Exhibit 10.34


 


Exhibit D


to Merger Agreement


 




 





TAX RECEIVABLE AGREEMENT


 


among


 


FIRST WIND HOLDINGS INC.


 


FIRST WIND HOLDINGS, LLC


 


and


 


THE SERIES B MEMBERS OF
FIRST WIND HOLDINGS, LLC


 


Dated as of           ,
2010


 




 




















 


TABLE OF CONTENTS


 


	
   

  	
  PAGE

  
	
  ARTICLE 1

  
	
  DEFINITIONS

  
	
   

  	
   

  
	
  Section 1.01. Definitions

  	
  2

  
	
  Section 1.02. Other Definitional and Interpretative Provisions

  	
  10

  
	
   

  	
   

  
	
  ARTICLE 2

  
	
  DETERMINATION OF CUMULATIVE REALIZED TAX BENEFIT

  
	
   

  	
   

  
	
  Section 2.01. Exchange Basis Schedule

  	
  11

  
	
  Section 2.02. Tax Benefit Schedule

  	
  11

  
	
  Section 2.03. Procedures, Amendments.

  	
  12

  
	
   

  	
   

  
	
  ARTICLE 3

  
	
  TAX BENEFIT PAYMENTS

  
	
   

  	
   

  
	
  Section 3.01. Payments.

  	
  13

  
	
  Section 3.02. No Duplicative Payments

  	
  14

  
	
  Section 3.03. Pro Rata Payments

  	
  14

  
	
   

  	
   

  
	
  ARTICLE 4

  
	
  TERMINATION

  
	
   

  	
   

  
	
  Section 4.01. Early Termination and Breach of Agreement.

  	
  14

  
	
  Section 4.02. Early Termination Notice

  	
  16

  
	
  Section 4.03. Payment upon Early Termination.

  	
  16

  
	
   

  	
   

  
	
  ARTICLE 5

  
	
  SUBORDINATION AND LATE PAYMENTS

  
	
   

  	
   

  
	
  Section 5.01. Subordination

  	
  17

  
	
  Section 5.02. Late Payments by WIND

  	
  17

  
	
   

  	
   

  
	
  ARTICLE 6

  
	
  NO DISPUTES; CONSISTENCY; COOPERATION

  
	
   

  	
   

  
	
  Section 6.01. Series B Member Participation in WIND’s and the Company’s Tax
  Matters

  	
  17

  
	
  Section 6.02. Consistency

  	
  18

  
	
  Section 6.03. Cooperation

  	
  18

  
	
  Section 6.04. Section 754 Elections

  	
  18

  



 


i

















 


	
  ARTICLE 7

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  Section 7.01. Notices

  	
  18

  
	
  Section 7.02. Counterparts

  	
  19

  
	
  Section 7.03. Entire Agreement; No Third Party Beneficiaries

  	
  19

  
	
  Section 7.04. Governing Law

  	
  20

  
	
  Section 7.05. Severability

  	
  20

  
	
  Section 7.06. Successors; Assignment; Amendments; Waivers

  	
  20

  
	
  Section 7.07. Titles and Subtitles

  	
  21

  
	
  Section 7.08. Resolution of Disputes

  	
  21

  
	
  Section 7.09. Reconciliation

  	
  22

  
	
  Section 7.10. Withholding

  	
  23

  
	
  Section 7.11. Admission of WIND into a Consolidated Group; Transfers of Corporate
  Assets

  	
  23

  
	
  Section 7.12. Confidentiality

  	
  24

  
	
  Section 7.13. LLC Agreement

  	
  24

  
	
  Section 7.14. Change in Tax Law

  	
  25

  
	
  Section 7.15. WAIVER OF JURY TRIAL

  	
  25

  



 


ii

















 


TAX RECEIVABLE AGREEMENT


 


among


 


FIRST WIND HOLDINGS INC.


 


FIRST WIND HOLDINGS, LLC


 


and


 


THE SERIES B MEMBERS OF FIRST
WIND HOLDINGS, LLC


 


TAX RECEIVABLE AGREEMENT, dated as of        ,
2010 (this “Agreement”), among First Wind
Holdings Inc., a Delaware corporation (“WIND”), First
Wind Holdings, LLC, a Delaware limited liability company (the “Company”) and each of the undersigned parties hereto
identified as “Series B Members.”  Capitalized terms used but not simultaneously
defined are defined in or by reference to Section 1.01.


 


W I T N E S S E T H:


 


WHEREAS, the Series B Members hold Series B
membership interests (“Series B Membership
Interests”) in the Company, which is treated as a partnership for
United States federal income tax purposes;


 


WHEREAS, WIND is the managing member of, and holds
and will hold Series A membership interests (“Series A
Membership Interests”) in, the Company;


 


WHEREAS, as a result of the Series B Members
agreeing to hold Series B Membership Interests rather than transferring
all of their Series B Membership Interests in exchange for WIND’s class A
common stock, par value $0.001 per share (“Class A Shares”),
WIND is expected to incur significantly lower Tax liabilities on an ongoing
basis with respect to the operations of the Company;


 


WHEREAS, the Series B Membership Interests
(together with the Class B Shares) are exchangeable for Class A
Shares of WIND;


 


WHEREAS, the Company and each of its direct and
indirect subsidiaries that is treated as a partnership for United States
federal income tax purposes has or will have in effect an election under Section 754
of the Internal Revenue Code of 1986, as amended (the “Code”),
for each Taxable Year in which an exchange of Series B Membership
Interests (together with Class B Shares) for Class A Shares occurs,
which election is intended to result in an adjustment to the Tax basis of the
assets owned by the Company and such subsidiaries (solely to the extent
allocated to WIND) at the time (each such time, an “Exchange
Date”) of 


 

















 


an exchange of Series B Membership Interests (together
with the Class B Shares) for Class A Shares or any other deemed or
actual acquisition of Series B Membership Interests by WIND for cash or
otherwise (collectively, an “Exchange”) by
reason of such Exchange and the payments under this Agreement;


 


WHEREAS, the income, gain, loss, expense and other
Tax items of (i) WIND, as a member of the Company (and in respect of each
of the Company’s direct and indirect subsidiaries treated as a partnership for
United States federal income tax purposes) may be affected by the Basis
Adjustment and (ii) WIND may be affected by the Imputed Interest; and


 


WHEREAS, the parties to this Agreement desire to
make certain arrangements with respect to the effect of the Basis Adjustment
and the Imputed Interest on the actual liability for Taxes of WIND;


 


NOW, THEREFORE, the parties hereto hereby agree as
follows:


 


ARTICLE 1

DEFINITIONS


 


Section 1.01.  Definitions.  As used in this Agreement, the
following terms have the following meanings:


 


“Advisory Firm”
means       , or any other accounting firm that
is a nationally recognized as being expert in Tax matters and that is appointed
by the Board.


 


“Affiliate”
means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such first Person.


 


“Agreed Rate”
means LIBOR.


 


“Agreement” is
defined in the preamble.


 


“Amended Schedule”
is defined in Section 2.03(b) of this Agreement.


 


“Applicable Law”
means, to the extent applicable to WIND, the Company or their activities or any
Series B Member, as applicable: (a) all United States federal and
state statutes and laws and all statutes and laws of foreign countries; (b) all
rules and regulations (including interpretations thereof) of all
regulatory agencies, organizations and bodies; and (c) all rules and
regulations (including interpretations thereof) of all self-regulatory
agencies, organizations and bodies now or hereafter in effect.


 


2

















 


“Applicable Series B
Member” means in respect of that portion of any Tax Benefit Payment
that arises from an Exchange or a deemed Exchange pursuant to clause (6) of
the definition of “Valuation Assumptions,”
the Exchanging Series B Member or Series B Member deemed to Exchange,
as applicable.


