Exhibit
10.57


 


EXECUTION COPY


 


POWER PURCHASE AGREEMENT


 


BETWEEN


 


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


 


AND


 


MILFORD WIND CORRIDOR PHASE II, LLC


 


DATED AS OF MARCH 1, 2010


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Article I DEFINITIONS AND INTERPRETATION

  	
  1

  
	
  Section 1.1

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
  Interpretation

  	
  21

  
	
   

  	
   

  	
   

  
	
  Article II EFFECTIVE DATE, TERM,
  PURCHASE OPTION, EARLY TERMINATION AND FACILITY PROPERTIES

  	
  22

  
	
  Section 2.1

  	
  Effective Date

  	
  22

  
	
  Section 2.2

  	
  Agreement Term and Delivery Term

  	
  23

  
	
  Section 2.3

  	
  Survivability

  	
  23

  
	
  Section 2.4

  	
  Early Termination

  	
  23

  
	
  Section 2.5

  	
  Buyer Purchase Options

  	
  23

  
	
  Section 2.6

  	
  The Facility Generating Premises

  	
  25

  
	
  Section 2.7

  	
  Facility Common Facilities’ Interests

  	
  26

  
	
  Section 2.8

  	
  Transmission Line and Facility Transmission Line Interests

  	
  27

  
	
  Section 2.9

  	
  Real Property Consents

  	
  27

  
	
  Section 2.10

  	
  Operation and Maintenance Agreement

  	
  27

  
	
   

  	
   

  	
   

  
	
  Article III DEVELOPMENT OF THE FACILITY

  	
  27

  
	
  Section 3.1

  	
  In General

  	
  27

  
	
  Section 3.2

  	
  Certification of Commercial Operation Date; Preliminary Notice

  	
  29

  
	
  Section 3.3

  	
  Other Information

  	
  29

  
	
  Section 3.4

  	
  Milestone Schedule

  	
  29

  
	
  Section 3.5

  	
  Liquidated Damages

  	
  29

  
	
  Section 3.6

  	
  Additional Capacity after Early Completion in the Early
  Completion Facility Configuration

  	
  30

  
	
  Section 3.7

  	
  Decommissioning and Other Costs

  	
  30

  
	
   

  	
   

  	
   

  
	
  Article IV POINT OF DELIVERY AND
  INTERCONNECTION AGREEMENT

  	
  30

  
	
  Section 4.1

  	
  Point of Delivery

  	
  30

  
	
  Section 4.2

  	
  Interconnection Agreement

  	
  30

  
	
  Section 4.3

  	
  Transmission Service Agreement

  	
  31

  
	
   

  	
   

  	
   

  
	
  Article V OPERATION AND MAINTENANCE OF
  THE FACILITY

  	
  31

  
	
  Section 5.1

  	
  Compliance with Electrical Service Requirements

  	
  31

  
	
  Section 5.2

  	
  General Operational Requirements

  	
  31

  
	
  Section 5.3

  	
  Operation and Maintenance Plan

  	
  31

  
	
  Section 5.4

  	
  Taxes

  	
  31

  
	
  Section 5.5

  	
  Environmental Credits

  	
  32

  
	
  Section 5.6

  	
  Scheduling of Energy and Scheduled Outages

  	
  32

  
	
   

  	
   

  	
   

  
	
  Article VI COMPLIANCE DURING
  CONSTRUCTION AND OPERATION PERIOD

  	
  36

  
	
  Section 6.1

  	
  In General

  	
  36

  



 


i

















 


	
  Section 6.2

  	
  Compliance With Standards

  	
  37

  
	
  Section 6.3

  	
  Quality Assurance Program

  	
  38

  
	
  Section 6.4

  	
  Effect of Review by Buyer

  	
  38

  
	
  Section 6.5

  	
  Preservation of the
  Facility

  	
  38

  
	
   

  	
   

  	
   

  
	
  Article VII
  PURCHASE AND SALE OF POWER

  	
  38

  
	
  Section 7.1

  	
  Purchases by Buyer

  	
  38

  
	
  Section 7.2

  	
  Conditions Precedent to
  Prepayment

  	
  40

  
	
  Section 7.3

  	
  Performance Security

  	
  41

  
	
  Section 7.4

  	
  Energy to Come Exclusively
  from Facility; Dedicated Facility; Sales to Third Parties

  	
  41

  
	
   

  	
   

  	
   

  
	
  Article VIII
  TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS

  	
  41

  
	
  Section 8.1

  	
  In General

  	
  41

  
	
  Section 8.2

  	
  Costs

  	
  42

  
	
  Section 8.3

  	
  Title; Risk of Loss

  	
  42

  
	
   

  	
   

  	
   

  
	
  Article IX
  ENVIRONMENTAL ATTRIBUTES; EPS AND RPS COMPLIANCE

  	
  42

  
	
  Section 9.1

  	
  Transfer of Environmental
  Attributes

  	
  42

  
	
  Section 9.2

  	
  Reporting of Ownership of
  Environmental Attributes

  	
  42

  
	
  Section 9.3

  	
  Environmental Attributes

  	
  42

  
	
  Section 9.4

  	
  Use of Accounting System
  to Transfer Environmental Attributes

  	
  43

  
	
  Section 9.5

  	
  Further Assurances

  	
  43

  
	
  Section 9.6

  	
  RPS and EPS Compliance

  	
  44

  
	
   

  	
   

  	
   

  
	
  Article X
  MAKEUP OF SHORTFALL ENERGY

  	
  44

  
	
  Section 10.1

  	
  Makeup of Shortfall

  	
  44

  
	
  Section 10.2

  	
  No Excess Energy During
  Shortfall Periods

  	
  44

  
	
  Section 10.3

  	
  Replacement Energy

  	
  44

  
	
  Section 10.4

  	
  Application of Shortfall
  Energy or Replacement Energy

  	
  45

  
	
   

  	
   

  	
   

  
	
  Article XI
  CAPACITY RIGHTS

  	
  45

  
	
  Section 11.1

  	
  Purchase and Sale of
  Capacity Rights

  	
  45

  
	
  Section 11.2

  	
  Representation Regarding
  Ownership of Capacity Rights

  	
  45

  
	
  Section 11.3

  	
  Further Assurances

  	
  45

  
	
   

  	
   

  	
   

  
	
  Article XII
  BILLING; PAYMENT; AUDITS; METERING; ATTESTATIONS

  	
  45

  
	
  Section 12.1

  	
  Billing and Payment

  	
  45

  
	
  Section 12.2

  	
  Disputed Invoices

  	
  46

  
	
  Section 12.3

  	
  Buyer’s Right of Setoff

  	
  47

  
	
  Section 12.4

  	
  Records and Audits

  	
  47

  
	
  Section 12.5

  	
  Electric Metering Devices

  	
  48

  
	
   

  	
   

  	
   

  
	
  Article XIII
  REPRESENTATIONS AND WARRANTIES; COVENANT OF SELLER

  	
  50

  
	
  Section 13.1

  	
  Representations and
  Warranties of Buyer

  	
  50

  
	
  Section 13.2

  	
  Representations and
  Warranties by Seller

  	
  51

  
	
  Section 13.3

  	
  Covenant of Seller Related
  to Seller’s Status as Special Purpose Entity

  	
  53

  



 


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  Section 13.4

  	
  Covenants of Seller
  Related to Leases and Property Agreements

  	
  53

  
	
   

  	
   

  	
   

  
	
  Article XIV
  DEFAULT; TERMINATION AND REMEDIES; PERFORMANCE DAMAGE

  	
  54

  
	
  Section 14.1

  	
  Default

  	
  54

  
	
  Section 14.2

  	
  Default Remedy

  	
  56

  
	
  Section 14.3

  	
  Effect of Termination on
  Interconnection Agreement

  	
  57

  
	
  Section 14.4

  	
  Termination for Default

  	
  57

  
	
  Section 14.5

  	
  Calculation of Termination
  Payment

  	
  57

  
	
   

  	
   

  	
   

  
	
  Article XV
  MISCELLANEOUS

  	
  59

  
	
  Section 15.1

  	
  Authorized Representative

  	
  59

  
	
  Section 15.2

  	
  Notices

  	
  59

  
	
  Section 15.3

  	
  Dispute Resolution

  	
  60

  
	
  Section 15.4

  	
  Further Assurances

  	
  60

  
	
  Section 15.5

  	
  No Dedication of
  Facilities

  	
  60

  
	
  Section 15.6

  	
  Force Majeure

  	
  61

  
	
  Section 15.7

  	
  Assignment of Agreement

  	
  62

  
	
  Section 15.8

  	
  Ambiguity

  	
  63

  
	
  Section 15.9

  	
  Attorney Fees &
  Costs

  	
  63

  
	
  Section 15.10

  	
  Voluntary Execution

  	
  64

  
	
  Section 15.11

  	
  Entire Agreement

  	
  64

  
	
  Section 15.12

  	
  Governing Law

  	
  64

  
	
  Section 15.13

  	
  Venue

  	
  64

  
	
  Section 15.14

  	
  Execution in Counterparts

  	
  64

  
	
  Section 15.15

  	
  Effect of
  Section Headings

  	
  64

  
	
  Section 15.16

  	
  Waiver

  	
  64

  
	
  Section 15.17

  	
  Relationship of the
  Parties

  	
  65

  
	
  Section 15.18

  	
  Indemnification; Damage or
  Destruction; Insurance; Limit of Liability

  	
  65

  
	
  Section 15.19

  	
  Severability

  	
  66

  
	
  Section 15.20

  	
  Confidentiality

  	
  66

  
	
  Section 15.21

  	
  Buyer’s Cure Rights and
  Rights Under Foreclosure

  	
  68

  
	
  Section 15.22

  	
  LADWP Business Policies

  	
  69

  
	
  Section 15.23

  	
  Service Contract

  	
  70

  



 


iii

















 


	
  APPENDIX A

  	
  MONTHLY PAYMENT SCHEDULE

  
	
   

  	
   

  
	
  APPENDIX B

  	
  FACILITY DESCRIPTION AND
  MILESTONE SCHEDULE

  
	
   

  	
   

  
	
  APPENDIX C

  	
  BUYER AND SELLER BILLING,
  NOTIFICATION AND SCHEDULING CONTACT INFORMATION

  
	
   

  	
   

  
	
  APPENDIX D

  	
  FORM OF ATTESTATION

  
	
   

  	
   

  
	
  APPENDIX E

  	
  FORM OF SECURITY
  INTEREST

  
	
   

  	
   

  
	
  APPENDIX F

  	
  INSURANCE

  
	
   

  	
   

  
	
  APPENDIX G

  	
  REMAINING PREPAYMENT
  AMOUNT

  
	
   

  	
   

  
	
  APPENDIX H

  	
  CIRCLE FOUR LEASE

  
	
   

  	
   

  
	
  APPENDIX I

  	
  GUARANTEED GENERATION AND
  PREPAYMENT AMOUNT TABLE

  
	
   

  	
   

  
	
  APPENDIX J

  	
  QUALITY ASSURANCE PROGRAM

  
	
   

  	
   

  
	
  APPENDIX K

  	
  PERMITS

  
	
   

  	
   

  
	
  APPENDIX L

  	
  CLOSING CONDITIONS FOR
  PURCHASE OF FACILITY

  
	
   

  	
   

  
	
  APPENDIX M

  	
  FORM OF LETTER OF
  CREDIT

  
	
   

  	
   

  
	
  APPENDIX N

  	
  FACILITY OPERATOR

  
	
   

  	
   

  
	
  APPENDIX O

  	
  FORM OF CONSENT AND
  AGREEMENT

  
	
   

  	
   

  
	
  APPENDIX P

  	
  BUYER’S SYSTEM PROTECTION
  DESIGN REQUIREMENTS

  
	
   

  	
   

  
	
  APPENDIX Q

  	
  METERING PROCEDURES

  



 


iv

















 


POWER PURCHASE AGREEMENT


 


PARTIES


 


THIS POWER PURCHASE
AGREEMENT (“Agreement”)
is entered into as of this 1st day of March, 2010 by and between Southern California Public Power
Authority, a public entity and joint powers agency formed and organized
pursuant to the California Joint Exercise of Powers Act (California Government
section 6500, et seq.) (“Buyer”), and Milford
Wind Corridor Phase II, LLC, a limited liability company organized and existing
under the laws of the State of Delaware (“Seller”). 
Each of Buyer and Seller is referred to individually under this
Agreement as a “Party”
and together they are referred to as the “Parties.”


 


RECITALS


 


WHEREAS, Buyer seeks to
provide to certain of its members energy from renewable power sources;


 


WHEREAS, in response to a
Request for Proposals issued by Buyer on September 1, 2006, Seller
proposes to develop, finance, construct, own and operate a nominal 102 MW wind
electric generating facility (the “Facility,” as further described herein),
located near Milford, Utah, which will utilize wind energy technology and sell
power to Buyer for the term of this Agreement, subject to certain early
termination events and purchase options exercisable by Buyer as provided
herein;


 


WHEREAS, Buyer desires to
purchase Energy from the Facility from Seller, and Seller desires to sell
Energy from the Facility to Buyer; and


 


WHEREAS, the Parties desire
to set forth the terms and conditions pursuant to which such sales and
purchases shall be made.


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein set forth, the
Parties hereto agree as follows:


 


ARTICLE I


DEFINITIONS AND INTERPRETATION


 


Section 1.1            Definitions.  The following capitalized terms in this
Agreement and the appendices hereto shall have the following meanings:


 


“Affiliate” means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person. As used in this Agreement, “control” shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of


 


1

















 


management, policies or
activities of a Person, whether through ownership or voting securities, by
contract or otherwise.


 


“Agreement” means this Power Purchase Agreement, as it may be
amended, supplemented or otherwise modified from time to time hereafter in
accordance with its terms.


 


“Agreement Term” has the meaning set forth in Section 2.2.


 


“Ancillary Documents” means all agreements and other documents
included in the Performance Security, the LD Security, Deed of Trust and all
other instruments, agreements, certificates, and other documents executed or
delivered by or on behalf of Buyer or Seller pursuant to or in connection with
any thereof or this Agreement.


 


“ASME” means American Society of Mechanical Engineers.


 


“ASTM” means American Society for Testing and Materials and any
successor thereto.


 


“Authorized Auditors” means representatives of Buyer or Buyer’s
Agents who are authorized to conduct audits on behalf of Buyer.


 


“Authorized Representative” means, with respect to each Party,
the Person designated as such Party’s authorized representative pursuant to Section 15.1.


 


“AWS” means American Welding Society and any successor thereto.


 


“Bankruptcy” means any case, action or proceeding under any
bankruptcy, reorganization, debt arrangement, insolvency or receivership law or
any dissolution or liquidation proceeding commenced by or against a Person and,
if such case, action or proceeding is not commenced by such Person, such case
or proceeding shall be consented to or acquiesced in by such Person or shall
result in an order for relief or shall remain undismissed for sixty (60) days.


 


“Brown Act” has the meaning set forth in Section 15.20.


 


“Business Day” means any calendar day that is not a Saturday, a
Sunday, or a day on which commercial banks are authorized or required to be
closed in Los Angeles, California or New York, New York.


 


“Buyer” has the meaning set forth in the Preamble.


 


“Buyer’s Agent” means any member or agent of Buyer authorized
or designated by Buyer to make any determination or perform, carry out or
provide any function on behalf of Buyer under this Agreement.


 


“CAISO” means the California Independent System Operator, or
any successor entity thereto.


 


2

















 


“Cal-OSHA” means California Occupational Safety &
Health Administration and any successor thereto.


 


“CAMD” means the Clean Air Markets Division of the United
States Environmental Protection Agency, any successor agency and any other
state, regional or federal or intergovernmental entity or Person that is given
authorization or jurisdiction or both over a program involving the
registration, validation, certification or transferability or any of the
foregoing of Environmental Attributes.


 


“Capacity Rights” means the rights, whether in existence as of
the Effective Date or arising thereafter during the Agreement Term, to
capacity, resource adequacy, associated attributes and/or reserves or any of
the foregoing associated with the electric generating capability of the
Facility, including the right to resell such rights.


 


“Cash Grants” means the grants pursuant to Section 1603 of
the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5.


 


“CEC” means the California Energy Resources Conservation and
Development Commission and any successor agency thereto.


 


“CEC Performance Standard” means, at any time, the applicable
greenhouse gas emissions performance standard in effect at such time for
baseload electric generation facilities owned or operated (or both) by local
publicly owned electric utilities, as established by the CEC or other Governmental
Authority having jurisdiction over Buyer.


 


“Circle Four Lease” means the Amended and Restated Land Lease
Agreement, dated as of February 22, 2007, between Circle Four LLC, as
lessor, and Seller, as lessee, attached to this Agreement as Appendix H.


 


“Closing” has the meaning set forth in Appendix L.


 


“Code” means the Internal Revenue Code of 1986, as amended.


 


“Commercial Operation” means, with respect to the Facility, the
Early Completion Facility Configuration, or any additional wind turbines installed
in accordance with Section 3.6, as the case may be, that Seller
shall have demonstrated to the reasonable satisfaction of Buyer that all of the
following have occurred:


 


(a)           Construction of the Facility has been
completed in accordance with the terms and conditions of this Agreement and the
Facility possesses all the characteristics, and satisfies all of the
requirements, set forth for this Facility in this Agreement;


 


(b)           The Facility has successfully
completed all testing required by Prudent Utility Practices or any Requirement
of Law to be completed prior to full commercial operations;


 


(c)           Seller has obtained all Permits
required for the construction, operation and maintenance of the Facility in
accordance with this Agreement (including those identified in Appendix K),
and all such Permits are final and non-appealable;


 


3

















 


(d)           The Facility is both authorized and
able to operate at an installed capacity of no more than 102 MW and to deliver
Energy to the Point of Delivery in accordance with Prudent Utility Practices,
the requirements of this Agreement and all applicable Requirements of Law;


 


(e)           Seller has obtained Insurance
coverage for the Facility as required by Appendix F;


 


(f)            Construction of all interconnection
facilities and transmission facilities necessary to deliver Energy to the Point
of Delivery has been completed and all agreements and arrangements have been
executed and made, as provided in the Agreement, to deliver Energy to the Point
of Delivery;


 


(g)           The Facility and the Related
Interests and Rights shall be fully effective;


 


(h)           All of the requirements as set forth
in Section 2.6, Section 2.7, Section 2.8, Section 2.9
and Section 2.10 to be met on or prior to the Commercial Operation Date
have been met; and


 


(i)            Buyer shall have received executed
copies of (x) the Interconnection Agreement and the assignment of the
interconnection rights from Milford I to Seller necessary for the
interconnection of the Facility to the Point of Delivery; (y) the joint
ownership and operating agreements between Milford I, Seller and any other
parties thereto with respect to their respective rights and interests with
respect to the Facility Common Facility Interests and the Facility Transmission
Line Interests, and the sharing of responsibilities and obligation related
thereto; and (z) the consent required under Section 4.2, each
such agreement being in a form reasonably acceptable to Buyer, provided
that Buyer shall acknowledge acceptance in writing on a timely basis if
requested by Facility Lender.


 


“Commercial Operation Date” means the date on which Commercial
Operation of the Facility, or the Early Completion Facility Configuration, as
the case may be, shall have occurred; provided, that Seller shall have
the right to install additional wind turbines in accordance with Section 3.6
following the Commercial Operation Date if Commercial Operation is achieved in
the Early Completion Facility Configuration in accordance with Section 3.6.


 


“Consent and Agreement” means the agreement attached as Appendix
O.


 


“Contract Capacity” means the aggregate installed capacity of
the Facility, not to exceed 102MW; provided, that Seller shall have the
right to declare Commercial Operation as to the Early Completion Facility Configuration
at the Commercial Operation Date and thereafter on or before ninety (90) days
following the Commercial Operation Date may declare Commercial Operation as to
all additional wind turbines in accordance with Section 3.6.


 


“Contract Year” means (i) for the first Contract Year, the
period beginning on the Prepayment Date and ending at 24:00 hours on June 30
following the Prepayment Date, (ii) for the following nineteen (19)
Contract Years beginning on the first day of July following the Prepayment
Date, each succeeding twelve-month period up to and including the period ending
with the June 30 next preceding the twentieth (20th) anniversary of the
Prepayment Date; and (iii) for the final Contract Year, the period
beginning on the first day of July next preceding the


 


4

















 


twentieth (20) anniversary
of the Prepayment Date and ending at 24:00 hours on the date that the Agreement
Term shall end.


 


“Costs” has the meaning set forth in Section 14.5(i)(3).


 


“CPRA” has the meaning set forth in Section 15.20.


 


“Credit Agreement” shall mean the Credit Agreement, to be
executed between Seller and the Facility Lenders providing, among other things,
for the financing of construction of the Facility, including related development
and other project costs, interest and other finance costs during and after
construction, reserves and spare parts, contemplated to be outstanding for a
period after construction until repaid from proceeds of the Prepayment Amount,
together with proceeds of a tax equity arrangement or Cash Grants and/or other
capital sources, or until the right, title and interest of the Facility Lenders
in and to the Credit Agreement shall be purchased, together with the related
promissory notes and collateral documents, pursuant to the Consent and
Agreement.


 


“Deed of Trust” has the meaning set forth in the definition of “Security
Interest.”


 


“Deemed Delivered Excess Energy” has the meaning set forth in Section 5.6(g).


 


“Deemed Delivered Interim Energy”  has the meaning set forth in
Section 5.6(g).


 


“Deemed Delivered Prepaid Energy” has the meaning set forth in Section 5.6(g).


 


“Deemed Delivered Startup and Test Energy”  has the meaning set forth in
Section 5.6(g).


 


“Default” has the meaning set forth in Section 14.1.


 


“Defaulting Party” has the meaning set forth in Section 14.1.


 


“Delivered Energy” means the MWh of Facility Energy delivered
by Seller and received by Buyer as metered at the Point of Delivery, adjusted
to include Deemed Delivered Prepaid Energy, Deemed Delivered Excess Energy,
Deemed Delivered Startup and Test Energy and Deemed Delivered Interim Energy,
in accordance with Section 5.6.


 


“Delivered Excess Energy” means the portion of the Delivered
Energy that is designated as Excess Energy.


 


“Delivered Guaranteed Generation” means the portion of the
Delivered Energy that is designated as Guaranteed Generation.


 


“Delivery Term” has the meaning set forth in Section 2.2.


 


“Downgrade Event”, with respect to a financial institution,
means the failure of such financial institution to maintain the credit rating
or organizational status of a Qualified Issuer or the commencement by such
financial institution of involuntary or voluntary bankruptcy,


 


5














 


insolvency, reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
proceeding (whether under any present or future statute, law or regulation).


 


“Early Completion Facility Configuration” means a configuration
of the Facility with the interconnection facilities and installed wind turbines
aggregating not less than 90 MW of nameplate capacity and not more than 102 MW
of nameplate capacity.


 


“EEI” means Edison Electric Institute and any successor
thereto.


 


“Effective Date” means the date on which Buyer executes this
Agreement, and the conditions precedent set forth in Section 2.1
have been met.


 


“Electric Metering Device(s)” means all meters, metering
equipment, and data processing equipment used to measure, record, or transmit
data relating to the Energy output from the Facility. Electric Metering Devices
include the metering current transformers and the metering voltage
transformers.


 


“End of Term Purchase Price” has the meaning set forth in Section 2.5(c).


 


“Energy” means electrical energy.


 


“Environmental Attribute Reporting Rights” means all rights to
report the ownership of the Environmental Attributes to any Person without
limitation, including under Section 1605(b) of the Energy Policy Act
of 1992, as amended from time to time, or any successor statute, or any other
current or future international, federal, state or local law, regulation or
bill, or otherwise.


 


“Environmental Attributes” means any and all current or future
credits, benefits, emissions reductions, offsets or allowances, howsoever
entitled, named, registered, created, measured, allocated or validated (A) that
are at any time recognized or deemed of value (or both) by applicable law, or
any voluntary or mandatory program of any Governmental Authority and (B) that
are attributable to (i) generation by the Facility of Delivered Energy or
Replacement Energy required to be delivered by Seller to Buyer during the
Agreement Term and (ii) the emissions or other environmental
characteristics of such generation or its displacement of conventional or other
types of Energy generation. 
Environmental Attributes include without limitation any of the
aforementioned arising out of legislation or regulation concerned with oxides
of nitrogen, sulfur, carbon, or any other greenhouse gas or chemical compound,
particulate matter, soot, or mercury, or implementing the United Nations
Framework Convention on Climate Change (the “UNFCCC”), the Kyoto Protocol to the
UNFCCC, California’s greenhouse gas legislation (including but not limited to
California Assembly Bill 32 (Global Warming Solutions Act of 2006)) or any
similar international, federal, state or local program or crediting “early
action” with a view thereto, or laws or regulations involving or administered
by the CAMD, and all Environmental Attribute Reporting Rights, including all
evidences (if any) thereof such as renewable energy certificates of any kind.
Environmental Attributes for purposes of this definition are separate from the
Energy produced from the Facility. Environmental Attributes specifically
exclude (i) investment tax credits, any local, state or federal production
tax credits, depreciation deductions or other tax credits providing a tax
benefit to Seller or any other Person based on ownership or a security interest
in the Facility, or Energy production from


 


6

















 


any portion of the Facility,
including any investment or production tax credit expected to be available to
Seller with respect to the Facility, (ii) depreciation deductions and
benefits, and other tax benefits arising from ownership or operation of the
Facility unrelated to its status as a generator of renewable or environmentally
clean Energy, and (iii) cash grants or other financial incentives from any
local, state or federal government available to Seller with respect to the
Facility.


 


“Environmental Documents” has the meaning set forth in Section 3.1(a).


 


“EPA” means the United States Environmental Protection Agency
and any successor agency.


 


“EPS Compliant” when used with respect to the Facility or any
other facility at any time, means that the facility satisfies both the PUC
Performance Standard and the CEC Performance Standard in effect at the time; provided,
if it is impossible for the facility to satisfy both the PUC Performance
Standard and the CEC Performance Standard in effect at any time, the facility
shall be deemed EPS Compliant if it satisfies the CEC Performance Standard in
effect at the time and those portions of the PUC Performance Standard in effect
at the time that it is possible for the facility to satisfy while at the same
time satisfying the CEC Performance Standard in effect at the time.


 


“EPS Law” means Sections 8340 and 8341 of the California Public
Utilities Code as implemented and amended from time to time, or any successor
laws or regulations in the State of California.


 


“Excess Energy” means, for any Contract Year, the Energy from
the Facility delivered to the Point of Delivery, which is in excess of the
Guaranteed Annual Quantity for such Contract Year.


 


“Excess Energy Price” means the price per MWh ($/MWh) paid by
Buyer to Seller for Excess Energy according to the provisions in Appendix A.


 


“Facility” means the wind powered electric generating facility
to be located on the Facility Premises, including, but not limited to, the
Facility Premises, the structures, facilities, equipment, fixtures,
improvements and associated real and personal property and the other rights and
interests described in Appendix B.


 


“Facility Common Facilities Interests” means the rights and
interests in and to the properties, structures, equipment and facilities, and
described generally in Appendix B, that (i) provide Seller with
ownership interests (which may be an undivided interest) and leasehold interests
in the Site Common Facilities, including all associated real or personal
property, and the rights and interests of Seller in and to any and all
agreements for joint ownership and operation, any third-party joint operation,
or use of the Site Common Facilities or the capacity or capability thereof, and
(ii) shall provide Seller with the rights to capability, capacity or use
of the Site Common Facilities necessary to support the design capacity of the
Facility on a prudent and reliable basis.


 


7

















 


“Facility Debt” means payment obligations of Seller to the
Facility Lenders under the Credit Agreement outstanding at any date of
application of such term, with the understanding that when such term is used
with reference to repayment of the Facility Debt, the amount is calculated as
of the date of repayment, including principal of, premium and interest on
indebtedness, fees, expenses or penalties, amounts due upon acceleration,
prepayment or restructuring, tax credit or benefit monetization, swap or
interest rate hedging breakage costs and any claims or interest due with
respect to any of the foregoing.


 


“Facility Energy” means Energy generated by the Facility, less
Station Usage Energy.


 


“Facility Generating Premises” means the real and personal
property (including all fixtures and appurtenances thereto) and related
physical and intangible property and the Facility Common Facilities Interests,
all as described in the Leases and Property Agreements and as further described
in Appendix B as constituting the Facility Generating Premises.


 


“Facility Lender” means any lender providing senior or
subordinated construction, debt or equity financing or refinancing for or in
connection with the development, construction, purchase, or installation of the
Facility, including any equity and tax investor providing financing or
refinancing in connection therewith, and any trustee or agent acting on their
behalf, and any Person providing interest rate protection agreements to hedge any
of the foregoing debt obligations.


 


“Facility Metered Output” means the energy produced by the
Facility wind turbine generators as measured by the Electric Metering Devices
installed at the Substation.


 


“Facility Premises” means the Facility Generating Premises, the
land and rights and interests in land included in the Facility Common
Facilities Interests and the Facility Transmission Line Interests.


 


“Facility Transmission Line Interests” means (i) the
rights and interests in and to the properties, structures and facilities,
including any easements, rights-of-way or contractual rights held or to be held
by Seller with respect to its rights to its share of the capacity of the
Transmission Line, including rights and interests in the Interconnection
Agreement and other agreements relating to the operation and use of the
Transmission Line and the use of capacity thereof, and in and to transmission
lines and/or roadways servicing the Facility Premises or the Facility located
(or to be located) thereon, described in Appendix B as constituting the
Facility Transmission Line Interests, and (ii) the undivided ownership
rights and interests in the Transmission Line as provided under Section 2.8(a).


 


“Fair Market Value” has the meaning set forth in Section 2.5(b).


 


“FERC” means the Federal Energy Regulatory Commission or any
successor agency thereto.


 


“First Buyer Purchase Option” has the meaning set forth in Section 2.5(a).


 


“First Notice” has the meaning set forth in Section 2.5(b).


 


8

















 


“First Option Exercise Date” has the meaning set forth in Section 2.5(b).



 


“First Option Purchase Date” has the meaning set forth in Section 2.5(b).



 


“First Option Purchase Price” has the meaning set forth in Section 2.5(b).


 


“First Wind” means First Wind Holdings,
LLC.


 


“Force Majeure” has the meaning set forth in Section 15.6.


 


“Forced Outage” means the removal of service availability of
the Facility, or any portion of the Facility, for emergency reasons or
conditions in which the Facility, or any portion thereof, is unavailable due to
unanticipated failure, including as a result of Force Majeure.


 


“GAAP” means Generally Accepted Accounting Principles that are
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants applicable to a government-owned utility applying all statements
and interpretations issued by the Governmental Accounting Standards Board
(GASB) and statements and pronouncements of the Financial Accounting Standards
Board which are not in conflict with the statements and interpretations issued
by the GASB or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession, that are applicable to
the circumstances as of the date of determination.


 


“Gains” has the meaning set forth in Section 14.5(i)(1).


 


“Governmental Authority” means any federal, state, regional,
city or local government, any intergovernmental association or political
subdivision thereof, or other governmental, regulatory or administrative
agency, court, commission, administration, department, board, or other
governmental subdivision, legislature, rulemaking board, tribunal, or other
governmental authority, or any Person acting as a delegate or agent of any
Governmental Authority.


 


“Guaranteed Annual Quantity” means, (i) for each Contract
Year other than the first Contract Year and the final Contract Year, the
Guaranteed Generation divided by twenty (20), and (ii) for the first
Contract Year and the final Contract Year, the product obtained by multiplying (A) the
quotient obtained by dividing the Guaranteed Generation by twenty (20) by (B) a
fraction, the numerator of which is the number of days in the first Contract
Year or the final Contract Year, as applicable, and the denominator of which is
365.


 


“Guaranteed Commercial Operation Date” means October 1,
2010, as may be extended on a day-for-day basis not to exceed one (1) year
due to an event of Force Majeure, and as may be extended on a day-for-day basis
from April 1, 2010 if the Effective Date does not occur on or before April 1,
2010.


 


“Guaranteed Generation” means the MWh of Facility Energy
prepaid by Buyer and guaranteed to be delivered from the Facility to the Point
of Delivery as measured at the Point of Delivery, which shall be equal to P99
Energy, multiplied by twenty (20) years.


 


9

















 


“IEEE” means Institute of Electrical and Electronics Engineers.


 


“Independent Engineer”  means
Garrad Hassan and Partners, Inc.
or such other engineer as may be jointly selected by the Parties.


 


“Independent Manager” means a manager who is not at the time of
initial appointment, or at any time while serving as Independent Manager, and
has not been at any time during the preceding five (5) years: (i) a
member, stockholder, equityholder, director, manager (except as such
Independent Manager of Seller), officer, employee, partner, attorney or counsel
of Seller, any member of Seller, or any Affiliate of Seller; (ii) a
customer, supplier or other Person who derives any of its purchases or revenues
from its activities with Seller, any member of Seller, or any Affiliate of
Seller (other than for serving as Independent Manager of the Seller); (iii) a
Person controlling or under common control with any such stockholder,
equityholder, partner, manager, customer, supplier or other Person; or (iv) a
member of the immediate family of any such member, stockholder, equityholder,
director, officer, employee, manager, partner, customer, supplier or other
Person.


 


“Insurance” means the policies of insurance as set forth in Appendix
F.


 


“Interest Rate” means the lesser of (i) two hundred (200)
basis points above the per annum Prime Rate reported daily in The  Wall
Street Journal, or (ii) the maximum rate permitted by
applicable Requirements of Law.


 


“Interim Energy” means the MWh of Facility Energy delivered to
the Point of Delivery, as metered at the Point of Delivery, during the Interim
Period. Prior to the earlier of the completion of the STS Upgrade or December 31,
2010, Seller shall not deliver any Interim Energy in an amount greater than the
Maximum Interim Energy Amount.


 


“Interim Energy Rate” has the meaning set forth in Appendix
A.


 


“Interim Period” means the period beginning on the Commercial
Operation Date and ending on the Prepayment Date.


 


“IPT”  means (i) when
used with respect to a Retail Seller for any year for which an Incremental
Procurement Target has been set for the Retail Seller by the PUC under the RPS
Law, the incremental procurement target so set, and (ii) when used with
respect to a Retail Seller for any year for which an incremental procurement
target has not been set for the Retail Seller by the PUC under the RPS Law, the
incremental procurement target last set for the Retail Seller by the PUC under
the RPS Law, and (iii) when used with respect to Buyer for any year, means
Buyer’s members’ renewable energy portfolio standard or procurement target for
the year in which this Agreement is entered into as established by Buyer’s
members’ governing body, as applicable, and in effect on the date this
Agreement is entered into, as established by Buyer’s members.


 


“Interconnection Agreement” has the meaning set forth in Section 4.2.


 


“Intermountain Power Agency” means the Intermountain Power Agency, a political subdivision of
the State of Utah.


 


10

















 


“Intermountain Power Project Switchyard” means the transmission
switchyard owned by the Intermountain Power Agency, which is located in Delta,
Utah, which interconnects through Intermountain Power Project transmission
systems to the interstate transmission grid.


 


“ISA” means Instrument Society of America.


 


“KW” means kilowatt.


 


“KWh” means kilowatt-hour.


 


“LD Security” has the meaning set forth in Section 3.5(a).


 


“Lien” means any mortgage, deed of trust, lien, security
interest, retention of title or lease for security purposes, pledge, charge,
encumbrance, equity, attachment, claim, easement, right of way, covenant,
condition or restriction, leasehold interest, purchase right or other right of
any kind, including an option, of any other Person in or with respect to any
real or personal property.


 


“Lease” means the Circle Four Lease and all other leases for
the Facility.


 


“Leases and Property Agreements” means (A) the following
leases and property agreements and instruments under which Seller shall acquire
the Facility Generating Premises: (i) the Lease and all other easements
and other real property rights of any nature for the Facility, including access
rights from third parties (other than the State of Utah), (ii) a grant or
grants of right of way to Seller by the USBLM, (iii) the lease or leases
to Seller, as lessee, from the State of Utah, and (iv) agreements or
instruments providing for the acquisition and fee ownership by Seller of
parcels of land, and (B) the grants of rights of way and the leases,
agreements, deeds and other instruments providing for the acquisition by Seller
of rights and interests in the Transmission Line right of way and associated
property rights and interests in all cases, each as amended, supplemented,
replaced or otherwise modified from time to time.


 


“Losses” has the meaning set forth in Section 14.5(i)(2).


 


“Major Maintenance Blockout” has the meaning set forth in Section 5.6(e).


 


“Major Subcontractors” has the meaning set forth in Section 12.4.


 


“Material Adverse Effect” means any effect that is material and
adverse to the operations or physical condition of the Facility, or limits the
ability of Seller to deliver Facility Energy.


 


“Maximum Interim Energy Amount” means an amount, measured in
MWh, of Facility Energy delivered to the Point of Delivery, as metered at the
Point of Delivery, equal to the difference between (i) the Energy
delivered at the Point of Delivery from the Milford Wind Phase I Facility and (ii) the
maximum amount of Energy associated with 200 MW.


 


“Milestone” has the meaning set forth in Section 3.4.


 


11

















 


“Milford I” means Milford Wind Corridor Phase I, LLC.


 


“Milford Wind Phase I Facility” means the wind generating
facility and transmission line and related facilities of Milford I provided for
under the Power Purchase Agreement, dated as of March 16, 2007, between
Buyer and Milford I, as amended by the First Amendment to Power Purchase
Agreement, dated as of January 16, 2009.


 


“Monthly Payment” means the amount to be paid to Seller by
Buyer on a monthly basis for all items set forth in Appendix A.


 


“MVAR” means megavolt-ampere-reactive or
megavolt-amperes-reactive, as applicable.


 


“MVARh” means megavolt-ampere-reactive-hour or
megavolt-ampere-reactive-hours, as applicable.


 


“MW” means megawatt or megawatts, as applicable.


 


“MWh” means megawatt-hour or megawatt-hours, as applicable.


 


“NERC” means the North American Electric Reliability Council or
its successor organization, if any.


 


“Non-Consolidation Opinion” means a reasoned opinion of
Chadbourne & Parke LLP, in form and substance reasonably acceptable to
Buyer, as to the non-consolidation of Seller in a bankruptcy proceeding of any
member of Seller, addressed and delivered to Buyer on or before the Prepayment
Date.


 


“Non-Defaulting Party” has the meaning set forth in Section 14.4(a).


 


“OATT” means Open Access Transmission Tariff approved by FERC
or approved by the governing body(s) of a non jurisdictional public
utility.


 


“Off Peak” means all hours other than On Peak hours.


 


“One Year Shortfall Make Up Period” has the meaning set forth
in Section 10.1.


 


“On Peak” means 6:00 a.m. - 10:00 p.m., Monday
through Friday.


 


“Operating Insurance” means the Insurance associated with the
Facility after final completion of the Facility construction phase,
specifically excluding Marine/Inland Marine Cargo, Marine Delay in Start Up,
and Builder’s Risk coverages, as set forth in Appendix F, which are
associated with construction or personnel.


 


“OSHA” means Occupational Safety & Health
Administration and any successor thereto.


 


“P99 Energy” means, with respect to the production of Energy
from the Facility, the amount of Facility Energy expected to be delivered to
the Point of Delivery annually, with a


 


12

















 


probability of exceedance of
99%, as calculated by a nationally recognized wind expert acceptable to Buyer.


 


“Pacific Prevailing Time” means the time in Los Angeles,
California when actual transactions are made.


 


“Party” has the meaning set forth in the Preamble.


 


“Performance Security” means the performance security to be
provided, pursuant to Section 7.3, on or prior to the Prepayment
Date to secure Seller’s performance under this Agreement.


 


“Permit” means all applications, permits, licenses, franchises,
certificates, concessions, consents, authorizations, approvals, registrations,
orders, filings, entitlements and similar requirements of whatever kind and
however described which are required to be obtained or maintained by any Person
with respect to the development, siting, design, acquisition, construction,
equipping, financing, ownership, possession, shakedown, start-up, testing,
operation or maintenance of the Facility, the production and delivery of
Energy, Capacity Rights and Environmental Attributes, or any other transactions
or matter contemplated by this Agreement (including those pertaining to
electrical, building, zoning, environmental and occupational safety and health
requirements), including those described in Appendix K.


 


“Permitted Encumbrances” means (i) any Lien approved by
Buyer in a writing separate from this Agreement which expressly identifies the
Lien as a Permitted Encumbrance, (ii) Liens for Taxes not yet due or for
taxes being contested in good faith by appropriate proceedings, so long as such
proceedings do not involve (a) a material risk of the sale, forfeiture,
loss or (b) a restriction on the use of the Facility or any part thereof, provided
that such proceedings end by the expiration of the Agreement Term, (iii) suppliers’,
vendors’, mechanics’, workman’s, repairman’s, employees’ or other like Liens
arising in the ordinary course of business for work or service performed or
materials furnished in connection with the Facility for amounts the payment of
which is either not yet delinquent, bonded or is being contested in good faith
by appropriate proceedings, provided that such proceedings end by
expiration of the Agreement Term, (iv) Lease and Property Agreements, or
memoranda of such Leases and Property Agreements; or (v) easements, rights
of way, use rights, exceptions, encroachments, reservations, restrictions,
conditions or limitations listed as items 8 through 28 and 30 through 34 of
Schedule B of the Commitment for Title Insurance, Order No. NSC- 344152-
SLC 1, with an effective date of August 14, 2009, issued to Seller by
First American Title Insurance Company; provided that in each case the
same do not impair the operation or use of the Facility or any interest therein
as contemplated by this Agreement, or have a material adverse effect on the
value, the remaining useful life or the utility of the Facility or any interest
therein.


 


“Person” means any individual, corporation, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization, entity, government or other political subdivision.


 


13

















 


“Point of Delivery” means the interconnection facilities of
Seller located at the point of interconnection between the Transmission Line
and the Intermountain Power Project 345-kV Switchyard as further described in
the Interconnection Agreement.


