any change in the trading price
of Parent Common Stock (it being understood that the underlying cause of the
change in trading may be deemed to constitute and may be taken into account in
determining whether there has been a Parent Material Adverse Effect) or (vi) any
effect that results from a change in Law or GAAP;

    


    (rrrrr)        “Parent Preferred
Stock” means the preferred stock of Parent, par value $0.001 per
share;

    


    (sssss)    “Parent SEC
Documents” has the meaning set forth in Section 3.4;

    


    
      
        
           


        

        
          80

          
            

          

        

        
           


        

      

    

    


    (ttttt)                       
  “Parent Stock
Plan” has the meaning set forth in Section 3.1(a);

    


    (uuuuu)                    
“Parent
Trading Price” means the volume weighted average price of one share of
Parent Common Stock (as reported, absent manifest error, on Bloomberg) for the
ten consecutive trading days ending on and including the trading day that is two
trading days preceding the Closing Date;

    


    (vvvvv)                    
“Patents”
has the meaning set forth in Section 8.4(kkkk);

    


    (wwwww)                 
“Pending
Agreements” has the meaning set forth in Section 2.14(f);

    


    (xxxxx)                       
 “Permit”
means any permit, license, approval, consent or authorization issued by a
Governmental Entity;

    


    (yyyyy)                   
 “Permit
Applications” has the meaning set forth in Section 2.19(a).

    


    (zzzzz)                        
“Permitted
Encumbrances” means (i) liens for taxes not yet due or being contested in
good faith, (ii) Encumbrances which do not have a Company Material Adverse
Effect or a Project Material Adverse Effect, and (iii) mechanics’, carriers’,
workers’, repairers’ and similar statutory liens arising or incurred in the
ordinary course of business for amounts that are not delinquent and that are not
material, either individually or in the aggregate;

    


    (aaaaaa)                    
“Permitted
Retained Liabilities” has the meaning set forth in Section
2.5(c);

    


    (bbbbbb)
                 
“Permitted
Tech Sale” has the meaning set forth in Section 4.4(a);

    


    (cccccc)                    
a “Person”
means any individual, firm, corporation, partnership, company, limited liability
company, division, trust, joint venture, association, Governmental Entity or
other entity or organization;

    


    (dddddd)                  
“PG&E”
means Pacific Gas and Electric Company, a California corporation;

    


    (eeeeee)                    
“PPA” means
any Contract for the sale of the electricity and/or Environmental Attributes of
a Project;

    


    (ffffff)                        
“Pre-Closing
Project Liabilities” shall have the meaning set forth in the Drop Down
Agreement.

    


    (gggggg)                  
“Pre-Closing Tax
Liabilities” has the meaning set forth in Section 7.2(a)(iii) and Section
7.2(b);

    


    (hhhhhh)                  
“Private
Placement Information Statement” has the meaning set forth in Section
4.5(b);

    


    
      
        
           


        

        
          81

          
            

          

        

        
           


        

      

    

    


    (iiiiii)                           “Project”
means each of the solar power projects under development by the Company, either
directly or through a Subsidiary, identified on Schedule
8.4(iiiiii);

    


    (jjjjjj)                      
    “Project
Assets” has the meaning set forth in Section 2.16(b);

    


    (kkkkkk)                   
 “Project
Business” means the Company’s and its Subsidiaries businesses directly
related to the Projects;

    


    (llllll)                        
  “Project Business
Information” means all originals and all copies of the files, documents,
ledgers, instruments, papers, financial records, databases, compilations, books
and records and similar information, whether in paper, digital or other tangible
or intangible form that are Related to the Project Business;

    


    (mmmmmm)              
“Project
Business Payments” means (I) prepayments, deposits, payments for land
rights, permits, letters of credit in support of PPA’s, and similar payments
made by the Company or any of its Subsidiaries that (1) are for the Project
Business, and (2) (A) were made between January 1, 2009 and the date hereof and
are set forth on Section 2.4 of the Company Disclosure Letter, (B) were made
between the date hereof and Closing pursuant to the budget set forth on Schedule
8.4(mmmmmm), (C) were approved by Parent in writing prior to such expenditure,
or (D) are Project Pre-Payments made between January 1, 2009 and the date
hereof, and (II) the pro rata portion, based on the period starting on the
Closing Date and ending on July 17, 2010, of the premium paid by OptiSolar Farms
Canada Inc. pursuant to the insurance policy numbered “CP 292084867” by and
between OptiSolar Farms Canada Inc. and Continental Casualty Company, which
policy became effective as of July 17, 2008, plus the pro rata portion, based on
the period starting on the Closing Date and ending on July 17, 2010, of the
premium paid by OptiSolar Farms Canada Inc. pursuant to the Commercial Wrap-Up
Liability Policy by Lloyd’s Underwriters, which policy became effective as of
July 17, 2008;