 


“Basis Adjustment”
means the adjustment to the Tax basis of an Exchange Asset as a result of an
Exchange or the payments made pursuant to this Agreement, under the principles
of Section 732(b) of the Code (in situations where, as a result of
one or more Exchanges, the Company becomes an entity that is disregarded as
separate from its owner for U.S. federal income Tax purposes), Section 1012
of the Code or Sections 743(b) and 754 of the Code (including in situations
where, following an Exchange, the Company remains in existence as an entity for
U.S. federal income Tax purposes) and, in each case, comparable sections of
state and local Tax laws. 
Notwithstanding any other provision of this Agreement, the amount of any
Basis Adjustment resulting from an Exchange of one or more Series B
Membership Interests (together with the Class B Shares) shall be
determined without regard to any Pre-Exchange Transfer of such Series B
Membership Interests (together with the Class B Shares) and as if any such
Pre-Exchange Transfer had not occurred.


 


A “Beneficial Owner”
means, with respect to a security,  any
Person who directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares: (i) voting power,
which includes the power to vote, or to direct the voting of, such security
and/or (ii) investment power, which includes the power to dispose of, or
to direct the disposition of, such security. 
The terms “Beneficially Own”
and “Beneficial Ownership” shall have
correlative meanings.


 


“Board” means
the board of directors of WIND.


 


“Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks
in Boston, Massachusetts or New York City, New York are authorized by law to
close.


 


“Change in Tax Law”
is defined in Section 7.14 of this Agreement.


 


“Change of Control”
means the occurrence of any of the following events:


 


(i)                                                         any Person or any group of Persons acting together which would
constitute a “group” for purposes of Section 13(d) of the Securities
and Exchange Act of 1934, or any successor provisions thereto, becomes the
Beneficial Owner, directly or indirectly, of securities of WIND representing
more than fifty 


 


3

















 


percent (50%) of the combined voting power of
WIND’s then outstanding voting securities; or


 


(ii)                                                      the following people cease for any reason to constitute a majority of
the number of directors of WIND then serving: people who, on the date of the
consummation of the IPO, constitute the Board and any new director (other than
a director whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a consent
solicitation, relating to an election of directors of WIND) whose appointment
or election by the Board or nomination for election by WIND’s stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date of the consummation
of the IPO or whose appointment, election or nomination for election was
previously so approved or recommended by the directors referred to in this
clause (ii); or


 


(iii)                                                   there is consummated a merger or consolidation of WIND with any other
corporation or other entity, and, immediately after the consummation of such
merger or consolidation, either (x) the Board immediately prior to the
merger or consolidation does not constitute at least a majority of the board of
directors of the company surviving the merger or, if the surviving company is a
subsidiary, the ultimate parent thereof, or (y) all of the Persons who
were the respective Beneficial Owners of the voting securities of WIND
immediately prior to such merger or consolidation do not Beneficially Own,
directly or indirectly, more than 50% of the combined voting power of the then
outstanding voting securities of the Person resulting from such merger or
consolidation; or


 


(iv)                                                  the stockholders of WIND approve a plan of complete liquidation or
dissolution of WIND or there is consummated an agreement or series of related
agreements for the sale or other disposition, directly, or indirectly, by WIND
of all or substantially all of WIND’s assets, other than such sale or other
disposition by WIND of all or substantially all of WIND’s assets to an entity,
at least fifty percent (50%) of the combined voting power of the voting
securities of which are owned by stockholders of WIND in substantially the same
proportions as their voting power of WIND immediately prior to such sale.


 


4

















 


Notwithstanding the foregoing, (x) the
ownership by D.E. Shaw L.P., Madison Dearborn Capital IV, L.P. (and any of
their respective Affiliates) of any securities of WIND shall not contribute to
or be deemed to cause the occurrence of a Change of Control and (y) except
with respect to clause (ii) and clause (iii)(x) above, a “Change of Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the shares of
capital stock of WIND immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate voting power
in an entity which owns all or substantially all of the assets of WIND
immediately following such transaction or series of transactions.


 


“Class A Shares”
is defined in the recitals.


 


“Class B Shares”
means WIND’s class B common stock, par value $0.001 per share.


 


“Code” is
defined in the recitals.


 


“Control” means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.


 


“Corporation Return”
means the United States federal and/or state and/or local Tax Return, as
applicable, of WIND filed with respect to Taxes for any Taxable Year.


 


“Cumulative Net Realized
Tax Benefit” for a Taxable Year means the cumulative amount (but not
less than zero) of Realized Tax Benefits for all Taxable Years of WIND, up to
and including such Taxable Year, net of the cumulative amount of Realized Tax
Detriments for the same period.  The Realized
Tax Benefit and Realized Tax Detriment for each Taxable Year shall be
determined based on the most recent Tax Benefit Schedule or Amended Schedule,
if any, in existence at the time of such determination.


 


“Default Rate”
means LIBOR plus 300 basis points.


 


“Determination”
shall have the meaning ascribed to such term in Section 1313(a) of
the Code or similar provision of state and local Tax law, as applicable, or any
other event (including the execution of an IRS Form 870-AD) that finally
and conclusively establishes the amount of any liability for Tax.


 


“Dispute” is
defined in Section 7.08(a) of this Agreement.


 


“Early Termination Date”
means the date of an Early Termination Notice for purposes of determining the
Early Termination Payment.


 


5

















 


“Early Termination Notice”
is defined in Section 4.02 of this Agreement.


 


“Early Termination Schedule”
is defined in Section 4.02 of this Agreement.


 


“Early Termination Payment”
is defined in Section 4.03(b) of this Agreement.


 


“Early Termination Rate”
means the sum of (i) the long-term Treasury rate in effect on the
applicable date and (ii) the excess, if any, of (x) the interest rate
on the longest-maturity debt obligation of WIND (as reflected on its
consolidated balance sheet) then-outstanding over (y) the then-current
interest rate for U.S. Treasury bonds with a term to maturity that is
equivalent to the term of such debt obligation.


 


“Exchange” is
defined in the recitals; “Exchanged” and “Exchanging” shall have correlative meanings.


 


“Exchange Assets”
means each asset that is held by the Company, or by any of its direct or
indirect subsidiaries treated as a partnership or disregarded entity for
purposes of the applicable Tax, at the time of an Exchange.


 


“Exchange Basis Schedule”
is defined in Section 2.01 of this Agreement.


 


“Exchange Date”
is defined in the recitals.


 


“Exchange Payment”
is defined in Section 5.01 of this Agreement.


 


“Expert” is
defined in Section 7.09 of this Agreement.


 


“Hypothetical Tax Liability”
means, with respect to any Taxable Year, the liability for Taxes of WIND or any
consolidated group of which WIND is a member (or the Company, but only with
respect to income of the Company the Tax liability for which is allocable to
WIND for such Taxable Year using the same methods, elections, conventions and
similar practices used on the relevant Corporation Return) as would be shown on
its Tax Return (including any consolidated return in which WIND joins) but
(i) using the Non-Stepped Up Tax Basis as reflected on the Exchange Basis
Schedule including amendments thereto for the Taxable Year instead of the Tax
basis of the Exchange Assets reflecting the Basis Adjustments and
(ii) excluding any deduction attributable to Imputed Interest for the
Taxable Year.  Hypothetical Tax Liability
shall be determined without taking into account the carryover or carryback of
any Tax item (or portions thereof) that is attributable to the Basis Adjustment
or to the Imputed Interest.


 


6














 


“Imputed Interest”
shall mean any interest imputed under Section 1272, 1274 or 483 or other
provision of the Code and any similar provision of state and local Tax law with
respect to WIND’s payment obligations under this Agreement.


 


“IPO” means the
initial public offering of Class A Shares by WIND.


 


“IRS” means the
United States Internal Revenue Service.


 


“LIBOR” means,
with respect to any one-month period, the rate per annum equal to the British
Bankers Association LIBOR Rate from Telerate Successor Page 3750, as
published by Reuters at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such period, as the rate for dollar
deposits with a maturity comparable to such period.