 


“Prepaid Energy Price” means Forty-Seven Dollars ($47.00) per
MWh.


 


“Prepayment Amount” means the amount to be paid by Buyer for
the Guaranteed Generation as set forth in Section 7.1(g).


 


“Prepayment Date” means the date on which Buyer pays the
Prepayment Amount to Seller.


 


“Present Value Rate” means, at any date, the sum of 0.50% plus
the yield reported on page “USD” of the Bloomberg Financial Markets
Services Screen (or, if not available, any other nationally recognized trading
screen reporting on-line intraday trading in United States government
securities) at 11:00 a.m. (New York City, New York time) for the United
States government securities having a maturity that most nearly matches the
remaining term of the Agreement at that date.


 


“Prudent Utility Practices” means those practices, methods, and
acts, that are commonly used by a significant portion of the wind power
generation industry in prudent engineering and operations to design and operate
electric equipment (including wind powered facilities) lawfully and with
safety, dependability, efficiency, and economy, including any applicable
practices, methods, acts, guidelines, standards and criteria of FERC, NERC,
WECC and all applicable Requirements of Law.


 


“Public Utilities Code” means the Public Utilities Code of the
State of California.


 


“PUC” means the California Public Utilities Commission and any
successor thereto.


 


“PUC Performance Standard” means, at any time, the greenhouse
gas emission performance standard in effect at such time for baseload electric
generation facilities owned or operated (or both) by load-serving entities and
not local publicly-owned electric utilities, as established by the PUC or other
Governmental Authority under the EPS Law.


 


“Qualified Issuer” means a financial institution either
organized under the laws of the United States or a State therein or a United
States branch of a foreign financial institution, in each case, that has a
current long-term credit rating (corporate or long-term senior unsecured debt)
of (1) “A3” or higher by Moody’s Investors Service, Inc.; and (2) “A-”
or higher by Standard & Poor’s.


 


“Quality Assurance Program” has the meaning set forth in Appendix
J.


 


“RECs” or “Renewable Energy
Certificates” means tradable environmental commodities that
represent proof that one (1) megawatt-hour (MWh) of Energy was generated
from an eligible resource. These certificates can be sold and traded and the
owner of the REC can claim to have purchased renewable energy. RECs are also
commonly known as renewable energy credits and green tags.


 


14

















 


“Related Interests and Rights” means the Facility Common
Facilities Interests and the Facility Transmission Line Interests.


 


“Remaining Prepayment Amount” means, with respect to the
Contract Year in which a termination of this Agreement occurs (other than upon
a purchase of the Facility and Related Interests and Rights by Buyer), the sum
of: (i) the amount set forth for such Contract Year in Appendix G,
as such amount may be modified on a pro-rata basis to reflect the final
configuration of the Facility as of the Prepayment Date; (ii) if any
Shortfall Energy or Replacement Energy has not been made up by Seller as of the
termination date, an amount equal to the product of (x) the amount of such
Shortfall Energy (measured in MWh), or the amount of such Replacement Energy
(measured in MWh), as the case may be, multiplied by (y) the  Prepaid Energy Price; and (iii) any
amounts owed to Buyer under Section 10.3 for Replacement Energy
purchased by Buyer in accordance with Section 10.3, or if Buyer has
not purchased such Replacement Energy in accordance with Section 10.3,
such Replacement Energy (measured in MWh) multiplied by the Prepaid Energy
Price.


 


“Replacement Energy” has the meaning set forth in Section 10.3.


 


“Requirement of Law” means federal, state and local laws,
statutes, regulations, rules, codes or ordinances enacted, adopted, issued or
promulgated by any federal, state, local or other Governmental Authority
(including those pertaining to electrical, building, zoning, environmental and
occupational safety and health requirements).


 


“Retail Seller”  means an “electrical corporation”
(as defined in Section 218 of the Public Utilities Code) that is a “retail
seller” as defined in Section 399.12(b) of the California Public
Utilities Code as amended from time to time and any successor law.


 


“RPS Compliant,” when used with respect to the Facility or any
other facility at any time, means (i) that all Energy generated by that
facility at that time would, if purchased by a Retail Seller together with the
associated Environmental Attributes, be eligible to be credited against the IPT
of the Retail Seller for the year during which the Energy is purchased, and (ii) that
all Energy generated by that facility at that time would, if purchased by Buyer
together with the associated Environmental Attributes, be eligible to be
credited against the IPT of Buyer’s members.


 


“RPS Law” means Sections 399.11 to 399.20 of the Public
Utilities Code, as implemented and amended from time to time, and any successor
law.


 


“SCADA” has the meaning set forth in Section 5.6(g).


 


“Schedule or Scheduling” means the actions of Seller and Buyer
or their Authorized Representatives, including each Party’s Transmission
Providers, if applicable, of notifying, requesting and confirming to each other
the quantity of energy to be delivered at the Point of Delivery on any given
date during the Delivery Term.


 


“Scheduled Outage” means any outage with respect to the
Facility other than a Forced Outage.


 


15






 










 


“Scheduled
Outage Projection” has the meaning set forth in Section 5.6(e).


 


“Scheduler” means the Persons doing Scheduling for each
Party.  The contact information for Buyer’s
Scheduler and Seller’s Scheduler at the Effective Date is set forth in item 4, Appendix
C.


 


“Second Buyer Purchase Option” has the meaning set forth in Section 2.5(a).


 


“Second Notice” has the meaning set forth in Section 2.5(c).


 


“Second Option Exercise Date” has the meaning set forth in Section 2.5(c).


 


“Security Interest” means a lien on and security interests for
the Facility and the Related Interests and Rights including all leasehold
interests and real and personal property rights and interests of the Seller
under the Leases and Property Agreements then in effect to secure the performance
of this Agreement by Seller by means of a perfected first lien and priority
security interest in the Facility and the Related Interests and Rights, subject
only to Permitted Encumbrances, in the form of a Security Interest, Deed of
Trust, Security Agreement and Fixture Filing as set forth in Appendix E
(“Deed of Trust”).
The amount of the Security Interest will secure all of Seller’s obligations
under this Agreement, including the Remaining Prepayment Amount, any
Termination Payment and other amounts or damages owed by Seller to Buyer under
this Agreement. In the event of Buyer foreclosure on the Security Interest,
Seller will be responsible for the reasonable legal expenses of Buyer to
accomplish the foreclosure.


 


“Seller” has the
meaning set forth in the Preamble.


 


“Shortfall Energy” has the meaning set forth in Section 10.1.


 


“Shortfall Make Up Period” means the One Year Shortfall Make Up
Period and the Two Year Shortfall Makeup Period.


 


“Site Common Facilities” means and includes:


 


(a)           that certain substation (but
excluding the Intermountain Power Project Switchyard) interconnected with the
Facility and the Milford Wind Phase I Facility (the “Substation”),
including all switching facilities, equipment, instruments, control panels,
controls, switches, administrative supplies and other equipment, instruments,
and appurtenances in and related thereto (but excluding the Electric Metering
Devices on the feeder lines to the Substation as further described in Section 12.5(b));
the interconnections with the Transmission Line and collection systems and
related transmission facilities; the site of the Substation and related
facilities, including fee ownership interests, leaseholds, rights of way,
easements and other related property rights and interests and associated
buildings, structures and other improvements therefor;


 


(b)           approximately 12 miles of
newly constructed access roads and turnaround areas;


 


(c)           operation, maintenance and
storage buildings, structures and facilities;


 


16

















 


(d)           a 34.5 kV conductor line and
a communication line installed on Seller’s poles installed by Seller to
interconnect the Facility to the Substation; and


 


(e)           all equipment and other
personal property necessary or useful to provide operational and support
services to any of the foregoing.


 


“Special Purpose Entity” means a limited liability company,
which at all times prior to, on and after the date hereof:


 


(a)           shall not (i) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (ii) acquire by purchase or otherwise all or substantially all
of the business or assets of or beneficial interest in any other entity, (iii) transfer,
lease or sell, in one transaction or any combination of transactions, all or
substantially all of its properties or assets except to the extent permitted
herein, (iv) modify, amend or waive any provisions of its organizational
documents related to its status as a Special Purpose Entity, or (v) terminate
its organizational documents or its qualifications and good standing in any
jurisdiction;


 


(b)           was, is and will be
organized solely for the purpose of (i) acquiring, developing, owning,
holding, selling, leasing, transferring, exchanging, managing and operating the
Facility, entering into this Agreement with Buyer and transacting lawful
business that is incident, necessary and appropriate to accomplish the
foregoing;


 


(c)           has not been, is not, and
will not be engaged in any business unrelated to the acquisition, development,
construction, ownership, management or operation of the Facility;


 


(d)           has not had, does not have
and will not have, any assets other than those related to the Facility;


 


(e)           has held itself out as and
will hold itself out to the public as a legal entity separate and distinct from
any other entity and has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;


 


(f)            has maintained and will
maintain its financial statements, bank accounts, accounts books, resolutions,
agreements and records separate from any other Person and has filed and will
file its own tax returns (except to the extent treated as a “disregarded entity”
for tax purposes and is not required to file tax returns under applicable law);


 


(g)           has held itself out and
identified itself and will hold itself out and identify itself as a separate
and distinct entity under its own name or in a name franchised or licensed to
it by an entity other than an Affiliate of Seller and not as a division,
department, or part of any other Person;


 


(h)           has maintained and will
maintain its assets in such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from those of any other
Person;


 


(i)            has not made and will not
make loans or advances to any Person or hold evidence of indebtedness issued by
any other Person (other than cash and investment-grade


 


17

















 


securities issued by an
entity that is not an Affiliate of or subject to common ownership with such
entity) or made any gifts or fraudulent conveyances to any Person;


 


(j)            has not identified and will
not identify its members, or any Affiliate of any member, as a division or part
of it, and has not identified itself and shall not identify itself as a
division or department of any other Person;


 


(k)           has not entered into or been
a party to, and will not enter into or be a party to, any transaction with its
members or Affiliates, except (i) in the ordinary course of its business and on
terms which are intrinsically fair, commercially reasonable and are no less
favorable to it than would be obtained in a comparable arm’s-length transaction
with an unrelated third party, or (ii) in connection with the development or
construction of the Facility, provided that any indebtedness or other
obligations of Seller pursuant to any such transaction with its members or
Affiliates shall be fully performed and discharged in their entirety prior to
Commercial Operation, and (iii) as set forth in this Agreement;


 


(l)            does not and will not have
any obligation to indemnify, and has not indemnified and will not indemnify any
Person other than its officers, managers or members, as the case may be, and
the Independent Manager in connection with activities related to the
performance of this Agreement;


 


(m)          has considered and shall
consider the interests of its creditors in connection with all limited
liability company actions;


 


(n)           does not and will not have
any of its obligations guaranteed by any Affiliate and will not hold itself out
as being responsible for the debts or obligations of any other Person except in
connection with the development or construction of the Facility, provided
that any such debts or obligations shall be fully performed and discharged
prior to Commercial Operation;


 


(o)           has complied and will comply
with all of the terms and provisions contained in its organizational documents,
including the provision requiring that there be an Independent Manager at all
times, and has done or caused to be done and will do all things necessary to
preserve its existence;


 


(p)           has not commingled, and will
not commingle, its funds or assets with those of any Person and has not
participated and will not participate in any cash management system with any
other Person;


 


(q)           will hold its assets in its
own name and will conduct all business in its own name;


 


(r)            has maintained and will
maintain its financial statements, accounting records and other entity
documents separate from any other Person and has not permitted and will not
permit its assets to be listed as assets on the financial statement of any
other entity except as required by GAAP; provided, however, that
any such consolidated financial statement shall contain a note indicating that
its separate assets and liabilities are neither available to pay the debts of
the consolidated entity nor constitute obligations of the consolidated entity;


 


18

















 


(s)            has paid and will pay its
own liabilities and expenses, including the salaries of its own employees, out
of its own funds and assets and has maintained and will maintain a sufficient
number of employees in light of its contemplated business operations;


 


(t)            has observed and will observe
all limited liability company formalities;


 


(u)           has not assumed or
guaranteed or become obligated for, and will not assume or guarantee or become
obligated for the debts of any other Person (other than an Affiliate of Seller
solely as provided in (k) and (n) of this definition with respect to
debts incurred for the performance of an obligation of Seller under this
Agreement) and has not held out and will not hold out its credit as being
available to satisfy the obligations of any other Person (other than an
Affiliate of Seller solely as provided in (k) and (n) of this
definition with respect to debts incurred for the performance of an obligation
of Seller under this Agreement) except as permitted pursuant to this Agreement;


 


(v)           does not have and will not
acquire obligations or securities of its members or any Affiliate;


 


(w)          has allocated and will
allocate fairly and reasonably any overhead expenses that are shared with any
Affiliate, including, but not limited to, paying for shared space and services
performed by any employee of an Affiliate;


 


(x)           now maintains and uses, and
will maintain and use separate stationery, invoice and checks bearing its name;
such stationery, invoices and checks utilized by it or utilized to collect its
funds or pay its expenses have borne and shall bear its own name and have not
borne and shall not bear the name of any other entity unless such entity is
clearly designated as being its agent;


 


(y)           except in connection with
the development or construction, or financing of the development or
construction of the Facility, has not pledged and will not pledge its assets
for the benefit of any other Person;


 


(z)           now has, and will have
articles of organization, a certificate of formation and/or an operating
agreement, as applicable, that provides that it will not: (A) dissolve,
merge, liquidate or consolidate; (B) sell, transfer, lease or otherwise
convey all or substantially all of its assets; (C) engage in any other
business activity, or amend its organizational documents with respect to the
matters set forth in this definition without the affirmative vote of its
Independent Manager; or (D) without the affirmative vote of its
Independent Manager, file a bankruptcy or insolvency petition or otherwise
institute insolvency proceedings with respect to itself or to any other entity
in which it has a direct or indirect legal or beneficial ownership interest;


 


(aa)         is and intends to remain
solvent and has paid and intends to continue to pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from its
assets as the same shall have or become due, and has maintained, is maintaining
and intends to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations; and


 


(bb)         now has and will have no
indebtedness other than (i) the loan made by the


 


19

















 


Facility Lender pursuant to
the Credit Agreement, (ii) Taxes and Insurance premiums, (iii) liabilities
incurred in the ordinary course of business relating to its ownership, leasing
and operation of the Facility and its routine administration, that are not
evidenced by a note, and which amounts are normal and reasonable under the
circumstances, (iv) and any other liabilities incurred in the ordinary
course of business relating to its development and construction of the
Facility; provided that any such liabilities shall be fully discharged
prior to Commercial Operation, and (v) such other liabilities that are
permitted pursuant to this Agreement.


 


“Startup and Test Energy” means the MWh of Energy from the
Facility delivered by Seller to Buyer at the Point of Delivery prior to the
Commercial Operation Date, but not to exceed, at any time, an amount which is
equal to the difference between (i) the Energy delivered at the Point of
Delivery from Milford Wind Phase I Facility and (ii) the maximum amount of
Energy associated with 200 MW.


 


“Station Usage Energy” means Energy (a) used within the
Facility to power the lights, motors, buildings, panels, control systems and
other electrical loads that are necessary for operation and maintenance of the
Facility; or (b) consumed within the Facility’s electric energy
distribution/transmission system as losses.


 


“STS Upgrade”  means
the additions and improvements to and renewals of the Southern Transmission
System of the Intermountain Power Project of Intermountain Power Agency that
provide for an increase of the capacity of the Southern Transmission System
from 1920 MW to 2400 MW.


 


“Subcontractors” has the meaning set forth in Section 12.4(a).


 


“Substation” means the undivided interest of Seller in the
Substation described in the definition of “Site Common Facilities”.


 


“System Emergency” means an emergency condition or abnormal
interconnection situation which in Buyer’s sole judgment affects the ability of
Buyer or Buyer’s Transmission Provider to receive Energy at the Point of
Delivery.


 


“Taxes” has the meaning set forth in Section 5.4.


 


“Termination Payment” means in the case of a Default, the
amount, calculated pursuant to Section 14.5 and paid by a Party to
liquidate this Agreement.


 


“Transmission Line” means the generator lead line extending
from the Site Common Facilities Substation at the wind generation site to the
Intermountain Power Project Switchyard in Delta, Utah, a distance of
approximately 90 miles, including the rights of way, easements and other
property interests constituting the right of way of such transmission line and
the interconnection facilities at the Site Common Facilities Substation and the
interconnection facilities at the IPP Switchyard, together with all related
structures, facilities and equipment and associated real or personal
properties.


 


“Transmission Provider” means the Person(s) operating the
Transmission System(s) providing Transmission Services to or from the
Point of Delivery.


 


20

















 


“Transmission Services” means the transmission and other
services required to transmit Energy to or from the Point of Delivery.


 


“Transmission System” means the facilities utilized to provide
Transmission Services.


 


“Two  Year Shortfall Make Up
Period” has the meaning set forth in Section 10.1.


 


“USBLM” means the Bureau of Land Management of the United
States Department of Interior.


 


“WECC” means the Western Electricity Coordinating Council, or
any successor entity thereto.


 


“WREGIS” means Western Renewable Energy Generation Information
System, and any successor; provided that said successor is capable of
performing substantially similar functions and is acceptable to Buyer.


 


“WREGIS Certificates” has the meaning set forth in Section 9.4.


 


“WREGIS Operating Rules” means the rules describing the
operations of the Western Renewable Energy Generation Information System, as
published by WREGIS and as may be amended from time to time.


 


Other terms defined herein
have the meanings so given them in this Agreement.


 


Section 1.2            Interpretation.  In this Agreement, unless a clear contrary
intention appears:


 


(a)           the singular number includes
the plural number and vice versa;


 


(b)           reference to any Person
includes such Person’s successors and assigns but, in case of a Party hereto,
only if such successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such Person in any
other capacity or individually;


 


(c)           reference to any gender
includes the other;


 


(d)           reference to any agreement
(including this Agreement), document, instrument or tariff means such
agreement, document, instrument or tariff as amended or modified and in effect
from time to time in accordance with the terms thereof and, if applicable, the
terms hereof;


 


(e)           reference to any Article,
Section, or Appendix means such Article of this Agreement, Section of
this Agreement, or such Appendix to this Agreement, as the case may be, and
references in any Article or Section or definition to any clause
means such clause of such Article or Section or definition; 


 


21

















 


(f)            “hereunder”, “hereof”, “hereto”
and words of similar import shall be deemed references to this Agreement as a
whole and not to any particular Article or Section or other provision
hereof or thereof;


 


(g)           “including” (and with
correlative meaning “include”) means including without limiting the generality
of any description preceding such term;


 


(h)           relative to the
determination of any period of time, “from” means “from and including”, “to”
means “to but excluding” and “through” means “through and including”;


 


(i)            reference to time shall
always refer to Pacific Prevailing Time; and


 


(j)            reference to any “day” shall
mean a calendar day unless otherwise indicated.


 


ARTICLE II


EFFECTIVE DATE, TERM, PURCHASE OPTION,

EARLY TERMINATION AND FACILITY PROPERTIES


 


Section 2.1            Effective
Date.  This Agreement shall become
effective when duly executed and delivered by both Parties. On or prior to the
Effective Date, each of the following has occurred:


 


(a)           Buyer received copies of all
requisite resolutions and incumbency certificates of Seller and any other
documents evidencing all actions taken by Seller to authorize the execution and
delivery of this Agreement and all Ancillary Documents requiring execution by
Seller, such resolutions to be certified as of the Effective Date by an
Authorized Representative of Seller;


 


(b)           Buyer received an executed
original of a written legal opinion of Chadbourne & Parke LLP, counsel
for Seller, dated as of the Effective Date and addressed to Buyer concerning
this Agreement and related matters in form and substance satisfactory to Buyer
and its counsel;


 


(c)           First Wind, or an Affiliate
of First Wind, and Seller shall have entered into an agreement with Buyer under
which First Wind, or an Affiliate of First Wind (other than Seller), agrees to
apply for and to cause to be issued to Buyer the LD Security as provided under Section 3.5(b);


 


(d)           The LD Security required
under Section 3.5(b) was delivered to Buyer;


 


(e)           First Wind, or an Affiliate
of First Wind, and Seller shall have entered into an agreement with Buyer under
which First Wind, or an Affiliate of First Wind (other than Seller), agrees to
apply for and to cause to be issued to Buyer the Performance Security as
provided under Section 7.3; and


 


(f)            Buyer received evidence
reasonably satisfactory to Buyer that Seller or Seller’s contractors or
subcontractors have obtained or will have the right to use all Permits listed


 


22

















 


in Appendix K, except
for any such Permits not yet required to be obtained but which can reasonably
be expected to be obtained when needed, and each such Permit is final and
non-appealable, except as otherwise noted on Appendix K.


 


Section 2.2            Agreement
Term and Delivery Term.  This
Agreement shall have a delivery term commencing on the Commercial Operation
Date and ending on the twentieth (20th) anniversary of the Prepayment Date,
unless sooner terminated in accordance with the terms of this Agreement (the “Delivery Term”). The
term of this Agreement (the “Agreement Term”) shall commence on the Effective Date
and shall end upon the date that is the twentieth (20th) anniversary of the
Prepayment Date.


 


Section 2.3            Survivability.  The provisions of this Section 2.3, Section 3.7,
Section 12.4, Article XIV, and Article XV shall survive the
termination of this Agreement. In addition, applicable provisions of this
Agreement shall continue in effect after termination to the extent necessary to
provide for final billing and adjustments related to the period prior to
termination of this Agreement, including payment of any money due and owing to
Seller or Buyer pursuant to this Agreement, including Section 3.5, Section 5.4,
Section 7.1, Section 7.4, and Section 10.3.


 


Section 2.4            Early
Termination.


 


(a)           Early
Termination by Mutual Agreement.  This Agreement
may be terminated by mutual written agreement of the Parties.


 


(b)           Early
Termination for Default.  Upon
the occurrence and during the continuation of a Default subject to applicable
cure periods, if any, the Non-Defaulting Party may terminate this Agreement as
set forth in Section 14.4.


 


(c)           Early
Termination for Business Policies. This Agreement shall
terminate when and as provided in Section 15.22. 


 


(d)           Purchase of
the Facility. If Buyer purchases the Facility pursuant to this
Agreement, this Agreement shall terminate effective upon the Closing unless
sooner terminated as otherwise herein provided.


 


(e)           Effect of
Termination.  Any
termination of this Agreement under this Section 2.4 shall be without
prejudice to the rights and remedies of either Party for Defaults occurring
prior to such termination.


 


Section 2.5            Buyer
Purchase Options.


 


(a)           Seller hereby grants to
Buyer an initial purchase option (the “First Buyer Purchase Option”) to be exercised
within the First Option Exercise Date and an additional purchase option (the “Second Buyer Purchase Option”)
to be exercised within the Second Option Exercise Date, in each case pursuant
to the terms of this Section 2.5.


 


(b)           At any time following the
Prepayment Date and on a date that is within the six (6) month period
immediately preceding the  seventh
(7th)  anniversary of the Commercial Operation
Date (such date hereinafter referred to as the “First Option Exercise Date”), Buyer


 


23

















 


may deliver to Seller
written notice (the “First
Notice”) that it intends to exercise the First Buyer Purchase
Option. Buyer’s exercise shall permit Buyer a one-time option to purchase the
Facility and the Related Interests and Rights at the seventh (7th), eighth
(8th), ninth (9th) or tenth (10th) anniversary of the Commercial Operation Date
(“First Option Purchase
Date”).  Buyer may select
one date only. Buyer shall deliver a written notice (“Purchase Notice”) to
Seller within a six (6) month period immediately preceding the selected
First Option Purchase Date of its intent to exercise the First Buyer Purchase
Option and purchase the Facility and Related Interests and Rights for a price
equal to the Fair Market Value thereof, but in no event for more than seventy
million dollars ($70 million)  (the
“First Option Purchase
Price”) which shall be determined as provided in the definition
of such term as set forth below.  For
purposes of this Agreement, “Fair Market Value”  means,
with respect to a particular time of calculation, the amount a willing buyer
would pay for the Facility and Related Interests and Rights, subject to
compliance with the terms and provisions of this Agreement through the
twentieth (20th) anniversary of the Prepayment Date, in an arm’s-length
transaction, to a willing seller under no compulsion to sell, as shall be
specified by agreement between Buyer and Seller or, if not agreed to by Buyer
and Seller within a period of 15 days after either Party by written notice to
the other Party requests a determination of the Fair Market Value, then as
specified in an appraisal prepared and mutually agreed to by two independent
recognized appraisers, one of which shall be appointed by Buyer and the other
of which shall be appointed by Seller, or, if such appraisers cannot agree on
such an appraisal, an appraisal arrived at by a third independent recognized
appraiser chosen by the mutual agreement of the two appraisers.  If either Party should fail to appoint an
appraiser within fifteen (15) days of receiving notice of the appointment of an
appraiser by the other Party, then such appraisal shall be made by the
appraiser appointed by the first Party. 
If the two appraisers cannot agree on such appraisal and fail to appoint
a third independent recognized appraiser within fifteen (15) days after the
appointment of the second appraiser, then either Party may apply to the
American Arbitration Association to make such appointment. The appraisal shall
be completed within thirty (30) days of the appointment of the last appraiser
appointed. Following determination of the Fair Market Value with respect to the
Facility and Related Interests and Rights, unless Buyer provides written notice
to Seller within ten (10) days preceding the First Option Purchase Date
that it will not exercise the option to purchase the Facility and Related
Interests and Rights, Buyer shall purchase and Seller shall sell, convey and
assign, the Facility and Related Interests and Rights for the First Option
Purchase Price, in accordance with an agreement provided by Buyer that includes
the terms and conditions substantially in the form of Appendix L. If
Buyer does not provide the First Notice by the First Option Exercise Date, then
Buyer shall forfeit the right to exercise the First Buyer Purchase Option.


 


(c)           If Buyer does not deliver
the First Notice by the First Option Exercise Date or purchase the Facility and
Related Interests and Rights pursuant to the First Buyer Purchase Option, Buyer
may exercise the Second Buyer Purchase Option to purchase the Facility and
Related Interests and Rights at the expiration of the Delivery Term.  Buyer shall exercise such option, if at all,
by providing Seller with notice (the “Second Notice”) at least one hundred eighty
(180) days prior to the expiration of the Delivery Term (the “Second Option Exercise Date”)
that it intends to exercise the Second Buyer Purchase Option and purchase the
Facility and Related Interests and Rights for a purchase price equal to the
Fair Market Value thereof  (the “End of Term Purchase Price”),
which shall be determined as provided in the definition of Fair Market Value as
set forth in Section 2.5(b). Following determination of the Fair
Market Value


 


24














 


with respect to the Facility
and Related Interests and Rights, unless Buyer provides written notice to
Seller within ten (10) days preceding the Second Option Exercise Date that
it will not exercise the option to purchase the Facility and Related Interests
and Rights, Buyer shall purchase and Seller shall sell, convey and assign, the
Facility and Related Interests and Rights for the End of Term Purchase Price in
accordance with an agreement provided by Buyer that includes the terms and
conditions substantially in the form of Appendix L.  If Buyer does not provide the Second Notice
by the Second Option Exercise Date, then Buyer shall forfeit the right to
exercise the Second Buyer Purchase Option.


 


(d)           At any time (i) prior
to the First Option Exercise Date (but following the sixth (6th) anniversary of
the Commercial Operation Date) and not during the period in which the Parties
are obligated to calculate in good faith the First Option Purchase Price, and (ii) during
the last year of the Delivery Term, but prior to the date on which Buyer must
provide the Second Notice, Buyer may request in writing (but only one time in
each time period) Seller’s reasonable estimate of the purchase price for the
Facility and Related Interests and Rights, and Seller shall provide such
estimate with supporting documentation within sixty (60) days of such written
request. The reasonable estimate will take into consideration the actual
Delivered Energy from the Commercial Operation Date through the most recent
anniversary of the Commercial Operation Date, and, if applicable, the expected
Delivered Energy from that date until the First Option Exercise Date.  The calculation of the expected Delivered
Energy will take into consideration the average annual Delivered Energy since
the Commercial Operation Date and other analysis and data appropriate under the
circumstances.


 


(e)           Commencing on the date on
which Buyer provides Seller a First Notice or Second Notice, as the case may
be, and for a period of no less than six (6) months,  Seller, at no cost to Buyer, shall make
available to Buyer and its representatives Seller’s qualified and trained
personnel, or cause the operator of the Facility to make available qualified
and trained personnel, to provide information, advice, and guidance to, and
opportunities for, Buyer and its representatives to observe such personnel in
connection with the operation and maintenance of the Facility at times and for
durations designed to allow an operator engaged by Buyer to operate and
maintain the Facility competently and independently without any future
assistance from Seller or its representatives. In addition, upon Buyer’s
reasonable request, Seller shall provide documentation to Buyer related to the
operation, maintenance and compliance with technical, regulatory and other
requirements of the Facility. Additional training services may be provided to
Buyer at a cost mutually agreed to by Buyer and Seller.


 


(f)            This Agreement shall be
terminated upon the Closing of any such purchase under this Section 2.5,
the payment in full by Buyer to Seller of the applicable purchase price for the
Facility and Related Interests and Rights and the return by Buyer to Seller of
the Performance Security.


 


Section 2.6            The
Facility Generating Premises.


 


(a)           Prior to the Commercial
Operation Date, Seller shall enter into Leases and Property Agreements which
shall provide Seller with leaseholds or other property rights and interests
sufficient for the development, construction, operation, maintenance and repair
of the Facility and Related Interests and Rights, which shall comprise the
Facility Generating Premises,


 


25

















 


as well as leaseholds and
property interests in other undeveloped lands. 
The terms and provisions of the Leases and Property Agreements entered
into by Seller shall be approved by Buyer, which approval shall not be
unreasonably withheld, conditioned or delayed. Buyer has approved the terms and
conditions of the Circle Four Lease and the Amended and Restated Special Use
Lease Agreement 1599B dated April 22, 2009 between Buyer and the State of
Utah acting by and through the School and Institutional Trust Lands
Administration. Seller may not remove any portions of or rights or interests in
the premises under the Leases and Property Agreements or amend or terminate any
of the Leases and Property Agreements, unless Buyer has provided prior written
consent to Seller, such consent to be determined in Buyer’s reasonable
discretion.  All Leases and Property
Agreements, or memoranda of such Leases and Property Agreements, to the extent
recordable under federal or state law, shall be duly recorded in the land
records of the applicable county or counties of the State of Utah or as
otherwise provided by applicable law.


 


(b)           Seller agrees not to develop
or improve the areas of such Leases and Property Agreements, other than the
Facility Generating Premises, which shall be developed and improved so as to
provide for the facilities and improvements of the Facility to be located on
the Facility Generating Premises in accordance with this Agreement.  Following the Commercial Operation Date,
Seller may not remove any portions of or rights or interests in the premises
under the Leases and Property Agreements or amend or terminate any of the Leases
and Property Agreements, unless Buyer has provided prior written consent to
Seller, such consent to be determined in Buyer’s reasonable discretion. All of
the ownership, rights and interests of Seller in the Leases and Property
Agreements held by Seller as of the Prepayment Date shall be subject to the
lien and security interest of the Deed of Trust.


 


Section 2.7            Facility
Common Facilities’ Interests. On or before the
Commercial Operation Date, the construction and installation of structures,
facilities and other improvements of the Facility on the Facility Generating
Premises as provided in this Agreement shall include the Facility Common
Facilities Interests. Prior to the Commercial Operation Date, with the prior
written consent of Buyer, not to be unreasonably withheld, Seller may sell,
transfer or otherwise only dispose of undivided interests or rights in such
Facility Common Facilities Interests, including the use of the capacity or
capabilities thereof, to other entities in accordance with agreements that
govern the common ownership, use, construction and operation of such Facility
Common Facilities Interests and include provisions for sharing of the costs
thereof and rights and entitlements to the capacity and services thereof; provided
that Seller shall not sell, transfer or dispose of the Facility Common
Facilities’ Interests or any portion thereof that are needed for the
construction, operation, maintenance, repair or dismantling of the Facility.
All of the ownership rights and interests of Seller in the Facility Common
Facilities Interests held by Seller as of the Prepayment Date shall be subject
to the lien and security interest of the Deed of Trust. Any sale, transfer or
disposal by Seller of rights or interests in such Facility Common Facilities
Interests following the Commercial Operation Date shall require the prior
written consent of Buyer, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary herein, Buyer shall have the right to
review any agreement that provides for joint or common ownership or operation
of the Facility Common Facilities Interests  or
any capacity or capability thereof, and such agreement shall be subject to
approval by Buyer, not to be unreasonably withheld, prior to becoming effective.


 


26

















 


Section 2.8            Transmission
Line and Facility Transmission Line Interests.


 


(a)           Prior to the Commercial
Operation Date, Seller shall acquire such undivided ownership rights and
interests in the Transmission Line, including the Facility Transmission Line
Interests, which shall be reasonably acceptable to Buyer and shall provide
Seller with rights to use the capacity of the Transmission Line for the
delivery of Energy from the Facility to the Point of Delivery.


 


(b)           All of the ownership, rights
and interests of Seller in the Transmission Line, including the Facility
Transmission Line Interests, held by Seller as of the Prepayment Date shall be
subject to the lien and security interest of the Deed of Trust.  Notwithstanding anything to the contrary
herein, Buyer shall have the right to review any agreement that provides for
joint or common ownership or operation of the Transmission Line, including the
Facility Transmission Line Interests, or any capacity or capability thereof,
and such agreement shall be subject to approval by Buyer, not to be
unreasonably withheld or delayed, prior to becoming effective.


 


Section 2.9            Real
Property Consents.  Prior to
the Commercial Operation Date, the lessors and other parties (other than USBLM)
under the Leases shall enter into consent and estoppel and non-disturbance
agreements with Buyer and Seller in form and substance satisfactory to Buyer,
providing, among other things, cure and step-in rights to Buyer under such
Leases and the required consents of such lessors and other parties to the
assignment by Seller of its rights and interests in and to such Leases to Buyer
under the Deed of Trust and in connection with the purchase of the Facility and
Related Interests and Rights by Buyer. In addition, prior to the Commercial
Operation Date, Seller shall use commercially reasonable efforts to obtain and
deliver to Buyer from the parties under the Leases and Property Agreements
which constitute easements, rights-of-way, and other property rights and
interests (other than the Leases referred to in the preceding sentence)
executed consents, in form and substance satisfactory to Buyer, to the
assignment by Seller of its rights and interests in and to such Leases and
Property Agreements to Buyer under the Deed of Trust and in connection with any
purchase of the Facility and Related Interests and Rights by Buyer. Consents to
assignment shall not be required if the terms of the Leases and Property
Agreements (other than the Leases for which consent shall be required), as the
case may be, expressly permit their assignment to Buyer in connection with the
Deed of Trust and the purchase options provided for hereunder.


 


Section 2.10         Operation
and Maintenance Agreement.  Prior to the Commercial Operation Date,
Seller shall deliver to Buyer an executed copy of an operation and maintenance
agreement for the Facility in form and substance reasonably acceptable to
Buyer.


 


ARTICLE III


DEVELOPMENT OF THE FACILITY


 


Section 3.1            In General.


 


(a)           Permitting.  Seller, at its sole cost and expense, shall
timely take all commercially reasonable and diligent steps necessary to obtain
or cause to be obtained all Permits required to construct, maintain or operate
the Facility in accordance with the


 


27

















 


requirements of this
Agreement and all applicable Requirements of Law including but not limited to
the timely preparation of all environmental documents required to have the
Facility reviewed under applicable federal and Utah law (the “Environmental  Documents”).


 


(b)           Project
Design. The location, design, configuration and capacities of the Facility
shall be consistent with the requirements of this Agreement and all applicable
Requirements of Law, including but not limited to the characteristics and other
requirements for the Facility set forth in Appendix B, and also subject
to any conditions that are imposed by the lead agency or any responsible agency
as part of the environmental review of the Facility required under applicable
Utah law and such conditions that Seller deems acceptable.


 


(c)           Meetings
With Governmental Authorities.  Seller shall represent the Facility as
necessary in all meetings with and proceedings before all Governmental
Authorities.


 


(d)           CEQA
Exemption. The Parties acknowledge and agree that the
Facility is subject to environmental review pursuant to NEPA, and is therefore
statutorily exempt from CEQA pursuant to Title 14, California Code of
Regulations, Section 15277.  The
Parties acknowledge and agree that Seller shall have no obligation to sell and
Buyer shall have no obligation to purchase any Energy under this Agreement
unless and until a notice of exemption pursuant to Title 14, California Code of
Regulations, Section 15277 (“Notice of Exemption”), shall have been duly
filed in the appropriate state and county, and the applicable period for any
legal challenges to any action by any such agency or any other Person,
including the statute of limitations pertaining to the filing of the Notice of
Exemption, shall have expired without any such challenge having been filed or,
in the event of any such challenge, the challenge shall have been determined
adversely to the challenger by final judgment or by settlement. Buyer agrees to
make the requisite filings in the appropriate state and county.


 


(e)           Development
and Construction of the Facility.  Seller shall use commercially reasonable and
diligent efforts to site, develop, finance and construct the Facility. The
Facility shall be owned by Seller during the Agreement Term. Seller shall
develop, finance and construct the Facility, at its sole risk and expense, and
in compliance with the requirements of this Agreement, all applicable
Requirements of Law, Prudent Utility Practices, and applicable manufacturer’s
and vendor’s specifications and recommended procedures; provided that
meeting these requirements shall not relieve Seller of its other obligations
under this Agreement.


 


(f)            Confirmation
of Facility Premises. Seller agrees and acknowledges that (i) Seller’s
agents and representatives have visited, inspected and are familiar with the
Facility Premises, its surface physical condition relevant to Seller’s
obligations under this Agreement, including surface conditions, normal and
usual soil conditions, roads, utilities, and topographical, air and water
quality conditions; (ii) Seller is familiar with all local and other
conditions which may be material to Seller’s performance of its obligations
under this Agreement (including, transportation, seasons and climate, access,
weather, handling and storage of materials and equipment; and availability and
quality of labor and utilities); and (iii) based on the foregoing, the
Facility Premises constitute an acceptable and suitable site for the
construction and operation of the Facility in accordance herewith. Any failure
by Seller to take the actions described in this Section will not relieve
Seller from any responsibility for estimating properly the difficulty and cost
of successfully constructing, maintaining or operating the Facility in
accordance with this


 


28

















 


Agreement or from proceeding
to construct, maintain and operate the Facility successfully without any
additional expense to Buyer.


 


Section 3.2            Certification
of Commercial Operation Date; Preliminary Notice. Seller shall furnish Buyer
at least ninety (90) days  prior to
the anticipated Commercial Operation Date a notice of such anticipated
Commercial Operation Date. Seller shall provide Buyer with a notice when Seller
believes that all conditions precedent to achieving Commercial Operation as
specified in the definition of “Commercial Operation” in Section 1.1
have been satisfied.


 


Section 3.3            Other
Information. Seller shall provide to Buyer such other
information that is in the possession of Seller or its Affiliates or is
reasonably available to Seller regarding the permitting, engineering,
construction or operations of Seller, its subcontractors or the Facility, and
other data concerning Seller, its subcontractors or the Facility that Buyer
may, from time to time, reasonably request in writing, subject to Seller’s
obligations of confidentiality to third parties with respect to such
information. Until the Commercial Operation Date, Seller shall provide to Buyer
monthly written reports describing permitting and development activities in the
previous month and anticipated progress and activities for the upcoming month
with respect to the Facility.


 


Section 3.4            Milestone
Schedule.  Seller has
provided Buyer with the milestone schedule set forth in Appendix B for
the development of the Facility.  Seller
shall use commercially reasonable efforts to achieve each milestone set forth
on Appendix  B (each, a “Milestone”) by the
date specified therefor, subject to extension in accordance with this
Agreement. Seller shall include in its weekly reports to Buyer the status of
each Milestone. In the event that Seller anticipates that it will not achieve
any Milestone by the date set forth in Appendix B, Seller shall, in its
weekly report to Buyer, notify Buyer of any anticipated delay in achieving a
Milestone, state the basis for such delay, outline the steps that Seller is
taking to address the delay, and propose a revised date for achievement of the
Milestone.


 


Section 3.5            Liquidated
Damages.


 


(a)           If Seller fails to achieve
Commercial Operation of the Facility by the Guaranteed Commercial Operation
Date, Seller shall pay liquidated damages to Buyer in an amount equal to $5,000
per day for the first thirty (30) days, and $19,375 per day thereafter, up to a
maximum of $4,800,000 in the aggregate, for each day intervening between the
Guaranteed Commercial Operation Date for the Facility and the earlier of (x) the
Commercial Operation Date, and (y) the date, if any, on which this
Agreement is terminated by Buyer pursuant to Section 14.4(a).


 


(b)           On the Effective Date,
Seller shall cause First Wind, or an Affiliate of First Wind (other than
Seller) to  apply for and cause to
be issued to Buyer, as the beneficiary thereunder, and thereafter to maintain
and replace, until such time as Seller achieves Commercial Operation of the
Facility, a letter of credit in the amount of $4,800,000 issued by a Qualified
Issuer, substantially in the form attached hereto as Appendix M, or such
other form as is acceptable to Buyer, which shall secure Seller’s obligations
to pay liquidated damages under Section 3.5(a) (the “LD Security”), all in
accordance with the terms and provisions of the agreement referred to in Section 2.1(c).


 


29

















 


(c)           Each Party agrees and
acknowledges that (i) the damages that Buyer would incur due to Seller’s
delay in achieving Commercial Operation by the Guaranteed Commercial Operation
Date would be difficult or impossible to predict with certainty, and (ii) it
is impractical and difficult to assess actual damages in the circumstances
stated and, therefore, the delay liquidated damages as agreed to by the Parties
and set forth herein are a fair and reasonable calculation of such damages.