    


    (nnnnnn)                  
“Project
Business Payments Certificate” has the meaning set forth in Section
1.6;

    


    (oooooo)                  
“Project
Company” means each of the wholly-owned Subsidiaries of the Company set
forth on Section 2.1(a) of the Company Disclosure Letter other than Hold Co, the
Spin-Off Subsidiary and Newco;

    


    (pppppp)                  
“Project
Company Business” has the meaning set forth in Section
2.1(h);

    


    (qqqqqq)                  
“Project
Contract” means each Contract that is Related to the Project Business to
which the Company or any of its Subsidiaries is a party other than those
Contracts set forth on Section 2.13 of the Company Disclosure
Letter;

    


    (rrrrrr)                        
“Project
Employees” has the meaning set forth in Section 2.11(c);

    


    (ssssss)                    
“Project
Environmental Reports” has the meaning set forth in Section ‎2.18(a);

    


    
      
        
           


        

        
          82

          
            

          

        

        
           


        

      

    

    


    (tttttt)                         “Project Fixed
Assets” has the meaning set forth in Section 2.16(a);

    


    (uuuuuu)                  
“Project IP
Rights” has the meaning set forth in Section 2.8(a);

    


    (vvvvvv)                  
“Project
Material Adverse Effect” means (a) with respect to the Topaz Project,
receipt by the Company or the Topaz Project Company of written notice (whether
directly or, in the case of clause (i), in an administrative or other public
record) of any of the following (i) from the Board of Supervisors of San Luis
Obispo County in the Topaz Conditional Use Permit (CUP) proceedings, that the
issuance of the Topaz CUP is denied; (ii) from any counterparty to the Real
Property Agreements related to the Topaz Project, which individually or in the
aggregate impacts at least 10% of the aggregate acreage constituting land rights
thereunder, terminating such Real Property Agreements or alleging a material
default under such Real Property Agreements, unless the Company promptly cures
any such alleged default or provides reasonable evidence that such allegation is
untrue; (iii) from Cal-ISO or PG&E, that the interconnection queue position
is terminated; or (iv) from PG&E, that the Topaz PPA is terminated or
alleging that a material default has occurred under the Topaz PPA for which
PG&E intends to terminate the Topaz PPA, unless the Company promptly cures
any such alleged default or provides reasonable evidence that such allegation is
untrue; or (b) any event, occurrence, change or effect that, individually or in
the aggregate materially and adversely impacts (financially or otherwise) the
Project Business, other than that part of the Project Business relating to the
Topaz Project, taken as a whole (taking account of the ability of the Company,
the Surviving Company or any Project Company to acquire, permit, develop,
finance, construct, interconnect, own, operate and achieve commercial operation
of the Projects (exclusive of the Topaz Project); provided, however,  in no
event shall any of the following be deemed, either alone or in combination, to
constitute, nor shall any of the following be taken into account in determining
whether there has been, a Project Material Adverse Effect:  with
respect forgoing clause (b), (A) any effect arising from or relating to changes
in general business, economic or securities markets conditions, (B) any acts of
war or other hostilities or terrorism, (C) any changes affecting the solar power
industry generally, (D) any effect that results from any action taken pursuant
to the express provisions of this Agreement (other than the Drop Down or the
Distribution), including any action taken with consent or the direction of
Parent or Merger Sub, or (E) any effect that results from a change in Law or
GAAP);

    


    (wwwwww)              
“Project
Pre-Payments” has the meaning set forth in Section 2.4(b);

    


    (xxxxxx)                      
“Project
Registered Intellectual Property” has the meaning set forth in Section
2.8(b);

    


    (yyyyyy)                  
“Prudent
Industry Practices” shall mean the practices, methods, equipment,
specifications, and standards of care, skill, safety and diligence, as the same
may change from time to time, but applied in light of the facts known at the
time, as are generally applied or utilized under comparable circumstances by
experienced and prudent professionals in respect of the design, development,
permitting, construction, interconnection, commissioning, maintenance, financing
and operation of solar generating facilities of comparable type and complexity
to a Project.  “Prudent Industry Practices” do not necessarily mean
the best practice, method, or standard of care, skill, safety and diligence in
all cases, but is instead intended to encompass a range of acceptable practices,
methods, and standards;