 


“LLC Agreement”
means the Limited Liability Company Agreement of the Company dated as of      ,
2010, as amended.


 


“Market Value”
means the closing price of the Class A Shares on the applicable Exchange
Date on the national securities exchange on which such Class A Shares are
then traded or listed, as reported by the Wall Street Journal;
provided that if the closing price is
not reported by the Wall Street Journal
for the applicable Exchange Date, then the Market Value shall mean the closing
price of the Class A Shares on the Business Day immediately preceding such
Exchange Date on the national securities exchange on which such Class A
Shares are then traded or listed, as reported by the Wall Street
Journal; provided, further,
that if the Class A Shares are not then listed on a national securities
exchange, “Market Value” shall mean the fair
market value of the Class A Shares, as determined by the Board in good
faith.


 


“Material Objection Notice”
is defined in Section 4.02 of this Agreement.


 


“Series B Member
Representative” means D. E. Shaw MWP Acquisition Holdings, L.L.C.
(attn: Bryan Martin).


 


“Series B Members”
means the parties hereto, other than WIND, and each other Person who from time
to time executes a Joinder Agreement in the form attached hereto as Exhibit A.


 


“Net Tax Benefit”
is defined in Section 3.01(b).


 


“Non-Stepped Up Tax Basis”
means, with respect to any asset at any time, the Tax basis that such asset
would have had at such time if no Basis Adjustments had been made.


 


“Notice” is
defined in Section 7.01.


 


“Objection Notice”
is defined in Section 2.03(a).


 


7

















 


“Person” means
any individual, corporation, firm, partnership, joint venture, limited
liability company, estate, trust, business association, organization,
governmental entity or other entity.


 


“Pre-Exchange Transfer”
means any transfer (including upon the death of a Series B Member) of one
or more Series B Membership Interests (together with the Class B
Shares) (i) that occurs prior to an Exchange of such Series B
Membership Interests (together with the Class B Shares), and (ii) to
which Section 743(b) or 734(b) of the Code applies.


 


“Realized Tax Benefit”
means, for a Taxable Year, the net excess, if any, of the Hypothetical Tax
Liability over the actual liability for Taxes of WIND (or, without duplication,
the Company, but only with respect to income of the Company the Tax liability
for which is allocable to WIND for such Taxable Year using the same methods,
elections, conventions and similar practices used on the relevant Corporation Return).  If all or a portion of the actual liability
for such Taxes for the Taxable Year arises as a result of an audit by a Taxing
Authority of any Taxable Year, such liability shall not be included in
determining the Realized Tax Benefit unless and until there has been a
Determination.


 


“Realized Tax Detriment”
means, for a Taxable Year, the net excess, if any, of the actual liability for
Taxes of WIND (or, without duplication, the Company, but only with respect to
income of the Company the Tax liability for which is allocable to WIND for such
Taxable Year using the same methods, elections, conventions and similar
practices used on the relevant Corporation Return) over the Hypothetical Tax
Liability for such Taxable Year.  If all
or a portion of the actual liability for such Taxes for the Taxable Year arises
as a result of an audit by a Taxing Authority of any Taxable Year, such
liability shall not be included in determining the Realized Tax Detriment
unless and until there has been a Determination.


 


“Reconciliation Dispute”
is defined in Section 7.09 of this Agreement.


 


“Reconciliation Procedures”
shall mean those procedures set forth in Section 7.09 of this Agreement.


 


“Schedule” means
any of (i) an Exchange Basis Schedule, (ii) a Tax Benefit Schedule or
(iii) an Early Termination Schedule.


 


“Senior Obligations”
is defined in Section 5.01 of this Agreement.


 


“Series A Membership
Interests” is defined in the recitals.


 


“Series B Membership
Interests” is defined in the recitals


 


8

















 


“Subsidiaries”
means, with respect to any Person, as of any date of determination, any other
Person as to which such Person, owns, directly or indirectly, or otherwise
controls more than 50% of the voting power or other similar interests or the
sole general partner interest or managing member or similar interest of such
Person.


 


“Subsidiary Stock”
means any stock or other equity interest in any subsidiary entity of the
Company that is treated as a corporation for United States federal income tax
purposes.


 


“Tax Benefit Payment”
is defined in Section 3.01(b) of this Agreement.


 


“Tax Benefit Schedule”
is defined in Section 2.02 of this Agreement.


 


“Tax Return”
means any return, declaration, report or similar statement filed or required to
be filed with respect to Taxes (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return
and declaration of estimated Tax.


 


“Taxable Year”
means a taxable year of WIND as defined in Section 441(b) of the Code
or comparable section of state or local Tax law, as applicable (and, therefore,
may include a period of less than 12 months for which a Tax Return is prepared)
in which there is a Basis Adjustment or increased depreciation, amortization or
interest deductions attributable to an Exchange.


 


“Taxes” means
any and all United States federal, state and local taxes, assessments or
similar charges that are based on or measured with respect to net income or
profits, and any interest related to such taxes; “Tax”
has a correlative meaning.


 


“Taxing Authority”
shall mean any domestic, federal, national, state.  county or municipal or other local
government, any subdivision, agency, commission or authority thereof, or any
quasi-governmental body exercising any taxing authority or any other authority
exercising Tax regulatory authority.


 


“Treasury Regulations”
means the final, temporary and proposed regulations under the Code promulgated
from time to time (including corresponding provisions and succeeding
provisions) as in effect for the relevant taxable period.


 


“Valuation Assumptions”
shall mean, as of an Early Termination Date, or following a Change of Control,
as applicable, the assumptions that (1) in each Taxable Year ending on or
after such Early Termination Date, WIND will have sufficient taxable income to
fully utilize the deductions arising from the Basis Adjustments and the Imputed
Interest, (2) the U.S. federal income Tax rates and


 


9

















 


state and local income Tax rates that will be in
effect for each such Taxable Year will be those specified for each such Taxable
Year by the Code and other applicable laws as in effect on the Early
Termination Date, (3) any loss carryovers generated by any Basis Adjustment
or Imputed Interest and available as of the date of the Early Termination
Schedule will be utilized by WIND on a pro rata basis from the date of the
Early Termination Schedule through the date that is 5 years prior to the
scheduled expiration date of such loss carryovers, (4) any non-amortizable
assets (other than Subsidiary Stock) will be disposed of on the fifteenth
anniversary of the earlier of (x) the Basis Adjustment and (y) the
Early Termination Date; provided, however,
that, in the event of a Change of Control involving a sale of assets,
non-amortizable assets shall be deemed disposed of at the time of such sale, if
earlier, (5) any Subsidiary Stock will be deemed never to be disposed of
and (6) if, at the Early Termination Date, there are Series B
Membership Interests that have not been Exchanged, then each such Series B
Membership Interest shall be deemed to be Exchanged for the Market Value of the
Class A Shares and the amount of cash that would have been received if the
Exchange occurred on the Early Termination Date.


 


“WIND” is
defined in the preamble.


 


Section 1.02.  Other Definitional and
Interpretative Provisions.  The
words “hereof,” “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  The
headings and captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.  References to Articles, Sections and Exhibits
are to Articles, Sections and Exhibits of this Agreement unless otherwise
specified.  Any capitalized term used in
any Exhibit but not otherwise defined therein has the meaning ascribed to
such term in this Agreement.  Any
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular.  Whenever the
words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation,” whether or
not they are in fact followed by those words or words of like import.  “Writing,” “written” and comparable terms
refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form. 
References to any agreement or contract are to that agreement or
contract as amended, modified or supplemented from time to time in accordance
with the terms thereof.  References to
any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless
otherwise specified, from and including or through and including,
respectively.  References to “law,” “laws”
or to a particular statute or law shall be deemed also to include any and all
Applicable Laws.