 


Section 3.6            Additional
Capacity after Early Completion in the Early Completion Facility Configuration.  In the event that Seller shall achieve
Commercial Operation in the Early Completion Facility Configuration, then
Seller shall nevertheless have the right to install additional wind turbines
(for a maximum installed capacity of 102 MW) up to ninety (90) days following
the Commercial Operation Date.  Seller
shall have the right to modify the Facility configuration shown in Appendix
B to incorporate additional wind turbines installed and completed after
achievement of Commercial Operation of the Facility in the Early Completion
Facility Configuration by providing written notice to Buyer at the Commercial
Operation Date. Any such installation of additional wind turbines shall satisfy
all of the conditions set forth in the definition of Commercial Operation and
shall have no effect on the Prepayment Amount.


 


Section 3.7            Decommissioning
and Other Costs.  If Buyer
elects to purchase the Facility pursuant to this Agreement, (including pursuant
to Section 15.21), Buyer shall be responsible for all costs of
decommissioning or demolition of the Facility or any environmental or other
liability associated with the decommissioning or demolition without regard to
the timing or cause of the decommissioning or demolition.  If Buyer elects not to purchase the Facility
pursuant to this Agreement, Buyer shall not be responsible for any costs of
decommissioning or demolition of the Facility or any environmental or other
liability associated with the decommissioning or demolition.


 


ARTICLE IV


POINT OF DELIVERY AND INTERCONNECTION AGREEMENT


 


Section 4.1            Point of
Delivery. Seller shall deliver the Facility Energy to Buyer,
and Buyer, or its designee, shall receive such Facility Energy from Seller,
under this Agreement at the Point of Delivery. Seller will be responsible for
all losses to the Point of Delivery. Buyer will be responsible for all losses
from the Point of Delivery.


 


Section 4.2
           Interconnection Agreement. Intermountain Power Agency
and Milford I have entered into an interconnection agreement that defines the
equipment to be installed at the Point of Delivery to interconnect the Facility
at the Point of Delivery thereof, and which provides Buyer with rights as a
third party beneficiary thereunder. 
Seller shall have received an assignment from Milford I of the
interconnection rights and ownership interests in interconnection facilities
necessary for the interconnection of the Facility at the Point of Delivery and
shall enter into an Interconnection Agreement with Intermountain Power Agency
and/or an amended Interconnection Agreement among Milford I and Intermountain
Power Agency for the interconnection of the Facility to the Point of Delivery
(the “Interconnection
Agreement”) which shall provide Buyer with rights as a third
party beneficiary thereunder as may be reasonably requested by Buyer. In
addition, Seller shall provide evidence satisfactory to Buyer of the consent
and release by or on behalf of the lenders providing financing to Milford I, if


 


30

















 


applicable, for the Milford
Wind Phase I Facility of the transfer by Milford I to Seller of the rights,
title and interests under the Interconnection Agreement which are necessary for
the Facility and the Related Interests and Rights which rights, title and
interests were transferred and assigned as security by Milford I to such
lenders.


 


Section 4.3            Transmission
Service Agreement. Seller shall, at Seller’s sole cost and expense,
arrange transmission service, pursuant to the applicable OATTs, which would
enable Seller to sell Facility Energy  to
other parties during any period as described in Section 7.4.


 


ARTICLE V


OPERATION AND MAINTENANCE OF THE FACILITY


 


Section 5.1            Compliance
with Electrical Service Requirements.  Seller shall, at its sole expense, operate
and maintain the Facility: (i) in accordance with Prudent Utility Practices,
the requirements of this Agreement, all applicable Requirements of Law, the
requirements of applicable manufacturer’s and operator’s specifications and,
using commercially reasonable efforts to comply with any published
recommendations of the manufacturers and suppliers of the wind turbines and
other major components of the Facility; (ii) with due regard for the safety,
security and reliability of the interconnection facilities, Transmission Line
and Transmission System and in accordance with the Buyer’s system protection
design requirements, attached hereto as Appendix P, and (iii) in a
manner that is reasonably likely to maximize the output of Energy from the
Facility and result in a useful life for the Facility of not less than twenty
(20) years.


 


Section 5.2            General
Operational Requirements. In addition to the requirements set forth
in Section 5.1 and elsewhere in this Agreement, Seller shall, at
all times employ or cause to be employed qualified and trained personnel for
managing, operating and maintaining the Facility and for coordinating with
Buyer and Buyer’s Agent. Seller shall ensure that necessary personnel are
available on-site or on-call twenty-four (24) hours per day during the Delivery
Term. The Facility shall be operated during the Delivery Term by an Affiliate
of Seller, by the party listed on Appendix N or such other Person as
Buyer shall approve in the exercise of its reasonable discretion. For the
avoidance of doubt, in no event will the operation of the Facility by a third
party, nor shall Buyer’s approval of any third party operator, relieve Seller
of any of its obligations hereunder.


 


Section 5.3            Operation
and Maintenance Plan. Seller shall devise and implement a plan of
inspection, maintenance, and repair for the Facility and the components thereof
in order to maintain such equipment in accordance with Prudent Utility
Practices, and shall keep records with respect to inspections, maintenance, and
repairs thereto. The aforementioned plan and all records of such activities
shall be available for inspection by Buyer during Seller’s regular business
hours upon reasonable notice.


 


Section 5.4            Taxes. Commencing on
the Prepayment Date, Buyer will be responsible for, and will reimburse Seller
if paid by Seller, lawful state and local taxes assessed within the State of
Utah, which are directly associated with the Facility or the delivery or sale
of Energy or Environmental Attributes, if any, including all property taxes or
payments in lieu of property taxes directly associated with the Facility and
excluding income, payroll, and sales taxes (other


 


31

















 


than sales taxes directly
imposed on the delivery or sale of Energy or Environmental Attributes, if any)
(“Taxes”).
To the extent reasonably able to do so, either Party, upon written request of
the other, shall provide a certificate of exemption or other reasonably
satisfactory evidence of exemption if either Party is exempt from any Taxes,
and shall use all reasonable efforts to obtain or maintain, or to enable the
other Party to obtain or maintain, any exemption from or reduction of any
Taxes, whether currently available or becoming available in the future. Seller
will pay all lawful Taxes and will use reasonable efforts to minimize Taxes,
and will consult with Buyer on any negotiations Seller may undertake with
governmental authorities responsible for imposing Taxes. Promptly following its
payment of any Taxes, Seller shall provide Buyer with copies of receipts or
other evidence of the payment of such Taxes. Seller shall also promptly provide
to Buyer copies of all notices, correspondence or other items (including,
without limitation, written reports on any verbal exchanges with the relevant
taxing authorities) to the extent relating to Taxes, and shall afford Buyer a
reasonable opportunity to participate in any discussions or other
communications with any taxing authority relating to Taxes. To the extent it is
legally able to do so, Seller will follow the written instructions of Buyer
with respect to the negotiation, reporting, payment and contest (and shall
permit Buyer to conduct such contest, to the extent it is legally able to do
so) of any Taxes for which Seller is liable hereunder.  Seller shall promptly pay to Buyer the amount
of any refunds or other credits against any Taxes or other economic benefits
which Seller receives or to which it is entitled with respect to any Taxes for
which Buyer is responsible hereunder. Without limiting the generality of the
foregoing, the Parties agree that, if beneficial to the efforts of either Party
to obtain or maintain any exemption from or reduction of any Taxes, whether
currently available or becoming available in the future, the Parties will
cooperate to restructure the transactions contemplated by this Agreement so as
to enable either Party to obtain or maintain such exemption or reduction, as
the case may be, provided, however, that any such restructuring
shall not affect adversely the economic consequences to either Party. Buyer
shall have no obligations with to respect to any Taxes to the extent such Taxes
(1) are attributable to any period prior to the Commercial Operation Date,
or following the expiration or termination of this Agreement in accordance with
the terms hereof, (2) are imposed as a result of the gross negligence or
willful misconduct by the Seller, the breach by the Seller of any of its
obligations under this Agreement, any Ancillary Document or any related
transaction document, (3) are imposed as a result of any transfers by
Seller of any interest in the Facility, this Agreement or any transaction
contemplated hereby or related hereto (except to the extent resulting from a
breach by Buyer if its obligations under this Agreement).


 


Section 5.5            Environmental
Credits.  Seller shall, if applicable,
obtain in its own name and at its own expense any and all pollution or
environmental credits or offsets necessary to operate the Facility in
compliance with the Requirements of Law.


 


Section 5.6
           Scheduling of Energy and Scheduled Outages.  The Authorized Representatives of the Buyer
and Seller shall, as soon as reasonably practicable following the Effective
Date, and in any event prior to the Commercial Operation Date, mutually develop
forecasting and Scheduling procedures which may be modified, from time to time,
by written agreement of both Authorized Representatives in order to comply with
all applicable requirements, including those of the Transmission Provider,
CAISO, WECC, and any balancing authority. 
The Authorized Representatives shall promptly cooperate with respect to
any reasonably necessary and appropriate modifications to such forecasting or
scheduling procedures.


 


32

















 


(a)           Seller or Seller’s designee
shall be responsible for Scheduling the forecast of Energy to the Point of
Delivery during the Delivery Term in accordance with the dispatch and
Scheduling procedures that may be updated from time to time by Buyer or Buyer’s
Agent. Seller shall submit schedules, and any updates to such schedules, to
Buyer or Buyer’s Agent designated by Buyer based on the most current forecast
of Energy.  All generation scheduling and
Transmission Services shall be performed in accordance with the applicable
NERC, CAISO, and WECC operating policies, criteria, and any other applicable
guidelines. Seller shall also fulfill the contractual, metering and
interconnection requirements set forth in this Agreement, so as to be able to
deliver Energy to the Point of Delivery.


 


(b)           Following the Commercial
Operation Date, no later than forty-five (45) days before the beginning of each
calendar year, Seller or Seller’s designee shall provide, or cause to be
provided, a non-binding forecast of each month’s average-day deliveries of
Energy, by hour, for the following eighteen (18) months.


 


(c)           Following the Commercial
Operation Date, ten (10) Business Days before the beginning of each month,
Seller or Seller’s designee shall provide, or cause to be provided, a
non-binding forecast of each day’s average deliveries of Energy, by hour, for
the following month.


 


(d)           Following the Commercial
Operation Date, Seller or Seller’s designee shall cause the Facility’s
Scheduling coordinator to provide Buyer, Buyer’s Agent, Buyer’s real time
operators, and Buyers designated Scheduling representatives:


 


(1)           by 5:30 AM
Pacific Prevailing Time on the Business Day immediately preceding the date of
delivery of Energy, with a copy of a non-binding hourly forecast of deliveries
of Energy for each hour of the immediately succeeding day.  Any forecast provided a day prior to any
non-Business Day shall include a forecast for that non-Business Day, each
succeeding non-Business Day, and the next Business Day. Seller shall provide
Buyer, or Buyer’s Agent, with a copy of any and all updates to such forecast
indicating a change in forecasted Energy from the then-current forecast. Daily
and hourly scheduling with the CAISO and the WECC shall be performed in
accordance with Scheduling procedures mutually agreed upon by Buyer and the
applicable Scheduling representatives of Seller prior to the date on which
Seller anticipates to commence the delivery of Start-up and Test Energy.


 


(2)           by 12:00 p.m.
on the normal Business Day prior to each pre-scheduling day as identified in
the WECC prescheduling calendar, via email, with day-ahead pre-schedules for
each of the succeeding twenty-four (24) hours in the form of an excel
spreadsheet. In order to allow Buyer to make schedule changes in conformity
with the CAISO Scheduling deadline, Seller shall notify Buyer or Buyer’s Agent
via telephone of any hourly changes due to a change in unit availability or an
outage no later than one-hundred five (105) minutes (one (1) hour and
forty-five (45) minutes) prior to the start of such scheduling hour. Seller
shall follow up with Buyer via email within thirty (30) minutes of placing the
telephone call in order to confirm the hourly change and to provide Buyer with
an explanation for the change; and


 


33














 


(3)                with
continuously updated non-binding hourly forecasts of deliveries of Energy for
each hour of the succeeding twenty (24)-hour period, in either electronic
format, via an internet website accessible to Buyer, Buyer’s Agent, Buyer’s
real time operators, and Buyers designated Scheduling representatives, or via
email in the form of an excel spreadsheet (or any combination thereof),
transmitted on an hourly basis.  Seller
shall attempt to optimize the estimates for such time period two (2) hours
prior to such forecasts.


 


(e)           Following the Commercial
Operation Date, Buyer and Seller shall cooperate to minimize Scheduled Outages
during certain consecutive or nonconsecutive weeks of each Contract Year (not
to exceed twelve (12) weeks per Contract Year) specified by Buyer (the “Major Maintenance Blockout”),
but in accordance with Prudent Utility Practices. No later than one hundred
twenty (120) days prior to the Commercial Operation Date and the commencement
of each Contract Year thereafter, Buyer shall provide Seller with its specified
Major Maintenance Blockout. Seller shall attempt to minimize its Scheduled
Outages during the Major Maintenance Blockout consistent with Prudent Utility
Practices. No later than sixty (60) days prior to the Commercial Operation Date,
and on each January 1 thereafter, Seller shall provide Buyer, or Buyer’s
Agent as designated by Buyer, with a non-binding written projection of all
Scheduled Outages for the succeeding three (3) years (the “Scheduled Outage Projection”),
reflecting a minimized schedule of scheduled maintenance during the Major
Maintenance Blockout.  In addition,
Seller shall cooperate in good faith with Buyer’s maintenance scheduling
requests consistent with Prudent Utility Practices.  The Scheduled Outage Projection shall include
information concerning all projected Scheduled Outages during such period,
including (i) the anticipated start and end dates of each Scheduled Outage; (ii)
a description of the maintenance and/or repair work to be performed during the
Scheduled Outage; and (iii) the anticipated MW capacity, if any, during the
Scheduled Outage. Seller shall notify Buyer, or Buyer’s Agent, of any change in
the Scheduled Outage Projection as soon as practicable, but in no event later
than thirty (30) days prior to the originally scheduled date of the Scheduled
Outage. Seller will use commercially reasonable efforts to accommodate
reasonable requests of Buyer with respect to the timing of Scheduled Outages
and Seller will, to the extent feasible and consistent with Prudent Utility
Practices, and except when such Scheduled Outages would overlap with the Major
Maintenance Blockout, arrange for Scheduled Outages to occur between October 1
and May 1 of each year and coincident with planned transmission outages.
In the event of a System Emergency, Seller shall make all reasonable efforts to
reschedule any Scheduled Outage previously scheduled to occur during the System
Emergency.


 


(f)            In the event of a Forced
Outage affecting at least ten percent (10%) of the installed capacity of the
Facility, to the extent practicable, Seller shall notify Buyer, or Buyer’s Agent,
within two (2) hours of the Forced Outage and provide detailed information
concerning the Forced Outage, including (i) the start and anticipated end dates
of the Forced Outage; (ii) a description of the cause of the Forced Outage; (iii)
a description of the maintenance and/or repair work to be performed during the
Forced Outage; and (iv) the anticipated MW capacity, if any, during the Forced
Outage. Seller shall take all reasonable measures and exercise commercially
reasonable efforts to avoid Forced Outages and to limit the duration and extent
of any such outages.


 


34

















 


(g)           Seller shall reduce
deliveries of Energy for curtailments required by Buyer (i) due to a
System Emergency, (other than due to a Force Majeure event as set forth in (iii)
below), (ii) due to system improvements, curtailments and/or scheduled and
unscheduled repairs or maintenance on Buyer’s side of the Point of Delivery,
(other than due a Force Majeure event as set forth in (iii) below) that prevent
it from accepting Energy at the Point of Delivery, or (iii) due to an
event of Force Majeure on Buyer’s side of the Point of Delivery, that prevents
it from accepting Energy at the Point of Delivery, or (iv) after December 31,
2010, if the STS Upgrade has not been completed and the Interim Energy exceeds
the Maximum Interim Energy Amount. Seller shall provide the capability to
implement curtailments and adjust curtailment amounts in real-time by means of
setpoints received from the supervisory control and data acquisition (“SCADA”)
system of Buyer or Buyer’s Agent. During the Agreement Term, the Parties shall
reasonably estimate the amount of such curtailed Energy and Seller shall be
credited for all curtailed Energy under subsections (i) and (ii) of this Section 5.6(g) that
would have been realized had the curtailment not occurred in accordance with
this Section 5.6(g); and for the avoidance of doubt, Seller shall not
be credited for Energy that was curtailed under subsection (iii) of this Section 5.6(g).
Curtailed Energy under subsections (i) and (ii) of this Section 5.6(g) in
any Contract Year shall be deemed Delivered Energy for purposes of determining
Delivered Guaranteed Generation until the Guaranteed Annual Quantity for such
Contract Year has been achieved (“Deemed Delivered Prepaid Energy”) and
thereafter, for such Contract Year, shall be deemed Delivered Excess Energy (“Deemed Delivered Excess Energy”).  Curtailed Energy under Subsections (i) and
(ii) of this Section 5.6(g) prior to the Commercial
Operation Date shall be deemed delivered Startup and Test Energy (“Deemed Delivered Startup and Test
Energy”) and, following the Commercial Operation Date and prior
to the Prepayment Date curtailed Interim Energy under Subsections (i), (ii) and
(iv) shall be deemed delivered Interim Energy (“Deemed Delivered Interim Energy”),
as applicable.  For the avoidance of
doubt, the Parties agree that: (1) prior to the earlier of the completion
of the STS Upgrade or December 31, 2010, Seller shall not deliver Interim
Energy in an amount that exceeds the Maximum Interim Energy Amount, and (2) for
the period between December 31, 2010, and the Prepayment Date, if any Interim
Energy is curtailed pursuant to subsection (iv), such curtailed Energy shall be
Deemed Delivered Interim Energy.  Subject
to this Section, Buyer shall pay Seller for such Deemed Delivered Excess
Energy, at the Excess Energy Price then in effect, for such Deemed Delivered
Startup and Test Energy at the price for Startup and Test Energy set forth in
Appendix A, and for such Deemed Delivered Interim Energy at the Interim Energy
Rate.  During any period of curtailment
under subsections (i), (ii) or (iv) of this Section 5.6(g), Seller
shall use reasonable commercial efforts to sell such curtailed Energy (but not
the Environmental Attributes associated with such curtailed Energy) to third
parties; provided that (A) Seller shall remit to Buyer any net
proceeds resulting from the sale of Deemed Delivered Prepaid Energy and such
proceeds shall be the property of Buyer, (B) if such Energy is sold to
third parties, Seller shall deliver the Environmental Attributes to Buyer and
Buyer shall pay Seller for such Environmental Attributes in accordance with Section 12.1(a)(5);
and (C) any proceeds from the sale of Deemed Delivered Excess Energy,
Deemed Delivered Startup and Test Energy or Deemed Delivered Interim Energy to
a third party purchaser shall be the property of Seller and Buyer shall have no
obligation to pay Seller for such Deemed Delivered Excess Energy, Deemed
Delivered Startup and Test Energy or Deemed Delivered Interim Energy.  For the avoidance of doubt, the provisions of
this Section 5.6(g) shall not apply to curtailments resulting
from a Force Majeure event preventing Seller from delivering Energy from the
Facility as described in Section 15.6(a).


 


35

















 


Seller shall install
sufficient measuring equipment at the Facility to collect data necessary to
reasonably determine the amount of Deemed Delivered Prepaid Energy, Deemed
Delivered Excess Energy, Deemed Delivered Startup and Test Energy or Deemed
Delivered Interim Energy.  Seller shall
install sufficient meteorological towers around the Facility Generating
Premises or in conjunction with the wind turbines comprising the Facility to
provide the capability of measuring and recording representative wind data
twenty-four (24) hours per day, which wind data, in conjunction with actual
wind turbine availability and capability, shall be used to calculate the Deemed
Delivered Prepaid Energy, Deemed Delivered Excess Energy, Deemed Delivered
Startup and Test Energy and Deemed Delivered Interim Energy.


 


ARTICLE VI


COMPLIANCE DURING CONSTRUCTION AND OPERATION PERIOD


 


Section 6.1            In General.


 


(a)           The
Facility.  Seller
warrants that it will perform, or cause to be performed, all engineering,
design and construction in a good and workmanlike manner and in material
compliance with applicable standards, Prudent Utility Practice, all applicable Requirements
of Law, and Seller’s Quality Assurance Program. Seller warrants that, as of the
Commercial Operation Date, and, if applicable, the date on which any remaining
turbines achieve Commercial Operation under Section 3.6: (i) the
Facility, its engineering, design and construction, its components and related
work, shall be free from material defects caused by errors or omissions in
design, engineering, and construction and (ii) the Facility will comply in
all material respects with the requirements of this Agreement, applicable
standards, reports, studies, Permits, and Requirements of Law. Seller also
warrants that throughout the Agreement Term it will monitor the operation and
maintenance of the Facility and that said operation and maintenance is, and
will be, in material compliance with all applicable standards, reports,
studies, and Permits, Prudent Utility Practices, Requirements of Law applicable
to the Facility, Seller’s Quality Assurance Program, and other provisions of
this Agreement. Without limiting the foregoing, Seller shall promptly repair
and/or replace, consistent with Prudent Utility Practice, any component of the
Facility that may be damaged or destroyed or otherwise not operating properly.
Seller shall, subject to Seller’s reasonable judgment consistent with Prudent Utility
Practices, exercise commercially reasonable efforts to undertake all published,
recommended or required updates or modifications from manufacturers or suppliers
to the Facility, its equipment and materials, including procedures, programming
and software in a timely manner.  Seller
shall, at its expense, maintain throughout the Agreement Term an inventory of
spare parts for the Facility in a quantity that is consistent with Prudent
Utility Practice.


 


(b)           Buyer’s
Right To Monitor In General. Buyer shall have the right
and Seller shall permit Buyer and its representatives, advisors, engineers and
consultants to observe, inspect and monitor, upon reasonable notice to Seller,
and during normal working hours and subject to Seller’s or its subcontractor’s
reasonable requirements and procedures in respect of confidentiality (subject
to the provisions set forth in Section 15.20) and safety, all
operations and activities at the Facility, including the performance of the
contractor(s) under the construction contract(s) pertaining to the
Facility, the design, engineering, procurement and installation of the
equipment, start up and testing, and Commercial Operation.


 


36

















 


(c)           Startup and
Testing. Prior to the Commercial Operation Date, and as a condition precedent
to the achievement of the Commercial Operation Date, and during normal working
hours and subject to Seller’s or its subcontractor’s reasonable requirements
and procedures in respect of confidentiality (subject to the provisions set
forth in Section 15.20) and safety, Buyer shall have the right to:


 


(1)                review and
monitor the contractors’ performance and achievement of all initial performance
tests and all other tests required under the Facility construction contracts
that must be performed in order to achieve completion, with respect to which
Seller shall provide to Buyer a schedule for the performance of such tests at
least two (2) Business Days before such tests are scheduled to begin; and


 


(2)                be present to
witness such initial performance tests and review the results thereof; and


 


(3)                upon notice to
Seller, perform such detailed examinations, inspections, quality surveillance
and tests as, in the judgment of Buyer, are appropriate and advisable to
determine that the Facility equipment and all ancillary components of the
Facility have been installed in accordance with this Agreement and the Facility
construction contracts, all applicable standards, Prudent Utility Practices,
Requirements of Law, the Quality Assurance Program and the Milestones, provided
that such examinations, inspections, quality surveillance and tests shall not
interfere with the operations of the Facility or Seller’s or its subcontractors’
work.


 


(d)           Access and Cooperation. Seller shall,
and shall cause each of its subcontractors to:


 


(1)                grant to Buyer
such rights of access to the Facility during normal working hours and subject
to Seller’s subcontractor’s reasonable requirements and procedures in respect
of confidentiality (subject to the provisions set forth in Section 15.20)
and safety, and to inspect, make notes about and copy (and make such copies and
notes available to Buyer) all documents, drawings, plans, specifications,
permits, test results and information as Buyer may reasonably request;


 


(2)                make the
personnel of, and consultants to, the contractor(s) and Seller available
to Buyer and its agents, representatives and consultants at reasonable times
and with prior notice for purpose of discussing any aspect of the Facility or
the development, engineering, construction, installation, testing or
performance thereof; and


 


(3)                otherwise
cooperate in all reasonable respects with Buyer and its Authorized
Representatives, advisors, engineers and consultants in order to allow Buyer to
exercise its rights under this Section 6.1.


 


Section 6.2            Compliance
With Standards. Seller shall cause the Facility and all parts
thereof to be designed, constructed, tested, operated and maintained to meet
all of the requirements of this Agreement, all applicable requirements of the
latest revision of the ASTM,


 


37

















 


ASME, AWS, EPA, EEI, IEEE, ISA,
National Electrical Code, National Electric Safety Code, OSHA, as applicable,
Uniform Building Code, Uniform Plumbing Code, and the applicable local County
Fire Department Standards of the applicable county, and other codes and
standards and operations and maintenance requirements applicable to the
services, equipment, and work as generally shown in this Agreement, as well as
all applicable Requirements of Law not specifically mentioned in this Section.


 


Section 6.3            Quality
Assurance Program. Seller agrees to maintain and comply with a
written quality assurance policy (“Quality Assurance Program”) attached hereto
as Appendix J, and Seller shall cause all work performed on or in
connection with the Facility to materially comply with said Quality Assurance
Program.


 


Section 6.4            Effect of
Review by Buyer.  Any review
by Buyer of the design, construction, engineering, operation or maintenance of
the Facility is solely for the information of Buyer. Buyer shall have no
obligation to share the results of any such review with Seller, nor shall any
such review or the results thereof (whether or not the results are shared with
Seller) nor any failure to conduct any such review relieve Seller from any of
its obligations under this Agreement. By making any such review, Buyer makes no
representation as to the economic and technical feasibility, operational
capability or reliability of the Facility. 
Seller shall in no way represent to any third party that any such review
by Buyer of the Facility, including, but not limited to, any review of the design,
construction, operation or maintenance of the Facility by Buyer, is a
representation by Buyer as to the economic and technical feasibility,
operational capability or reliability of the Facility.  Seller is solely responsible for the economic
and technical feasibility, operational capability and reliability thereof.


 


Section 6.5            Preservation
of the Facility.  Except as
expressly permitted by this Agreement, Seller shall not sell or otherwise
dispose of, or create, incur, assume, or permit to exist any Lien (other than
the Permitted Encumbrances) on, any portion of the Facility, the Related
Interests and Rights, or any other property or assets which are necessary to
the operation, maintenance, and use of the Facility, without the prior written
approval of Buyer. Notwithstanding anything in this Agreement to the contrary,
Seller may secure its obligations under the Credit Agreement by granting a lien
on and security interest in and to the Facility under a deed of trust and
related documents, which shall include an assignment of Seller’s rights and
interests under the Agreement; provided that such deed of trust and
related documents shall be subject to, and Seller, Buyer and the Facility
Lenders shall enter into and comply with, the terms and provisions of a Consent
and Agreement in substantially the form set forth in Appendix O to the
Agreement.


 


ARTICLE VII


PURCHASE AND SALE OF POWER


 


Section 7.1            Purchases
by Buyer.


 


(a)           The Facility shall have a
Contract Capacity not to exceed 102 MW, with an expected capacity at the Point
of Delivery of not more than 100.5 MW.


 


38

















 


(b)           Prior to the earlier of the
completion of the STS Upgrade or December 31, 2010, Seller shall not
deliver any Interim Energy in an amount greater than the Maximum Interim Energy
Amount.


 


(c)           Prior to the Commercial
Operation Date, Seller shall sell and deliver, and Buyer shall purchase and
accept the Startup and Test Energy at the rate for such Energy set forth in
paragraph 2 of the payment schedule set forth in Appendix A.


 


(d)           After Commercial Operation
and during the Interim Period, Seller shall sell and deliver, and Buyer shall
purchase and accept the Interim Energy at the Interim Energy Rate set forth in
paragraph 5 of the payment schedule set forth in Appendix A.


 


(e)           At least ninety (90) days
prior to the anticipated Commercial Operation Date, Seller shall deliver to
Buyer a written declaration of the planned Contract Capacity of the Facility,
the planned capacity at the Point of Delivery, and the planned Guaranteed
Generation; and, if Commercial Operation is expected to be achieved in the
Early Completion Facility Configuration, an indication of whether Seller
anticipates installing additional wind turbines.


 


(f)            The Guaranteed Generation shall
be calculated based on a written certification to be furnished to Buyer and
prepared by AWS Truewind, LLC, or a qualified wind consultant to be selected by
Seller and subject to Buyer’s approval, of the P99 Energy which shall be based
on the Contract Capacity as of the Commercial Operation Date, less Station
Usage Energy and transmission losses from the Facility to the Point of
Delivery, multiplied by twenty (20) years; provided, however,
that the Guaranteed Generation shall in no event be based on an amount of
planned Contract Capacity greater than the Early Completion Facility
Configuration consisting of the actual Contract Capacity installed on the
Commercial Operation Date.


 


(g)           On a date that is the later
of: (i) one hundred twenty (120) days following the Commercial Operation
Date and (ii) January 1, 2011, Buyer shall pay to Seller the Prepayment
Amount set forth in Appendix I for the Guaranteed Generation, as
calculated pursuant to Section 7.1(f); provided, that all of
the conditions in Section 7.2 have been met or will be met
concurrently with the making of the Prepayment Amount.


 


(h)           Following the Prepayment
Date, during each Contract Year, Seller shall make available, schedule and
deliver, and Buyer shall accept and purchase (for which the Prepayment Amount
is Seller’s consideration), the Guaranteed Annual Quantity for such Contract  Year from the Facility during the Delivery
Term.


 


(i)            For all Excess Energy
delivered in each Contract Year, Buyer shall pay Seller the Excess Energy Price
in accordance with paragraph 1 of the payment schedule set forth in Appendix
A.


 


(j)            For all Delivered Energy
following the Commercial Operation Date, Buyer shall pay Seller the
Environmental Attributes Payment in accordance with paragraph 3 of the payment
schedule set forth in Appendix A.


 


(k)           Commencing on the Prepayment
Date, except as otherwise provided in Appendix A, Buyer shall reimburse
Seller for all Taxes and Operating Insurance premiums


 


39

















 


following the Prepayment
Date, pursuant to Appendix A. Such reimbursement amounts will be
estimated by Seller prior to the year of payment, divided by 12, and paid
monthly by Buyer. Any overpayment or underpayment by Buyer of reimbursement
amounts for such actual Taxes and Operating Insurance premiums paid by Seller
will be reconciled through an adjustment to the invoice sent to Buyer in the
month following the applicable year of payment.


 


Section 7.2            Conditions
Precedent to Prepayment.


 


Notwithstanding anything to
the contrary in this Agreement, Buyer’s obligation to pay the Prepayment Amount
shall be conditioned upon satisfaction of each of the following conditions:


 


(a)           achievement of Commercial
Operation by the Commercial Operation Date;


 


(b)           the deposit in escrow, with
escrow instructions that have been approved by Buyer, of a request for
reconveyance executed by the Facility Lender providing construction or other
financing for the Facility of its lien or liens on the Facility and the Related
Interests and Rights;


 


(c)           the receipt by Buyer of
Seller’s title insurance policy as to the Facility Premises that is reasonably
satisfactory to Buyer, provided, however, that said title
insurance policy shall not be required for lands owned by USBLM or the State of
Utah;


 


(d)           Buyer obtaining the Security
Interest, which Security Interest shall be in full force and effect, and which
shall be recorded and filed in the applicable counties;


 


(e)           the receipt by Buyer of the
Non-Consolidation Opinion;


 


(f)            the receipt by Buyer of an
executed original of a written legal opinion of legal counsel reasonably
satisfactory to Buyer, dated as of the Prepayment Date and addressed to Buyer,
concerning the Security Interest and related matters in form and substance
satisfactory to Buyer and its counsel;


 


(g)           the receipt by Buyer of the
Performance Security;


 


(h)           there being no uncured
Default then existing under this Agreement by Seller and there being no fact or
circumstance then existing that with the giving of notice or passing of time
could give rise to a Default under this Agreement;


 


(i)            all representations and
warranties of Seller set forth in Section 13.2 being true and
accurate in all material respects as of the Prepayment Date;


 


(j)            no circumstance existing
that has, had or could reasonably be expected to have a Material Adverse Effect
on the Facility;


 


(k)           the Leases and Property
Agreements and all other agreements required to have been executed and
delivered to Buyer in order to achieve Commercial Operation shall be in


 


40

















 


full force and effect and no
material breach or default thereunder having occurred and be continuing, nor
shall there exist any facts or circumstances that with the passing of time
could give rise to a breach or default under such agreements;


 


(l)            the receipt by Buyer of
evidence reasonably satisfactory to Buyer of the consent to, and release by or
on behalf of, the lenders providing financing to Milford I for the Milford Wind
Phase I Facility of the transfer by Milford I to Seller of the rights, title
and interests held by Milford I in the (i) real and personal property
under the Leases and Property Agreements necessary for the Facility and Related
Interests and Rights; (ii) Facility Common Facilities Interest; and (iii) Facility
Transmission Line Interests; and


 


(m)          the receipt by Buyer of
evidence satisfactory to Buyer that any indebtedness or other obligations
permitted under (k) or (n) of the definition of ‘Special Purpose Entity” have
been fully performed and discharged in their entirety.


 


Section 7.3            Performance
Security. On or prior to the Prepayment Date, Seller shall
cause First Wind, or an Affiliate of First Wind (other than Seller), to apply
for and cause to be issued to Buyer, as the beneficiary thereunder, and thereafter
to  maintain and to replace, a
letter of credit in the amount of $5,000,000 issued by a Qualified Issuer
substantially in the form attached hereto as Appendix M, or such other
form as is acceptable to Buyer, which shall secure Seller’s performance under
this Agreement, (the “Performance
Security”), all in accordance with the terms and provisions of
the agreement referred to in Section 2.1(e).


 


Section 7.4            Energy to
Come Exclusively from Facility; Dedicated Facility; Sales to Third Parties.  Except as provided in Article X,
in no event shall Seller have the right to procure energy from sources other
than the Facility for sale and delivery pursuant to this Agreement.  During the Delivery Term and subject to the
terms and conditions of this Agreement, all of the Energy from the Facility
shall be dedicated to the Buyer; provided that Seller may sell to any
third-party purchaser (i) Energy from the Facility sold as provided under Section 5.6(g),
(ii) Facility Energy, the delivery of which is curtailed due to a Force
Majeure event that prevents Buyer from receiving Energy at the Point of
Delivery, or (iii) if a Buyer Default has occurred and is continuing, the
Facility Energy that is not accepted by Buyer at the Point of Delivery, provided,
that Seller shall remit to Buyer any net proceeds resulting from the sale of
Deemed Delivered Prepaid Energy and such proceeds shall be the property of
Buyer and any proceeds resulting from the sale of other Energy from the
Facility as provided in this Section 7.4 to a third-party purchaser
shall be the property of Seller.


 


ARTICLE VIII


TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS


 


Section 8.1            In General. Seller shall
arrange and be responsible for any Transmission Services required to deliver
Energy to the Point of Delivery, and shall Schedule or arrange for Scheduling
services with its Transmission Providers, as needed, to so deliver the Energy
to the Point of Delivery. Buyer shall arrange and be responsible for
Transmission Services at and from the Point of Delivery, and shall Schedule or
arrange for Scheduling services with its Transmission Providers to receive
Energy at the Point of Delivery. Each Party shall designate an authorized
Scheduler to effect the Scheduling of all Energy.


 


41

















 


Section 8.2            Costs. Seller shall
be responsible for any costs or charges imposed on or associated with the
delivery of Energy up to the Point of Delivery, including but not limited to
control area services, inadvertent energy flows, transmission losses and
charges relating to the transmission of Energy. 
Buyer shall be responsible for any costs or charges imposed on or
associated with the delivery of Energy at and from the Point of Delivery,
including but not limited to control area services, inadvertent energy flows,
transmission losses and charges relating to the transmission of Energy. In the
event Seller procures transmission to sell Energy to a third party, Seller
shall be responsible for any costs or charges associated therewith.


 


Section 8.3            Title; Risk
of Loss. As between the Parties, Seller shall be deemed to be in exclusive
control (and responsible for any damages or injury caused thereby) of all
Energy prior to the Point of Delivery, and Buyer shall be deemed to be in
exclusive control (and responsible for any damages or injury caused thereby) of
all Energy at and from the Point of Delivery. Seller warrants that it will
deliver all Energy and Environmental Attributes to Buyer free and clear of all
Liens created by any Person other than Buyer. Title to and risk of loss as to
all Energy and Environmental Attributes shall pass from Seller to Buyer at the
Point of Delivery.


 


ARTICLE IX


ENVIRONMENTAL ATTRIBUTES; EPS AND RPS COMPLIANCE


 


Section 9.1            Transfer of
Environmental Attributes.  For
and in consideration of Buyer entering into this Agreement, and in addition to
the agreement by Buyer and Seller to purchase and sell Energy on the terms and
conditions set forth herein, Seller shall transfer to Buyer, and Buyer shall
receive from Seller, all right, title, and interest in and to all Environmental
Attributes, free and clear of all Liens, whether now existing or acquired by
Seller or that hereafter come into existence or are acquired by Seller during
the Agreement Term, for all Delivered Energy and Replacement Energy.  Seller agrees to transfer and make such
Environmental Attributes available to Buyer immediately to the fullest extent
allowed by applicable law upon Seller’s production or acquisition of such
Environmental Attributes. Seller represents and covenants that it has not
assigned, transferred, conveyed, encumbered, sold or otherwise disposed of
(other than Liens on the proceeds of the Environmental Attributes in favor of
Facility Lender) and will not in the future assign, transfer, convey, encumber,
sell or otherwise dispose of all or any portion of such Environmental
Attributes to any Person other than Buyer or attempt to do any of the foregoing
with respect to any of the Environmental Attributes.


 


Section 9.2            Reporting
of Ownership of Environmental Attributes.  During the Agreement Term, Seller shall not
report to any Person that the Environmental Attributes granted hereunder to
Buyer belong to any Person other than Buyer, and Buyer may report under any
program that such Environmental Attributes purchased hereunder belong to it.


 


Section 9.3            Environmental
Attributes.  Upon Buyer’s
request, Seller shall take all actions and execute all documents or instruments
necessary under applicable law, bilateral arrangements or other voluntary Environmental
Attribute programs of any kind, as applicable, to maximize the attribution,
accrual, realization, generation, production, recognition and validation of
Environmental Attributes throughout the Agreement Term.


 


42

















 


Section 9.4            Use of
Accounting System to Transfer Environmental Attributes. In
furtherance and not in limitation of Section 9.3, Seller shall use
WREGIS or any successor system to evidence the transfer of any Environmental
Attributes considered RECs under applicable law or any voluntary program (“WREGIS Certificates”),
associated with Facility Energy or Replacement Energy in accordance with WREGIS
reporting protocols, and as such shall register the Facility with WREGIS. After
the Facility is registered with WREGIS, at Buyer’s option, Seller shall (i) transfer
WREGIS Certificates using the Forward Certificate Transfer method, as described
in WREGIS Operating Rules, from Seller’s WREGIS account to up to three WREGIS
accounts, as designated by Buyer, or (ii) retire said WREGIS Certificates into
Seller’s WREGIS Retirement sub-account on behalf of Seller’s requirements (if
any); provided, however, that Seller must initially select to use
either option (i) or (ii) thirty (30) days prior to delivering any
Energy to the Point of Delivery, and, provided, further, if
option (i) is selected, Buyer may change to option (ii) at the
beginning of any calendar year during the Agreement Term upon thirty (30) days
advance written notice.  If option (ii) is
selected, then Buyer shall provide Seller the number and vintage of MWh of
WREGIS Certificates to be retired by providing written notice to Seller not
later than thirty (30) days prior to the desired retirement date. Seller shall
be responsible for the WREGIS expenses associated with registering the
Facility, maintaining its account, WREGIS Certificate issuance fees, and
transferring WREGIS Certificates to Buyer or Buyer’s Agent, or any other
designees, and Buyer shall be responsible for the WREGIS expenses associated
with maintaining its account, or the accounts of its designees, if any, and
subsequent transferring or retiring of WREGIS Certificates, or Seller’s fees
for the retirement of WREGIS Certificates on behalf of Buyer.  Forward Certificate Transfers will occur
monthly based on the certificate creation time-line established by the WREGIS
Operating Rules.  As of the Effective
Date, the certificate creation time line is established as not later than
ninety (90) days following the end of each month. For example, for MWhs
generated in January 2010, the certificates will be created in WREGIS not
later than April 30, 2010. Seller shall be responsible for, at its
expense, validating and disputing data with WREGIS prior to certificate
creation each month. In the event that WREGIS is not in operation, or WREGIS
does not track Seller’s transfer of WREGIS Certificates to Buyer, Buyer’s
Agent, or its designees for purposes of any RECs attributed, accrued, realized,
generated, produced, recognized or validated relative to the Facility Energy or
Replacement Energy, or Buyer chooses not to use WREGIS for any reason, Seller
shall document the production and transfer of RECs under this Agreement by
delivering to Buyer an attestation for the RECs produced by the Facility, or Replacement
Energy, measured in whole MWh, or by such other method as Buyer shall
designate.


 


Section 9.5            Further
Assurances.  If such
function is not already accomplished via WREGIS, Seller will document the
production of Environmental Attributes by delivering with each invoice to Buyer
an attestation for Environmental Attributes (i) produced by the Facility or (ii)
included with Replacement Energy for the preceding calendar month.  The form of attestation is set forth as Appendix
D.  At Buyer’s request, the Parties
shall execute all such documents and instruments and take such other action in
order to effect the transfer of the Environmental Attributes specified in this
Agreement to Buyer’s Agents as Buyer may reasonably request.  In the event of the promulgation of a scheme
involving Environmental Attributes administered by CAMD, upon notification by
CAMD that any transfers contemplated by this Agreement will not be recorded,
the Parties shall promptly cooperate in taking all


 


43














 


reasonable actions necessary
so that such transfer can be recorded. 
Each Party shall promptly give the other Party copies of all documents
it submits to CAMD to effectuate any transfers.