    


    
      
        
           


        

        
          83

          
            

          

        

        
           


        

      

    

    


    (zzzzzz)                     
 “PUHCA”
means Public Utility Holding Company Act of 1935, as amended;

    


    (aaaaaaa)                  
“Purchaser
Representative” has the meaning set forth in Section 4.5(a);

    


    (bbbbbbb)                
“Purchaser
Representative Agreement” has the meaning set forth in Section
4.5(a);

    


    (ccccccc)                  
“Purchaser
Representative Condition” has the meaning set forth in Section
4.5(a);

    


    (ddddddd)                
“10-K” has
the meaning set forth in Section 3.7;

    


    (eeeeeee)                  
“Real
Property” has the meaning set forth in Section 2.17(a);

    


    (fffffff)                      
 “Real
Property Agreements” has the meaning given to
it in Section 2.17(a);

    


    (ggggggg)                
“Real
Property Rights” has the meaning given to it in Section
2.17(a);

    


    (hhhhhhh)                
“Registration
Rights Agreement” means the Registration Rights Agreement by and between
Parent and Hold Co in substantially the form attached hereto as Exhibit
K;

    


    (iiiiiii)                         
“Related to
the Project Business” means related to, used or held for use in the
Project Business or any Project Company Business, whether or not related to,
used or held for use in any other business or otherwise;

    


    (jjjjjjj)                         
“Release”
means any releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, disposing or dumping of a
Hazardous Material into the Environment (including, without limitation, the
abandonment or discarding of barrels, containers and other closed receptacles
containing any Hazardous Materials);

    


    (kkkkkkk)                  
“Required
Permits” has the meaning set forth in Section 2.19;

    


    (lllllll)                         
“Required
Hold Co Merger Vote” has the meaning set forth in Section
2.25;

    


    (mmmmmmm)           
“Required
Vote” has the meaning set forth in Section 2.25(b);

    


    (nnnnnnn)                
“Retained
Permit Rights” has the meaning set forth in Section 2.19(a);

    


    (ooooooo)                
“SEC” means
the United States Securities and Exchange Commission.

    


    
      
        
           


        

        
          84

          
            

          

        

        
           


        

      

    

    


    (ppppppp)                
“Securities
Act” means the Securities Act of 1933, as amended;

    


    (qqqqqqq)                
“Shortlisted
Projects” means the projects set forth on Schedule
8.4(qqqqqqq);

    


    (rrrrrrr)                       
“Solicitation
Date” has the meaning set forth in Section 4.5(b);

    


    (sssssss)                  
“Spin-off
Subsidiary” has the meaning set forth in the Recitals;

    


    (ttttttt)                       
“Stockholders’
Representation Agreement” has the meaning set forth in Section
4.5(a);

    


    (uuuuuuu)                
“Straddle
Period” has the meaning set forth in Section 7.2(b);

    


    (vvvvvvv)                
“Subsequent
SEC Documents” has the meaning set forth in Section 3.4;

    


    (wwwwwww)           
a “Subsidiary”
of any Person means another Person, an amount of the voting securities, other
voting ownership or voting partnership interests of which is sufficient to elect
at least 50% of its board of directors or other governing body (or, if there are
no such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first Person;

    


    (xxxxxxx)                    
“Surviving
Company” has the meaning set forth in Section 1.1;

    


    (yyyyyyy)                
“Tax” has
the meaning set forth in Section 2.9(a);

    


    (zzzzzzz)                    
“Tax
Authority” has the meaning set forth in Section 2.9(a);

    


    (aaaaaaaa)                
“Tax
Return” has the meaning set forth in Section 2.9(a);

    


    (bbbbbbbb)             
“Tech
Environmental Reports” has the meaning set
forth in Section 2.18(b);

    


    (cccccccc)                
“Termination
Date” has the meaning set forth in Section 6.1(b);

    


    (dddddddd)             
“Topaz
Phase I” means the first phase of the Topaz Project consisting of 210
MW;

    


    (eeeeeeee)                
“Topaz
Phase II” means the second phase of the Topaz Project consisting of 340
MW;

    


    (ffffffff)                     
“Topaz
PPA” means the Power Purchase and Sale Agreement between PG&E and the
Topaz Project Company, executed by PG&E on July 1, 2008 and by the Topaz
Project Company on June 30, 2008;

    