 


10

















 


ARTICLE 2

DETERMINATION OF CUMULATIVE REALIZED TAX BENEFIT


 


Section 2.01.  Exchange Basis Schedule.  Within 60 calendar days after the filing of
the United States federal income Tax Return of WIND for each Taxable Year, WIND
shall deliver to the Series B Member Representative a schedule (the “Exchange Basis Schedule”) that shows, in reasonable detail (i) the
Non-Stepped Up Tax Basis of the Exchange Assets as of each applicable Exchange
Date, (ii) the Basis Adjustment with respect to the Exchanges effected in
such Taxable Year, calculated in the aggregate, (iii) the period or
periods, if any, over which the Exchange Assets are amortizable and/or
depreciable and (iv) the period or periods, if any, over which each Basis
Adjustment is amortizable and/or depreciable (which, for non-amortizable
assets, shall be based on the Valuation Assumptions).


 


Section 2.02.  Tax Benefit Schedule.  (a) Within 60 calendar days after the
filing of the United States federal income Tax return of WIND for any Taxable
Year in which there is a Realized Tax Benefit or Realized Tax Detriment, WIND
shall provide to the Series B Member Representative a schedule showing, in
reasonable detail, the calculation of the Realized Tax Benefit or Realized Tax
Detriment for such Taxable Year (a “Tax Benefit Schedule”).  On no more than a quarterly basis, WIND
agrees to, at the request of the Series B Member Representative, confirm
the value of the applicable Class A Shares with respect to any Exchanges
in the prior calendar quarter.  The Tax
Benefit Schedule will become final as provided in Section 2.03(a) and
may be amended as provided in Section 2.03(b) (subject to the
procedures set forth in Section 2.03(b)).


 


(b)   Applicable Principles.  Subject to Section 3.03, the Realized
Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to
measure the decrease or increase in the actual liability for Taxes of WIND for
such Taxable Year attributable to the Basis Adjustments and Imputed
Interest.  The actual liability for Taxes
will take into account the deduction of the portion of the Tax Benefit Payment
that must be accounted for as interest under the Code based upon the
characterization of Tax Benefit Payments as additional consideration payable by
WIND for the Series B Membership Interests and Class B Shares
acquired in an Exchange.  Carryovers or
carrybacks of any Tax item attributable to the Basis Adjustment and the Imputed
Interest shall be considered to be subject to the rules of the Code and
the Treasury Regulations or the appropriate provisions of United States state
and local income and franchise tax law, as applicable, governing the use,
limitation and expiration of carryovers or carrybacks of the relevant
type.  If a carryover or carryback of any
Tax item includes a portion that is attributable to the Basis Adjustment or the
Imputed Interest and another portion that is not, such portions shall be
considered to be used in accordance with the “with and without”
methodology.  All Tax Benefit Payments
attributable to the Basis Adjustments (other than amounts accounted for 


 


11

















 


as interest under the
Code) will (A) be treated as subsequent upward purchase price adjustments
that give rise to further Basis Adjustments to Exchange Assets for WIND and (B) have
the effect of creating additional Basis Adjustments to Exchange Assets for WIND
in the year of payment, and, as a result, such additional Basis Adjustments
will be incorporated into the current year calculation and into future year
calculations, as appropriate.


 


Section 2.03. Procedures, Amendments.


 


(a)        Procedures.  Every time WIND delivers to the Series B
Member Representative an applicable Schedule under this Agreement, including
any Amended Schedule, but excluding any Early Termination Schedule or amended
Early Termination Schedule, (i) WIND also shall (x) deliver to the Series B
Member Representative the Corporation Return, along with schedules and work
papers, as determined by WIND or requested by the Series B Member
Representative, providing reasonable detail regarding the preparation of such
Schedule and (y) allow the Series B Member Representative reasonable
access, to the appropriate representatives of WIND and the Advisory Firm in
connection with a review of such Schedule and (ii) the Series B
Member Representative shall promptly provide each Applicable Series B
Member with the applicable Schedule and related work papers applicable to such
Applicable Series B Member.  Each
party shall bear its own expenses associated with such review and
investigation.  The applicable Schedule
shall become final and binding on all parties unless the Applicable Series B
Member, within 30 calendar days after an Exchange Basis Schedule or amendment
thereto or a Tax Benefit Schedule or amendment thereto was provided to the Series B
Member Representative, provides WIND with notice of a material objection to
such Schedule (“Objection Notice”) made in good
faith.  If WIND and the Applicable Series B
Member are unable to successfully resolve the issues raised in such notice
within 30 calendar days of receipt by WIND of an Objection Notice with respect
to such Exchange Basis Schedule or Tax Benefit Schedule, WIND and the Series B
Member Representative shall employ the reconciliation procedures as provided
for in Section 7.09 of this Agreement (the “Reconciliation
Procedures”); provided that,
to the extent that the matter at issue affects an Applicable Series B
Member but not the Series B Member Representative, the Reconciliation
Procedures shall be applied, mutatis mutandis,
by WIND and the relevant Applicable Series B Member.


 


(b)        Amended Schedule.  The applicable Schedule for any Taxable Year
may be amended from time to time by WIND (i) in connection with a
Determination affecting such Schedule, (ii) to correct inaccuracies in the
Schedule identified as a result of the receipt of additional factual
information relating to a 


 


12

















 


Taxable Year after the
date the Schedule was provided to the Series B Member Representative, (iii) to
comply with the Expert’s determination under the Reconciliation Procedures, (iv) to
reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such
Taxable Year attributable to a carryback or carryforward of a loss or other Tax
item to such Taxable Year, (v) to reflect a change in the Realized Tax
Benefit or Realized Tax Detriment for such Taxable Year attributable to an
amended Tax Return filed for such Taxable Year, or (vi) to adjust the
Exchange Basis Schedule to take into account payments made pursuant to this
Agreement (any such Schedule, an “Amended Schedule”).


 


ARTICLE 3

TAX BENEFIT PAYMENTS


 


Section 3.01.  Payments.


 


(a)        Payments.  Within five (5) Business Days of a Tax
Benefit Schedule that was delivered to Series B Member Representative
becoming final in accordance with Section 2.03(a), WIND shall pay to the
Applicable Series B Members the applicable Tax Benefit Payment determined
pursuant to Section 3.01(b).  Each
such Tax Benefit Payment shall be made by wire transfer of immediately
available funds to the bank accounts of the Applicable Series B Members
previously designated by each such Series B Member to WIND; provided that no Tax Benefit Payment shall be made in
respect of estimated Tax payments, including, without limitation, United States
federal income Tax payments.


 


(b)        A “Tax Benefit Payment”
means an amount, not less than zero, equal to the Net Tax Benefit and the
Interest amount.  For the avoidance of
doubt, for Tax purposes, the Interest Amount shall not be treated as interest
but instead shall be treated as additional consideration of Series B
Membership Interests (together with Class B Shares) in Exchanges.  The “Net Tax Benefit”
for a Taxable Year shall be an amount equal to the excess, if any, of 85% of
the Cumulative Net Realized Tax Benefit as of the end of such Taxable Year over
the total amount of Tax Benefit Payments previously made under this Section 3.01;
provided, however, that no Series B
Member shall be required to return any portion of any previously received Tax
Benefit Payment under any circumstances. 
The “Interest Amount” shall equal the
interest on the Net Tax Benefit calculated at the Agreed Rate from the due date
(without extensions) for the filing of the Corporation Return with respect to
Taxes for such Taxable Year until the date of payment.  The Net Tax Benefit shall be determined
separately with respect to each separate Exchange on an individual basis by
reference to the amount realized by the applicable Exchanging Series B
Member on the Exchange of a Series B Membership Interest (and a
corresponding Class B Share) and the resulting Basis Adjustment to WIND
(as determined pursuant to Section 2.02(b)); provided that



 


13

















 


for each Taxable Year
ending on or after the date of a Change of Control, all Tax Benefit Payments,
whether paid with respect to Exchanges (i) prior to the date of such
Change of Control or (ii) on or after the date of such Change of Control,
shall be calculated by utilizing Valuation Assumptions (1), (3), (4) and
(5), substituting in each case the term “the closing date of a Change of
Control” for an “Early Termination Date”.