 


Section 9.6            RPS and EPS
Compliance.  Seller
warrants and guarantees that when complete, the Facility will be both RPS
Compliant and, if required by applicable Requirements of Law, EPS
Compliant.  From time to time and at any
time requested by Buyer, Seller will furnish to Buyer or Governmental
Authorities or other Persons designated by Buyer, all certificates and other
documentation reasonably requested by Buyer in order to assist Buyer in
qualifying the Facility as RPS Compliant and EPS Compliant, if required by
applicable Requirements of Law.


 


ARTICLE X


MAKEUP OF SHORTFALL ENERGY


 


Section 10.1         Makeup of
Shortfall.  If in any
Contract Year the amount of Delivered Energy is less than the Guaranteed Annual
Quantity for such Contract Year (such difference constituting for such Contract
Year, the “Shortfall
Energy”), then, subject to Section 10.2, Seller
shall remedy such shortfall by delivering Energy to the Point of Delivery,
including any associated Environmental Attributes, to Buyer in an amount equal
to the Shortfall Energy during the applicable Shortfall Make Up Period. The
make up period for such shortfall shall be (a) if the shortfall in such
Contract Year is equal to or greater than ten percent (10%) of the Guaranteed
Annual Quantity for such Contract Year, the next succeeding Contract Year
following the Contract Year in which a shortfall occurred (the “One Year Shortfall Make Up Period”),
provided, however, that Seller shall have an additional One Year
Shortfall Make Up Period to make up the shortfall if, at the end of the
original One Year Shortfall Make Up Period, the shortfall has been reduced to a
level less than ten percent (10%) of such Guaranteed Annual Quantity; and (b) if
the amount of Shortfall Energy in a Contract Year is less than ten percent
(10%) of the Guaranteed Annual Quantity for such Contract Year, the next
succeeding two (2) Contract Years following the Contract Year in which
such shortfall occurred (the “Two Year Shortfall Makeup Period”).  The One Year Shortfall Make Up Period may be
extended on a day-for-day basis for Force Majeure events, but in no event
longer than  one (1) Contract
Year following the end of the One Year Shortfall Make Up Period. Buyer shall
not be obligated to make any additional payment for any Energy provided to
Buyer to replace Shortfall Energy.


 


Section 10.2         No Excess
Energy During Shortfall Periods.  During any period in which there is Shortfall
Energy due to Buyer, all Energy that would otherwise be designated as Excess
Energy shall be provided by Seller to Buyer, including any associated
Environmental Attributes, and Buyer shall not be obligated to make any payment
to Seller for such Energy until the Shortfall Energy has been fully made up.


 


Section 10.3         Replacement
Energy.  If Seller fails to deliver any
Shortfall Energy by the end of the applicable Shortfall Make Up Period, Seller
shall provide to Buyer replacement energy at the Point of Delivery (or such
other point as mutually agreed to in writing by the Parties), to replace such
undelivered Shortfall Energy and shall provide Buyer with Environmental
Attributes comparable to those associated with the Energy produced by the
Facility (“Replacement
Energy”), within ninety (90)-days after the end of the
applicable Shortfall Make Up Period on a delivery schedule consistent with the
Facility’s historic


 


44

















 


percentage of On Peak and
Off Peak Delivered Energy, or other delivery schedules as mutually agreed to by
the Parties, provided that such schedule shall not cause the Delivered
Energy to be delivered at a rate greater than 102 MW.  Buyer shall pay Seller the Environmental
Attribute payment in accordance with paragraph 3 of the payment schedule set
forth in Appendix A for all Environmental Attributes associated with the
Replacement Energy.  If Seller fails to
deliver Replacement Energy as described above then Buyer shall purchase
Replacement Energy and Seller shall reimburse Buyer for its costs of such
Replacement Energy, and Buyer shall promptly notify Seller of the costs
thereof.


 


Section 10.4         Application
of Shortfall Energy or Replacement Energy. In the event of shortfalls
in multiple Contract Years, any Shortfall Energy or Replacement Energy
delivered by Seller shall be applied in priority to the earliest outstanding
shortfalls hereunder until all shortfalls are satisfied.


 


ARTICLE XI


CAPACITY RIGHTS


 


Section 11.1         Purchase
and Sale of Capacity Rights.  For and in consideration of Buyer entering
into this Agreement, and in addition to the agreement by Buyer and Seller to
purchase and sell Facility Energy on the terms and conditions set forth herein,
Seller hereby transfers to Buyer, and Buyer hereby accepts from Seller, all of
the Capacity Rights. Buyer and Seller acknowledge and agree that the
consideration for the transfer of Capacity Rights is contained within the
relevant prices for Facility Energy.  In
no event shall Buyer have any obligation or liability whatsoever for any debt
pertaining to the Facility by virtue of Buyer’s ownership of the Capacity
Rights or otherwise.


 


Section 11.2         Representation
Regarding Ownership of Capacity Rights.  Seller represents and covenants that it has
not assigned, transferred, conveyed, encumbered, sold or otherwise disposed of
and will not in the future assign, transfer, convey, encumber, sell or
otherwise dispose of any of the Capacity Rights to any Person other than Buyer
or attempt to do any of the foregoing with respect to any of the Capacity
Rights. Seller shall not report to any Person that any of the Capacity Rights
belong to any Person other than Buyer. Buyer may, at its own risk and expense,
report to any Person that the Capacity Rights belong to it.


 


Section 11.3         Further
Assurances.  Seller
shall execute and deliver such necessary documents and instruments and take
such other action as Buyer may reasonably request to effect recognition and
transfer of the Capacity Rights to Buyer. Seller shall bear the costs
associated therewith.


 


ARTICLE XII


BILLING; PAYMENT; AUDITS; METERING; ATTESTATIONS


 


Section 12.1         Billing and
Payment. Billing and payment for the Energy purchases by Buyer under this
Agreement and for any other amounts due and payable by Buyer hereunder shall be
as follows:


 


(a)           On or before the tenth
(10th) day of the month following a month in which transactions occur
hereunder, Seller shall render one (1) invoice to Buyer showing the
following:


 


45

















 


(1)                Delivered
Energy allocated to:


 


(2)                The Delivered
Energy to be counted toward the Guaranteed Annual Quantity for the applicable
Contract Year, and an accounting of new or made-up Shortfall Energy and/or
Replacement Energy.


 


(3)                Delivered
Excess Energy billed pursuant to Appendix A.


 


(4)                Any Startup and
Test Energy billed pursuant to Appendix A.


 


(5)                Environmental
Attributes billed pursuant to Appendix A based on Facility Metered Output
and, if applicable, Replacement Energy.


 


(6)                Interim Energy
delivered between the Commercial Operation Date and Prepayment Date, billed
pursuant to Appendix A.


 


(7)                Any
reimbursement to Seller for Taxes and Operating Insurance premiums, and
adjustments for actual Taxes and Operating Insurance premiums, pursuant to Section 7.1.


 


(8)                Any
reimbursement to Buyer for the purchase of Replacement Energy.


 


(9)                Any other
payments due to Buyer or to Seller under this Agreement, including amounts due
to Buyer in connection with third party sales of curtailed Energy under Section 5.6(g) or
Section 7.4.


 


(b)           Monthly invoices, to the
extent applicable, shall be based on meter readings, or if such readings are
unavailable, the best available data.


 


(c)           Monthly invoices shall be
sent to the address set forth in Appendix C or such other address as is
provided by Buyer in writing.


 


(d)           Buyer shall pay the amounts
set forth in each monthly invoice by wire transfer to the accounts designated
on the invoices rendered by Seller on or before thirtieth (30th) day after receipt by Buyer
of the applicable invoice. Bills or portions of bills which are not paid by the
due date shall thereafter accrue interest at the Interest Rate, from and
including the date payment was due until the date such payment is made.  Seller shall pay to Buyer any reimbursement
owed to Buyer as set forth in Section 12.1(a)(8) with respect
to any month at the time Seller submits its next monthly invoice to Buyer, but
in no event more than thirty (30) days after such payment is due.


 


(e)           Attestations of
Environmental Attribute transfers to Buyer shall accompany monthly invoices
pursuant to Section 9.1.


 


Section 12.2         Disputed
Invoices. In the event any portion of any bill is in
dispute, the undisputed amount shall be paid when due. The Party disputing a
payment shall promptly notify the other Party in writing of the basis for the
dispute.  Disputes shall be discussed by
the


 


46

















 


Authorized Representatives,
who shall use reasonable efforts to amicably and promptly resolve the disputes,
and any failure to agree shall be subject to resolution in accordance with Section 15.3.
Upon resolution of any dispute, the required amount of payment or refund shall
be paid within ten (10) days after such determination, with interest
accrued at the Interest Rate from and including the due date until the date
such payment or refund is paid.


 


Section 12.3         Buyer’s
Right of Setoff. In addition to any right now or hereafter granted
under applicable law and not by way of limitation of any such rights, Buyer
shall have the right at any time or from time to time, without notice to Seller
or any other Person, any such notice being hereby expressly waived, to set off
against any amount due Seller from Buyer under this Agreement, any amount due
Buyer from Seller under this Agreement, including but not limited to any
amounts due because of breach of this Agreement or any other obligation and any
costs payable by Seller under Section 10.3 if and to the extent
paid in the first instance by Buyer.


 


Section 12.4         Records and
Audits.


 


(a)           Seller shall cause (or, with
respect to contracts entered into prior to the Effective Date, Seller shall use
reasonable efforts to cause) any subcontractors and suppliers providing
services or supplies that impact the calculation of the Taxes and Operating
Insurance premiums that will be paid by Buyer under this Agreement, (such
subcontractors or suppliers (“Subcontractors”) to maintain, and Seller shall itself
maintain, with respect to the foregoing, all records pertaining to the
management of this Agreement, related subcontracts, and performance of services
pursuant to this Agreement (including all billings, costs, metering, and
Environmental Attributes), in their original form, including but not limited
to, reports, documents, deliverables, employee time sheets, accounting
procedures and practices, records of financial transactions, and other
evidence, regardless of form (e.g., machine readable media such as disk, tape, etc.)
or type (e.g., databases, applications software, database management software,
utilities, etc.), sufficient to verify the determination of Taxes and
Operating Insurance and to properly reflect all costs claimed to have been
incurred and services performed pursuant to this Agreement. In addition, Seller
and its Subcontractors must maintain all records and documents necessary to
permit adequate evaluation of Seller’s Taxes and Operating Insurance premiums
paid hereunder by Buyer, along with the computations and projections used, and
Buyer and the Authorized Auditors shall have the right to discuss such records
with Seller’s officers and independent public accountants (and by this
provision Seller authorizes said accountants to discuss such billings and costs),
all at such times and as may be reasonably requested, and all such records
shall be retained, and shall be subject to examination and audit by the
Authorized Auditors, for a period of not less than four (4) years
following payment made by Buyer hereunder, or, if the payment is made in the
last year of the Delivery Term, no less than the four (4) years following
the expiration or termination date of this Agreement. Seller shall make said
records or, to the extent accepted by the Authorized Auditors, photographs,
micro-photographs, etc. or other authentic reproductions thereof,
available to the Authorized Auditors at Seller’s offices located at all
reasonable times and without charge.  The
Authorized Auditors will have the right to reproduce, photocopy, download,
transcribe, and the like any such records. 
Any information provided by Seller on machine-readable media shall be
provided in a format accessible and readable by the Authorized Auditors.  Seller shall not, however, be required to
furnish the Authorized Auditors with commonly available software. In addition,
Seller, its Subcontractors and the subcontractors of all agreements entered
into after the Effective Date and having a value


 


47

















 


in excess of $25,000  (such subcontractors, “Major Subcontractors”)
shall be subject at any time with fourteen (14) calendar days prior written
notice to audits or examinations by Authorized Auditors to verify compliance
with all Agreement requirements relative to practices, methods, procedures,
performance, compensation, and documentation, and with respect to the
Subcontractors, to verify Taxes and Operating Insurance premiums. All such
records subject to audit or examination shall be retained by the Major
Subcontractor for a period of not less than four (4) years following the
payment by Seller to such Major Subcontractor. Examinations and audits will be
performed using generally accepted auditing practices and principles and
applicable Governmental Authority audit standards. If Seller utilizes or is
subject to FAR, Part 30 and 31, et seq.
accounting procedures, or a portion thereof, examinations and audits will
utilize such information.  To the extent
that the Authorized Auditor’s examination or audit reveals inaccurate, incomplete
or non-current records, or records are unavailable, the records shall be
considered defective.  Consistent with
standard auditing procedures, Seller will be provided fifteen (15) calendar
days to review the Authorized Auditor’s examination results or audit and
respond to Buyer’s prior to the examination’s or audit’s finalization and
public release. If the Authorized Auditor’s examination or audit indicates
Seller has been overpaid under a previous payment application, the identified
overpayment amount shall be paid by Seller to Buyer within thirty (30) calendar
days of notice to Seller of the identified overpayment. Seller shall
contractually require all Major Subcontractors to comply with the provisions of
this Section by inserting this Section 12.4 in each Major
Subcontractor contract and by contractually requiring each Major Subcontractor
to insert this Section 12.4 in any of its subcontract contracts
related to services under this Agreement. In addition, Seller and its Major
Subcontractors shall also include the following language in each Subcontractor
contract:  “The Southern California
Public Power Authority is a third party beneficiary of the foregoing audit
provision. The benefits of the audit provision shall inure solely for the
benefit of the Southern California Public Power Authority. The designation of
the Southern California Public Power Authority as a third party beneficiary of
the audit provision shall not confer any rights or privileges on Seller,
subcontractor or any other person/entity.” 
Notwithstanding the foregoing, if the audit reveals that Buyer
overpayment to Seller is more than five percent (5.0%) of the billings
reviewed, Seller shall pay all expenses and costs incurred by the Authorized
Auditors arising out of or related to the examination or audit. Such
examination or audit expenses and costs shall be paid by Seller to Buyer within
thirty (30) calendar days of notice to Seller of such costs and expenses.


 


(b)           Notwithstanding anything
herein to the contrary, this Section shall not be deemed to require that
Buyer pay for any costs and expenses of Seller other than the Taxes and
Operating Insurance premiums as required under this Agreement.


 


Section 12.5         Electric
Metering Devices.


 


(a)           The Facility Energy made
available to Buyer, or Buyer’s Agent, by Seller under this Agreement shall be
measured using Electric Metering Devices installed, owned and maintained by
Seller or its designee in accordance with the Interconnection Agreement, if
applicable, and Prudent Utility Practices. Such Electric Metering Devices shall
be installed (i) at the Site Common Facilities Substation located on the
Facility Generating Premises; and (ii) at the Point of Delivery.  All Electric Metering Devices used to provide
data for the computation of payments shall be sealed and the Seller or its
designee shall only break the seal when such Electric Metering Devices are to
be inspected and tested or adjusted in accordance with this


 


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Section 12.5. Seller or its
designee shall specify the number, type, and location of such Electric Metering
Devices subject to the requirements of Section 12.5(b).


 


(b)           Although the Facility shares
a common Point of Delivery with the Milford Wind Phase I Facility, the two
facilities have separate scheduling, operating, and energy accounting
requirements, and therefore require metering arrangements that will permit
separate calculations for the Facility and for Milford Wind Phase I Facility.
Appendix Q sets forth the procedure for separate calculations.


 


(1)           The Electric
Metering Devices installed at the Site Common Facilities Substation located on
the Facility Generating Premises shall include but not be limited to
revenue-quality measurements of the Facility’s instantaneous MW, instantaneous
MVAR, MWh received, MWh delivered, MVARh received, and MVARh delivered.


 


(2)           The Electric
Metering Devices for the Facility’s MWh received, MWh delivered, MVARh
received, and MVARh delivered shall be capable of receiving and executing an
accumulator freeze request from the SCADA system of the Buyer or Buyer’s agent,
as do the existing electric metering devices installed at the Point of Delivery
for measuring Energy delivered from the Milford Wind Phase I Facility.  The accumulator freeze request will be
provided by means of the Distributed Network Protocol version 3 (DNP 3).  The accumulator freeze request shall be
delivered to the aforementioned Electric Metering Devices within five (5) seconds
of the time that the accumulator freeze request is available at Seller’s Facility.


 


(3)           Delivered
Energy that is metered shall be the Energy as measured by the Electric Metering
Devices described in this Section 12.5(b) and allocated
according to Appendix Q. All meters used in the calculations shown in Appendix
Q shall meet the requirements of this Section 12.5(b).


 


(c)           Seller or its designee, at
no expense to Buyer, shall inspect and test all Electric Metering Devices upon
installation and at least annually thereafter. Seller shall provide Buyer with
reasonable advance notice of, and permit a representative of Buyer to witness
and verify, such inspections and tests, provided, however, that
Buyer shall not unreasonably interfere with or disrupt the activities of Seller
or its designee and shall comply with all safety standards applicable to the
Facility Premises as provided to Buyer by Seller in writing. Upon request by
Buyer, Seller or its designee shall perform additional inspections or tests of
any Electric Metering Device and shall permit a qualified representative of
Buyer to inspect or witness the testing of any Electric Metering Device; provided,
however, that Buyer shall not unreasonably interfere with or disrupt the
activities of Seller or its designee and shall comply with all safety standards
applicable to the Facility Premises as provided to Buyer by Seller in
writing.  The actual expense of any such
requested additional inspection or testing shall be borne by Seller.


 


(d)           Adjustment
for Inaccurate Meters. If an Electric Metering Device fails to
register, or if the measurement made by an Electric Metering Device is found
upon testing to be inaccurate by more than one percent (1.0%), an adjustment
shall be made correcting all


 


49

















 


measurements by the inaccurate
or defective Electric Metering Device for both the amount of the inaccuracy and
the period of the inaccuracy. The adjustment period shall be determined by
reference to Seller’s check-meters, if any, or as far as can be reasonably
ascertained by Seller from the best available data, subject to review and
approval by Buyer.  If the period of the
inaccuracy cannot be ascertained reasonably, any such adjustment shall be for a
period equal to one-third of the time elapsed since the preceding test of the
Electric Metering Devices. To the extent that the adjustment period covers a
period of deliveries for which payment has already been made by Buyer, Seller
shall use the corrected measurements as determined in accordance with this Section
12.5 to recompute the amount due for the period of the inaccuracy and shall
subtract the previous payments by Buyer for this period from such recomputed
amount. If the difference is a positive number, the difference shall be paid by
Buyer to Seller; if the difference is a negative number, that difference shall
be paid by Seller to Buyer, or at the discretion of Buyer, may take the form of
an offset to payments due to Seller from Buyer. Payment of such difference by
the owing Party shall be made not later than thirty (30) days after the owing
Party receives notice of the amount due, unless Buyer elects payment via an
offset.


 


ARTICLE XIII


REPRESENTATIONS AND WARRANTIES; COVENANT OF SELLER


 


Section 13.1         Representations
and Warranties of Buyer. Buyer makes the following representations
and warranties to Seller:


 


(a)           Buyer is a validly existing
California Joint Powers Authority under the laws of the State of California and
has the legal power and authority to own its properties, to carry on its
business as now being conducted and to enter into this Agreement and each
Ancillary Document to which it is a party and carry out the transactions
contemplated hereby and thereby and perform and carry out all covenants and
obligations on its part to be performed under and pursuant to this Agreement
and all such Ancillary Documents.


 


(b)           The execution, delivery and
performance by Buyer of this Agreement and each Ancillary Document to which it
is a party have been duly authorized by all necessary action, and do not and
will not require any consent or approval of Buyer’s Board of Directors or
members other than that which has been obtained.


 


(c)           The execution and delivery
of this Agreement and each Ancillary Document to which it is a party, the
consummation of the transactions contemplated hereby and thereby and the
fulfillment of and compliance with the provisions of this Agreement and each
Ancillary Document to which it is a party do not and will not conflict with or
constitute a breach of or a default under, any of the terms, conditions or
provisions of any legal requirements, or its joint powers agreement or bylaws,
or any deed of trust, mortgage, loan agreement, other evidence of indebtedness
or any other agreement or instrument to which Buyer is a party or by which it
or any of its property is bound, or result in a breach of or a default under
any of the foregoing.


 


(d)           This Agreement and each
Ancillary Document to which it is a party constitutes the legal, valid and
binding obligation of Buyer enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or


 


50

















 


similar laws relating to or
affecting the enforcement of creditors’ rights generally or by general
equitable principles, regardless of whether such enforceability is considered
in a proceeding in equity or at law.


 


(e)           There is no pending, or to
the knowledge of Buyer, threatened action or proceeding affecting Buyer before
any Governmental Authority, which purports to affect the legality, validity or
enforceability of this Agreement.


 


Section 13.2         Representations
and Warranties by Seller. Seller makes the following representations
and warranties to Buyer:


 


(a)           Seller is a limited
liability company, duly organized, validly existing and in good standing under
the laws of the State of Delaware, is qualified to do business in the States of
California and Utah and has the legal power and authority to own its
properties, to carry on its business as now being conducted and to enter into
this Agreement and each Ancillary Document to which it is a party and, subject
to the receipt of the regulatory approvals, carry out the transactions
contemplated hereby and thereby and perform and carry out all covenants and
obligations on its part to be performed under and pursuant to this Agreement
and each Ancillary Document to which it is a party.


 


(b)           The execution, delivery and
performance by Seller of this Agreement and each Ancillary Document to which it
is a party have been duly authorized by all necessary action, and do not and
will not require any consent or approval of Seller’s managing member or equity
holders other than that which has been obtained.


 


(c)           The execution and delivery
of this Agreement and each Ancillary Document to which it is a party, the
consummation of the transactions contemplated hereby and thereby and the
fulfillment of and compliance with the provisions of this Agreement and each
Ancillary Document to which it is a party, do not and will not conflict with or
constitute a breach of or a default under, any of the terms, conditions or
provisions of any Requirement of Law, or any organizational documents,
agreement, deed of trust, mortgage, loan agreement, other evidence of
indebtedness or any other agreement or instrument to which Seller is a party or
by which it or any of its property is bound, or result in a breach of or a
default under any of the foregoing or result in or require the creation or
imposition of any Lien upon any of the properties or assets of Seller (except as
contemplated hereby), and Seller has obtained or shall timely obtain all
Permits required for the lawful performance of its obligations hereunder and
thereunder and operation of the Facility in accordance with Prudent Utility
Practices, the requirements of this Agreement, the Ancillary Documents and all
Requirements of Law.


 


(d)           This Agreement and each of
the Ancillary Documents to which it is a party, constitutes the legal, valid
and binding obligation of Seller enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws relating to or affecting the enforcement of creditors’ rights
generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.


 


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(e)           There is no pending, or to
the knowledge of Seller, threatened action or proceeding affecting Seller
before any Governmental Authority, which purports to affect the legality,
validity or enforceability of this Agreement or any of the Ancillary Documents.


 


(f)            Seller is not in violation
of any Requirement of Law, which violations, individually or in the aggregate,
would reasonably be expected to result in a material adverse effect on the
business, assets, operations, or condition (financial or otherwise) of Seller
or the ability of Seller to perform any of its obligations under this Agreement
or any Ancillary Document.


 


(g)           Seller shall inform all
investors in the Seller of the existence of this Agreement and all Ancillary
Documents on or before the date of such investment in the Seller.


 


(h)           Seller is a Special Purpose
Entity.


 


(i)            Seller has (i) not entered
into this Agreement or any Ancillary Document with the actual intent to hinder,
delay or defraud any creditor and (ii) received reasonably equivalent value in
exchange for its obligations under this Agreement and the Ancillary Documents.
No petition in bankruptcy has been filed against Seller, and neither Seller nor
any of its constituent Persons has ever made an assignment for the benefit of
creditors or taken advantage of any insolvency act for its benefit as a debtor.


 


(j)            All of the assumptions made
in the Non-Consolidation Opinion, including, but not limited to, any exhibits
attached thereto, are true and correct in all material respects. Seller has
complied with all of the assumptions made with respect to Seller in the
Non-Consolidation Opinion.  Seller has no
reason to believe that any environmental authorizations under the laws of the
State of Utah or other Permits required to construct, maintain or operate the
Facility in accordance with the requirements of this Agreement and all
applicable Requirements of Law will not be timely obtained in the ordinary
course of business.


 


(k)           All Tax returns and reports
of Seller required to be filed by it have been timely filed, and all Taxes
shown on such Tax returns to be due and payable and all assessments, fees and
other governmental charges upon the Seller and upon its properties, assets,
income, business and franchises that are due and payable have been paid when
due and payable. Seller knows of no proposed Tax assessment against Seller that
is not being actively contested by it in good faith and by appropriate
proceeding.


 


(l)            Seller owns or possesses, or
will own or possess in a timely manner, all patents, rights to patents,
trademarks, copyrights and licenses necessary for the performance by Seller of
this Agreement and the Ancillary Documents and the transactions contemplated
thereby, without any conflict with the rights of others.


 


(m)          At all times after the
Commercial Operation Date, Seller shall have “Site Control” which means that
Seller shall: (i) own the Facility Premises; (ii) be the holder of grant
or grants of right of way to Seller by the USBLM; or (iii) be the lessee
of the Facility Premises under a lease which permits Seller to perform its
obligations under this Agreement. Seller shall provide Buyer with prompt notice
of any change in the status of Seller’s Site Control.


 


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Section 13.3         Covenant of
Seller Related to Seller’s Status as Special Purpose Entity.  Seller shall at all times comply with the
requirements of, and qualify as, a Special Purpose Entity.


 


Section 13.4         Covenants
of Seller Related to Leases and Property Agreements.


 


(a)           Following delivery of the
Deed of Trust, in the event that the lessor under any lease included under the
Leases and Property Agreements is the subject of a bankruptcy, reorganization
or other insolvency case proceeding, Seller as lessee under such lease shall
elect to retain its rights under such lease pursuant to Section 365(h) of
the U.S. Bankruptcy Code or other similar applicable law in the event that such
lessor seeks to reject or otherwise disaffirm such lease, unless Buyer agrees
otherwise in writing provided to the Seller in accordance with the notice
provisions of this Agreement.  Seller, as
lessee under such lease, shall provide to Buyer all notices, motions and
pleadings it receives in any such proceeding promptly, but no later than three
business days following receipt. Seller, as lessee under such lease, hereby
appoints Buyer as attorney in fact to appear and be heard on behalf of Seller,
as lessee under such lease, in any such proceeding and Seller, as lessee under
such lease, shall take no action in such proceeding without the prior written
consent of Buyer.


 


(b)           In the event that Seller is
the subject of a bankruptcy, reorganization or other insolvency case or
proceeding, Seller, as lessee under any lease included under the Leases and
Property Agreements, shall not reject or otherwise disaffirm such lease
pursuant to Section 365 of the U.S. Bankruptcy Code or other similar
applicable law unless Buyer is first granted by the applicable court or courts
appropriate relief including any relief from any stay, such that Buyer may
enforce all of its rights and interests and has taken possession of the
Facility pursuant to the Performance Security.


 


(c)           Seller agrees to enforce the
provisions of the Leases and Property Agreements and duly perform its covenants
and agreements thereunder. Seller further agrees not to consent, agree to or
permit, or to take or cause to be taken any action or non-action, to bring about
any rescission or termination of or amendment to any of the Leases and Property
Agreements or to take any action in connection with any of the Leases and
Property Agreements which will materially impair or have a material adverse
effect on the rights, interest or security of Buyer, or elect to arbitrate any
controversy, claim or dispute under an arbitration provision in the Leases and
Property Agreements, or to assign, sublease, encumber, mortgage, or grant any
security interest in or otherwise dispose of any of the Leases and Property
Agreements or any portion thereof or interest therein without the consent of
Buyer, except as permitted in this Agreement.


 


(d)           Upon any payment by Buyer,
as Beneficiary under the Deed of Trust, under any of the Leases and Property
Agreements to cure any default of Seller thereunder, and thereby prevent
termination of any of the Leases or Property Agreements, or the exercise of any
other remedy of the other party or parties thereunder arising out of such
default, Buyer shall be entitled to offset amounts otherwise due Seller
pursuant to the Monthly Payment hereunder by the amount of such cure payment or
remedy cost until Buyer has been fully repaid.


 


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(e)           Following delivery of the Deed of Trust, in the event of a
complete taking of the Facility or any substantial portion thereof or a partial
taking of a portion of the Facility under a statute or by right of eminent
domain or private purchase in lieu thereof, Seller shall pay to Buyer from the
sum awarded to and received by Seller, including damages and interest, the
amount of the loss in value of this Agreement to Buyer resulting from such
complete or partial taking; provided that in the event of a complete
taking, such payment to Buyer shall not be less than the Remaining Prepayment
Amount, if Seller is awarded and receives at least this amount.


 


(f)            Following delivery of the Deed of Trust, upon the receipt
by Seller of any offer to acquire or purchase from any other party under the
Leases and Property Agreements all or any portion of such party’s interest in
the Facility Premises, Seller shall promptly notify Buyer in writing of its
receipt of such offer and furnish Buyer with a copy thereof. Seller agrees not
to elect to exercise its option to purchase such offered interest in the
Facility Premises unless it shall first reach agreement with Buyer as to any
amendment or modification of the Deed of Trust and/or this Agreement reasonably
requested by Buyer to reflect such purchase by Seller of the offered interest
in the Facility Premises.


 


(g)           Following delivery of the Deed of Trust, Seller shall
provide Buyer, as Beneficiary under the Deed of Trust, with evidence that the
rent, fees or other payments payable by Seller under the Leases and Property
Agreements have been paid at least ten days prior to the date on which such
rent, fees or other payments would be delinquent. If Seller does not provide
Buyer with such evidence within five days after receipt of written request for
the same and if such rent, fees or other payments have not been paid, Buyer, as
Beneficiary under the Performance Security, may, but shall not be obligated to,
cure such default by Seller as provided under Section 13.4(d).


 


ARTICLE XIV


DEFAULT; TERMINATION AND REMEDIES; PERFORMANCE DAMAGE


 


Section 14.1
Default. Each of the following events or circumstances shall constitute a “Default”
by the responsible Party (the “Defaulting Party”):


 


(a)           Payment Default.
Failure by either Party to pay any amount when and as due under this Agreement
(other than payments disputed in good faith), including the failure of Buyer to
pay the Prepayment Amount when and as due, which is not cured within thirty
(30) days after receiving written notice thereof from the other Party hereto; provided
that, with respect to a failure to pay the Prepayment Amount, such cure shall
include payment of interest from the due date at the Interest Rate.


 


(b)           Performance Default.  Failure by either Party to perform any of its
material duties or obligations under this Agreement when and as due (other than
the failure to make any payment) which is not cured within thirty (30) calendar
days after receipt of written notice thereof from the other Party hereto, provided
that if such failure cannot be cured within such thirty (30) day period,
despite reasonable commercial efforts, such Party shall have up to ninety (90)
calendar days to cure.


 


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(c)           Inaccuracy of
Representations and Warranties. 
Inaccuracy of any representations and warranties made herein at the time
made or deemed to be made that has a material adverse effect on the other
Party.


 


(d)           Bankruptcy.
Bankruptcy of a Party.


 


(e)           Security Interest
Default.  A default shall have
occurred and be continuing under the Deed of Trust or the Security Interest
shall fail to be in full force and effect in accordance with the terms of this
Agreement or Buyer shall not have or shall cease to have a valid and perfected
Lien in the Facility and Related Interests and Rights or Seller shall contest
the validity or enforceability of the Security Interest or any provision
thereof in writing or deny that it has any further liability thereunder.


 


(f)            Security Failure.
The failure of Seller to cause First Wind, or an Affiliate of First Wind (other
than Seller), to apply for and cause to be issued to Buyer and thereafter to
maintain and replace the LD Security or Performance Security in compliance with
Section 3.5(b) or Section 7.3, as applicable, including,
among other requirements thereunder, (1) in the case of a Downgrade Event,
the failure of Seller to cause First Wind or an Affiliate of First Wind (other
than Seller) to replace the LD Security or the Performance Security (unless
payment on such LD Security or Performance Security has been made upon demand
by Buyer as provided for pursuant to the agreement referred to in Section 2.1(c)or
Section 2.1(e), as applicable); or (2) in the case of a
failure of Seller to cause First Wind, or an Affiliate of First Wind (other
than Seller), prior to thirty (30) days before the expiration date of the LD
Security or Performance Security to cause the extension thereof or the issuance
of a replacement LD Security or Performance Security (unless payment on such LD
Security or Performance Security has been made upon demand by Buyer as provided
for pursuant to the agreement referred to in Section 2.1(e)); or
the failure of Seller to cause First Wind or an Affiliate of First Wind (other
than Seller) to provide replacement LD Security or Performance Security within
ten (10) Business Days after written notice to Seller of the occurrence of
any of the following events:  (x) the
failure of the Qualified Issuer to honor a demand for payment or make a payment
thereunder; (y) the LD Security or the Performance Security issued by such
Qualified Issuer shall fail to be in full force and effect in accordance with
the terms of this Agreement; or (z) the Qualified Issuer shall repudiate,
disaffirm, disclaim, reject, in whole or in part, or challenge the validity of
its LD Security or Performance Security.


 


(g)           Insurance Default.  The failure of Seller to maintain and provide
the required insurance for the required period of coverage as set forth in Appendix
F.


 


(h)           Lease or Property
Default. Except as may be expressly permitted by this Agreement, any
of the Leases and Property Agreements fails to be in effect or any of the
Leases is terminated for any reason or amended in any material respect, without
Buyer’s written consent, not to be unreasonably withheld.


 


(i)            Seller Commercial
Operation Date Default. 
Failure by Seller to achieve the Commercial Operation Date within
two-hundred forty (240) calendar days following the Guaranteed Commercial
Operation Date (as such date may be extended for Force Majeure),


 


55

















 


and such failure is not
cured within thirty (30) calendar days after receipt of written notice thereof
from Buyer to Seller.


 


(j)            Buyer Purchase Default.  Failure by Buyer to accept Startup or Test
Energy prior to the Commercial Operation Date, Interim Energy during the
Interim Period and Excess Energy on or after the Prepayment Date, except as
provided under Section 5.6(g).


 


Seller shall, promptly upon
obtaining knowledge thereof, provide written notice to Buyer of the occurrence
of any Default of Seller (or breach of this Agreement) or any occurrence,
circumstance or event, or any combination thereof, which, with the lapse of
time, the giving of notice, or both, would constitute a Default of Seller (or
breach of this Agreement).


 


Section 14.2         Default Remedy.


 


(a)           If Buyer is in Default for nonpayment, subject to any duty
or obligation under this Agreement, Seller may, at its sole option, suspend
service, sell Energy and Environmental Attributes to third parties pursuant to
and in accordance with Section 7.4 or continue to provide services
pursuant to its obligations under this Agreement; provided that nothing
in this Section 14.2(a) shall affect Seller’s rights and
remedies set forth in this Section 14.2; and provided, further,
that Excess Energy sold to third parties shall not count toward Delivered
Guaranteed Generation.  Seller’s
continued service to Buyer shall not act to relieve Buyer of any of its duties
or obligations under this Agreement.


 


(b)           Notwithstanding any other provision herein, if any Default
has occurred and is continuing, the affected Party may, whether or not the
dispute resolution procedure set forth in Section 15.3 has been
invoked or completed, bring an action in any court of competent jurisdiction as
required by Section 15.3 seeking injunctive relief in accordance
with applicable California or Federal rules of civil procedure.


 


(c)           Except as expressly limited by this Agreement, if a
Default has occurred and is continuing and Buyer is the Defaulting Party,
Seller may without further notice exercise any rights and remedies provided
herein or otherwise available at law or in equity, including the right to
terminate this Agreement upon giving notice of intent to terminate to Buyer. No
failure of Seller to exercise, and no delay in exercising, any right, remedy or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by Seller of any right, remedy or power hereunder preclude any
other or future exercise of any right, remedy or power.


 


(d)           Except as expressly limited by this Agreement, if a
Default has occurred and is continuing and Seller is the Defaulting Party,
Buyer may without further notice exercise any rights and remedies provided for
herein, or otherwise available at law or equity, including (i) application
of all amounts available under the LD Security, Performance Security, and the
Deed of Trust against any amounts then payable by Seller to Buyer under this
Agreement, (ii) termination of this Agreement pursuant to Section 14.4,
(iii) exercise its rights under the Deed of Trust, subject to the
provisions of this Agreement, and (iv) foreclosure of Buyer’s Deed of
Trust, upon notice of intent to terminate this Agreement to Seller.  No failure of Buyer to exercise, and no delay
in exercising, any right, remedy or power hereunder shall operate as a


 


56

















 


waiver thereof, nor shall
any single or partial exercise by Buyer of any right, remedy or power hereunder
preclude any other or future exercise of any right, remedy or power.


 


Section 14.3         Effect of Termination on
Interconnection Agreement. The expiration or termination for any
reason of this Agreement shall not affect the Leases and Property Agreements or
the Interconnection Agreement or the continuing effectiveness thereof.


 


Section 14.4         Termination for Default.


 


(a)           If Default occurs, the Party that is not the Defaulting
Party (the “Non
Defaulting Party”) shall, for so long as the Default is
continuing, and subject to applicable cure rights, and without limiting any
other rights or remedies available to the Non-Defaulting Party under this
Agreement, possess the right to terminate this Agreement upon written notice to
the Defaulting Party in accordance with Section 15.2, such notice
of termination shall specify the date on which the termination is to become
effective.


 


(b)           Upon termination, the Non Defaulting Party shall liquidate
this Agreement as soon as practicable. The Termination Payment shall be
calculated in accordance with Section 14.5. With respect to Seller,
the Termination Payment shall be the sole and exclusive remedy for termination
of this Agreement after the termination under this Section 14.4 is
received.


 


(c)           Upon termination, the Non-Defaulting Party may withhold
any payments it owes the Defaulting Party for any obligations incurred prior to
termination under this Agreement until the Defaulting Party pays the
Termination Payment to the Non Defaulting Party. The Non Defaulting Party shall
possess the right to set off the amount due it under this Section 14.4
by any such payments due the Defaulting Party.


 


Section 14.5         Calculation of Termination Payment. The Non
Defaulting Party shall calculate the Termination Payment as follows:


 


(a)           If Seller is the Defaulting Party, upon any termination
under Section 14.4, Seller shall pay Buyer the Remaining Prepayment
Amount. In addition to such payment of the Remaining Prepayment Amount, Buyer
shall calculate the Gains, Losses, and Costs. The Gains, Losses, and Costs
shall include those for the Excess Energy and the Environmental Attributes,
which shall be determined by comparing (i) the value of the Excess Energy
and Environmental Attributes projected to be delivered for the remaining term
giving effect to the Excess Energy Price and the value derived from the
Environmental Attributes under this Agreement had it not been terminated to (ii) the
equivalent quantities and relevant market prices for the remaining term either
quoted by a bona fide third party offer or which are reasonably expected to be
available in the market under a replacement contract for this Agreement. To
ascertain the market prices of a replacement contract, Buyer may consider,
among other valuations, quotations from dealers in energy contracts and bona
fide third party offers, all adjusted for the length of the remaining term and
differences in transmission.  It is
expressly agreed that Buyer shall not be required to enter into replacement
transactions in order to determine the Termination Payment.


 


(b)           If Buyer is the Defaulting Party, upon any termination
under Section 14.4, Seller shall pay Buyer the Remaining Prepayment
Amount, unless offset by termination payments otherwise due to Seller. In
addition to such obligation for payment of the Remaining


 


57

















 


Prepayment Amount, Seller
shall calculate the Gains, Losses and Costs. The Gains, Losses, and Costs shall
include those for the Excess Energy and the Environmental Attributes, which
shall be determined by comparing the value of the Excess Energy and
Environmental Attributes projected to be delivered for the remaining Delivery
Term giving effect to the Excess Energy Price and the value derived from the
Environmental Attributes under this Agreement had it not been terminated to the
equivalent quantities and relevant market prices for the remaining Delivery
Term either quoted by a bona fide third party offer or which are reasonably
expected to be available in the market under a replacement contract for this
Agreement. To ascertain the market prices of a replacement contract, Seller may
consider, among other valuations, quotations from dealers in energy contracts
and bona fide third party offers, all adjusted for the length of the remaining
Delivery Term and differences in transmission. It is expressly agreed that
Seller shall not be required to enter into replacement transactions in order to
determine the Termination Payment.


 


(c)           The Gains and Losses for Excess Energy and Environmental
Attributes calculated under Section 14.5(a) shall be
discounted to present value using the Present Value Rate as of the time of
termination (to take account of the period between the time notice of
termination was effective and when such amount would have otherwise been due if
this Agreement had been performed in full).


 


(d)           Each Party shall use reasonable
efforts to mitigate or eliminate Costs.


 


(e)           In no event, however, shall a Party’s
Gains, Losses or Costs include any penalties or similar charges imposed by the
Non-Defaulting Party.


 


(f)            The Non Defaulting Party shall set off or aggregate, as
appropriate, the Gains and Losses and Costs and notify the Defaulting
Party.  If the Non Defaulting Party’s
aggregate Losses and Costs exceed its aggregate Gains with respect to Excess
Energy and Environmental Attributes, the Defaulting Party shall, within three (3) Business
Days of receipt of such notice, pay the resulting Termination Payment, after
any aggregation or set off as provided in Section 14.5(g), to the
Non Defaulting Party, which amount shall bear interest at the Present Value
Rate from the time notice of termination was received until paid. If the Non
Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, the
Termination Payment shall be zero.