    (gggggggg)             
“Topaz
Project” means the 550 MW Project under development by the Company
(through the Topaz Project Company) in San Luis Obispo County, California;
and

    


    
      
        
           


        

        
          85

          
            

          

        

        
           


        

      

    

    


    (hhhhhhhh)             
“Topaz
Project Company” means Topaz Solar Farms LLC, a Delaware limited
liability company and a wholly-owned Subsidiary of the Company;

    


    (iiiiiiii)                        
“Trademarks”
has the meaning set forth in Section 8.4(kkkk);

    


    (jjjjjjjj)                        
“Trade
Secrets” has the meaning set forth in Section 8.4(kkkk);

    


    (kkkkkkkk)                
“Transfer
Contract” means each Contract that is not Related to the Project Business
to which the Company or any of its Subsidiaries is a party;

    


    (llllllll)                        
“UNFCCC”
has the meaning set forth in Section 8.4(ggg);

    


    (mmmmmmmm)        
“Unaccredited
Investor” means a Person who is not an “Accredited Investor” as defined
in Rule 501 of Regulation D promulgated under the Securities Act;

    


    (nnnnnnnn)             
“Support
Agreement” has the meaning set forth in the Recitals; and

    


    (oooooooo)             
“Written
Consent” shall have the meaning set forth in the Recitals.

    


    (pppppppp)             
“Canadian
Amount” means the US dollar equivalent, using the exchange rate published
in the Wall Street Journal for the Business Day two days prior to the Closing
Date, of the aggregate amount in the bank accounts in the name of all
Subsidiaries of the Company organized in Canada as of the Closing, as set forth
on the certificate delivered pursuant to Exhibit G, Item
12.

    


    (qqqqqqqq)             
“Italian
Amount” means the US dollar equivalent, using the exchange rate published
in the Wall Street Journal for the Business Day two days prior to the Closing
Date, of the aggregate amount in the bank accounts in the name of all
Subsidiaries of the Company organized in Italy as of the Closing, as set forth
on the certificate delivered pursuant to Exhibit G, Item
12.

    


    8.5           Counterparts.  This
Agreement may be executed in one or more counterparts (whether delivered by
facsimile or otherwise, including but not limited to electronic delivery), each
of which shall be considered one and the same instrument and shall become
effective when one or more counterparts have been signed by each of the parties
hereto and delivered to the other parties hereto; it being understood that all
parties hereto need not sign the same counterpart.

    


    8.6           Entire Agreement; No Third Party
Beneficiaries.  This Agreement and the documents and
instruments and other agreements specifically referred to herein or delivered
pursuant hereto, including all the exhibits attached hereto, the Company
Disclosure Letter, (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, except for the Confidentiality Agreement, which shall
continue in full force and effect, and shall survive any termination of this
Agreement, in accordance with its terms, and (b) are not intended to confer, and
shall not be construed as conferring, upon any Person other than the parties
hereto any rights or remedies hereunder (except the provisions of Article 7,
which are intended to be for the benefit of the persons covered thereby and may,
to the extent provided therein, be enforced by such persons). No covenant or
other undertaking in this Agreement shall constitute an amendment to any
employee benefit plan, program, policy or arrangement, and any covenant or
undertaking that suggests that an employee benefit plan, program, policy or
arrangement will be amended shall not be understood to effect such amendment,
such amendment becoming effective only upon the adoption of a written amendment
in accordance with the amendment procedures of such plan, program, policy or
arrangement.

    


    
      
        
           


        

        
          86

          
            

          

        

        
           


        

      

    

    


    8.7           Assignment.  Except
as set forth in Section 7.9, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
(whether by operation of Law or otherwise) without the prior written consent of
the other parties except by Parent after the Effective Time to an Affiliate of
Parent or in connection with a merger of Parent or a sale of substantially all
of the assets of Parent.  In no event shall such assignment relieve
Parent of its obligations hereunder.  Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and
assigns.

    


    8.8           Severability.  Any
term or provision of this Agreement that is held by a court of competent
jurisdiction or arbitrator to be invalid, void or unenforceable in any situation
in any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of the
invalid, void or unenforceable term or provision in any other situation or in
any other jurisdiction.  If the final judgment of such court or
arbitrator declares that any term or provision hereof is invalid, void or
unenforceable, the parties agree to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, void or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
original intention of the invalid or unenforceable term or
provision.