 


Section 3.02.  No Duplicative Payments.  It is intended that the provisions
of this Agreement will not result in duplicative payment of any amount
(including interest) required under this Agreement.  It is also intended that the provisions of
this Agreement, subject to Article 4 and Section 7.14, will result in
85% of WIND’s Cumulative Net Realized Tax Benefit being paid to the Series B
Members pursuant to this Agreement.  The
provisions of this Agreement shall be construed in the appropriate manner to
ensure such intentions are realized.


 


Section 3.03.  Pro Rata Payments.  Notwithstanding anything in Section 3.01
to the contrary, to the extent that (i) WIND’s aggregate Tax benefit with
respect to any Basis Adjustment or Imputed Interest is limited in a particular
Taxable Year because WIND does not have sufficient Taxable income or (ii) WIND
lacks sufficient funds to satisfy, or is prevented under any credit agreement
or other arrangement from satisfying, its obligations to make all Tax Benefit
Payments due in a particular Taxable Year, the limitation on the Tax Benefit,
or the Tax Benefit Payments that may be made, as the case may be, shall be
taken into account or made for the Applicable Series B Members in the same
proportion as Tax Benefit Payments would have been made absent the limitations
in clauses (i) and (ii) of this paragraph, as applicable.


 


ARTICLE 4

TERMINATION


 


Section 4.01.  Early Termination and
Breach of Agreement.


 


(a)       WIND may terminate this Agreement with
respect to all of the Series B Membership Interests held (or previously
Exchanged) by all Series B Members at any time by paying to the Series B
Members the Early Termination Payment; provided, however,
that this Agreement shall terminate only upon the receipt of the Early
Termination Payment by all Series B Members, and provided,
further, that WIND may withdraw any Early Termination Notice prior
to the time at which any Early Termination Payment has been paid.  Upon payment of the Early Termination Payment
by WIND, neither the Series B Members nor WIND shall have any further
payment obligations under this Agreement, other than for any (x) Tax
Benefit Payment agreed to by WIND acting in good faith and the Applicable Series B
Member to be due and payable but unpaid as of the Early Termination Notice and (y) Tax
Benefit Payment due for the Taxable Year ending 


 


14

















 


with or including the
date of the Early Termination Notice (except to the extent that the amount
described in this clause (y) is included in the Early Termination
Payment).  If an Exchange occurs after
WIND makes the Early Termination Payments with respect to all Series B
Members, WIND shall have no obligations under this Agreement with respect to
such Exchange.


 


(b)        If WIND breaches any of its material
obligations under this Agreement, then all of WIND’s obligations hereunder
shall be accelerated and calculated as if an Early Termination Notice had been
delivered on the date of such breach and such obligations shall include, but
shall not be limited to, (1) the Early Termination Payment calculated as
if an Early Termination Notice had been delivered on the date of such
acceleration, (2) any Tax Benefit Payment agreed to by WIND acting in good
faith and any Applicable Series B Member to be due and payable but unpaid
as of the date of such acceleration, and (3) any Tax Benefit Payment due
for the Taxable Year ending with or including the date of such
acceleration.  The failure to make any
payment due pursuant to this Agreement within three months of the date such
payment is due shall be deemed to be a breach of a material obligation under
this Agreement for all purposes of this Agreement; provided
that the Series B Member Representative or the party that is entitled to
receive such payment has provided WIND with written notice that specifies the
amount due, and WIND has failed to make such payment by the later of (x) the
90th day after the date such payment is due and (y) the 30th day after
receiving such written notice; and provided further
that it will not be considered to be a breach of a material obligation under
this Agreement to make a payment due pursuant to this Agreement within three
months of the date such payment is due. 
Notwithstanding anything in this Agreement to the contrary, it shall not
be a breach of this Agreement if WIND fails to make any Tax Benefit Payment
when due to the extent that WIND has insufficient funds to make such payment as
a result of applicable limitation imposed by credit agreements or similar
arrangements in respect of indebtedness for borrowed money to which the Company
is a party (including, without limitation, limitations on the ability of the
Company and its direct and indirect subsidiaries to make distributions or
payments to WIND), or if the Board determines in good faith that making any
such distribution or Tax Benefit Payment would result in a default under any
such credit agreement or similar arrangement in respect of indebtedness for
borrowed money to which the Company is a party; provided
that the interest provisions of Section 5.02 shall apply to any such late
payment (but the Default Rate shall be replaced by the Agreed Rate).  Notwithstanding anything in this Agreement to
the contrary, it shall not be a breach of this Agreement if WIND fails to make
any Tax Benefit Payment when due if the Board determines in good faith that (i) any
such distribution or Tax Benefit Payment could be set aside as a fraudulent
transfer or conveyance or similar action under fraudulent transfer laws or (ii) any
such distribution or Tax Benefit Payment could cause WIND to be
undercapitalized.


 


15

















 


(c)        WIND, the Company and each of the Series B
Members hereby acknowledge that, as of the date of this Agreement, the
aggregate value of the Tax Benefit Payments cannot reasonably be ascertained
for United States federal income Tax or other applicable Tax purposes.


 


Section 4.02.  Early Termination Notice.  If WIND exercises its right of
early termination under Section 4.01, WIND shall deliver to the Series B
Member Representative notice of such intention to exercise such right (“Early Termination Notice”) and a schedule (the “Early Termination Schedule”) specifying WIND’s intention to
exercise such right and showing in reasonable detail the calculation of the
Early Termination Payment and the Series B Member Representative shall
promptly provide such notice and schedule to each Series B Member.  The Early Termination Schedule shall become
final and binding on all parties unless an Applicable Series B Member,
within 30 calendar days after the Early Termination Schedule was provided to
the Series B Member Representative, provides WIND with notice of a
material objection to such Schedule made in good faith (“Material
Objection Notice”).  If the
parties, for any reason, are unable to successfully resolve the issues raised
in such notice within 30 calendar days after receipt by WIND of the Material
Objection Notice, WIND and the Series B Member Representative shall employ
the Reconciliation Procedures as described in Section 7.09 of this
Agreement; provided that, to the extent that the matter
at issue affects an Applicable Series B Member but not the Series B
Member Representative, the Reconciliation Procedures shall be applied, mutatis mutandis, by WIND and the relevant Applicable Series B
Member.


 


Section 4.03.  Payment upon Early Termination.


 


(a)        Within five (5) Business Days after
the Early Termination Schedule has become final and binding, WIND shall pay to
each Applicable Series B Member an amount equal to the Early Termination
Payment.  Such payment shall be made by
wire transfer of immediately available funds to the bank account designated by
the Applicable Series B Member.


 


(b)        The “Early
Termination Payment” as of the date of the delivery of an Early
Termination Schedule shall equal with respect to the Applicable Series B
Member the present value, discounted at the Early Termination Rate as of such
date, of all Tax Benefit Payments that would be required to be paid by WIND to
the Applicable Series B Member beginning from the Early Termination Date
and assuming that the Valuation Assumptions are applied.


 


16














 


ARTICLE 5

SUBORDINATION AND LATE PAYMENTS


 


Section 5.01.  Subordination.  Notwithstanding any other
provision of this Agreement to the contrary, any Tax Benefit Payment or Early
Termination Payment required to be made by WIND to the Series B Members
under this Agreement (an “Exchange Payment”)
shall rank subordinate and junior in right of payment to any principal,
interest or other amounts due and payable in respect of all obligations in
respect of indebtedness of WIND (“Senior Obligations”)
and shall rank pari passu with all current or
future unsecured obligations of WIND that are not Senior Obligations.