 


(g)           The Non Defaulting Party shall aggregate or set off, as
applicable, at its election, any or all other amounts owing between the Parties
under this Agreement with or against the Termination Payment so that all such
amounts are aggregated and/or netted to a single liquidated amount, which shall
be the amount of the Termination Payment. Such Termination Payment shall be
paid within three (3) Business Days following the date notice of
termination is received. Notwithstanding any other provision of this Section 14.5,
if Buyer shall be the Non-Defaulting Party, in no event shall the amount of the
Termination Payment due Buyer be less than the Remaining Prepayment Amount,
subject, however, to aggregation or setoff, as applicable, of any amounts owing
between the Parties under this Agreement other than Gains, Losses and Costs.


 


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(h)           If the Defaulting Party disagrees with the calculation of
the Termination Payment and the Parties cannot otherwise resolve their
differences, the calculation issue shall be submitted to informal dispute
resolution as provided in Section 15.3(a). Pending resolution of
the dispute, the Defaulting Party shall pay the full amount of the Termination
Payment calculated by the Non Defaulting Party within three (3) Business
Days of receipt of notice of termination as set forth in Section 14.4(a) subject
to the Non Defaulting Party refunding, with interest, at the Present Value
Rate, any amounts determined to have been overpaid.


 


(i)            For purposes of this Section 14.5:


 


(1)                   “Gains”
means the economic benefit (exclusive of Costs), if any, resulting from the
termination of this Agreement, determined in a commercially reasonable manner,
as calculated in accordance with this Section 14.5;


 


(2)                   “Losses”
means the economic loss (exclusive of Costs), if any, resulting from the
termination of this Agreement, determined in a commercially reasonable manner
as calculated in accordance with this Section 14.5;


 


(3)                   “Costs”
means brokerage fees, commissions and other similar transaction costs and
expenses reasonably incurred in terminating any specifically related
arrangements or entering into arrangements which replace this Agreement, and
excluding attorneys’ fees, if any, incurred in connection with the Non Defaulting
Party enforcing its rights with regard to this Agreement.


 


ARTICLE XV


MISCELLANEOUS


 


Section 15.1
Authorized Representative.  Each
Party hereto shall designate an authorized representative who shall be
authorized to act on its behalf with respect to those matters contained herein
(each an “Authorized
Representative”), which shall be the functions and
responsibilities of such Authorized Representatives.  Each Party may also designate an alternate
who may act for the Authorized Representative. Within thirty (30) calendar days
after execution of this Agreement, each Party shall notify the other Party in
writing of the identity of its Authorized Representative, and alternate if
designated, and shall promptly notify the other Party of any subsequent changes
in such designation. The Authorized Representatives shall have no authority to
alter, modify, or delete any of the provisions of this Agreement.  Prior to the Commercial Operation Date, the
Authorized Representative of each Party will meet periodically to discuss
issues related to the sharing of information on the operation and maintenance
of the Facility and interconnection facilities, provided, however,
except as otherwise provided herein with respect to the scheduling of Startup
and Test Energy, that Buyer shall
have no right to approve Seller’s schedules or budgets.  Each Party by notice to the other Party may
also designate a Person as its designee as provided in this Agreement.


 


Section 15.2
Notices. With the exception of billing invoices pursuant to Section 12.1
hereof, all notices, requests, demands, consents, waivers and other
communications which are required under this Agreement shall be in writing and
shall be deemed properly sent if delivered in person or sent by facsimile transmission,
reliable overnight courier, or sent by registered or


 


59

















 


certified mail, postage
prepaid to the persons specified in Appendix C.  In addition to the foregoing, the Parties may
agree in writing at any time to deliver notices, requests, demands, consents,
waivers and other communications through alternate methods, such as electronic
mail.


 


Section 15.3         Dispute Resolution.  Subject to Section 14.2(b),
regarding suits for injunctive relief, disputes under this Agreement between
Seller and Buyer may be resolved in accordance with the provisions of this Section 15.3.


 


(a)           In the event of any claim, controversy or dispute between
the Parties arising out of or relating to or in connection with this Agreement
(including any dispute concerning the validity of this Agreement or the scope
and interpretation of this Section 15.3) (a “Dispute”), either
Party (the “Notifying
Party”) may deliver to the other Party (the “Recipient Party”)
notice of the Dispute with a detailed description of the underlying
circumstances of such Dispute (a “Dispute Notice”). The Dispute Notice shall
include a schedule of the availability of the Notifying Party’s senior officers
(having a title of senior vice president (or its equivalent) or higher) duly
authorized to settle the Dispute during the thirty (30) day period following
the delivery of the Dispute Notice.


 


(b)           The Recipient Party shall within five (5) Business
Days following receipt of the Dispute Notice, provide to the Notifying Party a
parallel schedule of availability of the Recipient Party’s senior officers
(having a title of senior vice president (or its equivalent) or higher) duly
authorized to settle the Dispute. Following delivery of the respective senior
officers’ schedules of availability, the senior officers of the Parties shall
meet and confer as often as they deem reasonably necessary during the remainder
of the thirty (30) day period in good faith negotiations to resolve the Dispute
to the satisfaction of each Party.


 


(c)           In the event a Dispute is not resolved pursuant to the
procedures set forth in Section 15.3(a) and Section 15.3(b) by
the expiration of the thirty (30) day period set forth in Section 15.3(a) then
either Party may pursue any legal remedy available to it in accordance with the
provisions of Section 15.12 of this Agreement.


 


(d)           Claims Presentment Under California Law.  As stated in Section 15.12, this
Agreement shall be governed by, interpreted and enforced in accordance with the
laws of the State of California, without regard to the conflict of laws
principles thereof. In addition to the dispute resolution process set forth in
this Section, the Parties to this Agreement must comply with California law
governing claims against public entities and presentment of such claims.


 


Section 15.4         Further Assurances. Each Party
agrees to execute and deliver all further instruments and documents, and take
all further action not inconsistent with the provisions of this Agreement that
may be reasonably necessary to effectuate the purposes and intent of this
Agreement.


 


Section 15.5         No Dedication of Facilities. Any
undertaking by one Party hereto to the other Party under any provisions of this
Agreement shall not constitute the dedication of the system or any portion
thereof of either Party to the public or to the other Party or any other
Person, and it is understood and agreed that any such undertaking by either
Party shall cease upon the termination of such Party’s obligations under this
Agreement.


 


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Section 15.6         Force Majeure.


 


(a)           A Party shall not be considered to be in default in the
performance of any of its obligations under this Agreement (other than the
obligations of a Party to make payment of amounts due under this Agreement),
including Buyer’s obligations to receive Energy (including Startup or Test
Energy, Interim Energy, Guaranteed Generation, Excess Energy and Shortfall
Energy) at the Point of Delivery, when and to the extent such Party’s
performance is prevented by a Force Majeure that, despite the exercise of due
diligence, such Party is unable to prevent or mitigate; provided the
Party has given a written detailed description of the full particulars of the
Force Majeure to the other Party reasonably promptly after becoming aware
thereof (and in any event within fourteen (14) days after the initial
occurrence of the claimed Force Majeure) (the “Force Majeure Notice”), which notice
shall include information with respect to the nature, cause and date and time
of commencement of such event, and the anticipated scope and duration of the
delay.  The Party providing such notice
shall be excused from fulfilling its obligations under this Agreement until
such time as the Force Majeure has ceased to prevent performance or other
remedial action is taken, at which time the Party shall promptly notify the
other Party of the resumption of its obligations under this Agreement.
Notwithstanding anything in this Agreement to the contrary, if Seller is unable
to deliver or Buyer is unable to receive Excess Energy due to a Force Majeure,
Buyer shall have no obligation to pay Seller for the Excess Energy not
delivered or received by reason thereof. It is understood by the Parties that
the foregoing provisions shall not excuse any obligations of Seller with
respect to delivery of the Guaranteed Generation under Article VII,
or Shortfall Energy and Replacement Energy provided under Article X,
or Buyer’s obligation to make Monthly Payments up to the time that Seller
ceases deliveries of Energy due to Force Majeure. In no event shall Buyer be
obligated to compensate Seller or any other Person for any losses, expenses or
liabilities that Seller or such other Person may sustain as a consequence of
any Force Majeure.


 


(b)           The term “Force Majeure” means any act of God, labor disturbance,
act of the public enemy, war, insurrection, riot, fire, terrorism, storm or
flood, explosion, change in law or any order, regulation or restriction imposed
by governmental, military or lawfully established civilian authorities (i) which
prevents one Party from performing any of its obligations under this Agreement,
(ii) which could not reasonably be anticipated as of the date of this
Agreement, (iii) which is not within the reasonable control of, or the result
of negligence, willful misconduct, breach of contract, intentional act or
omission or wrongdoing on the part of the affected Party (or any subcontractor
or Affiliate of that Party, or any Person under the control of that Party or
any of its subcontractors or Affiliates, or any Person for whose acts such
Affiliate or subcontractor is responsible), and (iv) which by the exercise
of due diligence the affected Party is unable to overcome or avoid or cause to
be avoided; provided nothing in this clause (iv) shall be construed
so as to require either Party to accede or agree to any provision not
satisfactory to it in order to settle and terminate a strike or labor dispute
in which it may be involved.  Any Party
rendered unable to fulfill any of its obligations by reason of a Force Majeure
shall exercise reasonable efforts to remove such inability with reasonable
dispatch within a reasonable time period and mitigate the effects of the Force
Majeure. The relief from performance shall be of no greater scope and of no
longer duration than is required by the Force Majeure. Without limiting the
generality of the foregoing, a Force Majeure does not include any of the
following (each an “Unexcused
Cause”): (1) any requirement to meet a renewable portfolio
standard or any change (whether voluntary or mandatory) in any renewable
portfolio


 


61

















 


standard that may affect the
value of the Energy purchased hereunder; (2) events arising from the
failure by Seller to construct, operate or maintain the Facility in accordance
with this Agreement, unless such failure was itself caused by an event of Force
Majeure; (3) any increase of any kind in any cost; (4) delays in or
inability of a Party to obtain financing or other economic hardship of any
kind; (5) Seller’s ability to sell any Energy at a price in excess of that
provided in this Agreement or Buyer’s ability to purchase any Energy at a price
less than those provided in this Agreement; (6) curtailment or other
interruption of any Transmission Service unless such curtailment or
interruption was itself caused by an event of Force Majeure; failure of third
parties to provide goods and services essential to a Party’s performance,
unless such failure was itself caused by an event of Force Majeure; (7) Facility
or related equipment failure of any kind, including wells, machinery and lines
of pipe; or (8) any changes in the financial condition of Buyer, Seller,
the Facility Lender or any subcontractor or supplier affecting the affected Party’s
ability to perform its obligations under this Agreement.


 


Section 15.7         Assignment of Agreement.


 


(a)           Except as set forth in this Section 15.7,
neither Party hereto shall assign or transfer this Agreement, in whole or in
part, or any of its interests hereunder to any other Person without the prior
written consent of the other Party hereto. 
Such consent shall not be unreasonably withheld by either Party. Any
attempt to transfer or assign this Agreement, or any privilege hereunder,
without such prior written consent, except as provided herein, shall be void
and confer no right on any Person that is not a party to this Agreement.


 


(b)           Seller’s consent shall not be required for Buyer to assign
this Agreement, in whole or in part; to any of Buyer’s members, provided
that at the time of assignment each of the assignees shall have an investment
grade rating from Moody’s or Standard & Poor’s.


 


(c)           Buyer’s consent shall not be required for Seller to assign
this Agreement to an Affiliate of Seller, subject however to compliance with Section 13.3;
provided that Seller provides reasonable assurances and executes
documents reasonably required by Buyer regarding Seller’s continued liability
for all of Seller’s obligations under this Agreement in the event of any nonperformance
on the part of such assignee.


 


(d)           Except as otherwise provided in Buyer’s indenture of trust
or similar agreement under which Buyer issues or has issued bonds or other
obligations relating to the Facility, it is specifically agreed that there are
no third party beneficiaries of this Agreement, and that, except as provided in
this Section 15.7, this Agreement shall not grant any rights
enforceable by any Person not a party to this Agreement.  Notwithstanding the foregoing, Buyer’s
consent shall not be required for Seller to collaterally assign this Agreement
for the sole purpose of financing this Facility to any Facility Lender; provided,
however, that the terms of such financing and the documentation relating
thereto shall comply with the applicable terms and conditions of this
Agreement.  Seller shall provide Buyer
with written notice of any such assignment to any Facility Lender no later than
thirty (30) days after the assignment. Notwithstanding the foregoing or
anything else expressed or implied herein to the contrary, other than liens on
the proceeds of the Energy or Environmental Attributes in favor of the Facility
Lender, Seller shall not assign, transfer, convey, encumber, sell or otherwise
dispose of all or any portion of the Energy, Capacity Rights or Environmental
Attributes to any Person.


 


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(e)           To facilitate Seller’s obtaining of financing to construct
and operate the Facility, Buyer shall provide such consents to assignment or
other documents (in form and substance satisfactory to Buyer) as may be
reasonably requested by Seller or any Facility Lender in connection with the
financing of the Facility, including the acquisition of equity for the
development, construction and operation of the Facility; provided, however,
that the terms of such financing and the documentation relating thereto shall
comply with the applicable terms and conditions of this Agreement.  Seller shall reimburse, or shall cause the
Facility Lender to reimburse, Buyer for the incremental direct expenses
incurred by Buyer in the preparation, negotiation, execution and/or delivery of
any documents requested by Seller or the Facility Lender, and provided by
Buyer, pursuant to this Section 15.7(e).


 


(f)            In no event shall Buyer be liable to Facility Lender for
any claims, losses, expenses or damages whatsoever other than liability Buyer
may have to Seller under this Agreement. In the event of any foreclosure,
whether judicial or nonjudicial, or any deed in lieu of foreclosure, in
connection with any deed of trust, mortgage, or other similar Lien, Facility
Lender or other transferee, and their successors in interest and assigns, will
be bound by the covenants and agreements of Seller in this Agreement; provided,
however, that until the Person who acquires title to the Facility
executes and delivers to Buyer a written assumption of Seller’s obligations
under this Agreement in form and substance acceptable to Buyer, such Person
will not be entitled to any of the benefits of this Agreement. Any sale or
transfer of the Facility by Facility Lender must be made only to an entity that
is acceptable to Buyer and has financial qualifications and operating
experience equivalent to Seller.


 


(g)           Notwithstanding the provision in Section 3.1
as to the ownership of the Facility by Seller during the Agreement Term, Seller
may secure its obligations under the Credit Agreement by granting a lien on and
security interest in and to the Facility under a deed of trust and related
documents which shall include an assignment of Seller’s rights and interests
under the Agreement; provided that such deed of trust and related
documents shall be subject to, and Seller, Buyer and the Facility Lenders shall
enter into and comply with, the terms and provisions of a Consent and Agreement
in substantially the form set forth in Appendix O to the Agreement.


 


(h)           Seller may subcontract its duties or obligations under
this Agreement without the prior written consent of Buyer, provided,
that no such subcontract shall relieve Seller of any of its duties or
obligations hereunder.


 


Section 15.8         Ambiguity.  The Parties acknowledge that this Agreement
was jointly prepared by them, by and through their respective legal counsel,
and any uncertainty or ambiguity existing herein shall not be interpreted
against either Party on the basis that the Party drafted the language, but
otherwise shall be interpreted according to the application of the rules on
interpretation of contracts.


 


Section 15.9         Attorney Fees & Costs. Both Parties
hereto agree that in any action to enforce the terms of this Agreement that
each Party shall be responsible for its own attorney fees and costs. Each of
the Parties to this Agreement was represented by its respective counsel during
the negotiation and execution of this Agreement.


 


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Section 15.10       Voluntary Execution.  Both Parties hereto acknowledge that they
have read and fully understand the content and effect of this Agreement that
the provisions of this Agreement have been reviewed and approved by their
respective counsel.  The Parties to this
Agreement further acknowledge that they have executed this Agreement
voluntarily, subject only to the advice of their own counsel, and do not rely
on any promise, inducement, representation or warranty that is not expressly
stated herein.


 


Section 15.11       Entire Agreement.  This Agreement (including all Appendices and
Exhibits) contains the entire understanding concerning the subject matter
herein and supersedes and replaces any prior negotiations, discussions or
agreements between the Parties, or any of them, concerning that subject matter,
whether written or oral, except as expressly provided for herein.  This is a fully integrated document.  Each Party acknowledges that no other party,
representative or agent, has made any promise, representation or warranty,
express or implied, that is not expressly contained in this Agreement that
induced the other Party to sign this document. This Agreement may be amended or
modified only by an instrument in writing signed by each Party.


 


Section 15.12       Governing Law. This
Agreement shall be governed by, interpreted and enforced in accordance with and
construed under the laws of the State of California without regard to conflict
of law principles.


 


Section 15.13       Venue. All litigation arising out
of, or relating to this Agreement, shall be brought in a state or federal court
in the County of Los Angeles in the State of California. The Parties
irrevocably agree to submit to the exclusive jurisdiction of such courts in the
State of California and waive any defense of forum
non conveniens.


 


Section 15.14       Execution in Counterparts.  This Agreement may be executed in
counterparts and upon execution by each signatory, each executed counterpart
shall have the same force and effect as an original instrument and as if all
signatories had signed the same instrument. Any signature page of this
Agreement may be detached from any counterpart of this Agreement without
impairing the legal effect of any signature thereon, and may be attached to
another counterpart of this Agreement identical in form hereto by having
attached to it one or more signature pages.


 


Section 15.15       Effect of Section Headings.  Section headings appearing in this
Agreement are inserted for convenience only and shall not be construed as
interpretations of text.


 


Section 15.16       Waiver. The failure of either
Party to this Agreement to enforce or insist upon compliance with or strict
performance of any of the terms or conditions hereof, or to take advantage of
any of its rights hereunder, shall not constitute a waiver or relinquishment of
any such terms, conditions or rights, but the same shall be and remain at all
times in full force and effect. Notwithstanding anything expressed or implied
herein to the contrary, nothing contained herein shall preclude either Party
from pursuing any available remedies for breaches not rising to the level of a
Default, including without limitation recovery of damages caused by the breach
of this Agreement and specific performance or any other remedy given under this
Agreement or now or hereafter existing in law or equity or otherwise.  Each Party acknowledges that money damages
may not be an adequate remedy for violations of this Agreement and that either
Party


 


64

















 


may, in its sole discretion,
seek and obtain from a court of competent jurisdiction specific performance or
injunctive or such other relief as such court may deem just and proper to
enforce this Agreement or to prevent any violation hereof. Each Party hereby
waives any objection to specific performance or injunctive relief. The rights
granted herein are cumulative.


 


Section 15.17       Relationship of the Parties. This
Agreement shall not be interpreted to create an association, joint venture or
partnership between the Parties hereto or to impose any partnership obligation
or liability upon either such Party. 
Neither Party shall have any right, power or authority to enter into any
agreement or undertaking for, or act on behalf of, or to act as an agent or
representative of, the other Party.


 


Section 15.18       Indemnification; Damage or Destruction; Insurance;
Limit of Liability.


 


(a)           Indemnification.
Seller undertakes and agrees to indemnify and hold harmless Buyer and all of
the officers and employees of each, and, at the option of Buyer, defend Buyer,
and any and all of its Board, officers, agents, employees, advisors, assigns
and successors in interest from and against any and all suits and causes of
action, claims, charges, damages, demands, judgments, civil fines and penalties,
or losses of any kind or nature whatsoever, for death, bodily injury or
personal injury to any person, including Seller’s employees and agents, or
damage or destruction to any property of either Party, or third persons in any
manner arising by reason of (i) any breach of this Agreement by, or (ii) the
negligent acts, errors, omissions or willful misconduct of, in each case under (i) and
(ii), Seller, or any of Seller’s officers, agents, employees, or subcontractors
of any tier, except to the extent caused by the gross negligence or willful
misconduct of Buyer, its Board, officers, agents, or employees.


 


(b)           Damage or Destruction.
In the event of any damage or destruction of the Facility or any part thereof,
the Facility or such part thereof shall be diligently repaired, replaced or
reconstructed by the Seller so that the Facility or such part thereof shall be
restored to substantially the same general condition and use as existed prior
to such damage or destruction, unless a different condition or use is approved
by Buyer. Proceeds of Insurance with respect to such damage or destruction
maintained as provided in this Agreement shall be applied, subject to the
consent of the Facility Lender, not to be unreasonably withheld, to the payment
for such repair, replacement or reconstruction of the damage or destruction.


 


(c)           Insurance.
Seller shall obtain and maintain the Insurance coverages listed in Appendix
F.


 


(d)           Condemnation or Other
Taking. For the Agreement Term, Seller shall immediately notify
Buyer of the institution of any proceeding for the condemnation or other taking
of the Facility or any portion thereof. Buyer may participate in any such
proceeding and Seller will deliver to Buyer all instruments necessary or
required by Buyer to permit such participation. 
Without Buyer’s prior written consent, Seller (i) shall not agree
to any compensation or award, and (ii) shall not take any action or fail
to take any action which would cause the compensation to be determined.  All awards and compensation for the taking or
purchase in lieu of condemnation of the Facility or any portion thereof shall
be applied toward the repair, restoration, reconstruction or replacement of the
Facility


 


65

















 


(e)           Limitation of Liability.
Except to the extent included in (i) the liquidated damages, (ii) indemnification
obligations related to third party claims, and (iii) other specific
charges expressly provided for herein, neither Party hereunder shall be liable
for special, incidental, exemplary, indirect, punitive or consequential damages
arising out of a Party’s performance or non-performance under this Agreement,
whether based on or claimed under contract, tort (including such Party’s own
negligence) or any other theory at law or in equity. Anything to the contrary
in the Agreement notwithstanding, Seller’s maximum liability under the Agreement
shall not exceed the Prepayment Amount; provided, however, the
foregoing limitation of liability shall not apply to liability arising out of
the gross negligence or willful misconduct of Seller or its
subcontractors.  In addition, to the
extent that Buyer receives any insurance proceeds or other payment from a third
party with respect to its losses, the amounts received shall not count toward
or reduce the liability cap set forth herein.


 


Section 15.19       Severability.  In the event any of the terms, covenants or
conditions of this Agreement, or the application of any such terms, covenants
or conditions, shall be held invalid, illegal or unenforceable by any court
having jurisdiction, all other terms, covenants and conditions of this
Agreement and their application not adversely affected thereby shall remain in
force and effect, provided that the remaining valid and enforceable
provisions materially retain the essence of the Parties’ original bargain.


 


Section 15.20       Confidentiality.


 


(a)           Each Party agrees, and shall use reasonable efforts to
cause its parent, subsidiary and Affiliates, and its and their respective
directors, officers, employees and representatives, as a condition to receiving
confidential information hereunder, to keep confidential, except as required by
law, all documents, data, drawings, studies, projections, plans and other
written information that relate to economic benefits to or amounts payable by
either Party under this Agreement, and, with respect to documents that are
clearly marked “Confidential” at the time a Party shares such information with
the other Party (“Confidential
Information”).  The
provisions of this Section 15.20 shall survive and shall continue
to be binding upon the Parties for period of one (1) year following the
date of termination of this Agreement. 
Notwithstanding the foregoing, information shall not be considered
confidential which (i) is disclosed with the prior written consent of the
originating Party, (ii) was in the public domain prior to disclosure or is
or becomes publicly known or available other than through the action of the
receiving Party in violation of this Agreement, (iii) was lawfully in a
Party’s possession or acquired by a Party outside of this Agreement, which
acquisition was not known by the receiving Party to be in breach of any
confidentiality obligation, or (iv) is developed independently by a Party
based solely on information that is not considered confidential under this
Agreement .


 


(b)           Either Party may, without violating this Section 15.20,
disclose matters that are made confidential by this Agreement:


 


(1)                   To its
counsel, accountants, auditors, advisors, other professional consultants,
credit rating agencies, actual or prospective co-owners, investors, lenders,
underwriters, contractors, suppliers, and others involved in construction,


 


66

















 


operation, and financing
transactions and arrangements for a Party or its subsidiaries, affiliates, or
parent;


 


(2)                   To
governmental officials and parties involved in any proceeding in which either
Party is seeking a permit, certificate, or other regulatory approval or order
necessary or appropriate to carry out this Agreement; to governmental officials
or the public as required by any law, regulation, order, rule, ruling or other
Requirement of Law, including without limitation oral questions, discovery
requests, subpoenas, civil investigations or similar processes and laws or
regulations requiring disclosure of financial information, information material
to financial matters, and filing of financial reports.  If a Party is requested or required, pursuant
to any applicable law, regulation, order, rule, order, ruling or other
Requirement of Law, discovery request, subpoena, civil investigation or similar
process to disclose any of the Confidential Information, such Party shall
provide prompt written notice to the other Party of such request or requirement
so that at such other Party’s expense, such other Party can seek a protective
order or other appropriate remedy concerning such disclosure.


 


(c)           Notwithstanding the foregoing or any other provision of
this Agreement, Seller acknowledges that Buyer, as a California municipal
corporation, is subject to disclosure as required by the California Public
Records Act, Cal. Govt. Code §§ 6250, et.
seq. (“CPRA”),
and the Ralph M. Brown Act, Cal. Govt. Code §§ 54950, et. seq. (“Brown Act”). Confidential Information of
Seller provided to Buyer pursuant to this Agreement will become the property of
Buyer and Seller acknowledges that Buyer shall not be in breach of this
Agreement or have any liability whatsoever under this Agreement or otherwise
for any claims or causes of action whatsoever resulting from or arising out of
Buyer’s copying or releasing to a third party any of the Confidential
Information of Seller pursuant to the CPRA or Brown Act. Notwithstanding the
foregoing or any other provision of this Agreement, Buyer may record, register,
deliver and file all such notices, statements, instruments and other documents
as may be necessary or advisable to render fully valid, perfected and
enforceable under all applicable law the credit support contemplated by this
Agreement and the rights, Liens and priorities of Buyer with respect to such
credit support.


 


(d)           If Buyer receives a CPRA request for Confidential
Information of Seller, and Buyer determines that such Confidential Information
is subject to disclosure under the CPRA, then Buyer will notify the Seller of
the request and its intent to disclose the documents. The Buyer, as required by
the CPRA, will release such documents unless the Seller timely obtains a court
order prohibiting such release. If Seller, at its sole expense, chooses to seek
a court order prohibiting the release of Confidential Information pursuant to a
CPRA request, then Seller undertakes and agrees to defend, indemnify and hold
harmless Buyer from and against all suits, claims, and causes of action brought
against Buyer for Buyer’s refusal to disclose Confidential Information of
Seller to any person making a request pursuant to CPRA. Seller’s indemnity
obligations shall include, but are not limited to, all actual costs incurred by
Buyer, and specifically including costs of experts and consultants as well as
all damages or liability of any nature whatsoever arising out of any such
suits, claims, and causes of action brought against Buyer, through and
including any appellate proceedings. Seller’s obligations to Buyer under this
indemnification provision shall be due and payable on a monthly, ongoing basis
within thirty


 


67

















 


(30) days after each
submission to Seller of Buyer’s invoices for all fees and costs incurred by Buyer,
as well as all damages or liability of any nature.


 


Section 15.21       Buyer’s Cure Rights and Rights Under
Foreclosure.


 


(a)           Buyer Cure Rights Under the Credit Agreement.  The provisions of the Credit Agreement which
relate to the Buyer’s cure rights and the enforcement thereof shall be in form
and substance reasonably acceptable to Buyer and shall provide Buyer with the
right, but not the obligation, at any time, to pay any or all amounts due from
Seller thereunder and to do any other act or thing required of Seller, in each
case to cure any default of Seller thereunder or to prevent the termination of
the Credit Agreement or the exercise of any remedy by the Facility Lenders
thereunder which would preclude Buyer from exercising its purchase option
pursuant to this Section, as contemplated by Section 1.3 of the Consent
and Agreement.  Under the Credit
Agreement the Facility Lenders shall agree not to exercise remedies under the
Credit Agreement or any related collateral documents which would preclude Buyer
from exercising its purchase option pursuant to this Section, as contemplated
by Section 1.3 of the Consent and Agreement until Buyer has been given
thirty (30) days from its receipt of notice by the Facility Lenders of the
default by Seller to cure a monetary default and, if such default is
non-monetary, sixty (60) days from receipt of such notice (or up to ninety (90)
days, so long as Buyer is diligently pursuing appropriate action to cure and
has made progress toward curing such non-monetary default); and the effect of
any such cure by Buyer shall be as if Seller had cured the applicable default
within the cure period afforded Seller under the Credit Agreement, including
cessation of exercise of remedies by the Facility Lenders. Upon any payment or
cure by the Buyer relating to such a default by Seller, the amounts expended by
Buyer to provide such cure, including any defaulted payment and interest
thereon and all other payments made and expenses incurred by Buyer in providing
such cure shall be recovered by Buyer as follows:  (i) in the event of the payment of the
Prepayment Amount and purchase of Delivered Energy by Buyer, from and after the
date of payment of the Prepayment Amount but subject to the provisions with
respect to Shortfall Energy under Section 10.1 and Section 10.2,
such amounts expended to provide such cure shall be applied in reduction of the
Excess Energy Price payable by Buyer for Excess Energy as provided under Section 7.1,
or (ii) in the event of the purchase of the Facility by Buyer under this
Section, the purchase price shall be reduced by such amounts expended to
provide such cure up to a maximum reduction of $2.5 million. For purposes of
exercising and enforcing its cure rights as set forth in this Section 15.21
and in the Credit Agreement, Buyer shall be an express third party beneficiary
of the applicable provisions under the Credit Agreement.  No action of Buyer taken pursuant to the
exercise of its rights as provided in this Section 15.21 shall be
deemed to be a waiver of any right accruing to Buyer on account of the
occurrence of any matter which constitutes a default or a breach of Seller’s
obligations under the Agreement.


 


(b)           Foreclosure Under the Credit Agreement. In the
event of any default by Seller under the Credit Agreement that has not been
cured and upon receipt by Buyer of a Foreclosure Notice (as defined in the
Consent and Agreement), Buyer shall have the right, at its option, to purchase
the Facility from Seller in lieu of foreclosure as set forth in this Section 15.21.  In the event that Buyer furnishes written
notice to Seller with a copy to the Facility Lenders within sixty (60) days
following Buyer’s receipt of such Foreclosure Notice that it will exercise its
option to purchase the Facility and setting forth the date of such purchase
(which shall be within ninety (90) days following the date of such Foreclosure
Notice), Buyer shall


 


68

















 


purchase the Facility from
Seller as hereinafter provided.  In the
case of such purchase of the Facility, Buyer shall furnish Seller with at least
fifteen (15) days written notice of the date of purchase and furnish a copy of
such notice to the Facility Lenders. The purchase price of the Facility shall
be paid by the Buyer to the account designated by the Facility Lenders and
shall be equal to the amount of the Facility Debt. Seller agrees and expressly
represents and warrants to Buyer that its rights to sell the Facility to Buyer
in accordance with the provisions of this Section 15.21 do not and
will not conflict with and are permitted by the Credit Agreement and the deed
of trust and related agreements and documents securing Seller’s performance
under the Credit Agreement.


 


Section 15.22       LADWP Business Policies. Seller shall
use reasonable efforts to comply with the following business policies as
applicable hereunder to the extent that Seller is required to do so under
California law:


 


(a)           LADWP’s Recycling Policy.  The Buyer supports the use of
recycled-content products of all types. 
Recycled-content products help conserve natural resources, including
water and energy, and reduce demands upon landfills.


 


The Seller shall submit all
written documents on paper with a minimum of 30 percent post-consumer recycled
content.  Existing company/corporate
letterhead/stationery that accompanies these documents is exempt from this
requirement.  Documents of two or more pages in
length shall be duplex-copied (double-sided pages). Neon or fluorescent paper
shall not be used in any written documents submitted to Buyer.


 


(b)           Non-Discrimination/Equal
Employment Practices/Affirmative Action Construction &
Non-Construction Agreements. During the performance of this
Agreement, Seller shall not discriminate in its employment practices against
any employee or applicant for employment because of race, religion, national
origin, ancestry, sex, age or physical handicap. All subcontracts awarded under
this Agreement shall contain a like nondiscrimination provision. The applicable
provisions of Executive Order No. 11246 of September 24, 1965; Part 60-741
of 41 Code of Federal Regulations pertaining to handicapped workers, including
60-741.4 Affirmative Action Clause; and Sections 10.8 to 10.13 of the Los
Angeles Administrative Code pertaining to nondiscrimination in employment in
the performance of City of Los Angeles contracts are incorporated herein by
reference and made a part hereof as if they were fully set forth herein.


 


Each of the above documents,
if approved, shall be effective for twelve (12) months following the date of
approval for the Affirmative Action practices.


 


(c)           Supplier Diversity.  It is the policy of Buyer to provide Minority
Business Enterprises (“MBEs”),
Women Business Enterprises (“WBEs”) and all other business enterprises an equal
opportunity to participate in the performance of all LADWP
agreements/contracts. The Seller shall assist LADWP in implementing this policy
and shall use its reasonable efforts to attain MBE and WBE participation of 15
percent and 7 percent, respectively, and to ensure that all available business
enterprises, including MBEs and WBEs, have an equal opportunity to compete for
and participate in the work of this Agreement.


 


69

















 


(1)                   MBE/WBE Defined. “Minority Business
Enterprise” (“MBE”)
or “Women’s Business Enterprise” (“WBE”), as used herein means a business
enterprise that meets both of the following criteria:


 


(2)                   A business
that is at least 51 percent owned by one or more minority person(s) or
women or, in the case of any business whose stock is publicly held, at least 51
percent of the stock is owned by one or more minority person(s) or women.


 


(3)                   A business
whose management and daily business operations are controlled by one or more
minority person(s) or women.


 


(d)           Taxpayer Identification
Number (TIN).  Seller declares
that its authorized TIN is 20 8740764. No payment will be made under this
Agreement without a valid TIN number.


 


Section 15.23       Service Contract. The Parties
intend that this Agreement will qualify as a “service contract” as such term is
used in Section 7701(e) of the Code.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


70

















 


IN WITNESS WHEREOF, each
Party was represented by legal counsel during the negotiation and execution of
this Agreement and the Parties hereto have executed this Agreement as of the
date set forth at the beginning of this Agreement.


 


 


	
   

  	
   

  	
  Southern California Public
  Power Authority

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  10/18/10

  	
   

  	
  By:

  	
  /s/ Marcie L. Edwards

  
	
   

  	
   

  	
  Name:

  	
  Marcie L. Edwards

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Milford Wind Corridor
  Phase II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  March 1, 2010

  	
   

  	
  By:

  	
  /s/ Paul Gaynor 

  
	
   

  	
   

  	
  Name:

  	
  Paul Gaynor 

  
	
   

  	
   

  	
  Its:

  	
  President

  



 


71

















 


APPENDIX A


 


MONTHLY PAYMENT SCHEDULE


 


1.             Monthly Energy Payment (MEP) for
Excess Energy.  Buyer shall
make monthly payment to Seller for all Excess Energy pursuant to Section 12.1(a).
The monthly payment for Excess Energy shall be made in accordance to the
following formula:


 


MEP = EEP × DEE


 


Where:


 


EEP is the Excess Energy
Price, which is $40.00 per MWh and escalated at an annual rate of 2.00% for
twenty (20) Contract Years, commencing on January 1, 2011, and continuing
on each anniversary of that date.


 


DEE is the MWh of Delivered
Excess Energy delivered or deemed to be delivered to the Point of Delivery
during the month, as metered according to Section 12.5, as may be
adjusted pursuant to Section 5.6(g).


 


2.             Monthly Payment for Startup and Test
Energy. Buyer shall purchase Startup and Test Energy at a price equal to $
40.00 per MWh. All Startup and Test Energy shall be scheduled in accordance
with Buyer procedures in Section 5.6(a).  Buyer shall receive any and all Environmental
Attributes associated with the Startup and Test Energy, the value of which is
included in this Startup and Test Energy price.


 


3.             Monthly Environmental Attributes
Payment. Commencing on the Prepayment Date, Buyer shall make a monthly payment
to the Seller for the transfer of all Environmental Attributes pursuant to Section 9.1
in an amount equal to $16.50 per MWh times the Facility Metered Output and
escalated at an annual rate of 2.00% for twenty (20) Contract Years, commencing
on January 1, 2011 and continuing on each anniversary of that date.


 


4.             Taxes and Operating Insurance
Payment.  Commencing on the Prepayment
Date, Buyer shall reimburse Seller for all Taxes and Operating Insurance
premiums as set forth in Section 7.1(k)of the Agreement; provided
that such Taxes and Operating Insurance premiums associated with Site Common
Facilities or the Transmission Line will be apportioned to the Seller pro-rata
based on the Site Common Facilities Interests or the Facility Transmission Line
Interests, as the case may be, in the Site Common Facilities or the
Transmission Line, respectively, and in accordance with the common or joint
ownership, operation or use agreements therefor entered into in accordance with
Section 2.7 or Section 2.8, as applicable. Such Taxes
and Operating Insurance payments in the aggregate shall not exceed $4 million
for any Contract Year, escalated at an annual rate of 1.75% commencing on January 1,
2011 and continuing on each anniversary of that date. In the event Seller fails
to pay when due any Taxes or any Operating Insurance premiums, and fails to
make such payment within five days following notice from Buyer of such failure,
Buyer shall have the right to pay such Taxes or Operating Insurance premiums,
as the case may be, and Seller shall refund to Buyer the monthly payments made
by Buyer with respect to such overdue Taxes or Operating Insurance premiums


 


A-1

















 


pursuant to Section 7.1(k) with
interest on such amounts of monthly payments at the Present Value Rate.  Thereafter, Buyer shall have the right
exercised on notice to Seller to pay such Taxes or Operating Insurance
premiums, as applicable, in lieu of making monthly payments therefor as
provided in Section 7.1(k).


 


5.             Monthly Payment for Interim Energy. Buyer shall
purchase Interim Energy at a price equal to $70.00 per MWh (the “Interim Energy Rate”).


 


A-2














 


APPENDIX B


 


TO THE


POWER PURCHASE AGREEMENT


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


FACILITY DESCRIPTION AND MILESTONE SCHEDULE


 


ARTICLE
I.   FACILITY DESCRIPTION


 


·                  The Facility
Generating Premises, consisting of at least approximately 5,000 acres, as
described in Exhibit A to this
Appendix B, which consist of leaseholds and other property rights and interests
under the Leases and Property Agreements as set forth in Section 2.6.
Prior to the Commercial Operation Date, Seller shall update this Appendix B to
update Exhibit A, including the
list of the Leases and Property Agreements comprising the Facility Generating
Premises.


 


·                  Exhibit A also provides a Facility layout showing the planned
Facility configuration (which is subject to revision so as to show the actual
Facility configuration), provided that such configuration shall be consistent
with applicable setback requirements of USBLM and Millard County, Utah and
Beaver County, Utah.


 


·                  Rights of way
and easements associated with all of the wind turbine generators and all other
fixtures and personal property associated with the Facility Generating
Premises.


 


·                  Fee ownership
of all wind turbine generators  associated with the Contract Capacity, which is currently
expected to include up to sixty-eight (68) GE-1.5 MW SLE wind turbine
generators and pad-mounted transformers, and all other fixtures and personal
property located on or associated with the Facility Generating Premises.


 


·                  One permanent
meteorological tower appropriately located on the Facility Generating Premises,
as necessary to operate the Facility in accordance with this Agreement.


 


·                  A 34.5-kV power
underground collection system linking each turbine to the next and to the main
step-up transformer located on the Facility Generating Premises and the Site
Common Facilities.


 


·                  One main
step-up transformer to interconnect the 34.5-kV underground collection system
to the Transmission Line located on the Site Common Facilities.


 


·                  The Facility
Transmission Line Interests which shall consist of an ownership interest (which
may be an undivided tenant in common interest) in the property of the
Transmission Line, including the rights of way, easements and other property
rights and interests constituting the


 


B-1

















 


Transmission Line right of
way, all associated real or personal property, granted to Seller pursuant to
Agreements  between Milford I and
Seller  and all rights and
interests of the Seller in and to any rights of way, easement or license
agreements, crossing permits, or line crossing agreements.  Prior to the Commercial Operation Date,
Seller shall update this Appendix B to include a list of the agreements granting
to Seller the Facility Transmission Line Interests and governing the ownership
and operation of such interests.


 


·                  The Facility
Common Facilities Interests which shall consist of an ownership interest (which
may be an undivided interest) in the Site Common Facilities, including all
associated real or personal property, granted to Seller pursuant to agreements
between Milford I and Seller. Prior to the Commercial Operation Date, Seller
shall update this Appendix B to include a list of the agreements granting to
Seller the Facility Common Facilities Interests and governing the ownership and
operation of such interests.


 


ARTICLE II.   ESTIMATED PROJECT DEVELOPMENT MILESTONE SCHEDULE


 


	
  1Q10

  	
   

  	
  ·              Submit SF299 To BLM

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Receive Approval from USBLM for Engineering

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Submit Final Layout For Millard County
  Conditional Use Permit

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Submit Final Layout for Beaver County
  Conditional Use Permit

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Amendment to Plan of Development submitted
  to USBLM

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Receive Final, Amended Right of Way Grant
  from USBLM

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Obtain construction water right approvals
  and leases

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Receive layout approval under Millard County, Conditional-Use-Permit
  No. Z-2008-008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Receive layout approval under Beaver County Conditional Use Permit
  No. 2006-09 Amended

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Receive site layout approval from SITLA for state lands

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Notice To Proceed from USBLM for Construction

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Construction Commences

  



 


B-2

















 


	
  2Q10

  	
   

  	
  ·              Complete Civil Construction (Roads/Pads)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Complete WTG Turbine Foundations

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Start WTG Deliveries to Site

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Start Turbine Erection

  
	
   

  	
   

  	
   

  
	
  3Q10

  	
   

  	
  ·              Complete WTG Turbine Deliveries

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Complete WTG Turbine Erection

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Start Turbine Commissioning

  
	
   

  	
   

  	
   

  
	
  4Q10

  	
   

  	
  ·              Complete Turbine Commissioning

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Construction Demobilization Cleanup/Restoration

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·              Commercial Operation Date Achieved

  



 


B-3

















 


EXHIBIT A


TO


APPENDIX B


 


Lease and Property Agreements


 


1.                                      Land Lease
Agreement dated June 16, 2008, by and between Elmer Lewis Frasier, as Trustee
of the Elmer Lewis Frasier Revocable Living Trust dated November 16, 2007, as
Lessor, and Milford Wind Corridor Phase II, LLC, a Delaware limited liability
company (“Milford Phase II”), as Lessee. A Memorandum of Lease was
recorded on June 26, 2008 as Entry No. 00166412, Book 489, Page 425 in official
records, Millard County.