    


    8.9           Failure or Indulgence Not Waiver;
Remedies Cumulative.  No failure or delay on the part of either
party hereto in the exercise of any right hereunder shall impair such right or
be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right.  Except as otherwise provided herein all rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

    


    8.10         GOVERNING LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, IRRESPECTIVE OF THE CHOICE OF LAWS PRINCIPLES
OF THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND REMEDIES.

    


    
      
        
           


        

        
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    8.11         Binding
Arbitration.  From and after the Effective Time, any dispute,
claim or controversy arising out of or relating to this Agreement or the Escrow
Agreement including, by way of illustration and not limitation, the negotiation,
breach, termination, enforcement, interpretation or validity hereof or thereof,
including any request for specific performance, claim based on contract, tort,
statute or constitution or the determination of the scope or applicability of
this agreement to arbitrate, will be determined by arbitration in San Francisco,
CA before one arbitrator.  The arbitration will be administered by
JAMS pursuant to its Comprehensive Arbitration Rules and Procedures, as modified
in this Section.

    


    (a)      
     The arbitrator will have the power to order
hearings and meetings to be held in such place or places as he or she deems in
the interests of reducing the total cost to the parties of the
arbitration.  The arbitration proceedings will be conducted in
English.

    


    (b)       
    The arbitrator will have the power to order any remedy,
including monetary damages, specific performance and all other forms of legal
and equitable relief, except that the arbitrator will not have the power to
order punitive damages.  The arbitrator may hear and rule on
dispositive motions as part of the arbitration proceeding (e.g., motions for
summary disposition).

    


    (c)            Each
party will be entitled to the timely production by the other party of relevant,
non-privileged and non-confidential documents or copies thereof.  If
the parties are unable to agree on the scope and/or timing of such document
production, the arbitrator will have the power, upon application of any party,
to make all appropriate orders for the production of documents by any
party.

    


    (d)          
 Before the arbitrator establishes the facts of the case, each party will
be entitled to examine witnesses by deposition to provide non-privileged
testimony that is relevant to the controversies, claims or disputes at
issue.  If the parties are unable to agree on the propriety, scope or
timing of a deposition, the arbitrator, upon the application of any party, may
make all appropriate orders in connection with a proposed
deposition.

    


    (e)           
The arbitrator may appoint expert witnesses only with the consent of all of the
parties to the arbitration.

    


    (f)            
The arbitrator’s fees and the administrative expenses of the arbitration will be
paid equally by the parties to the arbitration.  Each party to the
arbitration will pay its own costs and expenses (including attorney’s fees) in
connection with the arbitration.

    


    (g)          
 The award rendered by the arbitrator will be final and binding on the
parties.  The award rendered by the arbitrator may be entered into any
court having jurisdiction, or application may be made to such court for judicial
acceptance of the award and an order of enforcement, as the case may
be.  Such court proceeding will disclose only the minimum amount of
information concerning the arbitration as is required to obtain such acceptance
or order.

    


    (h)           
Except as required by Law, neither party nor the arbitrator may disclose the
existence, content or results of an arbitration brought in accordance with this
Agreement.

    


    
      
        
           


        

        
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    (i)         
   Each party to this Agreement hereby agrees that in connection
with any such action process may be served in the same manner as notices may be
delivered under ‎‎Section 8.2 and
irrevocably waives any defenses it may have to service in such
manner.

    


    8.12         WAIVER OF JURY
TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.

    


    8.13         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 addition to any other remedy
to which they are entitled at Law or in equity.

    


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    Each of
Parent, the Company and Hold Co have caused this Agreement to be executed and
delivered as of the date first written above.

    


    
      	 
      	
              FIRST
      SOLAR, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      /s/ Michael J. Ahearn
	 
      	
              Name:  
      Michael J. Ahearn

            
	 
      	
              Title:     Chief
      Executive Officer

            
	 
      	 
      	 
      
	 
      	
              FIRST
      SOLAR ACQUISITION CORP.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      /s/ Mary Beth Gustafsson
	 
      	
              Name:  
      Mary Beth Gustafsson

            
	 
      	
              Title:    
      Vice President and General Counsel

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              OPTISOLAR
      INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      /s/ Randall S. Goldstein
	 
      	
              Name:  
      Randall S. Goldstein

            
	 
      	
              Title:    
      President and Chief Executive Officer

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              OPTISOLAR
      HOLDINGS LLC

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      /s/ Randall S. Goldstein
	 
      	
              Name:  
      Randall. S. Goldstein

            
	 
      	
              Title:    
      President and Chief Executive
Officer