 


Section 5.02.  Late Payments by WIND.  The amount of all or any portion
of any Exchange Payment not made to any Series B Member when due (without
regard to Section 5.01) under the terms of this Agreement shall be payable
together with any interest thereon, computed at the Default Rate and commencing
from the date on which such Exchange Payment was due and payable.


 


ARTICLE 6

NO DISPUTES; CONSISTENCY; COOPERATION


 


Section 6.01.  Series B Member
Participation in WIND’s and the Company’s Tax Matters.  Except as otherwise provided
herein, WIND shall have full responsibility for, and sole discretion over, all
Tax matters concerning WIND and the Company, including without limitation the
preparation, filing or amending of any Tax Return and defending, contesting or
settling any issue pertaining to Taxes. 
Notwithstanding the foregoing, WIND shall notify the Series B
Member Representative of, and keep the Series B Member Representative
reasonably informed with respect to, the portion of any audit of WIND and the
Company by a Taxing Authority the outcome of which is reasonably expected to
affect any Series B Member’s rights and obligations under this Agreement,
and shall provide to the Series B Member Representative reasonable
opportunity to provide information and other input to WIND, the Company and
their respective advisors concerning the conduct of any such portion of such
audit; Series B Members shall have the right to attend in person or by
telephone (but not participate in) any audit of WIND or the Company the outcome
of which could reasonably be expected to affect the amount of net payments that
the Series B Members are expected to receive under this Agreement; provided, however, that WIND and the Company shall not be
required to take any action that is inconsistent with any provision of the
Company Agreement.  WIND shall not settle
or fail to contest any issue pertaining to taxes that is reasonably expected to
affect the Series B Members’ rights and obligations under this agreement
without the consent of the Series B Member Representative, such consent
not to be unreasonably withheld.


 


17

















 


Section 6.02.  Consistency.  Except upon the written advice of
an Advisory Firm to WIND, WIND and the Series B Members agree to report
and cause to be reported for all purposes, including U.S. federal, state and
local Tax purposes and financial reporting purposes, all Tax-related items
(including without limitation the Basis Adjustments and each Tax Benefit
Payment) in a manner consistent with that specified by WIND in any Schedule
provided by or on behalf of WIND under this Agreement.  Any Dispute concerning such advice shall be
subject to Section 7.09; provided, however,
that only the Series B Member Representative shall have the right to
object to such advice pursuant to this Section 6.02.  In the event that an Advisory Firm is
replaced by WIND, such replacement Advisory Firm shall be required to perform
its services under this Agreement using procedures and methodologies consistent
with those used by the previous Advisory Firm, unless (a) otherwise
required by law or (b) WIND and the Series B Member Representative
agree to the use of other procedures and methodologies.


 


Section 6.03.  Cooperation.  The Series B Members shall (a) furnish
to WIND in a timely manner such information, documents and other materials as
WIND may reasonably request for purposes of making any determination or
computation necessary or appropriate under this Agreement, preparing any Tax
Return or contesting or defending any audit, examination or controversy with
any Taxing Authority, (b) make themselves available to WIND and its
representatives to provide explanations of documents and materials and such
other information as WIND or its representatives may reasonably request in
connection with any of the matters described in clause (a) above, and (c) reasonably
cooperate in connection with any such matter described in clause (a) above.  WIND shall reimburse the applicable Series B
Member for any reasonable third-party costs and expenses incurred pursuant to
this Section 6.03.


 


Section 6.04.  Section 754
Elections.  If at any point
any Subsidiary of WIND that is a partnership for U.S. federal income tax
purposes does not have a valid Section 754 election in effect, WIND shall
cause such Subsidiary to make a valid Section 754 election at the time
that such Subsidiary files its next U.S. federal income Tax Return.


 


ARTICLE 7

MISCELLANEOUS


 


Section 7.01.  Notices.  All notices, requests, consents
and other communications hereunder (each, a “Notice”)
to any party shall be in writing and shall be delivered in person or sent by
facsimile (provided a copy is thereafter promptly delivered as provided in this
Section 7.01) or nationally recognized overnight courier, addressed to
such party at the address or facsimile number set forth in Exhibit B
hereto, or below with respect to WIND, or such other address 


 


18

















 


or facsimile number as may hereafter be designated
in writing by such party to the other parties:


 


If to WIND, to:


 


First Wind Holdings Inc.

179 Lincoln Street, Suite 500

Boston, MA  02111

Telephone: 617-960-2888

Facsimile: 617-960-2889

Attention: General Counsel


 


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


 


Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY  10017

Telephone: 212-450-4969

Facsimile: 212-701-5742

Attention: Mario J. Verdolini


 


Each Notice shall be deemed received on the date
sent to the recipient thereof in accordance with this Section 7.01, if
sent prior to 5:00 p.m. in the place of receipt and such day is a Business
Day; otherwise, such Notice shall be deemed not to have been received until the
next succeeding Business Day.


 


Section 7.02.  Counterparts.  This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.  Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.


 


Section 7.03.  Entire Agreement; No Third
Party Beneficiaries.  This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter hereof.  This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto and their respective successors and permitted assigns, and nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.


 


19

















 


Section 7.04.  Governing Law.  This Agreement shall be governed
by, and construed in accordance with, the law of the State of New York, without
regard to the conflicts of laws principles thereof.


 


Section 7.05.  Severability.  If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.  Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.


 


Section 7.06.  Successors; Assignment;
Amendments; Waivers.  No Series B
Member may assign this Agreement to any person without the prior written
consent of WIND; provided, however, that (i) to
the extent Series B Membership Interests are effectively transferred in
accordance with the terms of the Company Agreement, the transferring Series B
Member may assign to the transferee of such Series B Membership Interests
the transferring Series B Member’s rights under this Agreement with
respect to such transferred Series B Membership Interests and (ii) a Series B
Member shall be entitled to assign its rights under this Agreement to (x) a
direct or indirect beneficial owner or Affiliate of such Series B Member,
or trust or other Person established for the benefit of one or more direct or
indirect beneficial owners or Affiliates of such Series B Member, in connection
with a liquidation, dissolution, winding up or other termination of such Series B
Member or (y) any other then-current Series B Member,  and, in either case (i) or (ii), such transferee shall
have executed and delivered, or, in connection with such transfer, execute and
deliver, a joinder to this Agreement in the form attached hereto as Exhibit A
(or such other joinder in form and substance reasonably satisfactory to WIND),
agreeing to become a “Series B Member” for all purposes of this Agreement,
except as otherwise provided in such joinder.


 


No provision of this Agreement may be amended
unless such amendment is approved in writing by each of WIND and the Company
and by Series B Members who would be entitled to receive at least
two-thirds (2/3) of the Early Termination Payments payable to all Series B
Members hereunder if WIND had exercised its right of early termination on the
date of the most recent Exchange prior to such amendment (excluding, for
purposes of this sentence, all payments made to any Series B Member
pursuant to this Agreement since the date of such most recent Exchange); provided, however, that no such amendment shall be effective
if such amendment would have a disproportionate effect on the payments certain Series B
Members will or may receive under this Agreement unless all such Series B
Members disproportionately affected consent in writing to such amendment.  No provision of this Agreement may be waived
unless such 


 


20

















 


waiver is in writing and signed by the party
against whom the waiver is to be effective.


 


Except as otherwise specifically provided herein,
all of the terms and provisions of this Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the parties hereto and
their respective successors, assigns, heirs, executors, administrators and
legal representatives.  WIND shall
require and cause any direct or indirect successor (whether by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of WIND, by written agreement, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that WIND
would be required to perform if no such succession had taken place.


 


Section 7.07.  Titles and Subtitles.  The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.