 


2.                                      Land Lease
Agreement dated June 30, 2008, by and between Leland E. Finley and Patricia J.
Finley, collectively, as Lessor, and Milford Phase II, as Lessee. A Memorandum
of Lease was recorded on July 18, 2008 as Entry No. 00166689, Book 490, Page
578 in official records, Millard County.


 


3.                                      Land Lease
Agreement dated December 12, 2008, by and between Peter Harris Brockdorff,
Jenny Elise Garver, and Ellen E. Supple, collectively, as Lessor, and Milford
Phase II, as Lessee. A Memorandum of Lease was recorded on February 10, 2009 as
Entry No. 00168679, Book 498, Page 340 in official records, Millard County.


 


4.                                      Land Lease
Agreement dated December 10, 2008, by and between Richard Holdaway, a.k.a.
Richard M. Holdaway, and Noreen Holdaway, collectively, as Lessor, and Milford
Phase II, as Lessee. A Memorandum of Lease was recorded on March 5, 2009 as
Entry No. 00168886, Book 499, Page 446 in official records, Millard County;


 


5.                                      Land Lease
Agreement dated March 6, 2009, by and between Charles F. Larsen, as Lessor, and
Milford Phase II, as Lessee. A Memorandum of Lease was recorded on May 20, 2009
as Entry No. 00169755, Book 503, Page 573 in official records, Millard County;


 


6.                                      Land Lease
Agreement dated December 10, 2008, by and between Anthony A. Weber, Dane A.
Weber. and Robin J. Weber, collectively, as Lessor, and Milford Phase II, as
Lessee. A Memorandum of Lease was recorded on August 14, 2009 as Entry No. 00170562,
Book 507, Page 197 in official records, Millard County.


 


7.                                      Land Lease
Agreement dated March 6, 2009, by and between Audrey Ohnikian, as Lessor, and
Milford Phase II, as Lessee. A Memorandum of Lease was recorded on September
16, 2009 as Entry No. 00170877, Book 508, Page 369 in official records, Millard
County;


 


8.                                      Land Lease
Agreement dated March 6, 2009, by and between Richard Belliston, as Lessor, and
Milford Phase II, as Lessee. A Memorandum of Lease was recorded on October 19,
2009 as Entry No.00171214, Book 510, Page 083 in official records, Millard
County.


 


9.                                      Amended and
Restated Land Lease Agreement, made effective as of February 22, 2007, and
executed as of April 22, 2009, by and between Circle Four LLC, a Delaware
limited


 


B-4

















 


liability
company, as Lessor, and Milford Phase II, as Lessee. An Amended and Restated
Memorandum of Lease was recorded on August 14, 2009 as Entry No. 00170558, Book
507, Page 155 in official records, Millard County and recorded August 25, 2009,
as Entry No. 240604, Book 437, Page 860 in official records, Beaver County.


 


10.                               Amended and
Restated Special Use Lease Agreement No. 1599B, dated effective as of April 22,
2009, by and between the State of Utah, acting by and through the School and
Institutional Trust Lands Administration, as Lessor, and Milford Phase II, as
Lessee. An Amended and Restated Memorandum of Lease was recorded on August 14,
2009 as Entry No. 00170560, Book 507, Page 173 in official records, Millard
County and recorded August 25, 2009 as Entry No. 240606, Book 438, Page 1 in
official records, Beaver County.


 


B-5

















 


Facility
Layout


 





 


B-6

















 


APPENDIX C


 


TO THE


POWER PURCHASE AGREEMENT

BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


BUYER AND SELLER BILLING, NOTIFICATION AND

SCHEDULING CONTACT INFORMATION


 


1.                                      Authorized
Representative. Correspondence pursuant to Section
15.1 shall be transmitted to the following addresses:


 


1.1                               If to Buyer:


 


Executive
Director


Southern
California Public Power Authority


225
S. Lake Avenue, Suite 1250


Pasadena,
CA 91101


Telephone:  626-793-9364


Facsimile:
  626-793-9461


 


With a copy to:


 


Los
Angeles Department of Water and Power


Attention:
Manager of Power Contracts


RE:
SCPPA Contract                     
[to be added following LADWP approval]


111
N. Hope Street, Room 1246


Los
Angeles, California 90012


 


1.2                               If to Seller:


 


Milford
Wind Corridor Phase II, LLC


c/o
First Wind


Attn:
Vice President, Operations


42015
Remington Ave, Suite 101


Temecula,
CA 92590


Telephone:  951-294-5570


Facsimile: 
 951-294-5590


 


C-1

















 


With
a copies to:


 


Milford
Wind Corridor Phase II, LLC


c/o
First Wind


Attn:
Senior Vice President, Asset Management


179
Lincoln Street, Suite 500


Boston,
MA 02111


Telephone:  617-960-2888

Facsimile:   619-960-2889


 


And
to:


 


Milford
Wind Corridor Phase II, LLC

c/oFirst Wind

Attn: General Counsel


179
Lincoln Street, Suite 500


Boston,
MA 02111

Telephone:  617-960-2888

Facsimile:   619-960-2889


 


2.                                      Billings and
payments pursuant to Section 7.1 and Appendix A shall be
transmitted to the following addresses:


 


2.1                               If Billing to
Buyer:


 


Finance
and Accounting Manager


Southern
California Public Power Authority


225
S. Lake Avenue, Suite 1250


Pasadena,
CA 91101

Telephone:  626-793-9364

Facsimile:   626-793-9461


 


With
a copy to:


 


Los
Angeles Department of Water and Power

Accounting Division – Accounts Payable Business Unit

P.O. Box 51211

Room 424


RE:
SCPPA Contract                    
[to be added following LADWP approval]


Los
Angeles, California 90051-5511


 


2.2                               If Payment to
Buyer:


 


Finance
and Accounting Manager


Southern
California Public Power Authority


225
S. Lake Avenue, Suite 1250


Pasadena,
CA 91101


 


C-2

















 


Telephone:  626-793-9364


Facsimile
:  626-793-9461


 


With a copy to:


 


Los Angeles Department of
Water and Power

Accounting Division – Accounts Payable Business Unit

P.O. Box 51211 

Room 424

RE:  SCPPA Contract                 
[to be added following LADWP approval]


Los Angeles, California
90051-5511


 


3.                                      All notices
(other than scheduling notices) required under the Agreement shall be sent by registered
or certified mail, postage prepaid, to the address specified below.


 


If to Buyer:


 


Executive Director


Southern California Public
Power Authority


225 S. Lake Avenue, Suite
1250


Pasadena, CA 91101


Telephone:  626-793-9364


Facsimile:
  626-793-9461


 


With
a copy to:


 


Los
Angeles Department of Water and Power

Attention:  Manager of Power Contracts


RE:
SCPPA Contract                    
[to be added following LADWP approval]


111
N. Hope Street, Room 1246

Los Angeles, California 90012


 


If
to Seller:


 


Milford
Wind Corridor Phase II, LLC


Attn:  Senior
Vice President, Asset Management


179
Lincoln Street, Suite 500


Boston,
MA 02111


Telephone:  617-960-2888


Facsimile: 
 617-960 2889


 


With
copies to:


 


Milford
Wind Corridor Phase II, LLC


c/o
First Wind


Attn:
General Counsel


179
Lincoln Street, Suite 500


 


C-3

















 


Boston, MA 02111


Telephone:  617-960-2888


Facsimile: 
 617-960-2889


 


And to:


 


Milford Wind Corridor Phase
II, LLC


c/o First Wind


Attn: Vice President,
Operations


42015 Remington Ave, Suite
101


Temecula,
CA 92590


Telephone:  951-294-5570


Facsimile:
  951-294-5590


 


4.                                      All notices
related to scheduling of the Facility shall be sent to the following address:


 


If
to Buyer:


 


Energy
Systems Manager


Southern
California Public Power Authority


225
S. Lake Avenue, Suite 1250


Pasadena,
CA 91101


Telephone:  626-793-9364


Facsimile:
  626-793-9461


 


With
a copy to:


 


Los
Angeles Department of Water and Power

Attention: Manager of Wholesale Energy Resources


RE:
SCPPA Contract                      
[to be added following LADWP approval]


111
N. Hope Street

Room 1148 (ECC)


Los
Angeles, California 90012-5701


 


If
to Seller:


 


DACC
Operator


First
Wind Operations and Maintenance


42105
Remington Ave,


Suite
101


Temecula,
CA 92590


Telephone:  951-294-5600


Facsimile: 
 951-294-5590


 


C-4














 


With
copies to:


 


Milford
Wind Corridor Phase II, LLC

c/o First Wind

Attn: Vice President, Asset Management

179 Lincoln Street

Suite 500

Boston, MA 02111 


Telephone:  617-960-2888

Facsimile:   617-960-2889


 


And
to:


 


Milford
Wind Corridor Phase II, LLC

c/o First Wind

Attn: Manager, Scheduling

34 Tower Road

Mars Hill, ME 04758

Telephone:  207-217-7947


 


And
to:


 


Milford
Wind Corridor Phase II, LLC

c/o First Wind

Attn: General Counsel

179 Lincoln Street

Suite 500

Boston, MA 02111

Telephone:  617-960-2888

Facsimile:   617-960-2889


 


C-5

















 


APPENDIX D


 


TO THE


POWER PURCHASE AGREEMENT

BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


FORM OF ATTESTATION


 


               (Seller)               
Environmental Attribute Attestation and Bill of Sale


 


                                          
(“Seller”) hereby sells, transfers and delivers to Southern California Public
Power Authority (“Buyer”) the Environmental Attributes and Environmental
Attribute Reporting Rights associated with the generation from the Facility
described below:


 


	
  Facility name and
  location:

  	
   

  	
   

  
	
  Fuel Type:

  	
   

  	
   

  
	
  Capacity (MW):         

  	
   

  	
  Operational Date:

  



 


	
  As
  applicable: CEC Reg.  no.              

  	
  Energy
  Admin.  ID  no.              

  	
  Q.F.  ID
  no.            

  



 


	
   

  	
  Dates

  	
   

  	
  MWhrs generated

  	
   

  
	
   

  	
                             20  

  	
   

  	
   

  	
   

  
	
   

  	
                             20  

  	
   

  	
   

  	
   

  
	
   

  	
                             20  

  	
   

  	
   

  	
   

  



 


in the amount of one
Environmental Attribute or its equivalent for each megawatt hour generated.


 


Seller further attests,
warrants and represents as follows:


 


	
  i)

  	
  the information provided
  herein is true and correct;

  
	
   

  	
   

  
	
  ii)

  	
  its sale to Buyer is its
  one and only sale of the Environmental Attributes and associated
  Environmental Attribute Reporting Rights referenced herein;

  
	
   

  	
   

  
	
  iii)

  	
  the Facility generated and
  delivered to the grid the Energy in the amount indicated as undifferentiated
  Energy; and

  
	
   

  	
   

  
	
  iv)

  	
  Seller owns the Facility
  and each of the Environmental Attributes and Environmental Attribute
  Reporting Rights associated with the generation of the indicated Energy for
  delivery to the grid have been generated and sold by the Facility.

  



 


D-1

















 


This serves as a bill of
sale, transferring from Seller to Buyer all of Seller’s right, title and
interest in and to the Environmental Attributes and Environmental Attribute
Reporting Rights associated with the generation of the Energy for delivery to
the grid.


 


	
   

  	
  Contact Person:

  	
   

  	
     tel:

  



 


D-2

















 


SUBJECT TO REVISION


 


APPENDIX E


 


TO THE


POWER PURCHASE AGREEMENT

BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY

AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


FORM OF SECURITY INTEREST


 


DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING


 


THIS DEED OF TRUST, SECURITY
AGREEMENT AND FIXTURE FILING (“Deed of Trust”) is made effective                             ,
2010, by and among Milford Wind Corridor Phase II, LLC, a Delaware limited
liability company, having an office and mailing address c/o First Wind Energy,
LLC, 85 Wells Avenue, Suite 305, Newton, Massachusetts 02459 (hereinafter “Trustor”),
                                                             
(hereinafter “Trustee”), and Southern California Public Power Authority,
a joint power agency created pursuant to the laws of the State of California
and having an office and mailing address at 225 South Lake Ave, Pasadena, CA
91101 (hereinafter “Beneficiary”).


 


WITNESSETH:


 


1.                                      Grant. Trustor
grants, transfers, assigns, conveys and warrants to Trustee, for the benefit of
Beneficiary, and its successors and assigns, IN TRUST, WITH POWER OF SALE AND
RIGHT OF ENTRY AND POSSESSION, all right, title and interest of Trustor in and
to all of the following (collectively the “Subject Property”):


 


a.                                      the leasehold
interests in each of the parcels of real property described on Exhibit A that are identified as a “Leasehold
Parcel” thereon (each a “Leasehold Parcel” and collectively the “Leasehold
Parcels”), pursuant to each of the land lease agreements described on Exhibit B attached hereto and made a part
hereof (as the same may be amended, restated, supplemented or otherwise
modified from time to time (each a “Ground Lease” and collectively, the “Ground
Leases”); and the leasehold estates in the Leasehold Parcels created by the
Ground Leases, and all other rights of Trustor under the Ground Leases,
including all of Trustor’s unexpired estate, title, interest and term of years
by virtue of the Ground Leases and any and all credits, deposits, options to
renew or extend, options to purchase, rights of first refusal, and any other
rights and privileges of Trustor thereunder;


 


b.                                      the
rights-of-way and other interests granted in and with respect to each of the
parcels of real property described on Exhibit
A that are identified as a “BLM Parcel” thereon (each a “BLM
Parcel” and collectively the “BLM Parcels”), pursuant to each of the
Right-of-


 


E-1

















 


Way Grant/Temporary Use
Permits issued by the United States Department of Interior Bureau of Land
Management (the “BLM”) described on Exhibit
B attached hereto and made a part hereof (as the same may be
amended, restated, supplemented or otherwise modified from time to time (each a
“BLM Grant” and collectively, the “BLM Grants”); and the easement
estates in the BLM Parcels created by the BLM Grants, and all other rights of
Trustor under the BLM Grants, including all of Trustor’s unexpired estate,
title and interest by virtue of the BLM Grants and any and all credits,
deposits, options to renew or extend, and any other rights and privileges of
Trustor thereunder. The Leasehold Parcels, and BLM Parcels are referred to
collectively as the “Land”);


 


c.                                       all
appurtenances now or hereafter belonging or in anywise appertaining to the
Land, including, without limitation, all easements, rights-of-way and rights
used in connection with or as a means of access to any portion of the Land, all
right, title or interest of Trustor in and to any road or highway adjoining the
Land or any part thereof and all strips and gores belonging, adjacent or
pertaining to the Land; and any after-acquired title to any of the foregoing
(all of the foregoing is referred to collectively as the “Appurtenances”);


 


d.                                      All buildings,
structures, replacements, furnishings, fixtures, fittings and other
improvements and property of every kind and character now or hereafter located
or erected on the Land and owned or purported to be owned by Trustor, or leased
or purported to be leased to Trustor, together with all building or
construction materials, equipment, appliances, machinery, fittings, apparatus,
fixtures and other articles of any kind or nature whatsoever now or hereafter
found on, affixed to or attached to the Land and owned or purported to be owned
by Trustor or leased or purported to be leased to Trustor, (all of the
foregoing is herein referred to collectively as the “Improvements”).  The Land, Improvements and Appurtenances are
herein referred to collectively as the “Real Estate”);


 


e.                                       All equipment
now or hereafter owned or purported to be owned by Trustor and used or useful
in connection with the Real Estate, regardless of whether located on the Real
Estate or located elsewhere including, without limitation, all rights of Trustor
under any lease to equipment and fixtures and other items of personal property
at any time (all of the foregoing is herein referred to collectively as the “Equipment”);


 


f.                                        All option
rights, purchase or sale contracts, condemnation claims, demands, awards and
settlement payments, insurance contracts, insurance payments and proceeds,
unearned insurance premiums, warranties, guarantees, utility deposits, books
and records and general intangibles of Trustor relating to the Real Estate or
the Equipment and any other intangible property of Trustor related to the Real
Estate, the Equipment, the Facility Transmission Line Interests or the Facility
Common Facilities’ Interests (hereafter defined) whether now existing or
hereafter obtained or arising (all of the foregoing is herein referred to
collectively as the “Intangibles Rights and Interests”);


 


g.                                       All rents,
issues, profits, royalties, avails, income and other benefits derived or owned
by Trustor directly or indirectly from the Real Estate or the Intangibles
Rights and Interests (all of the foregoing is herein collectively called the “Revenues”);


 


E-2

















 


h.                                      All rights of
Trustor, if any, to all plans and specifications, designs, drawings and other
matters prepared in connection with the Real Estate or the Equipment (all of
the foregoing is herein called the “Plans”);


 


i.                                          All rights of
Trustor under any contracts executed by Trustor with any provider of goods or
services for or in connection with any construction, operation, maintenance or
services performed or to be performed in connection with the Real Estate or the
Equipment, including, without limitation, any construction contracts and
management contracts (all of the foregoing are herein referred to collectively
as the “Contracts for Construction or Services”);


 


j.                                         All rights of
Trustor in any permits, approvals, consents and other authorizations in
connection with the Real Estate (all of the foregoing is herein referred to
collectively as the “Permits”);


 


k.                                      to the extent
not included in (a) through (j) above, all rights of Trustor in and to the
properties, easements, license agreements, crossing permits, right-of-way
agreements, line crossing agreements and other rights in land running in favor
of Trustor, structures, equipment and facilities, including, without
limitation, those described in Exhibit C
as the Facility Transmission Line Interests (the “Facility Transmission Line
Interests”);


 


l.                                          to the extent
not included in (a) through (j) above, all rights of Trustor in and to the
properties, structures, equipment and facilities described in Exhibit D as the Facility Common
Facilities’ Interests (the “Facility Common Facilities’ Interests”); and


 


m.                                  All other
property or rights of Trustor of any kind or character related to the Real
Estate, the Equipment, the Intangible Rights and Interests, the Revenues, the
Plans, the Contracts for Construction or Services, the Permits, the Facility
Transmission Line Interests or the Facility Common Facilities’ Interests, and
all substitutions, replacements and additions thereto, whether now existing or
hereafter acquired, and all proceeds (including insurance and condemnation
proceeds) and products of any of the foregoing.


 


2.                                      Secured
Obligations.  Trustor
makes the grant, conveyance, transfer and assignment set forth above for the
purpose of securing the payment and performance of (i) all obligations of
Trustor under the Power Purchase Agreement dated March 1, 2010, between
Trustor, as seller, and Beneficiary, as buyer (as amended, supplemented or
modified from time to time, the “Power Purchase Agreement”), which
provides for remedies to be exercised following a default (a “Default”)
under Section 14.1 of the Power Purchase Agreement.  The maximum principal amount secured by this
Deed of Trust is indefinite, but in no event shall it exceed                                       
Dollars ($                           ).


 


3.                                      Trustor
Covenants and Warranties. Trustor hereby covenants with and warrants
to the Trustee and Beneficiary that: (i) at the execution and delivery hereof
it is the owner of a valid leasehold interest in the Leasehold Parcels, and of
a valid right way interest in the BLM Parcels, and that it is the owner or
lessee of the other Subject Property, that the Subject Property is free from
all encumbrances whatsoever other than: (1) any lien expressly provided for or
permitted by the terms of the Power Purchase Agreement, (2) liens for taxes not
yet due or for taxes being contested in good faith by appropriate proceedings
so long as such proceedings do


 


E-3

















 


not involve a material risk
of the sale, forfeiture, loss or restriction on the use of the Subject Property
or any part thereof; (3) suppliers’, vendors’, mechanics’, workman’s, repairman’s,
employees’ or other like liens arising in the ordinary course of business for
work or service performed or materials furnished in connection with the Subject
Property for amounts the payment of which is either not yet delinquent or is
being contested in good faith by appropriate proceedings so long as such
proceedings do not involve a material risk of the sale, forfeiture, loss or
restriction on use of the Subject Property or any part thereof, and (4)
easements, rights of way, use rights, exceptions, encroachments, reservations,
restrictions, conditions or limitations, provided that in each case the same do
not interfere with or impair in any material respect with the operation or use
of the Subject Property or any rights or interests therein as contemplated by
the Power Purchase Agreement (collectively, the “Permitted Encumbrances”);
(ii) each of the Ground Leases and the BLM Grants is in full force and effect
and has not been modified or terminated and that Trustor is not in default
under any of the Ground Leases or BLM Grants; (iii) Trustor has good and lawful
right to sell, mortgage and convey the Subject Property; and (iv) Trustor and
its successors and assigns will forever warrant and defend the Subject Property
against all claims and demands whatsoever.


 


To protect the security of
this Deed of Trust, Trustor agrees with the Trustee and Beneficiary as follows:


 


a.                                      Payment of
Taxes. Trustor will pay or cause to be paid when due all taxes and
assessments, general or special, and any and all levies, claims, charges,
expenses and liens, ordinary or extraordinary, governmental or
non-governmental, statutory or otherwise, due or to become due, that may be
levied, assessed, or charged on or against the Subject Property, and will
submit to Beneficiary all receipts showing payment of all of such taxes,
assessments and charges promptly after Beneficiary’s written request therefor.


 


b.                                      Maintenance and
Repair.  Trustor will operate and
maintain the Subject Property as required by the Power Purchase Agreement and
not commit, suffer, or permit waste of any part of the Subject Property.


 


c.                                       Sales; Liens.  Except as permitted by the Power Purchase
Agreement, Trustor will not sell, contract to sell, assign, transfer or convey,
or permit to be transferred or conveyed, the Subject Property or any part
thereof or any interest or estate in any thereof; or create, suffer or permit
to be created or to exist any mortgage, lien, claim, security interest, charge,
encumbrance or other right or claim of any kind whatsoever upon the Subject
Property or any part thereof.


 


d.                                      Insurance. Trustor will
at all times maintain or cause to be maintained on the Subject Property all
insurance required under the Power Purchase Agreement, the Ground Leases, the
BLM Grants, and the Appurtenance Instruments (defined below). Any proceeds of
such insurance shall be paid and accounted for as provided for in the Power
Purchase Agreement, the Ground Leases, the BLM Grants, and the Appurtenance
Instruments, as applicable. Nothing contained in this Deed of Trust shall
create any responsibility or obligation on Beneficiary to collect any amounts
owing on any insurance policy or resulting from any condemnation, to rebuild or
replace any damaged or destroyed Improvements or other portions of the Subject
Property or to perform any other act hereunder. Beneficiary shall not by the
fact


 


E-4

















 


of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any insurance, incur any
liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of insurance contracts, solvency of insurance companies, or
payment or defense of lawsuits, and Trustor hereby expressly assumes full
responsibility therefor and all liability, if any, with respect thereto.


 


e.                                       Eminent Domain.  If the Subject Property, or any part or
interest in any thereof, is threatened or taken by condemnation, Trustor shall
take all action reasonably required by Beneficiary in order to protect Trustor’s
and Beneficiary’s rights with respect to any such taking, including the
commencement of, appearance in or prosecution of any appropriate action or
proceeding. Trustor and Beneficiary shall apply all condemnation awards as
provided in the Power Purchase Agreement.


 


f.                                        Governmental
Requirements. Trustor will at all times fully comply in all
material respects with, and cause the Subject Property and the use and
condition thereof fully to comply in all material respects with, all federal,
state, county, municipal, local and other governmental statutes, ordinances,
requirements, regulations, rules, orders and decrees of any kind whatsoever
that apply or relate to Trustor or the Subject Property or the use thereof
(including, without limitation, those relating to land use and development,
construction, access, water rights and use, and hazardous waste and
substances), and will comply with all conditions and requirements necessary to
preserve and extend any and all rights, licenses, permits, privileges,
franchises and concessions which are applicable to Trustor or have been granted
for the Subject Property or the use thereof, in each case to the extent
required under the Power Purchase Agreement. 
Unless required by applicable law, or unless Beneficiary has otherwise
first agreed in writing or under the Power Purchase Agreement, Trustor shall
not make or allow any changes to be made in the nature of the occupancy or use
of the Subject Property or any portion thereof for which the Subject Property
or such portion was intended at the time this Deed of Trust was delivered.  Trustor shall not initiate or acquiesce in
any change in any zoning or other land use classification now or hereafter in
effect and affecting the Subject Property or any part thereof without in each
case obtaining Beneficiary’s prior written consent thereto.


 


g.                                       No Mechanics’
Liens.  Trustor will not suffer any
construction, mechanic’s, laborer’s or materialmen’s lien or similar liens to
be created or remain outstanding upon the Subject Property or any part thereof,
other than those liens that are Permitted Encumbrances.  Trustor agrees to promptly deliver to
Beneficiary a copy of any notices that Trustor receives with respect to any
recorded lien or the foreclosure thereof.


 


h.                                      Continuing Priority.  Trustor will pay such fees, taxes and
charges, execute and record or file (at Trustor’s expense) such deeds,
conveyances, mortgages and financing statements and do all such other acts and
things as Beneficiary may from time to time reasonably request to establish and
maintain this Deed of Trust as a valid and perfected first and prior lien on
and security interest in the Subject Property.


 


i.                                          Environmental
Laws. Trustor shall take all appropriate response actions, including any
removal and remedial actions, in the event of a release, emission, discharge or
disposal of Hazardous Materials, as defined hereinafter, in, on, under, or
about the Subject Property and shall operate and maintain the Subject Property
in compliance with all


 


E-5

















 


Environmental Laws, as
defined hereinafter. The term “Hazardous Materials” shall mean dangerous,
toxic, or hazardous pollutants, contaminants, chemicals, wastes, materials or
substances, as defined in or governed by the provisions of any Environmental
Law. “Environmental Law” shall mean any federal, state or local laws,
statutes, ordinances, rules, regulations, orders, or permits now in effect or
hereinafter enacted, pertaining to the public health, safety, industrial hygiene,
or the environmental conditions on, under or about the Real Estate.


 


j.                                         Corrective
Action. In the event Trustor is in material breach of any of its
representations, warranties or agreements as set forth in this Deed of Trust,
then, without limiting Beneficiary’s other rights hereunder, Trustor, at its
sole expense, shall take all actions required, including, without limitation,
environmental cleanup of the Subject Property, to comply with the
representations, warranties, and covenants contained herein and with all
applicable legal requirements and, in any event, shall take all actions deemed
necessary under all applicable Environmental Laws.


 


k.                                      Right of
Inspection.  Trustor
hereby grants to Beneficiary, its agents, attorneys, employees, consultants, contractors,
successors and assigns, an irrevocable license and authorization, upon
reasonable notice, to enter upon and inspect the Subject Property and
facilities thereon, and perform such tests (including without limitation, if a
Phase I Environmental Site Assessment, as hereinafter defined, provides
evidence of a breach of Trustor’s covenants with respect to Hazardous Materials
hereunder, subsurface testing, soils and groundwater testing, and other tests
which may physically invade the Subject Property) as Beneficiary, in its
reasonable discretion, determines are necessary to protect its interest in the
Subject Property or in connection with any foreclosure (or transfer in lieu of
foreclosure) with respect to the Subject Property; provided, however, that under
no circumstances shall Beneficiary be obligated to perform such inspections or
tests, and provided further that Beneficiary indemnifies Trustor for the gross
negligence or willful misconduct of Beneficiary with respect to any such tests.
In making such inspections, Beneficiary shall be accompanied by a
representative of Trustor, if requested by Trustor, and shall comply with
Trustor’s safety requirements. Trustor shall make its representative reasonably
available to Beneficiary in order to accommodate Beneficiary’s inspections as
provided in this paragraph.  The term “Phase
I Environmental Site Assessment” shall mean an assessment of the
environmental condition of the Real Estate conducted in accordance with
American Society for Testing Materials (“ASTM”) standards.


 


l.                                          Indemnity.  Trustor agrees to indemnify and hold
Beneficiary, its directors, employees, agents, and its successors and assigns,
harmless from and against any and all claims, losses, damages, liabilities,
fines, penalties, charges, judgments, administrative orders, remedial action
requirements, enforcement actions of any kind, and all costs and expenses
incurred in connection therewith (including without limitation reasonable
attorneys’ fees and expenses) arising directly or indirectly, in whole or in
part, out of any failure of Trustor to comply with the environmental
representations, warranties, and covenants contained herein. This indemnity
shall in no way diminish any additional indemnification obligations of the
parties set forth in the Power Purchase Agreement.


 


E-6

















 


m.                                  Continuation of
Representations, Warranties, Covenants and Indemnities. Trustor’s
representations, warranties, covenants, and indemnities contained herein shall
survive the occurrence of any event whatsoever, including, without limitation,
the satisfaction of the obligations secured hereby, the reconveyance or
foreclosure of this Deed of Trust, the acceptance by Beneficiary of a deed in
lieu of foreclosure, or any transfer or abandonment of the Subject Property


 


n.                                      Beneficiary’s
Performance.  If Trustor
fails to pay or perform any of its obligations herein contained (including
payment of expenses of foreclosure and court costs), Beneficiary may (but need
not), as agent or attorney-in-fact of Trustor, make any payment or perform (or
cause to be performed) any obligation of Trustor hereunder, in any form and
manner deemed expedient by Beneficiary, and any amount so paid or expended
(plus reasonable compensation to Beneficiary for its out-of-pocket and other
expenses for each matter for which it acts under this Deed of Trust), with
interest thereon at the rate of one percent (1%) per month, or the maximum rate
permitted by law, whichever is less (the “Default Rate”), shall be added
to amount hereby secured and shall be repaid to Beneficiary upon demand. By way
of illustration and not in limitation of the foregoing, Beneficiary may (but
need not) do all or any of the following: 
make lease payments, payments of principal or interest, or other amounts
on the Ground Lease or the BLM Grants and any other lien, encumbrance or charge
on any of the Subject Property; complete construction; make payments with
respect to maintaining and operating the Subject Property, make repairs; obtain
insurance and pay premiums therefor; purchase, discharge, compromise or settle
any tax lien or any other lien, encumbrance, suit, proceeding, title or claim
thereof; contest any tax or assessment; and redeem from any tax sale or
forfeiture affecting the Subject Property. In making any payment or securing
any performance relating to any obligation of Trustor hereunder, Beneficiary
shall be the sole judge of the legality, validity and amount of any lien or
encumbrance and of all other matters necessary to be determined in satisfaction
thereof. No such action of Beneficiary shall ever be considered as a waiver of
any right accruing to it on account of the occurrence of any matter which
constitutes a Default or a breach of Trustor’s obligations under this Deed of Trust.


 


o.                                      Subrogation.  To the extent that Beneficiary, on or after
the date hereof, pays any sum under any provision of law or any instrument or
document creating any lien or other interest prior or superior to the lien of
this Deed of Trust, Beneficiary shall have and be entitled to a lien or other
interest on the Subject Property equal in priority to the lien or other
interest discharged and Beneficiary shall be subrogated to, and receive and
enjoy all rights and liens possessed, held or enjoyed by, the holder of such
lien, which shall remain in existence and benefit Beneficiary in securing the
obligations secured hereby.


 


p.                                      Covenants
Regarding Ground Leases, BLM Grants, and Appurtenance Instruments.


 


i.                                          Each of the
Ground Leases, BLM Grants and other instruments creating Trustor’s rights in
the Appurtenances, including, written easements, licenses, crossing permits or
other permits or agreements within the Subject Property (the “Appurtenance
Instruments”) is valid and is in full force and effect in accordance with
the terms thereof and has not been modified except as herein set forth. All of
the rents and other charges due and payable under the Ground Leases, BLM Grants
and Appurtenance Instruments prior to the execution


 


E-7














 


hereof have been paid, all
of the terms, conditions and agreements contained in the Ground Leases, BLM
Grants and Appurtenance Instruments have been performed and no default exists
under any of the Ground Leases, BLM Grants, or Appurtenance Instruments. This
Deed of Trust is lawfully executed and delivered and is, and will be kept, a
valid lien on the interests of Trustor therein.


 


ii.                                       Trustor will
promptly pay, or cause to be paid, all rents, charges and other sums or amounts
required to be paid by Trustor under the terms of the Ground Leases, BLM
Grants, and Appurtenance Instruments and will further timely and fully keep and
perform all of the covenants, terms, conditions and provisions of the Ground
Leases, BLM Grants, and Appurtenance Instruments required to be performed and
complied with by the tenant or grantee thereunder, and will not do or suffer to
be done anything the doing of which, or refrain from doing anything the
omission of which, will materially impair or have a material adverse effect upon
the security of this Deed of Trust. 
Trustor shall provide evidence of such payments promptly upon the
written request of Beneficiary.  Until
the obligations secured hereby have been indefeasibly paid in full, Trustor
shall exercise all options to renew the Ground Leases, BLM Grants, and
Appurtenance Instruments to the extent provided for in such agreements. Trustor
shall do, or cause to be done, all things necessary to preserve and keep
unimpaired the rights of Trustor as lessee or grantee under the Ground Leases,
BLM Grants, and Appurtenance Instruments and to prevent any default under such
agreements or any termination, surrender, cancellation, forfeiture or
impairment thereof, except as permitted under the Power Purchase Agreement.


 


iii.                                    Except as
permitted or required under the Power Purchase Agreement and under Section 3(p)(ii)
above, Trustor shall not extend, supplement, cancel or surrender or in any
material way modify the terms of any Ground Lease, the BLM Grants, or Appurtenance
Agreements without Beneficiary’s prior written consent, which consent shall not
be withheld unless such action is likely to adversely affect the security of
this Deed of Trust. Trustor expressly releases and surrenders unto Beneficiary
all its right, power and authority to cancel, surrender, amend, modify,
supplement or alter in any way the terms and provisions of the Ground Leases,
BLM Grants, or Appurtenance Agreements, except as specifically provided in the
Power Purchase Agreement or except with Beneficiary’s prior written consent,
which consent not be withheld unless such action is likely to adversely affect
the security of this Deed of Trust. 
Trustor will use commercially reasonable efforts to enforce the
provisions of the Ground Leases, BLM Grants, and Appurtenance Instruments short
of termination thereof to the end that Trustor may enjoy all of the rights
granted to it as lessee or grantee under the Ground Leases, BLM Grants, or
Appurtenance Agreements. Trustor will promptly notify Beneficiary of any
material breach by the lessor or grantor under any of the Ground Leases, BLM
Grants, or Appurtenance Agreements, and of any inability of such lessor or
grantor to perform its obligations under any of the Ground Leases, BLM Grants,
or Appurtenance Agreements. Upon a Default, Trustor assigns to Beneficiary the
proceeds of any claim Trustor may have against such lessor or grantor for such
breach or inability. In the event of a Default or a material breach by Trustor
of its obligations under this Deed of Trust, Beneficiary shall have the sole
right to choose either (i) to proceed against such lessor or grantor in
Trustor’s name or in Beneficiary’s name as agent for Trustor, and Trustor
agrees to cooperate with Beneficiary in such action and to execute all
documents required by Beneficiary in furtherance of such action, or (ii) to
have Trustor proceed on its and Beneficiary’s behalf, in which event
Beneficiary may participate in


 


E-8

















 


such proceedings, and
Trustor will deliver to Beneficiary all documents required by Beneficiary for
such participation. Trustor shall, at its expense, diligently prosecute such
proceedings, shall deliver to Beneficiary copies of all papers served in
connection therewith and shall consult and cooperate with Beneficiary and its
attorneys and agents, provided that no settlement of such proceedings may be
made by Trustor without Beneficiary’s prior written consent.


 


iv.                                   Trustor shall
promptly notify Beneficiary of any material default by Trustor under any Ground
Lease, BLM Grant or Appurtenance Instrument, or of the receipt by it of any
notice of default from the lessor or grantor thereunder or notice of
termination of any Ground Lease, BLM Grant or Appurtenance Instrument pursuant
to the provisions thereof and shall furnish to Beneficiary promptly any and all
information which Beneficiary may reasonably request concerning the performance
by Trustor of the covenants of the Ground Leases, the BLM Grants, the
Appurtenance Instruments, or of this Deed of Trust. Trustor shall promptly
deposit with Beneficiary a copy of the Ground Leases, BLM Grants, and the
Appurtenance Instruments, certified as true, correct and complete by Trustor,
and any and all documentary evidence received by it showing compliance by
Trustor with the provisions of the Ground Leases, BLM Grants, and Appurtenance
Instruments, and will also deliver to Beneficiary a copy of any notice,
communication, plan, specification or other instrument or document received or
given by it in any way relating to or affecting the Ground Leases, BLM Grants,
or Appurtenance Instruments, which may adversely affect the estate of the
lessor or the lessee in or under the Ground Leases or in the real estate
thereby demised, or the estate of the Trustor under the BLM Grants or
Appurtenance Instruments.


 


q.                                      Covenants
Regarding Facility Transmission Line Interests and the Facility Common
Facilities’ Interests.


 


i.                                          Trustor has
provided Beneficiary with true and correct copies of all easements, rights of
way, common ownership, maintenance and other agreements existing with regard to
the Facility Transmission Line Interests and the Facility Common Facilities’
Interests (collectively, and together with any other similar agreement entered
into by Trustor after the date hereof, the “Transmission and Common Facility
Agreements”). Each of the Transmission and Common Facility Agreements is a
valid and existing agreement, is in full force and effect in accordance with
the terms thereof and has not been modified, except as set forth herein. All of
payments and other charges payable by Trustor under the Transmission and Common
Facility Agreements prior to the execution hereof have been paid, all of the
terms, conditions and agreements contained in the Transmission and Common
Facility Agreements have been performed and no default exists under the
Transmission and Common Facility Agreements. This Deed of Trust is and will be
kept a valid lien on the rights and interests of Trustor therein.


 


ii.                                       Trustor will
promptly pay, or cause to be paid, all rents, charges and other sums or amounts
required to be paid by Trustor under the terms of the Transmission and Common
Facility Agreements, will further timely and fully keep and perform all of the
covenants, terms, conditions and provisions of the Transmission and Common
Facility Agreements required to be performed and complied with by Trustor
thereunder, and will not do or suffer to be done anything the doing of which,
or refrain from doing anything the omission of which, will impair the security
of this Deed of Trust.  Trustor shall
provide evidence of such payments promptly upon the request of Beneficiary.
Until the obligations secured hereby have


 


E-9

















 


been indefeasibly paid in
full, Trustor shall keep the Transmission and Common Facility Agreements in
full force and effect. Trustor shall do, or cause to be done, all things
necessary to preserve and keep unimpaired the rights of Trustor under the
Transmission and Common Facility Agreements and to prevent any default that
will impair or have an adverse effect upon the security of this Deed of Trust
under the Transmission and Common Facility Agreements, or any termination,
surrender, cancellation, forfeiture or impairment thereof.


 


iii.                                    Trustor
covenants that it will not modify, extend, supplement or cancel any of the
Transmission and Common Facility Agreements as to which Beneficiary has rights
of review and approval under Sections 2.7 or 2.8 of the Power Purchase
Agreement, or waive or release the other parties thereto of or from any
obligations, conditions or agreements by said parties, and shall not have the
power to do so, without Beneficiary’s prior written consent, which consent
shall be granted upon confirmation by Beneficiary that such action is not
likely to have a material adverse effect on, or materially increase the risk of
Beneficiary with regard to, the security provided to Beneficiary under this
Deed of Trust. Trustor agrees to promptly notify Beneficiary of any breach by
any party to the Transmission and Common Facility Agreements and to enforce the
obligations of the other parties to the Transmission and Common Facility
Agreements, to the end that Trustor may enjoy all of its rights under the
Transmission and Common Facility Agreements. In the event of a Default or a
material breach by Trustor of its obligations under this Deed of Trust,
Beneficiary shall have the sole right to choose either (i) to proceed
against such other parties in Trustor’s name or in Beneficiary’s name as agent
for Trustor, and Trustor agrees to cooperate with Beneficiary in such action
and to execute all documents required by Beneficiary in furtherance of such
action, or (ii) to have Trustor proceed on its and Beneficiary’s behalf,
in which event Beneficiary may participate in such proceedings, and Trustor
will deliver to Beneficiary all documents required by Beneficiary for such
participation. Trustor shall, at its expense, diligently prosecute such
proceedings, shall deliver to Beneficiary copies of all papers served in
connection therewith and shall consult and cooperate with Beneficiary and its
attorneys and agents, provided that no settlement of such proceedings may be
made by Trustor without Beneficiary’s prior written consent.


 


iv.                                   Trustor shall
promptly give Beneficiary notice of any material default by Trustor under the
Transmission and Common Facility Agreements or of the receipt by it of any
notice of default from any party thereunder or notice of termination of any of
the Transmission and Common Facility Agreements pursuant to the provisions
thereof and shall furnish to Beneficiary promptly any and all information which
Beneficiary may reasonably request concerning the performance by Trustor of the
covenants of the Transmission and Common Facility Agreements. Upon the request
of Beneficiary, Trustor shall promptly deposit with Beneficiary a copy of the
Transmission and Common Facility Agreements, certified as true, correct and
complete by Trustor, and any and all documentary evidence received by it
showing compliance by Trustor with the provisions of the Transmission and
Common Facility Agreements.