 


Section 7.08.  Resolution of Disputes.  (a) Any and all disputes which are not
governed by Section 7.09, including but not limited to any ancillary
claims of any party, arising out of, relating to or in connection with the
validity, negotiation, execution, interpretation, performance or non-performance
of this Agreement (including the validity, scope and enforceability of this
arbitration provision) (each a “Dispute”) shall
be finally settled by arbitration conducted by a single arbitrator in New York
in accordance with the then-existing Rules of Arbitration of the
International Chamber of Commerce.  If
the parties to the Dispute fail to agree on the selection of an arbitrator
within thirty (30) days of the receipt of the request for arbitration, the
International Chamber of Commerce shall make the appointment.  The arbitrator shall be a lawyer admitted to
the practice of law in the State of New York and shall conduct the proceedings
in the English language.  Performance
under this Agreement shall continue if reasonably possible during any arbitration
proceedings.  In addition to monetary
damages, the arbitrator shall be empowered to award equitable relief,
including, but not limited to an injunction and specific performance of any
obligation under this Agreement.  The
arbitrator is not empowered to award damages in excess of compensatory damages,
and each party hereby irrevocably waives any right to recover punitive,
consequential, exemplary or similar damages with respect to any Dispute.  The award shall be final and binding upon the
parties as from the date rendered, and shall be the sole and exclusive remedy
between the parties regarding any claims, counterclaims, issues, or accounting
presented to the arbitral tribunal. 
Judgment upon any award may be entered and enforced in any court having
jurisdiction over a party or any of its assets.


 


(b)        Notwithstanding the provisions of
paragraph (a), WIND may bring an action or special proceeding in any court of
competent jurisdiction for the purpose of compelling a party to arbitrate,
seeking temporary or preliminary relief 


 


21

















 


in aid of an arbitration
hereunder, and/or enforcing an arbitration award and, for the purposes of this
paragraph (b), each Series B Member (i) expressly consents to the
application of paragraph (c) of this Section 7.08 to any such action
or proceeding, (ii) agrees that proof shall not be required that monetary
damages for breach of the provisions of this Agreement would be difficult to
calculate and that remedies at law would be inadequate, and (iii) irrevocably
appoints WIND as such Series B Member’s agent for service of process in
connection with any such action or proceeding and agrees that service of
process upon such agent, who shall promptly advise such Series B Member of
any such service of process, shall be deemed in every respect effective service
of process upon the Series B Member in any such action or proceeding.


 


(c)        (i) EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE
PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF
PARAGRAPH (B) OF THIS SECTION 7.08, OR ANY JUDICIAL PROCEEDING
ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR
RELATING TO OR CONCERNING THIS AGREEMENT. 
Such ancillary judicial proceedings include any suit, action or
proceeding to compel arbitration, to obtain temporary or preliminary judicial
relief in aid of arbitration, or to confirm an arbitration award.  The parties acknowledge that the forums
designated by this paragraph (c) have a reasonable relation to this
Agreement, and to the parties’ relationship with one another; and (ii) the
parties hereby waive, to the fullest extent permitted by applicable law, any
objection which they now or hereafter may have to personal jurisdiction or to
the laying of venue of any such ancillary suit, action or proceeding brought in
any court referred to in paragraph (c)(i) of this Section 7.08 and
such parties agree not to plead or claim otherwise.


 


Section 7.09.  Reconciliation.  In the event that WIND and the Series B
Member Representative are unable to resolve a disagreement with respect to the
matters governed by Section 2.03, Section 4.02 and Section 6.02
within the relevant period designated in this Agreement (“Reconciliation
Dispute”), the Reconciliation Dispute shall be submitted for
determination to a nationally recognized expert (the “Expert”)
in the particular area of disagreement mutually acceptable to both
parties.  The Expert shall be a partner
in a nationally recognized accounting firm or a law firm (other than the
Advisory Firm), and the Expert shall not, and the firm that employs the Expert
shall not, have any material relationship with either WIND or the Series B
Member Representative or other actual or potential conflict of interest.  If the parties are unable to agree on an
Expert within thirty (30) days of receipt by the respondent(s) of written
notice of a Reconciliation Dispute, the Expert shall be appointed by the
International Chamber of Commerce.  The
Expert shall resolve any matter relating to the Exchange Basis Schedule or an
amendment thereto or the Early Termination Schedule or an amendment thereto
within thirty (30) calendar days and shall 


 


22

















 


resolve any matter relating to a Tax Benefit
Schedule or an amendment thereto within fifteen (15) calendar days or as soon
thereafter as is reasonably practicable, in each case after the matter has been
submitted to the Expert for resolution. 
Notwithstanding the preceding sentence, if the matter is not resolved
before any payment that is the subject of a disagreement would be due (in the
absence of such disagreement) or any Tax Return reflecting the subject of a
disagreement is due, the undisputed amount shall be paid on such date and such
Tax Return may be filed as prepared by WIND, subject to adjustment or amendment
upon resolution.  In the event that this
reconciliation provision is utilized, the fees of the Expert shall be paid in
proportion to the manner in which the dispute is resolved, such that, for
example, if the entire dispute is resolved in favor of WIND, the Series B
Member Representative shall pay all of the fees, or if the items in dispute are
resolved 50% in favor of WIND and 50% in favor of the applicable Series B
Member, each of WIND and the Series B Member Representative shall pay 50%
of the fees of the Expert.  Any dispute
as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.09
shall be decided by the Expert.  The
Expert shall finally determine any Reconciliation Dispute and the
determinations of the Expert pursuant to this Section 7.09 shall be (i) final
and may be enforced as if it were the award of an arbitrator issued under and
pursuant to the rules of the International Chamber of Commerce and (ii) binding
on WIND and the Series B Member Representative and may be entered and
enforced in any court having jurisdiction.


 


Section 7.10.  Withholding.  WIND shall be entitled to deduct
and withhold from any payment payable pursuant to this Agreement such amounts
as WIND is required to deduct and withhold with respect to the making of such
payment under the Code or any provision of state, local or foreign Tax
law.  To the extent that amounts are so
withheld and paid over to the appropriate Taxing Authority by WIND, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the applicable Series B Member.


 


Section 7.11.  Admission of WIND into a
Consolidated Group; Transfers of Corporate Assets.  (a) If WIND becomes a member
of another affiliated or consolidated group of corporations that files a
consolidated income Tax Return pursuant to Sections 1501 et seq.
of the Code or any corresponding provisions of state, local or foreign law,
then: (i) the provisions of this Agreement shall be applied with respect
to the group as a whole; and (ii) Tax Benefit Payments, Early Termination
Payments and other applicable items hereunder shall be computed with reference
to the consolidated taxable income of the group as a whole.


 


(b)        If any entity that is obligated to make
an Exchange Payment hereunder transfers one or more assets to a corporation
with which such entity does not file a consolidated Tax return pursuant to Section 1501
of the Code, such entity, for purposes of calculating the amount of any
Exchange Payment (e.g., calculating the gross
income of the entity and determining the Realized Tax 


 


23

















 


Benefit of such entity)
due hereunder, shall be treated as having disposed of such asset in a fully
taxable transaction on the date of such contribution.  The consideration deemed to be received by
such entity shall be equal to the fair market value of the contributed asset,
plus (i) the amount of debt to which such asset is subject, in the case of
a contribution of an encumbered asset or (ii) the amount of debt allocated
to such asset, in the case of a contribution of a partnership interest.


 


Section 7.12.  Confidentiality.  Each Series B Member
acknowledges and agrees that the information of WIND and of its Affiliates is
confidential and, except in the course of performing any duties as necessary
for WIND and its Affiliates, as required by law or legal process or to enforce
the terms of this Agreement, such person shall keep and retain in the strictest
confidence and not disclose to any Person any confidential matters, acquired
pursuant to this Agreement, of WIND and its Affiliates and successors,
concerning the Company and its Affiliates and successors or the other Series B
Members, learned by the Series B Member heretofore or hereafter.  This Section 7.12 shall not apply to (i) any
information that has been made publicly available by WIND or any of its
Subsidiaries, becomes public knowledge (except as a result of an act of such Series B
Member in violation of this Agreement) or is generally known to the business
community and (ii) the disclosure of information to the extent necessary
for a Series B Member to prepare and file his or her Tax returns, to
respond to any inquiries regarding the sale from any Taxing authority or to
prosecute or defend any action, proceeding or audit by any Taxing authority
with respect to such returns. 
Notwithstanding anything to the contrary herein, each Series B
Member (and each employee, representative or other agent of such Series B
Member or assignee, as applicable) may disclose to any and all Persons, without
limitation of any kind, the Tax treatment and Tax structure of WIND, the
Company, the Series B Members and their Affiliates, and any of their
transactions, and all materials of any kind (including opinions or other Tax
analyses) that are provided to the Series B Members relating to such Tax
treatment and Tax structure.


 


If a Series B Member commits a breach, or
threatens to commit a breach, of any of the provisions of this Section 7.12,
WIND shall have the right and remedy to have the provisions of this Section 7.12
specifically enforced by injunctive relief or otherwise by any court of
competent jurisdiction without the need to post any bond or other security, it
being acknowledged and agreed that any such breach or threatened breach shall
cause irreparable injury to WIND or any of its Subsidiaries or the other Series B
Members and the accounts and funds managed by WIND and that money damages alone
shall not provide an adequate remedy to such Persons.  Such rights and remedies shall be in addition
to, and not in lieu of, any other rights and remedies available at law or in
equity.


 


Section 7.13.  LLC Agreement.  This Agreement shall be treated as
part of the partnership agreement of the Company as described in Section 761(c) of
the


 


24














 


Code and Sections 1.704-1(b)(2)(ii)(h) and
1.761-1(c) of the Treasury Regulations.


 


Section 7.14.  Change in Tax Law.


 


Notwithstanding anything
herein to the contrary, if, in connection with an actual or proposed change in
law, any of the Applicable Series B Members reasonably believes that the
existence of this Agreement could cause income (other than income arising from
receipt of a payment under this Agreement) recognized by any Applicable Series
B Member or any member affiliated with an Applicable Series B Member (or direct
or indirect equity holders in such member) upon the IPO or any Exchange to be
treated as ordinary income rather than capital gain (or otherwise taxed at
ordinary income rates) for United States federal income Tax purposes or would have
other material adverse Tax consequences to an Applicable Series B Member or any
direct or indirect owner of an Applicable Series B Member (a “Change in Tax Law”), then (i) at the election of the
Applicable Series B Member and to the extent specified by the Applicable Series
B Member, this Agreement shall not apply with respect to an Exchange by the
Applicable Series B Member occurring after a date specified by the Applicable
Series B Member, (ii) at the election of the Applicable Series B Member, this Agreement
shall otherwise be amended in a manner determined by WIND and the Series B
Member Representative, acting jointly, provided that such amendment shall not
result in an increase in payments under this Agreement at any time as compared
to the amounts and times of payments that would have been due in the absence of
such amendment or (iii) at the election of the Series B Members, acting
unanimously, this Agreement shall cease to have further effect.


 


Section 7.15.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.


 


[Signature pages follow]


 


25

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized
representatives as of the day and year first above written.


 


	
   

  	
   

  	
   

  	
  FIRST WIND HOLDINGS INC.  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Paul Gaynor  

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer  

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  FIRST WIND HOLDINGS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Paul Gaynor

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  D. E. SHAW MWP
  ACQUISITION HOLDINGS, L.L.C.,

  as Member

  
	
   

  	
   

  	
   

  	
  By:

  	
  D. E. SHAW & CO., L.L.C., AS MANAGER

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  MADISON DEARBORN
  CAPITAL PARTNERS IV, L.P., 

  as Member

  
	
   

  	
   

  	
   

  	
  By:

  	
  MADISON DEARBORN PARTNERS IV, L.P.

  
	
   

  	
   

  	
   

  	
  Its:

  	
  GENERAL PARTNER

  
	
   

  	
   

  	
   

  	
  By:

  	
  MADISON DEARBORN CAPITAL PARTNERS, LLC

  
	
   

  	
   

  	
   

  	
  Its:

  	
  GENERAL PARTNER

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  



 


A-1

















 


	
   

  	
   

  	
   

  	
   

  	
  [NAME]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  



 


B-2

















 


Exhibit A


 


JOINDER


 


This JOINDER (this “Joinder”)
to the Tax Receivable Agreement (as amended, the “Tax
Receivable Agreement”) dated as of       , 2010, among
First Wind Holdings Inc., a Delaware corporation (“WIND”),
First Wind Holdings, LLC, a Delaware limited liability company (the “Company”) and each of the undersigned parties thereto
identified as “Series B Members” constitutes the
agreement and undertaking of        (the “Permitted Transferee”) in favor of and for the benefit of
WIND, the Company and the other parties to the Tax Receivable Agreement.


 


WHEREAS, on       , 20    ,
the Permitted Transferee acquired (the “Acquisition”)
Series B Membership Interests in the Company and the corresponding Class B
Shares of WIND (collectively, the “Interests” and,
together with all other Interests hereinafter acquired by the Permitted
Transferee from        (the “Transferor”) and its Permitted Transferees, the “Acquired Interests”) from the Transferor; and


 


WHEREAS, the Transferor, in connection with the
Acquisition, has required Permitted Transferee to execute and deliver this
Joinder pursuant to Section 7.06 of the Tax Receivable Agreement.


 


NOW, THEREFORE, in consideration of the foregoing
and the agreements contained herein, the Permitted Transferee hereby agrees as
follows:


 


Section 1.1. 
Definitions.  Capitalized words used but not defined in
this Joinder are used as defined in the Tax Receivable Agreement.


 


Section 1.2. 
Joinder. 
The Permitted Transferee hereby acknowledges and agrees to become a “Series
B Member” for all purposes of the Tax Receivable Agreement, including but not
limited to, being bound by Section 7.12, Section 2.03, Section 4.02, Section
6.01 and Section 6.02 of the Tax Receivable Agreement, with respect to the
Acquired Interests, and any other Interests the Permitted Transferee acquires
hereafter.


 


Section 1.3. 
Notice. 
All notices, requests, consents and other communications hereunder to
the Permitted Transferee shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by facsimile (provided a copy is
thereafter promptly delivered as provided in this Section 1.3) or nationally
recognized overnight courier, addressed to the Permitted Transferee at the
address or facsimile number set forth below or such other address or facsimile
number as may hereafter be designated in writing by Permitted Transferee.


 


A-1

















 


Section 1.4. 
Governing Law.  This Joinder shall be governed by, and
construed in accordance with, the law of the State of New York, without regard
to the conflicts of laws principles thereof.


 


IN WITNESS WHEREOF, this Joinder has been duly
executed and delivered by the Permitted Transferee as of the date first above
written.


 


	
   

  	
   

  	
   

  	
   

  	
  [NAME]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.

  



 


 


B-2

















 


Exhibit B


 


	
   

  	
   

  	
  Immediately Following IPO

  
	
  Name and Address of Series B Member

  	
   

  	
  Number of 

  Series B

  Membership

  Interests

  Owned

  	
   

  	
  Number of

  Class B

  Shares

  Owned

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D. E. Shaw MWP Acquisition the Company, L.L.C.

  [Address]  

  Facsimile:

  	
   

  	
   

  	
   

  	
   

  
	
  Madison Dearborn Capital Partners IV, L.P.  

  [Address]  

  Facsimile:

  	
   

  	
   

  	
   

  	
   

  
	
  [Name]  

  [Address]  

  Facsimile:

  	
   

  	
   

  	
   

  	
   

  
	
  [Name]  

  [Address]  

  Facsimile:

  	
   

  	
   

  	
   

  	
   

  



 


B-1