 


r.                                         Bankruptcy
Rights and Remedies. The lien of this Deed of Trust attaches to all of
Trustor’s rights and remedies at any time arising under or pursuant to Section 365
of the Bankruptcy Code (the “Bankruptcy Code”), including, without
limitation, all of Trustor’s rights to remain in possession of the Subject
Property.  Trustor shall not commence any
action, suit, proceeding or case, or file any application or make any motion,
in respect of the Ground Leases,


 


E-10

















 


BLM Grants, or Appurtenance
Instruments in any such case under the Bankruptcy Code without the prior
written consent of Beneficiary.  Trustor
shall promptly, after obtaining knowledge thereof, notify Beneficiary orally of
any filing by or against the lessor or Trustor of a petition under the
Bankruptcy Code. Trustor shall thereafter forthwith give written notice of such
filing to Beneficiary, setting forth any information available to Trustor as to
the date of such filing, the court in which such petition was filed and the
relief sought therein.  Trustor shall
promptly deliver to Beneficiary, following receipt, any and all notices,
summons, pleadings, applications and other documents received by Trustor in
connection with any such petition and any proceedings relating thereto.


 


s.                                        Beneficiary’s
Lease.  Notwithstanding the provisions
of the foregoing paragraphs regarding termination of the Ground Leases, BLM
Grants, or Appurtenance Instruments, upon a termination or rejection of one or
more of the Ground Leases, BLM Grants, or Appurtenance Instruments by or for
Trustor as a debtor under the Bankruptcy Code, Trustor acknowledges that
Beneficiary may enter into (1) an instrument recognizing, confirming and
giving legal effect to the continued existence of such Ground Lease, BLM Grant,
or Appurtenance Instrument in favor of Beneficiary or its designee, or (2) a
new lease or right-of-way grant in favor of Beneficiary or its designee (in
either event the “Beneficiary’s Lease”) for the Subject Property
pursuant to the terms of such Ground Lease, BLM Grant, or Appurtenance
Instrument, or the provisions of a separate agreement between Beneficiary and
the lessor, in such event, Beneficiary’s execution of the Beneficiary’s Lease
shall not be deemed to be in satisfaction in whole or in part of the
obligations secured hereby and all of the other terms, covenants and conditions
contained in this Deed of Trust shall remain as a lien on the Subject Property.
Trustor hereby releases, remises, and quitclaims to Beneficiary any interest
Trustor may have in the Beneficiary’s Lease and further agrees and acknowledges
that Beneficiary may assign the Beneficiary’s Lease without notice, consent or
joinder of Trustor.  Trustor further
waives any right Trustor may have to challenge the adequacy of any
consideration received therefore.


 


4.                                      Default and
Remedies.  Should (i) a
Default occur under the Power Purchase Agreement, as provided and defined
therein; (ii) Trustor fail to pay any amount when due under this Deed of
Trust or other amounts due under any Ground Lease, BLM Grant, Appurtenance
Instrument, any of the Transmission and Common Facility Agreements, or other
Intangible Rights and Interests, which is not cured within thirty (30) days
after receiving written notice thereof from Beneficiary or such shorter cure
period that may be provided under any such Ground Lease, BLM Grant,
Appurtenance Instrument, or any of the Transmission and Common Facility
Agreements; or (iii) Trustor fail to perform any of its other material
duties or obligations under this Deed of Trust, which failure is not cured
within sixty (60) days after receipt of written of such failure from
Beneficiary (provided that if (A) such breach cannot be cured within such
period, (B) such breach is susceptible of cure within an additional thirty
(30) days, (C) Trustor is proceeding with diligence and in good faith to
cure such breach, and (D) the existence of such breach has not resulted
in, and would not after considering the nature of the cure be reasonably
expected to give rise to, a termination by the counterparty to any Ground
Lease, BLM Grant, Appurtenance Instrument, or Transmission and Common Facility
Agreement, or other Intangible Rights and Interests which is subject to breach,
or to otherwise have a material adverse effect on the Subject Property or the
validity or priority of Beneficiary’s security interests and lien on the Subject
Property, then such cure period shall be extended an additional thirty (30)
days), then


 


E-11

















 


Beneficiary shall have the
right to foreclose the lien of this Deed of Trust.  In addition, Beneficiary may exercise any
remedy available at law or in equity or under the Power Purchase Agreement to
Beneficiary, including but not limited to those listed below, in such sequence
or combination as Beneficiary may determine in Beneficiary’s sole discretion:


 


a.                                      Performance of
Defaulted Obligations. 
Beneficiary may make any payment or perform any other obligation under
this Deed of Trust which Trustor has failed to make or perform as provided for
herein. All payments made and expenses (including reasonable attorney’s fees)
incurred by Beneficiary in this connection, together with interest thereon at
the Default Rate from the date paid or incurred until repaid, will be part of
the obligations secured by this Deed of Trust and will be immediately due and
payable by Trustor to Beneficiary. In lieu of advancing Beneficiary’s own funds
for such purposes, Beneficiary may use any funds of Trustor which may be in
Beneficiary’s possession, including but not limited to insurance or
condemnation proceeds and amounts deposited for taxes, insurance premiums, or
other purposes.


 


b.                                      Specific
Performance and Injunctive Relief.  Notwithstanding the availability of legal
remedies, Beneficiary will be entitled to obtain specific performance,
mandatory or prohibitory injunctive relief, or other equitable relief requiring
Trustor to cure or refrain from repeating any default.


 


c.                                       Possession of
Subject Property.  Beneficiary
may enter and take possession of the Subject Property without seeking or
obtaining the appointment of a receiver, may employ a managing agent for the
Subject Property, and may lease or rent all or any part of the Subject
Property, either in Beneficiary’s name or in the name of Trustor, and may
collect the rents, issues, and profits of the Subject Property. Any revenues
collected by Beneficiary under this section will be applied first toward
payment of all expenses (including reasonable attorney’s fees) incurred by
Beneficiary, together with interest thereon at the Default Rate from the date
incurred until repaid, and the balance, if any, will be applied against the obligations
secured hereby.


 


d.                                      Other Remedies.  Beneficiary may exercise all rights and
remedies set forth in the Power Purchase Agreement or in this Deed of Trust,
including all rights of a secured party under the UCC, as defined in Article 5
hereof.


 


e.                                       Foreclosure.


 


i.                                          Trustee’s Sale.  Beneficiary may foreclose this Deed of Trust
by way of a trustee’s sale pursuant to the provisions of Title 57, Chapter 1, Utah Code Annotated, as currently in
effect, as amended, or in any other manner then permitted by law (“Trustee’s
Sale”). After the lapse of such time as may then be required by law
following the recordation of said notice of default, and notice of default and
notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell the Subject Property on the date and at the time
and place designated in said notice of sale, either as a whole or in separate
parts or parcels, and in the absence of direction by Trustor, in such order as
it may determine, at public auction to the highest bidder, the purchase price
payable in lawful money of the United States at the time of the sale. To the
extent allowed by law, the person conducting the sale may, for any cause he or
she deems expedient, postpone the sale from time to time until it shall be
completed and, in


 


E-12

















 


every such case,
postponement shall be given by public declaration thereof at the time and place
last appointed for sale.  Trustee shall
execute and deliver to the purchaser its trustee’s deed conveying said property
so sold, but without any covenant or warranty, express or implied. The recitals
in the trustee’s deed of any matters or facts shall be conclusive proof as to
bona fide third parties of the truthfulness thereof.  Any person, including Beneficiary, may bid at
the sale. Trustee shall apply the proceeds of the sale to payment of (1) the
costs and expenses of exercising the power of sale and of the sale, including
the payment of Trustee’s and reasonable attorney’s fees; (2) the
obligations secured hereby; and (3) the remainder, if any, to the person
or persons entitled thereto.


 


ii.                                       Judicial
Foreclosure.  Beneficiary
shall also have the right to foreclose this Deed of Trust as a mortgage by
appropriate proceedings in any court of competent jurisdiction (“Judicial
Foreclosure”).


 


iii.                                    Expenses of
Trustee’s Sale or Foreclosure.  All reasonable fees, costs and expenses of
any kind incurred by Beneficiary in connection with foreclosure of this Deed of
Trust, including, without limitation, the reasonable costs of any appraisals of
the Subject Property obtained by Beneficiary, all reasonable costs of any
receivership for the Subject Property advanced by Beneficiary, and all
reasonable attorneys’ and consultants’ fees incurred by Beneficiary, appraisers’
fees, outlays for documentary and expert evidence, stenographers’ charges,
publication costs and costs (which may be estimates as to items to be expended
after entry of the decree) of procuring all such abstracts of title, title
searches and examination and similar data and assurances with respect to title,
as Trustee or Beneficiary may deem necessary either to prosecute such suit or
to evidence to bidders at the sales that may be had pursuant to such
proceedings the true conditions of the title to or the value of the Subject
Property, together with and including a reasonable compensation to Trustee,
shall constitute a part of the obligations secured hereby and may be included
as part of the amount owing from Trustor to Beneficiary at any foreclosure
sale.


 


iv.                                   Proceeds of
Trustee’s or Foreclosure Sale.  The proceeds of foreclosure sale of the
Subject Property shall be distributed and applied in the following order of
priority: first, on account of all costs and expenses incident to the
foreclosure proceedings, second, to the obligations secured hereby, and lastly,
to Trustor, or, if applicable to such person or persons legally entitled
thereto.


 


v.                                      Insurance Upon
Foreclosure.  In case of
an insured loss after Judicial Foreclosure or Trustee’s Sale proceedings have
been instituted, the proceeds of any insurance policy or policies, if not
applied to rebuilding or restoring the buildings or improvements, shall be used
to pay the amount due under the obligations secured hereby. In the event of
Judicial Foreclosure or Trustee’s Sale, Beneficiary or Trustee is hereby
authorized, without the consent of Trustor, to assign any and all insurance
policies to the purchaser at the sale, or to take such other steps as
Beneficiary or Trustee may deem advisable to cause the interest of such
purchaser to be protected by any of the said insurance policies.


 


f.                                        Appointment of
Receiver. Beneficiary shall be entitled to the appointment
of a receiver.  Such receiver and his
agents shall be empowered (a) to take possession of the Subject Property
and any businesses conducted by Trustor or any other person (other than the


 


E-13

















 


lessor or other persons
authorized by the lessor with respect to any rights to use portions of the
Subject Property retained by the lessor as provided in the Ground Leases or by
the BLM under the BLM Grants) thereon and any business assets used in
connection therewith and, if the receiver deems it appropriate, to operate the
same, (b) to exclude Trustor and Trustor’s agents and employees from the
Subject Property, (c) to collect the rents, issues, profits, and income
therefrom, (d) to complete any construction which may be in progress, (e) to
do such maintenance and make such repairs and alterations as the receiver deems
necessary, (f) to pay all taxes and assessments against the Subject
Property and all premiums for insurance thereon, (g) to pay all utility
and other operating expenses, and all sums due under any prior or subsequent
encumbrance, and (h) generally to do anything which Trustor could legally
do if Trustor were in possession of the Subject Property.  All reasonable expenses incurred by the
receiver or his agents shall constitute a part of the obligations secured
hereby. Any revenues collected by the receiver shall be applied first to the
expenses of the receivership, including reasonable attorneys’ fees incurred by
the receiver and by Beneficiary, together with interest thereon at the Default
Rate from the date incurred until repaid, and the balance shall be applied
toward the obligations secured hereby and then to Trustor or in such other
manner as the court may direct.  Unless
sooner terminated with the express consent of Beneficiary, any such
receivership will continue until the obligations secured hereby have been
discharged in full, or until title to the Subject Property has passed after
foreclosure sale and all applicable periods of redemption have expired.


 


g.                                       Right to Make
Repairs, Improvements.  Should any part of the Subject Property come
into the possession of Beneficiary after a Default under the Power Purchase
Agreement, as provided and defined therein, or after a default under this Deed
of Trust, Beneficiary may use, operate, and/or make repairs, alterations, additions
and improvements to the Subject Property for the purpose of preserving it or
its value. Trustor covenants to promptly reimburse and pay to Beneficiary, at
the address set forth in the first paragraph of this Deed of Trust, or at such
other place as may be designated by Beneficiary in writing, the amount of all
reasonable expenses (including the cost of any insurance, taxes, or other
charges) incurred by Beneficiary in connection with its custody, preservation,
use or operation of the Subject Property, together with interest thereon from
the date incurred by Beneficiary at the Default Rate, and all such expenses,
costs, taxes, interest, and other charges shall be a part of the obligations
secured hereby. It is agreed, however, that the risk of accidental loss or
damage to the Subject Property is undertaken by Trustor and, except for
Beneficiary’s willful misconduct or gross negligence, Beneficiary shall have no
liability whatsoever for decline in value of the Subject Property, for failure
to obtain or maintain insurance, or for failure to determine whether any
insurance ever in force is adequate as to amount or as to the risks insured.


 


h.                                      Waivers.  To the full extent that the covenants and
waivers contained in this paragraph are permitted by law, but not otherwise,
Trustor hereby waives any and all rights under, and covenants and agrees that
it will not at any time insist upon or plead or in any manner whatsoever claim
or take advantage of, any stay, exemption, moratorium or extension law now or
hereafter in effect or any law now or hereafter in effect providing for the
valuation or appraisement of the Subject Property or any part thereof prior to
any sale or sales thereof and Trustor will not invoke or utilize any such law
or laws or otherwise hinder, delay or impede the execution of any right, power
or remedy herein or otherwise granted or delegated to Trustee or Beneficiary,
but will suffer and permit the execution of every such right, power and remedy
as though no such law or laws have been made or enacted.


 


E-14

















 


5.                                      Uniform
Commercial Code. This Deed of Trust, to the extent that it conveys
or otherwise deals with (i) personal property, or (ii) items of personal
property which are or may become fixtures, shall also be construed as a
security agreement under the Uniform Commercial Code as in effect in the state
of Utah (“UCC”), and this Deed of Trust constitutes a financing
statement filed as a fixture filing in the Official Records of the county
recorder of the county or counties in which the Subject Property, or any
portion thereof is located with respect to any and all fixtures included within
the term “Subject Property” as used herein and with respect to any personal
property that may now be or hereafter become such fixtures.  For purposes of the foregoing, Trustor is the
debtor and owner of the Subject Property (with its address as set forth above),
Beneficiary is the secured party (with its address as set forth below). Trustor
grants to Beneficiary a valid and effective first priority security interest in
all of Trustor’s right, title and interest in and to all portions of the
Subject Property which constitute personal property, together with all
replacements, additions, and proceeds. 
Except for Permitted Encumbrances, Trustor agrees that, without the
written consent of Beneficiary and except as otherwise permitted under the
Power Purchase Agreement, no other security interest will be created under the
provisions of the UCC and no lease having a market value of over $500,000 will
be entered into with respect to any goods, fixtures, equipment, appliances, or
articles of personal property now attached to or used or to be attached to or
used in connection with the Subject Property; provided that any lease entered
into by Trustor having a market value of over $50,000 shall constitute Subject
Property subject to the security interest under this Deed of Trust. Subject to
the cure provisions of Article 4 herein, upon Trustor’s failure to perform any
of its material obligations under this Deed of Trust or upon the occurrence of
a Default under the Power Purchase Agreement, as provided and defined therein,
Beneficiary shall have the remedies of a secured party under the UCC and, at Beneficiary’s
option, may also invoke the power of sale and all other remedies provided in
this Deed of Trust as to the personal property and any other items of the
Subject Property subject to this security interest. In exercising any remedies,
Beneficiary may proceed against the items of Real Estate and any other items of
personal property specified in Article 1 as part of the Subject Property
separately or together and in any order whatsoever, without in any way
affecting the availability of Beneficiary’s remedies under the UCC or of the
remedies provided in this Deed of Trust.


 


6.                                      Beneficiary’s
Actions. Without affecting the lien of this instrument, Beneficiary may, from
time to time, release any obligation, extend, alter or renew the terms of
payment or performance, substitute security, and/or release any portion of the
Subject Property.


 


7.                                      Reconveyance by
Trustee.  Trustee may from time to time
and only upon the written request of Beneficiary, reconvey, without warranty,
any part of said property and/or join in any agreement subordinating the lien
or charge hereof.


 


8.                                      Partial Payment. The
acceptance by Beneficiary of any sum in payment, or part payment, of any
obligation secured hereby, after the same is due or after the recording of a
notice of default, shall not be considered a waiver of the right to require
prompt payment when due, of other sums, nor shall such acceptance cure or waive
any remaining default or invalidate any sale held pursuant to Notice for any
remaining default.


 


9.                                      Severability.  The invalidity of any one or more covenants,
phrases, clauses, sentences or paragraphs of this Deed of Trust shall not
affect the remaining portions of this Deed


 


E-15

















 


of Trust or any part
thereof, and this Deed of Trust shall be construed as if such invalid
covenants, phrases, clauses, sentences or paragraphs, if any, had not been
inserted herein.


 


10.                               Successors and
Assigns. This Deed of Trust shall inure to the benefit of and be binding upon
the heirs, legatees, devisees, administrators, executors, successors and
assigns of the parties hereto. The use of the singular number shall include the
plural number and the use of the plural number shall include the singular
number.  The use of the masculine gender
shall include the feminine gender, and corporation or corporations that may be
a party or parties hereto.  The term “Beneficiary”
shall mean the owners and holders of the obligation secured hereby, whether or
not named as Beneficiary herein.


 


11.                               Notices. Trustor
requests all notices to be given to it shall be made to the address stated on
the first page of this Deed of Trust. 
All notices required or permitted to be given hereunder shall be in
writing and may be given in person or by United States mail, by commercial
delivery service or by electronic transmission with verified receipt.  Any notice directed to a party to this Deed
of Trust shall become effective upon the earliest of the following: (i) actual
receipt by that party; (ii) delivery to the designated address of that
party, addressed to that party; or (iii) if given by certified or
registered United States mail, two (2) days after deposit with the United
States Postal Service, postage prepaid, addressed to that party at its
designated address.  Notwithstanding the
foregoing, any copy of a notice of default recorded pursuant to Utah law and
any notice of sale shall be sent to Trustor by certified or registered
mail.  The designated address of a party
shall be the address of that party shown at the beginning of this Deed of Trust
or such other address as that party, from time to time, may specify by notice
to the other parties.


 


12.                               Termination of
Deed of Trust. This Deed of Trust shall terminate and be of no
further force or effect upon the expiration or termination of the Power
Purchase Agreement and the payment by Trustor of the Termination Payment, if
any, as defined in and required in accordance with the Power Purchase Agreement
and any other payments due to Beneficiary thereunder.  Beneficiary agrees to deliver to Trustee
(with a copy to Trustor) a release, satisfaction and request for reconveyance
in recordable form within ten (10) days after such occurrence as provided
in the preceding sentence. Upon receipt of such release, satisfaction and
request for reconveyance and this Deed of Trust for cancellation (if required
under applicable law), Trustee shall reconvey, without warranty, the estate in
the Subject Property then held by Trustee. The grantee in such reconveyance may
be designated and described as the “person or persons legally entitled thereto.


 


13.                               Time of Essence
and Waiver. Time is declared to be of the essence in this Deed
of Trust.  If Beneficiary chooses to
waive any covenant, section, or provision of this Deed of Trust, or if any
covenant, section, or provision of this Deed of Trust is construed by a court
of competent jurisdiction to be invalid or unenforceable, it shall not affect
the applicability, validity, or enforceability of the remaining covenants,
paragraphs, or provisions.


 


14.                               Conflicts. In the event
of a conflict or inconsistency with the terms of this Deed of Trust and the
terms of the Power Purchase Agreement, the terms of the Power Purchase
Agreement shall control.  Notwithstanding
the foregoing, the rights and remedies afforded to beneficiaries under deeds of
trust and provided to Beneficiary in this Deed of Trust shall be in


 


E-16

















 


addition to, and not in lieu
of, rights and remedies provided to Beneficiary under the Power Purchase
Agreement.


 


15.                               Estoppel
Certificate.  Beneficiary
agrees to provide Trustor with an estoppel certificate specifying whether there
are any defaults hereunder (which shall include the amount of any outstanding
Termination Payment then due), within ten (10) days after Trustor’s
written request therefore.


 


16.                               Release
Provisions.  Beneficiary
agrees to execute and deliver (or cause the Trustee to execute and deliver) a
partial release of lien and amendment to this Deed of Trust in recordable form
releasing any portion of the Subject Property for which the conditions of
release pursuant to Sections 2.7 and 2.8 of the Power Purchase Agreement have
been met, as soon as practicable following Trustor’s written request therefore


 


Executed
as of this
                    
day of
                                          ,
20      .


 


E-17

















 


[TO BE EXECUTED
AND DELIVERED  AFTER RELEASE OF CONSTRUCTION
FINANCING]


 


	
   

  	
  TRUSTOR:

  
	
   

  	
   

  
	
   

  	
  Milford Wind Corridor
  Phase II, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Evelyn Lim

  
	
   

  	
  Title: Secretary

  



 


 


	
  STATE or COMMONWEALTH OF
  MASSACHUSETTS

  	
  )

  
	
   

  	
  : ss.

  
	
  COUNTY OF MIDDLESEX

  	
  )

  



 


The foregoing instrument was
acknowledged before me this               day
of                       ,                    ,
by Evelyn Lim, the Secretary of Milford Wind Corridor Phase II, LLC, a Delaware
limited liability company.


 


 


	
  My Commission Expires:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTARY PUBLIC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Residing at:

  	
   

  



 


E-18






 










 


EXHIBIT A


TO


DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING


 


[Legal Descriptions of
Leasehold Parcels and BLM Parcels, which include the Facility Premises, to be
provided prior to execution of the Deed of Trust]


 


E-19

















 


EXHIBIT B


TO


DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING


 


[Descriptions of each Ground
Lease and BLM Grant to be provided prior to the execution of the Deed of Trust]


 


E-20

















 


EXHIBIT C


TO


DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING


 


[Legal description of the
real property interests and description of all improvements, supporting
equipment and property agreements pertaining to the Facility Transmission Line
Interests, as defined in the Power Purchase Agreement, to be provided prior to
the execution of the Deed of Trust]


 


E-21

















 


EXHIBIT D


TO


DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING


 


[Facility Common Facility
Interests, as defined in the Power Purchase Agreement, to be provided prior to
execution of the Deed of Trust]


 


E-22

















 


APPENDIX F


 


TO THE


POWER PURCHASE AGREEMENT


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


INSURANCE


 


I.                                        GENERAL REQUIREMENTS


 


Prior to the start of work,
but not later than thirty (30) days after the date of award of contract, Seller
shall furnish Buyer evidence of coverage from insurers acceptable to Buyer and
in a form acceptable to Buyer’s Risk Manager. 
Such insurance shall be maintained by Seller at Seller’s sole cost and
expense.


 


Such insurance shall not
limit or qualify the liabilities and obligations of Seller assumed under this
Agreement. Buyer shall not by reason of its inclusion under these policies
incur liability to the insurance carrier for payment of premium for these
policies.


 


Any insurance carried by
Buyer which may be applicable shall be deemed to be excess insurance and Seller’s
insurance is primary for all purposes despite any conflicting provision in
Seller’s policies to the contrary.


 


Said evidence of insurance
shall contain a provision that the policy cannot be canceled or reduced in
coverage or amount without first giving thirty (30) calendar days prior notice
thereof (ten (10) days for non-payment of premium) to Southern California
Public Power Authority, 225 S. Lake Avenue, Suite 1250, Pasadena,
California 91101.


 


Should any portion of the
required insurance be on a “Claims Made” policy, Seller shall, at the policy
expiration date following completion of work, provide evidence that the “Claims
Made” policy has been renewed or replaced with the same limits, terms and
conditions of the expiring policy, or that an extended discovery period has
been purchased on the expiring policy at least for the contract under which the
work was performed.


 


Failure to maintain and
provide acceptable evidence of the required insurance for the required period
of coverage shall constitute a breach of contract, upon which Buyer may
immediately terminate or suspend the Agreement.


 


Seller shall be responsible
for all subcontractors’ compliance with the insurance requirements. All
contractors and subcontractors shall maintain the same types of insurance with
limits and terms that are normal and customary for the industry and types of
services being provided.


 


F-1

















 


II.                                   SPECIFIC COVERAGES REQUIRED


 


A.                                    Commercial Automobile Liability


 


Seller
shall provide Commercial Automobile Liability insurance which shall include
coverages for liability arising out of the use of owned, non-owned, and hired
vehicles for performance of the work as required to be licensed under the
California or any other applicable state vehicle code. The Commercial
Automobile Liability insurance shall have not less than $1,000,000.00 combined
single limit per occurrence and shall apply to all operations of Seller.


 


The
Commercial Automobile Liability policy shall include Buyer and its members,
officers, agents, and employees while acting within the scope of their employment,
as additional insured with Seller, and shall insure against liability for
death, bodily injury, or property damage resulting from the performance of this
Agreement. The form of evidence of insurance shall be a Buyer’s Additional
Insured Endorsement or an endorsement to the policy acceptable to Buyer’s Risk
Manager.


 


B.                                    Commercial General Liability


 


Seller
shall provide Commercial General Liability insurance with Blanket Contractual
Liability, Independent Contractors, Broad Form Property Damage,
Premises and Operations, Products and Completed Operations, Sudden and
Accidental Pollution, Fire Legal Liability and Personal Injury coverages
included. Except for Sudden and Accidental Pollution, which shall provide
coverage with limits of liability of not less than $1,000,000, such insurance
shall provide coverage with limits of liability not less than $25,000,000.00
combined single limit per occurrence and in the aggregate. The limits of
liability are to be specific for this Agreement. Umbrella or Excess Liability
coverages may be used to supplement primary coverages to meet the required
limits. Evidence of such coverage shall be on an endorsement to the policy
acceptable to the Buyer’s Risk Management Section, and shall provide for the
following:


 


1.                                      Include Buyer
and its members, officers, agents, and employees as additional insureds with
the Named Insured for the activities and operations under this Agreement.


 


2.                                      Severability-of-Interest
or Cross-Liability Clause such as: “The policy to which this endorsement is
attached shall apply separately to each insured against whom a claim is made or
suit is brought, except with respect to the limits of the company’s liability.”


 


3.                                      A description
of the coverages included under the policy.


 


C.                                    Excess Liability


 


Seller
may use an Umbrella or Excess Liability Coverage to meet coverage limits
specified in this Agreement.  Seller
shall require the carrier for Excess Liability to properly schedule and to
identify the underlying policies as provided for Buyer on an


 


F-2

















 


endorsement
to the policy acceptable to Buyer’s Risk Management Section. Such policy shall
include, as appropriate, coverage for Commercial General Liability, Commercial
Automobile Liability, Employer’s Liability, or other applicable insurance
coverages.


 


D.                                    Workers’ Compensation/Employer’s Liability Insurance


 


Seller
shall provide Workers’ Compensation insurance covering all of Seller’s employees
in accordance with the laws of any state in which the work is to be performed
and including Employer’s Liability insurance and a Waiver of Subrogation in
favor of Buyer. The limit for Employer’s Liability coverage shall be not less
than $1,000,000.00 each accident and shall be a separate policy if not included
with Workers’ Compensation coverage. 
Umbrella or Excess Liability coverages may be used to supplement primary
coverages to meet the required limits. Evidence of such insurance shall be in
the form of a Buyer Special Endorsement of insurance or on an endorsement to
the policy acceptable to Buyer’s Risk Management Section.  Workers’ Compensation/Employer’s Liability
exposure may be self-insured provided
that Buyer is furnished with a copy of the certificate issued by the state
authorizing Seller to self-insure. Seller shall notify Buyer’s Risk Management Section by
receipted delivery as soon as possible of the state withdrawing authority to
self-insure.


 


E.                                    Builders’ Risk


 


Builder’s
Risk insurance shall be of the “all risk” type, shall be written in completed
value form, and shall protect Seller and Buyer against risks of damage to
buildings, structures, and materials and equipment, that constitute part of the
project, whether on site or in transit, unless transit is covered under a
separate policy, at any location world wide. The amount of such insurance shall
be not less than the insurable value of the work at completion.  The Builder’s Risk insurance shall provide
for losses to be payable to Seller.  The
policy shall contain a provision that in the event of payment for any loss
under the coverage provided, the insurance company shall have no rights of
recovery against Seller. The Builders’ Risk policy shall insure against all
risks of direct physical loss or damage to property from any cause including
testing, ensuing loss, commissioning, earthquake and flood. The policy shall
also provide for a one (1) year maintenance extension from the date of
Final Completion.  The policy shall be in
full force and effect until the Commercial Operation Date or final completion
of the Facility whichever date is the later.


 


F.                                     Property All Risk Insurance


 


Seller
shall procure and maintain or cause to be procured and maintained an All Risk
Physical Damage policy to insure the full replacement value of the property
located at Facility as described in this Agreement. The policy shall include
coverage for boiler and machinery breakdown, earthquake, flood, expediting
expense, extra expense, Business Interruption, ensuing loss from faulty
workmanship, faulty materials, and/or faulty design.  This policy shall incept in full force and
effect as of the date of Final Completion. This policy shall name Buyer as an
additional insured, and all losses shall be payable in the same manner, as
provided for the Builders’ Risk Policy in Paragraph E.


 


F-3

















 


APPENDIX G


 


TO THE


POWER PURCHASE AGREEMENT


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


REMAINING PREPAYMENT AMOUNT


 


	
   

  	
   

  	
  Remaining Prepayment Amount

  	
   

  
	
  Contract Year

  	
   

  	
  (assuming 4,467,600 MWh)

  	
   

  
	
  0.5

  	
   

  	
  $

  	
  209,980,000

  	
   

  
	
  1

  	
   

  	
  $

  	
  206,505,000

  	
   

  
	
  1.5

  	
   

  	
  $

  	
  202,960,000

  	
   

  
	
  2

  	
   

  	
  $

  	
  199,345,000

  	
   

  
	
  2.5

  	
   

  	
  $

  	
  195,655,000

  	
   

  
	
  3

  	
   

  	
  $

  	
  191,890,000

  	
   

  
	
  3.5

  	
   

  	
  $

  	
  188,050,000

  	
   

  
	
  4

  	
   

  	
  $

  	
  184,135,000

  	
   

  
	
  4.5

  	
   

  	
  $

  	
  180,140,000

  	
   

  
	
  5

  	
   

  	
  $

  	
  176,065,000

  	
   

  
	
  5.5

  	
   

  	
  $

  	
  171,910,000

  	
   

  
	
  6

  	
   

  	
  $

  	
  167,670,000

  	
   

  
	
  6.5

  	
   

  	
  $

  	
  163,345,000

  	
   

  
	
  7

  	
   

  	
  $

  	
  158,935,000

  	
   

  
	
  7.5

  	
   

  	
  $

  	
  154,440,000

  	
   

  
	
  8

  	
   

  	
  $

  	
  149,855,000

  	
   

  
	
  8.5

  	
   

  	
  $

  	
  145,175,000

  	
   

  
	
  9

  	
   

  	
  $

  	
  140,405,000

  	
   

  
	
  9.5

  	
   

  	
  $

  	
  135,535,000

  	
   

  
	
  10

  	
   

  	
  $

  	
  130,570,000

  	
   

  
	
  10.5

  	
   

  	
  $

  	
  125,505,000

  	
   

  
	
  11

  	
   

  	
  $

  	
  120,340,000

  	
   

  
	
  11.5

  	
   

  	
  $

  	
  115,070,000

  	
   

  
	
  12

  	
   

  	
  $

  	
  109,695,000

  	
   

  
	
  12.5

  	
   

  	
  $

  	
  104,215,000

  	
   

  
	
  13

  	
   

  	
  $

  	
  98,625,000

  	
   

  
	
  13.5

  	
   

  	
  $

  	
  92,920,000

  	
   

  
	
  14

  	
   

  	
  $

  	
  87,105,000

  	
   

  
	
  14.5

  	
   

  	
  $

  	
  81,170,000

  	
   

  
	
  15

  	
   

  	
  $

  	
  75,120,000

  	
   

  



 


G-1

















 


	
   

  	
   

  	
  Remaining Prepayment Amount

  	
   

  
	
  Contract Year

  	
   

  	
  (assuming 4,467,600 MWh)

  	
   

  
	
  15.5

  	
   

  	
  $

  	
  68,945,000

  	
   

  
	
  16

  	
   

  	
  $

  	
  62,650,000

  	
   

  
	
  16.5

  	
   

  	
  $

  	
  56,225,000

  	
   

  
	
  17

  	
   

  	
  $

  	
  49,675,000

  	
   

  
	
  17.5

  	
   

  	
  $

  	
  42,995,000

  	
   

  
	
  18

  	
   

  	
  $

  	
  36,180,000

  	
   

  
	
  18.5

  	
   

  	
  $

  	
  29,230,000

  	
   

  
	
  19

  	
   

  	
  $

  	
  22,140,000

  	
   

  
	
  19.5

  	
   

  	
  $

  	
  14,905,000

  	
   

  
	
  20

  	
   

  	
  $

  	
  7,525,000

  	
   

  



 


G-2














 


APPENDIX H


 


TO THE


POWER PURCHASE AGREEMENT


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


CIRCLE FOUR LEASE


[financial terms redacted]


 


THIS AMENDED AND RESTATED
LAND LEASE AGREEMENT (this “Lease”) is made effective as of February 22,
2007 (the “Effective Date”), between Circle Four LLC, a Delaware limited
liability company with an address at 341 South Main Street, PO. Box 100,
Milford, UT 84751 (together with its successors and assigns, the “Lessor”), and
Milford Wind Corridor Phase II, LLC, a Delaware limited liability company with
an address c/o First Wind Energy, LLC, 85 Wells Avenue, Suite 305, Newton,
MA 02459 (together with its successors and assigns, the “Lessee”). Lessor and
Lessee are at times collectively referred to herein as the “Parties” or
individually as a “Party.”


 


A.                                    Lessor owns
land situated in Beaver and Millard Counties, Utah. Approximately 13,130 acres
of that land (the “Lessor Lands”), which, together with all other rights,
interests, privileges and appurtenances pertaining to the Lessor Lands,
including (i) such rights as may exist under law allowing an owner to
exploit wind energy occurring on the Lessor Lands (“Wind Rights”), and (ii) other
easements and rights of ingress, egress and maintenance of the Lessor Lands and
any rights as to adjacent roads, streets, and rights-of-way (such items in
clause (ii) collectively, the “Other Appurtenances”) are the subject of
this Lease and the Beaver County Land Lease (defined below).


 


B.                                    Lessor and Milford
Wind Corridor Phase I, LLC, a Delaware limited liability company (“Beaver
County Lessee”) are parties to that certain Land Lease Agreement dated
effective as of February 22, 2007 (“Original Land Lease”), concerning the
Lessor Lands more particularly described in the Original Land Lease and
evidenced by that certain Memorandum of Lease (“Original Memorandum”) recorded
in the Beaver County Recorder’s Office on February 26, 2007, as Entry No. 230418,
in Book 402, beginning at Page 392 and in the Millard County Recorder’s
Office on February 26, 2007, as Entry No. 160231, in Book 462,
beginning at Page 467.


 


C.                                    Pursuant to Section 17.1
and Section 17.5 of the Original Land Lease, Lessor and the Beaver County
Lessee have agreed to amend the Original Land Lease to remove from the Original
Land Lease all portions of the Lessor Lands located in Millard County, Utah
together with a portion of the Lessor Lands located in Beaver County, Utah in Section 6,
Township 26 South, Range 9 West, Salt Lake Base and Meridian (collectively, “Premises”)
and to execute a separate lease with respect to Premises as more particularly
described on Exhibit “A” attached hereto.


 


H-1

















 


D.                                    Lessor and
Beaver County Lessee have entered into that certain Amended and Restated Land
Lease Agreement made effective as of February 22, 2007 and executed on or
about the date hereof (“Beaver County Lease”), concerning portions of the
Lessor Lands located in Beaver County, Utah (“Beaver County Premises”).


 


E.                                     Beaver County
Lessee has assigned or will assign to Lessee all right, title and interest of
Lessee in and to the Premises under the Original Land Lease.


 


F.                                      Lessor and
Lessee desire to amend and restate the Original Land Lease to provide that the
Lessee lease from Lessor, and Lessor lease to Lessee, the Premises, the Wind
Rights and the Other Appurtenances (collectively, the “Leased Property”) for
purposes of wind energy generation and related uses on the terms and conditions
set forth herein.


 


NOW, THEREFORE, for good and
valuable consideration, the Parties agree as follows:


 


1.                                      DEFINITIONS.


 


1.1                               “Commencement
Date” shall have the meaning set forth in the Beaver County Lease.


 


1.2                               “Improvements”
is as defined in Section 6.


 


1.3                               “Inflation
Index” means the Consumer Price Index — Seasonally Adjusted U.S. City Average
For All Items For All Urban Consumers, “CPI-U” of the Bureau of Labor
Statistics of the United States Department of Labor (or any successor
Department of Labor index).


 


1.4                               “Lender(s)” means
the banks, entities, or institutions providing financing for a Wind Energy
Improvement from time to time.


 


1.5                               “Liens” is as
defined in paragraph 13.4.1.


 


1.6                               “Security
Assignee” is as defined in Subsection 17.2.


 


1.7                               “Transportation
Facilities” is as defined in Subsection 3.5.


 


1.8                               “Transmission
Facilities Easement” is as defined in Section 7.


 


1.9                               “Wind Energy
Improvement” is as defined in Section 6.


 


1.10                        “WTG” means a
wind turbine generator, consisting of pedestal, tower, rotors, generators,
control equipment, electrical connections, and any other related or appurtenant
facilities or equipment necessary to generate and transmit electricity.


 


2.                                      LEASE. Lessor hereby
leases to Lessee and Lessee leases from Lessor the Leased Property upon and
subject to the terms and conditions hereof. Except as provided herein, the
Parties agree that, upon the execution and delivery of this Lease by each
Party, the terms and


 


H-2

















 


provisions of the Original
Land Lease shall be and hereby are amended, superseded and restated in their
entirety by the terms and provisions of this Lease. In the event of any
conflict or inconsistency between the terms of this Lease and the terms of the
Original Land Lease, the terms of this Lease shall control. Except for Lessor’s
obligations arising under the Original Land Lease prior to the execution of
this Lease, Lessor shall have no further obligation or liability under the
Original Land Lease nor any further obligation or liability with respect to the
Beaver County Premises other than those obligations and liabilities agreed upon
in the Beaver County Lease. Except for the Lessee’s obligations, if any,
arising under the Original Land Lease with respect to the Premises prior to the
date of this Lease, Lessee shall have no further obligation or liability under
the Original Land Lease nor any obligation or liability with respect to the
Beaver County Premises. Notwithstanding the foregoing, for purposes of priority
the Parties intend this Lease to relate back to the Effective Date.


 


3.                                      PURPOSE AND
SCOPE OF LEASE. The Lease is for the use of the Leased Property
for the purpose of converting wind energy to electricity and exploiting the
Wind Rights, including the collection and transmission of electric power by
installing, operating, maintaining, and integrating WTGs on the Leased Property
in conjunction with similar uses on other properties, and for related
activities. Without limiting the generality of the foregoing, Lessee shall
have, subject to the limitations contained in this Lease, the following rights
and privileges under this Lease:


 


3.1                               The right to
develop, erect, construct, install, replace, repair, relocate, remove,
maintain, operate, and use, from time to time, WTGs, underground and above-ground
electrical transmission and communications lines related to the operation of
WTGs, electric transformers and substations, energy storage facilities,
telecommunications equipment, roads, meteorological towers and wind measurement
equipment, control buildings, maintenance yards, and related facilities and
equipment on the Leased Property, which WTGs may be integrated with each other
and with WTGs located on other properties; 


 


3.2                               The right to capture and to convert any
or all of the wind resources of premises.


 


3.3                               The right to investigate the potential of
wind energy conversion but not limited to, conducting
environmental and paleontological studies, soil tests, and studies of wind
speed, wind direction and other meteorological data and geological studies, and
other studies as may be required in connection with permitting the WTGs;


 


3.4                               The right to
develop, erect, construct, install, replace, repair, relocate, remove,
maintain, operate, and use the following from time to time in connection with
the WTGs (i) a line or lines of poles or towers, together with such wires
and cables as from time to time are suspended there from, and/or underground
wires and cables, for the transmission of electrical energy and/or for
communication purposes, and all necessary and proper anchors, support
structures, foundations, footings, crossarms and other appliances and fixtures
for use in connection with said towers, wires and cables; (ii) one or more
substations or interconnection or switching facilities from which the WTGs may
interconnect to a utility transmission system or the transmission system of
another purchaser of electrical energy; and (iii) roads associated with


 


H-3

















 


the foregoing (such towers,
wires, cables, substations, facilities and other enumerated items in clauses
(i), (ii) and (iii) are herein collectively called the “Transmission
Facilities”);


 


3.5                               The right of
pedestrian and vehicular ingress, egress, and access over and across the Leased
Property by means of roads and lanes thereon if existing, or otherwise by such
roads, structure, route or routes as Lessee may construct or improve from time
to time (“Transportation Facilities”);


 


3.6                               The right of
subjacent and lateral support to whatever is necessary for the operation and
maintenance of improvements on the Leased Property and other property used in
connection with Wind Energy Improvements, including, without limitation, guy
wires and supports;


 


3.7                               The right to
permit the rotors of WTGs located on adjacent properties to overhang the Leased
Property and the right to permit the rotors of WTGs on the Leased Property to
overhang any adjacent property owned by Lessor;


 


3.8                               The right to
grade, level, fill, clear and replant ground; and to excavate and use sand,
gravel, caliche or other materials suitable for road cover solely to construct
the Transportation Facilities on the Leased Property, all to the extent
permitted by law and only at locations and in amounts approved by Lessor in its
reasonable discretion;


 


3.9                               The right to
enter upon the Premises and to conduct Phase I and other environmental studies
or audits of the Premises, including the air, soil, and water in and about the
Premises, at any time; and


 


3.10                        The right to
undertake any other activities, whether accomplished by Lessee or a third party
authorized by Lessee, that are reasonably necessary, useful or appropriate to
accomplish any of the purposes or uses of the Lease set forth above.


 


4.                                      USES RESERVED
BY LESSOR


 


4.1                               Subject to
Subsections 4.2 (including Sub-subsection 4.2.6) and 13.3 below, Lessor
expressly reserves all rights to use the Leased Property (excluding any Wind
Rights) for purposes not granted to Lessee, including the installation and
operation of animal husbandry facilities, to the extent that the lawful
exercise of such reserved rights does not materially interfere with the
construction, operation, or maintenance of the Improvements. Lessor will give
sixty (60) days’ prior written notice to Lessee of any intended and new
material use or development of the Premises or Other Appurtenances. If Lessee
believes that interference with Lessee’s use of such Premises and Other
Appurtenances will result from the proposed use of the Premises and Other
Appurtenances by Lessor or its designees, Lessor will take all steps reasonably
necessary to ensure the compatibility of Lessor’s intended use with Lessee’s
use of such property. Lessee shall have no liability for costs associated with
any use of the Premises or Other Appurtenances by Lessor pursuant to the rights
reserved or not granted herein.


 


4.2                               In furtherance
of Subsection 4.1, and subject to Sub-subsection 4.2.6 below, in consideration
of Lessee’s investment in the Improvements and the other covenants contained in
this Lease, Lessor shall limit its future activities on the Premises, and any
grant of


 


H-4

















 


rights Lessor makes to any
third party, whether the right of use is located on the Premises or elsewhere,
as follows:


 


4.2.1                     Except to the
extent specifically provided in this Lease, Lessor shall not, and shall not
authorize other persons or entities to, install structures or undertake other
activities on the Premises that materially interfere with the wind speed or
wind direction over the Premises or materially decrease efficiency of any WTG,
including any WTGs located on lands adjoining the Premises, or the installation
or operation of the Improvements.


 


4.2.2                     Lessor will not
grant or authorize any mineral extraction rights or mineral estates, geothermal
rights, hunting rights, or similar types of usage rights on the Premises in a
form that materially interferes with the construction or operation of the
Improvements or other allowed uses of the Leased Property; provided that Lessor
shall have no liability to Lessee for any damages incurred by Lessee and caused
by unauthorized uses, or caused by trespasses by unrelated third parties.
Lessor shall not interfere with Lessee’s efforts reasonably necessary to
mitigate unauthorized uses or trespasses.


 


4.2.3                     Lessor will
not, and will not authorize any third party, to construct or install any
structure or other improvement that is within the Minimum Distance of any WTG.
The Minimum Distance for any such structure is as follows:


 


MD = 100 tf. + (H*20)


Where: MD = the Minimum
Distance


H = maximum height above
ground (in ft.) of any structure in excess of 15 tf.


 


Thus, for example, the
Minimum Distance for a building with a maximum height above ground of 20tf.
would be calculated as (20f1 -15ft = 5ft=f1; 5ft*20 = 100tf; 100tf + 100tf = 200tf
= MD).


 


4.2.4                     Lessor will
consult with and obtain Lessee’s prior written approval as to all animal
husbandry facilities and other structures constructed under 4.1 to be located
by or under the direction of Lessor or its permittees within the Minimum
Distance, whether located on or off the Premises. Lessee shall cooperate with
Lessor in any such review, and Lessee shall consent to any such structures so
long as, based upon appropriate professional engineering and meteorological
opinions, the proposed structures at the proposed location are not likely to
materially interfere with wind speed or wind direction over any portion of the
Premises, cause a material decrease in the output or efficiency of any WTG, or
otherwise materially interfere with Lessee’s operations on the Leased Property.


 


4.2.5                     Each of Lessor
and Lessee will use good faith, commercially reasonable efforts to avoid or
minimize material interference with each Party’s respective operations on the Leased
Property.


 


4.2.6                     Notwithstanding
the balance of this Subsection 4.2, if Lessee has not commenced commercial
electrical power production on the Premises by April 15, 2013, then unless
and until such construction commences, Lessor shall have the right to proceed
with any use of the Premises reserved by Lessor in Subsection 4.1, but shall
not be subject to the


 


H-5

















 


limitations of
Subsubsections 4.2.1 — 4.2.4 above. Thereafter if Lessee elects to commence
installation of WTGs and/or Wind Energy Improvements on the Premises, Lessee
shall give written notice of its election and the Parties will remain subject
to Subsection 4.2.5 above with respect to the design, installation and
operation of their respective facilities on the Premises, provided that Lessor
shall not be obligated to remove or relocate any facilities or uses previously
installed or allowed by it on the Premises. Any such notice from Lessee
electing to commence installation of WTGs and/or Wind Energy Improvements on
the Premises shall lapse without opportunity for extension or renewal if
commercial electrical power production does not commence within two years from
the date of the notice.


 


5.                                      EXCLUSIVENESS
OF LEASE. Lessee’s granted rights hereunder to the Wind Rights
and rights to erect and maintain WTGs and Wind Energy Improvements on the
Premises set forth in Section 3.1-3.4 and 3.6-3.7 are exclusive of all
other persons, including Lessor. Without limiting the generality of the
foregoing, Lessor covenants not to convey or authorize the exploitation of Wind
Rights or otherwise to grant or suffer any conflicting rights with respect to
the Leased Property.


 


6.                                      OWNERSHIP OF
WIND ENERGY IMPROVEMENTS. Lessor shall have no ownership or other
interest in any Improvements (as defined below). Lessee shall have title to all
Improvements at all times, whether or not the same shall be affixed to the
Premises, and Lessee may remove any or all such Improvements at any time. As
used in this Lease, the term “Improvements” means all facilities or equipment
installed on the Leased Property for the purpose of producing electricity by
wind power, including but not limited to WTGs, Transmission Facilities,
structures, equipment, machinery, wire, conduit, fiber, cable, poles, materials
and property of every kind and character constructed, installed and/or placed
on, above or below the Leased Property by or on behalf of Lessee. This Lease
contemplates that Improvements may be installed at separate times, in multiple
stages to create one or more sets of integrated Improvements under separate
capital structures and power sales arrangements, each defined as a “Wind Energy
Improvement.” The Wind Energy Improvements may share some common facilities
such as substations, transmission lines, and roads.


 


7.                                      TRANSMISSION
FACILITIES EASEMENT. Lessee shall have the right to sublease to any
utility, power provider, or other party (collectively, “Transmission Facility
Assignees”) any of its rights granted hereunder to (a) construct, operate,
and maintain the Transmission Facilities on the Leased Property, and (b) access
such Transmission Facilities, including the right of ingress and egress into
and across portions of the Leased Property and other adjacent property of
Lessor, if any. All such sublease rights shall remain subject to the terms and
conditions hereof If requested by a Transmission Facility Assignee and Lessee,
Lessor will provide written affirmation to such Transmission Facility Assignee
of such easements and access rights as granted to Lessee herein (each a “Transmission
Facility Easement”).


 


8.                                      SURVEY AND SITE
PLAN. Lessee may survey the Premises and all elements of any Wind Energy
Improvements at its own expense. Any site and/or construction plan(s) intended
to be used by Lessee with respect to the Improvements, Transportation
Facilities, or Transmission Facilities, including any plans required to be
filed from time to time in connection with permitting each Wind Energy
Improvement, shall be subject to the review and consent of Lessor; provided that
such review shall be as timely as practical so as to avoid permitting or


 


H-6

















 


construction delays, and
such consent will be provided so long as such plans maintain a distance between
lines of WTGs, such that Lessor may install buildings up to 30 tf. in height
above ground between such lines or arrays while conforming to the Minimum
Distance. Once accepted by Lessor, Lessee may make immaterial alterations to
such plans without prior Lessor consent and shall locate, construct, operate,
and replace all Improvements in accordance with such plans. While the wind
resource will dictate the location of the WTGs, Lessee shall use commercially
reasonable efforts to accommodate requests of Lessor regarding the location of
Transportation Facilities, Transmission facilities, and substations. To the
best of Lessor’s knowledge and only insofar as such plans have been provided to
Lessor by Lessee prior to the execution of this Lease, Lessor has reviewed and
approved the site and construction plans intended to be used by Lessee with
respect to the Improvements, Transportation Facilities, or Transmission
Facilities, including any plans required to be filed from time to time in
connection with permitting the Wind Energy Improvement related to the Premises.
No review and consent by Lessor shall constitute any warranty of Lessor or
create any liability of Lessor. Lessee shall be solely responsible for
designing, permitting, financing, constructing, operating, repairing, replacing,
and maintaining each Wind Energy Improvement. Lessor is solely responsible for
the placement and operation of its facilities on the Premises.


 


9.                                      TERM


 


9.1                               This Lease
shall be effective as of the Effective Date. The initial term of this Lease
shall be until the last day in the December following the fortieth (40th)
anniversary of the Commencement Date (“Initial Term”). The Lessee shall have
the option to renew this Lease for up to two additional ten (10) year
terms. If the Lessee is then in possession of the Premises and if there is not
a notice of default from Lessor pending at the time the lease term ends
(whether at the end of the Initial Term or the first extension), Lessee will be
deemed to have exercised its option to extend the term hereof absent Lessee
providing a written notice to Lessor to the effect that the extension will not
be undertaken. If a notice of default is pending, the lease term may be
extended only upon written consent from Lessor. Any such Lessee notice that it
will not extend the lease shall be in writing by certified or registered mail,
and made on or before sixty (60) days prior to the end of the Initial Term or
any extension of the Initial Term. For the purposes of this Section 9, a
notice of default shall be deemed to be pending if notice of default has been
given by Lessor as provided in Section 18 and the default specified in the
notice has not been corrected.


 


9.2                               If the Beaver
County Lease terminates pursuant to Section 9.2 of the Beaver County
Lease, this Lease shall automatically terminate as of the termination of the Beaver
County Lease. If Lessor’s right to terminate the Beaver County Lease pursuant
to Section 9.2 thereof is extinguished, this Section 9.2 shall have
no further effect. At Lessee’s request and expense, Lessor will provide written
acknowledgement in recordable form of the occurrence of Commencement Date.


 


9.3                               When the Lease
terminates for any reason, Lessor shall be entitled to file a notice thereof in
the office of the recorder of each county in which a portion of the Premises is
located.


 


H-7

















 


9.4                               Notwithstanding
the foregoing, Lessee shall not be entitled to erect WTGs on the Premises until
such time as Lessee has demonstrated to Lessor’s reasonable satisfaction that
Lessee is financially capable of performing its obligations under Section 21.
Within 15 business days of Lessee’s delivery of evidence of Lessee’s financial
capability to perform under Section 21, Lessor shall either deliver
written notice to Lessee of its acceptance of such evidence or provide a
detailed written explanation of its basis for not accepting such evidence. If
Lessor fails to respond in writing with such 15-day period, such failure shall
be deemed to waive objection to Lessee’s ability to perform its obligations
under Section 21 and Lessee shall be entitled to erect WTGs on the
Premises.


 


9.4.1                     The evidence of
Lessee’s financial capability to be provided under this Subsection 9.4 shall
include information represented and warranted by Lessee as providing an
accurate and complete statement of Lessee’s financial capability as of the date
furnished, together with any other additional assurances reasonably necessary
to demonstrate Lessee’s capability under Section 21.


 


10.                               RENT: TAXES AND
UTILITIES


 


10.1                        The rent
payable by Lessee to Lessor for use of the Premises shall be determined and
paid as set out in this Lease. All rents shall accrue and be deemed fully
earned by Lessor on a daily basis.


 


10.2                        Rent Payment. Payments due
Lessor hereunder will be made to Lessor at the address provided for notices
under this Lease, or to such other person, firm, or place as Lessor may from
time to time designate.


 


10.3                        Due Dates. All rent
payments shall be paid annually, except as otherwise specifically provided
herein. Rent shall be computed on a calendar year basis beginning on the
Commencement Date and thereafter shall be paid in annual payments. All annual
payments due hereunder shall be paid in arrears, and shall be due and payable
on or before March 31 of the calendar year following the year in which the
rental obligation accrues.


 


10.4                        Initial
Payments. In consideration of Lessor entering into this
exclusive wind resources Lease with Lessee, assistance with initial wind
assessments, and status as the primary private land owner necessary for the
Improvements, Lessee shall pay [language redacted ]. The payment under this
section shall be deemed fully earned when paid. Lessee shall be deemed in
default under this Lease if such payments are not received by Lessor within
sixty (60) days of the due date.


 


10.5                        Proration of
Rent. All annual Base Rent payments shall be prorated from the date rent
begins or the date on which an adjustment to rental rates occurs during any
partial calendar year during which this Lease is in effect. [language
redacted].


 


10.6                        Base Rent. [language
redacted]. Beginning as of the Commencement Date, the Base Rent due hereunder
shall be:


 


10.6.1              [language redacted].


 


H-8

















 


10.6.2              [language redacted].


 


10.6.3              [language redacted].


 


10.6.4              [language redacted]..


 


10.6.5              [language redacted].


 


10.6.6              [language redacted]


 


10.6.7              [language redacted].


 


10.7                        Lessor’s Taxes. [language
redacted].


 


10.8                        Lessee’s Taxes. [language
redacted].


 


10.9                        Utilities. To the extent
that Lessee’s use of the Leased Property or operation of any Wind Energy
Improvement involves the joint use with Lessor of electricity, gas, telephone
services or other utilities, the Parties shall cooperate in good faith to
apportion the cost of such utilities. Subject to the specific written consent
of Lessor, Lessee may construct, install, maintain and use one or more water
wells upon the Leased Property for potable water uses; in such event, Lessor
shall retain ownership of all water available from such well(s), but Lessor
will allow Lessee to use water from such wells at no cost to Lessee for the
limited use of potable water reasonably necessary for Lessee’s personnel and
minor cleaning and maintenance. The water rights to be furnished at no cost by
Lessor to Lessee shall not exceed 1.0 acre feet per year for all uses under
this Lease, except upon the prior written consent of Lessor. Lessor shall have
the right, but not the obligation, to conduct all proceedings before the Utah
Division of Water Rights and in any judicial review proceedings for all
applications pertaining to such water rights. Lessee shall bear the cost of all
such proceedings. Lessor shall reasonably cooperate with Lessee to obtain such
water rights approvals.


 


11.                               USE: GOVERNMENTAL
APPROVALS. Lessee’s uses of the Leased Property are subject
to receipt of all of the certificates, permits, zoning changes or variances,
easements, rights of way, and other federal, state or local authorizations
and/or approvals (collectively, the “Governmental Approvals”) that may be
required by any federal, state or local government, agency or other authority (“Governmental
Authorities”) under any applicable federal, state, or local law, rule,
regulation, ordinance, statute, order or decree (“Legal Requirements”) as well
as satisfactory soil boring tests which will permit the Lessee use of the
Leased Property as set forth above. Lessee shall have the right in its sole
discretion, to contest by appropriate legal proceedings, brought in the name of
Lessee or in the names of both Lessee and Lessor where appropriate or required,
the validity or applicability to the Leased Property, Transmission Facilities, Improvements,
or Wind Energy Improvements of any Legal Requirement, Taxes or the like, now or
hereafter made or issued by any Governmental Authority. Lessor shall cooperate
in every reasonable way in such contest, at no material out-of-pocket expense
to Lessor. If any of such Governmental Approvals should be finally rejected or
denied or any Governmental Approval issued to the Lessee is canceled, expires,
lapses or is otherwise withdrawn or terminated, or soil boring tests are found
to be unsatisfactory so that the Lessee in its sole discretion will be unable
to use the Leased Property for its intended purposes or the Lessee


 


H-9

















 


determines that the Leased
Property is no longer technically compatible for its intended use, the Lessee
shall have the right to terminate this Lease. Notice of the Lessee’s exercise
of its right to terminate shall be given to the Lessor in writing by certified
mail, return receipt requested, and shall be effective upon the mailing of such
notice by the Lessee. Except with respect to any surviving provisions hereof,
including provisions with respect to indemnity, taxes, removal of Improvements
and any outstanding rent due, this Lease shall become null and void and the
Parties shall have no further obligations.


 


12.                               LESSEE’S
REPRESENTATIONS, WARRANTIES AND COVENANTS. Lessee hereby represents,
warrants and covenants to Lessor as follows:


 


12.1                        Lessee’s
Authority. Lessee has full power, authority, capacity and
legal right to enter into, execute and deliver this Lease. Each person signing
this Lease on behalf of Lessee is authorized to do so. This Lease constitutes a
valid and binding agreement enforceable against Lessee in accordance with its
terms.


 


12.2                        Legal
Status/Approvals. Lessee (a) is duly organized or formed,
validly existing and in good standing under the laws of its state of
organization or formation; (b) is duly qualified to transact business and
is in good standing in the state of Utah; and (c) has full power and
authority to lease the Leased Property and carry on its business as now
conducted. Lessee has all necessary approvals, governmental and otherwise, to
execute and deliver this Lease and the execution and delivery of this Lease by
Lessee will not place Lessee in default of any agreements to which Lessee is a
party or bound.


 


12.3                        Liens. Lessee shall
keep Lessor’s interest in the Leased Property free and clear of all Liens and
mechanics liens and claims of liens for labor and services performed on, and
materials, supplies or equipment furnished to, the Leased Property in
connection with Lessee’s use of the Leased Property; provided, however, that if
(a) such a Lien does arise on Lessor’s interest in the Leased Property, (b) Lessee
has a right to contest such Lien and (c) Lessee, within thirty (30) days after
it receives notice of the filing of such Lien, either bonds around such Lien or
establishes appropriate reserves therefore, or, otherwise, removes such Lien
from the Leased Property pursuant to applicable law, then Lessee shall not be
deemed to have breached this Section. Lessee shall indemnify and defend Lessor
and the Premises against any lien or claim of lien arising in any way from
Lessee’s use of the Premises.


 


12.4                        Hazardous
Materials. Lessee shall not violate in any material respect
any Legal Requirement relating to the generation, manufacture, production, use,
storage, release or threatened release, discharge, disposal, transportation or
presence of any substance, material or waste which is now or hereafter
classified as hazardous or toxic, or which is regulated under current or future
Legal Requirement (collectively, “Hazardous Materials”) on or under the Leased
Property. Lessee will at the end of this Lease remove any Hazardous Materials
from the Premises deposited there by Lessee, except as specifically approved in
writing by Lessor.


 


12.5                        Estoppel
Certificate by Lessee. Lessee shall at any time, and from time to
time, within fifteen (15) days after a written request by Lessor, execute and
deliver to Lessor a written statement certifying that this Lease is in full
force and effect (or modified and stating the modification). Such statement
shall also state that, to Lessee’s knowledge, there are no defaults


 


H-10














 


existing at the time of
execution of the statement, or (to the extent applicable) if existing, the
nature of such defaults.


 


12.6                        Gates and
Fences. Lessee shall have the right to install and maintain gates, cattle
guards and other security structures where necessary or useful in connection
with Lessee’s use of the Leased Property. The location of all gates and fences
remains subject to Lessor review pursuant to Section 8 above.


 


12.7                        Bio-Security
and Animal Welfare. If Lessor installs any animal husbandry facilities
on the Premises, Lessee shall cause its personnel entering any such facility or
bringing a vehicle within fifty yards of such facility to comply with Lessor’s
Bio-Security Management System and Animal Welfare System Requirements, each as
currently in effect, or as supplemented or changed from time to time (copies of
which shall promptly be provided to Lessee). Lessor shall be entitled to
immediately prevent any officers, employees, agents, subcontractors, or others,
as well as any equipment, materials, tools, or any other substance or item from
entering or approaching any Lessor facility if such entry would breach Lessor’s
bio-security or animal welfare protocols.


 


13.                               LESSOR’S
REPRESENTATIONS, WARRANTIES AND COVENANTS. Lessor hereby represents,
warrants, and covenants to Lessee as follows:


 


13.1                        Lessor’s
Authority. Lessor has full power, authority, capacity and
legal right to enter into, execute and deliver this Lease, and to assign,
warrant, set-over, transfer and convey the Leased Property pursuant to the
terms of this Lease. Each person signing this Lease on behalf of Lessor is
authorized to do so. This Lease constitutes a valid and binding agreement
enforceable against Lessor and the Leased Property in accordance with its
terms.


 


13.2                        Legal Status;
Approvals. Lessor (a) is duly organized or formed,
validly existing and in good standing under the laws of its state of
organization or formation; (b) is duly qualified to transact business and
is in good standing in the state of Utah; and (c) has full power and
authority to own the Leased Property and carry on its business as now conducted
and proposed to be conducted. Lessor has all necessary approvals to execute and
deliver this Lease and the execution and delivery of this Lease by Lessor will
not place Lessor in default of any agreements to which Lessor is a party or
bound.


 


13.3                        Quiet Use. Lessor
covenants and agrees that Lessee shall have the quiet use and enjoyment of the
Leased Property in accordance with the terms of this Lease without hindrance or
interruption from Lessor or any other person or persons, subject to all items
of record as of the date hereof or arising from prescriptive or adverse use of
the Premises.


 


13.4                        Liens.


 


13.4.1              Lessor
represents that as of the Effective Date, to Lessor’s knowledge without further
inquiry, there are no liens, encumbrances, leases for wind energy or that will
interfere with the rights granted to Lessee under this Lease, mortgages, deeds
of trust, security interests, licenses, mineral estates, or other exceptions
(collectively, “Liens”) encumbering or affecting all or any portion of the
Leased Property that could materially and


 


H-11

















 


adversely affect Lessee’s
use of the Leased Property, except to the extent disclosed in the public record
or arising from adverse or prescriptive uses not known to Lessor.


 


13.4.2              To Lessor’s
knowledge, there are no currently existing options, rights of refusal, sales
contracts, or other such rights in favor of any third parties relating to the
Leased Property or any interest therein that could materially interfere with
the development, construction, installation, maintenance, or operation by
Lessee of the Improvements or that allow any party other than Lessee to exploit
the Wind Rights or that could materially and adversely affect Lessee’s use of
the Leased Property, except to the extent disclosed in the public record.


 


13.4.3              At Lessee’s
request, Lessor will use commercially reasonable efforts to remove, or
subordinate to Lessee’s reasonable satisfaction, any existing liens or
encumbrances that, in the opinion of Lessee, materially interfere with Lessee’s
use of the Leased Property.


 


13.4.4              If, after the
date hereof, Lessor creates or allows additional Liens with respect to the Leased
Property or any part thereof, Lessor shall, prior to granting such Lien, notify
such Lien holder of this Lease, and obtain from such holder a written
subordination agreement with Lessee providing that such holder will (i) subordinate
such Lien to Lessee’s interest under this Lease, (ii) agree not to disturb
Lessee’s possession or rights under this Lease or terminate this Lease, so long
as Lessor is not entitled to terminate this Lease under the provisions hereof, (iii) provide
notice to Lessee, its Lenders and any Security Assignee under Section 17.2
of defaults under the Lien documents, and (iv) comply with such other
requirements as may be reasonably required by Lessee, its Lenders and any
Security Assignee under Section 17.2 to protect the interests of Lessee,
its Lenders, or any Security Assignee under Section 17.2, all in a form
reasonably acceptable to Lessee and in recordable form. Lessee may, at its sole
option, cure or correct Lessor’s default and upon doing so, Lessee shall be
subrogated to any and all rights, titles, liens and equities of the holders of
such mortgage or security interest to the extent of such cure, and the Lessee
shall be entitled to deduct and setoff against all rents that may otherwise
become due under this Lease the sums paid by Lessee to cure or correct such
defaults.


 


13.5                        Requirements of
Governmental Authorities. Lessor shall fully cooperate with Lessee,
at no out-of-pocket expense to Lessor, in connection with (i) obtaining
and complying with any land use, environmental or other Governmental Approvals
required for the financing, construction, installation, relocation,
replacement, maintenance, operation or removal of any Wind Energy Improvements,
including without limitation execution of applications for such Approvals and (ii) providing
affidavits or documents from Lessor customarily required by title companies.


 


13.6                        Hazardous
Materials. Lessor represents that to its knowledge: there are
no Hazardous Materials located on the Leased Property in any amount which would
require reporting under applicable Legal Requirements; the Leased Property has
not been used for the generation, treatment, storage, or disposal of Hazardous
Materials; and there are no underground storage tanks located on the Leased
Property.


 


13.7                        No Litigation. Lessor is not
a party to any, and to Lessor’s knowledge there are no pending or threatened,
legal, administrative, arbitral or other proceedings, claims,


 


H-12

















 


actions or governmental or
regulatory investigations of any kind or nature whatsoever against Lessor (a) challenging
the validity or propriety of this Lease, the documents executed in connection
herewith, and/or transactions contemplated in this Lease and/or such documents
or (b) which could reasonably be expected to have a material adverse
effect on the ownership, operation or value of the Leased Property or any part
thereof or interest therein. Lessor shall promptly (i) inform Lessee of
any disagreements, disputes, threatened litigation or pending litigation
between any Lessor and any other party that may materially impact Lessee’s use
of the Leased Property, (ii) promptly give Lessee copies of any notices,
correspondence or other written or digital communication received by Lessor in
connection with any such disagreement, dispute, threatened litigation or
pending litigation.


 


13.8                        Estoppel
Certificates from Lessor. Lessor shall at any time and from time to
time, within fifteen (15) days after a written request by Lessee, execute and
deliver to Lessee a written statement certifying that this Lease is in full
force and effect (or modified and stating the modification). Such statement
shall also state that, to Lessor’s knowledge, there are no defaults existing at
the time of execution of the statement, or (to the extent applicable) if
existing, the nature of such defaults, and (b) attest to such other
factual matters relating to this Lease as Lessee shall reasonably request.


 


13.9                        Noise/Interference. Lessor
acknowledges and agrees that incident to the uses permitted by the Lease shall
be the continuous creation of audible and electromagnetic noise and
interference, radio frequency interference or cell tower interference related
to the maintenance, operation and use of the Wind Energy Improvements, including
WTGs, Transmission Facilities and other Improvements, and as further set forth
in Section 16.2, Lessor waives, on behalf of Lessor and its officers,
employees, permittees, invitees and agents (the “Lessor Parties”), the right to
make any claims for Losses as a result thereof.


 


13.10                 No Liability
for Failure to Develop or Operate. Lessor acknowledges and
agrees that Lessee may or may not elect to construct, install or develop WTGs,
Wind Energy Improvements, Transmission Facilities and/or Improvements on the
Leased Property in its sole discretion, and Lessee shall have no responsibility
or liability to Lessor or any other party in the event Lessee does not
construct, install or develop WTGs, Wind Energy Improvements, Transmission
Facilities and/or Improvements on the Leased Property. Furthermore, nothing in
this Lease may be interpreted as imposing on Lessee, or any other party, any
obligation to continuously operate any Wind Energy Improvements constructed,
developed or installed on the Leased Property, subject to the provisions of
10.6.


 


13.11                 Confidentiality. Lessor shall
maintain in confidence, except to the extent required by law, for the sole
benefit of Lessee, all information pertaining to the financial terms of or
payments under this Lease, Lessee’s site or product design, methods of
operation, methods of construction, power production or availability of the
Wind Energy Improvements whether disclosed by Lessee or discovered by Lessor,
unless such information either (a) is in the public domain by reason of
prior publication through no act or omission of Lessor or the other Lessor
Parties, or (b) was already known to Lessor at the time of disclosure and
which Lessor is free to use or disclose without breach of any obligation to any
person or entity. Lessor shall not publish or otherwise disclose such
information to others, except as necessary to financial advisors,


 


H-13

















 


consultants, retained
experts, constituent entities of any Lessor, and lawyers or other
professionals, who receive such information under an obligation of
confidentiality.


 


13.12                 Surface Waivers. At its
discretion, Lessee may seek executed waivers from each party owning or leasing
a mineral interest underlying any portion of the Premises the development of
which might interfere with Lessee’s rights under this Lease by each such
mineral owner or lessee, on terms reasonably satisfactory to Lessee. Lessor
will use reasonable efforts to cooperate with Lessee in such efforts. With
respect to any and all existing mineral and geothermal interests: (a) Lessor
is not and has not received any lease, rent or royalty payment arising out of
any mineral and/or geothermal production related to the Premises; (b) Lessor
is not aware of any mining and/or geothermal development or production activity
on or related to the Premises; and (c) Lessor hereby confirms to its
actual knowledge without duty of inquiry that there are no unexpired mineral
leases or geothermal leases on or related to the Premises.


 


14.                               LESSEE
INSURANCE. Prior to commencing any activities at the Premises
Lessee at its own cost and expense will obtain and maintain and comply with the
following insurance requirements throughout the Initial Term and any extensions
thereof:


 


14.1                        General
Liability. Lessee shall obtain and maintain, from an
insurance company or companies and in a form acceptable to Lessor, a policy or
policies of commercial general liability insurance, or its equivalent, covering
all of Lessee’s activities and operations on the Premises or that in any way
may be the source of any liability claim against Lessor. Such policy or
policies shall provide protection against liability for bodily injury and death
and for damage to property. Liability coverage shall provide at least [language
redacted] in any one occurrence, with an annual aggregate limit of at least
[language redacted]. Lessee shall have Lessor named as an additional insured on
each such policy, or as an insured indemnitee, or provide contractual liability
endorsement in favor of and satisfactory to Lessor.


 


14.2                        Property
Coverage for Lessee’s Improvements. Lessee shall maintain
commercially adequate property insurance for damage or destruction to its
Improvements situated on the Premises.


 


14.3                        Worker’s
Compensation. Lessee shall maintain any required workers’
compensation insurance protecting against liability to each of its employees
regarding activities and operations related to the transportation and delivery
services required by this Lease. Employer liability coverage under workers’
compensation shall be at least [language redacted] in all areas in which
workers’ compensation insurance provides coverage.


 


14.4                        Auto and Truck
Insurance. Lessee shall obtain vehicle insurance on all
vehicles used on the Premises. This insurance coverage shall include liability
coverage of at least [language redacted].


 


14.5                        Evidence of
Insurance. Lessee shall provide to Lessor, upon request,
evidence of all insurance policies (or self-insurance plans) required under
this Lease. Such insurance policies shall provide for thirty (30) days written
notice to Lessor prior to cancellation of any coverage required herein, unless
a shorter notice period is approved in writing by Lessor. Lessor will consider
in good faith, and will not unreasonably withhold its consent to, any request


 


H-14

















 


by Lessee to self-insure any
of the required coverages upon a showing by Lessee of the legality of
self-insurance and sufficient financial resources to support a self-insurance
program.


 


14.6                        Failure to
Obtain Required Insurance. Failure to obtain satisfactory insurance
and proof of insurance, or to provide self-insurance and evidence thereof,
shall constitute a default under this Lease. If Lessee fails to obtain any types
or amounts of insurance required under this Lease, Lessor shall have the right,
but shall not be obligated, to immediately obtain such insurance and keep the
same in effect. In such an event, Lessee shall pay Lessor the premium costs of
such insurance and any other actual costs incurred by Lessor in obtaining such
insurance within ten (10) days after demand.


 


14.7                        Increase in
Insurance Limits. Lessor may require by written notice an increase
in the insurance limits specified in this Section 14 based on inflation or
commercial adequacy. The inflation adjustment shall be made by one of the
following methods:


 


14.7.1              The coverage
limits for each policy of insurance required shall be increased on each
five-year anniversary of the Effective Date using the Inflation Index, with
2007 as the base year, or another index approved in writing by Lessor, for each
year that the Inflation Index is greater than the base year. The limits
required by this paragraph shall not exceed commercially reasonable limits.


 


14.7.2              Notwithstanding
the provision for inflation adjustment, if the policy limits established by
such adjustment do not comply with applicable law or are substantially less
than prevailing commercial practices for the activities conducted by Lessee,
then upon request from Lessor to Lessee, Lessee shall revise its policies to
provide commercially reasonable coverage limits.


 


15.                               LESSOR
INSURANCE. If Lessor commences new and material commercial
activities on the Premises, then at the request of Lessee, Lessor shall procure
and maintain during the Initial Term and any extension thereof, at its sole
cost and expense, a policy or policies of insurance in amounts not less than a
combined single limit of [language redacted] per occurrence and [language
redacted] in the aggregate, insuring against any and all liability to the
extent obtainable for injury or death of a person or persons or damage to
property occasioned by or arising out of or in connection with Lessor’s
occupation and material use of the Leased Property.  Lessee shall be named as an additional insured
on such policy or policies. Lessor shall provide copies of certificates
evidencing such coverage from time to time upon Lessee’s request. The limits of
any insurance coverage required under this Section 15 shall be subject to
adjustment as required under Subsection 14.7.


 


16.                               INDEMNITY AND
RELEASE


 


16.1                        Indemnity. To the
fullest extent permitted by law, each Party (an “Indemnifying Party”) shall
indemnify, defend and hold harmless the other Party and its consultants,
owners, agents, employees, and any company of which such Party is a subsidiary
or any company owned by an entity of which such Party is a subsidiary (the “Indemnified
Parties”) from and against claims, damages, losses and expenses, including, but
not limited to attorneys fees (collectively, “Losses”), arising out of or
resulting from (a) the Indemnifying Party’s


 


H-15

















 


activities or operations (i) on
the Premises or (ii) which may create any liability claim against the
Indemnified Parties, including, without limitation, in the case of Lessee,
liens for material or labor furnished to the Premises at the instance of
Lessee, except to the extent that such Losses are caused by one or more
Indemnified Parties, or (b) inaccuracies in or breaches of the Indemnifying
Party’s representations, warranties, covenants or agreements contained herein.  Should either Party suffer a Loss because of
an act or omission of the other Party, the other Party’s employees or agents,
or another for whose acts the other Party is legally liable, claim shall be
made in writing to the other Party within a reasonable time after such Loss
occurred. Any obligation of indemnity hereunder will be limited to claims in
excess of $10,000. This duty to indemnify the Indemnified Parties shall extend
beyond termination of the Lease provided for in this Lease and shall continue
for so long as the Indemnified Parties can be held liable for any claim or
injury arising from any activities of Lessee, whether such activity occurs on
the Premises or elsewhere.


 


16.2        Release by Lessor. LESSOR, ON ITS OWN BEHALF AND ON BEHALF
OF EACH INDEMNIFIED PARTY, HEREBY IRREVOCABLY RELEASES AND DISCHARGES EACH
LESSEE INDEMNIFIED PARTY FROM ANY LOSSES ATTRIBUTABLE TO (i) INTERFERENCE
WITH WIND ON ANY PROPERTY OWNED IN WHOLE OR IN PART BY LESSOR THAT IS
ADJACENT TO THE LEASED PROPERTY, OR (ii) AUDIBLE NOISE, ANY EFFECT OF ELECTROMAGNETIC
FIELDS OR BACKGROUND STRAY VOLTAGE ON PERSONS OR LIVESTOCK ELECTROMAGNETIC NOISE
OR INTERFERENCE, RADIO FREQUENCY INTERFERENCE OR CELL TOWER INTERFERENCE. IN
EACH CASE TO THE EXTENT CAUSED BY ANY OF THE IMPROVEMENTS.


 


17.                               ASSIGNMENT AND
SUBDIVISION


 


17.1                        Assignment by
the Parties. This Lease and the rights of any Party to this Lease
and the Leased Property, Wind Energy Improvements, Transmission Facilities and
Improvements may be assigned, encumbered, or mortgaged, in whole or in part,
(and may be sublet by Lessee) without the prior written consent of the
non-assigning Party, but no such assignment, encumbrance, mortgage, deed of
trust, or sublease shall operate to enlarge the obligations or diminish the
rights of the non-assigning Party hereto, nor relieve the assigning Party of
its indemnification obligations hereunder (except as expressly provided below,
with respect to the release of the assigning Party). Notwithstanding the
foregoing, no assignment, encumbrance, mortgage, or sublease of this Lease or
the rights of any Party hereunder or to the Leased Property, Wind Energy
Improvements, Transmission Facilities or Improvements, however accomplished,
shall be binding on the non-assigning Party until after the non-assigning Party
has been furnished with written notice thereof and an executed original
counterpart of the instrument establishing such persons’ rights under this
Lease and/or to the Leased Property, Wind Energy Improvements, Transmission
Facilities and Improvements. Except as otherwise provided herein, in the event
of an assignment or sublease of this Lease by any Party hereto that is not for
collateral or other security purposes, such Party shall be relieved of all
obligations under this Lease as to the interest so assigned to the extent that
such obligations relate to periods of time following such assignment and are
assumed by the party to whom assigned, and liability for obligations relating
to the interest so assigned and assumed and relating to the periods of time
from and after such assignment shall rest exclusively upon such assignee;
provided, that no such


 


H-16

















 


assignment shall release the
assigning Party from its removal obligations under Section 21 hereof
absent a demonstration to Lessor’s reasonable satisfaction that the assignee is
financially capable of assuming such obligations. Without limiting the
generality of the foregoing, any such assignment shall not relieve the
assigning Party from any obligation that arose or accrued prior to such
assignment.


 


17.2                        Security
Assignment by Lessee; Cure Rights of Security Assignee.


 


17.2.1              In connection
with Lessee’s financing of the Project, Lessee and every successor and assign
of Lessee may, without Lessor’s prior written consent, mortgage, collaterally
assign, or otherwise encumber and grant security interests in all or any part
of Lessee’s rights or interests in this Lease, or any part or parts thereof, or
any of the Wind Energy Improvements, Improvements or Transmission
Facilities, under one or more leasehold mortgage(s), or deed(s) of trust,
and may assign this Lease, or any part or parts thereof, and any subleases as
collateral security for such leasehold mortgage(s), upon the condition that all
rights acquired under such leasehold mortgage(s) or trustee(s) shall
be subject to each and all of the covenants, conditions, and restrictions set
forth in this Lease, and to all rights and interests of Lessor herein, none of
which covenants, conditions, or restrictions is or shall be waived by Lessor by
reason of the right given to so grant leasehold mortgages or deed(s) of
trust with respect to such interest in this Lease.


 


17.2.2              If Lessee
grants to any party (a “Security Assignee”) a Lien on or security interest in
all or any part of or any interest in its rights hereunder, Wind Energy
Improvements, Transmission Facilities, or Improvements for security purposes,
the Security Assignee shall have no obligation or liability under this Lease
prior to the time, if ever, that that such Security Assignee succeeds to the
rights of the Lessee under the Lease, or to the Wind Energy Improvements, Transmission
Facilities or Improvements by foreclosure or conveyance in lieu of foreclosure.


 


17.2.3              A Security
Assignee shall have the right, but not the obligation, at any time prior to the
termination or exercise of any other remedy, to pay any or all amounts due from
Lessee hereunder and to do any other act or thing required of Lessee as
necessary to cure any Lessee default and to prevent the termination of the
Lease or the exercise of any other remedy. Security Assignee shall be entitled
to a minimum of thirty (30) days to cure a monetary default if Lessee fails to
cure within Lessee’s cure period, and sixty (60) days to cure a non-monetary
default, if Lessee fails to cure within Lessee’s cure period; provided,
further, that such period shall be extended for non-monetary defaults as
reasonably necessary to effect a cure if and to the extent the same is not
susceptible of cure within such sixty (60) day period but Security Assignee
commences such cure within such period (or as soon as Security Assignee obtains
possession of the Leased Property) and diligently prosecutes the same to
completion. In furtherance of the foregoing, as a precondition to exercising
any rights or remedies as a result of any alleged default by Lessee, Lessor
shall give written notice of the alleged default to each Security Assignee of
which Lessor has received notice concurrently with delivery of such notice to
Lessee, specifying in detail the alleged default and not less than thirty (30)
days prior written notice of the date Lessor (subject to the notice provision
set forth in Section 18.2) will commence the exercise of termination or
any other remedy under this Lease. Upon any payment or cure by Security
Assignee provided for in this Section 17.2.3, Security Assignee shall be


 


H-17

















 


subrogated to the rights of
the Lessor in respect of the defaulted payment and interest payable thereon and
shall be entitled to receive such defaulted payment and interest as shall be
provided in the agreement or other instrument granting the Security Assignee a
Lien or security interest in all or any part of or interest in this Lease, the
Leased Property, the Wind Energy Improvement, Transmission Facilities or
Improvements or as shall be provided in any other agreement between the Lessee
and the Security Assignee, and Lessor shall not be entitled to terminate this
Lease and any notice of termination or breach previously given shall be void.


 


17.2.4              There shall be
no voluntary cancellation, surrender or amendment to this Lease by joint action
of Lessor and Lessee without the prior written consent of the Secured Assignee.


 


17.2.5              Lessor shall
execute any instruments that a Secured Party may reasonably request with
respect to acknowledging (i) the right of Lessee or its assignee or
sublessee to erect or install the Improvements, and that same shall not be
deemed to be nor become part of the Premises, (ii) the right of the
Secured Party to maintain a lien or security interest in the Improvements
superior to any claim or interest of Lessor, and (iii) the right to remove
any or all Improvements in the event of default in the instrument creating the
lien or security interest, subject to the terms hereof regarding remediation of
the Premises.


 


17.3                        New Lease. If this Lease
is rejected by a trustee or debtor-in-possession in any bankruptcy or
insolvency preceding except in the case where Lessee shall elect to retain its
rights under the Lease pursuant to Section 365(h) of the U.S.
Bankruptcy Code or other similar applicable law, or the Lease is terminated by
operation of law or as a result of any default, and within one hundred twenty
(120) days after such rejection or termination a Security Assignee shall have
arranged to the reasonable satisfaction of Lessor for the payment of all fees
or other charges due and payable by Lessee as of the date of such rejection or
termination, then Lessor shall execute and deliver to Security Assignee or its
designee a new lease to the Leased Property which (a) shall be for a term
equal to the remainder of the term of the Lease before giving effect to such
rejection or termination, (b) shall contain the same covenants,
agreements, terms, provisions and limitations as this Lease (except for any
requirements that have been fulfilled by Lessee prior to rejection or
termination of the Lease), (c) shall include that portion of the Lease,
Leased Property, Wind Energy Improvements or Improvements in which Security
Assignee had a security interest on the date of rejection or termination, (d) shall
enjoy the same priority as this Lease over any Lien or other interest created
by Lessor, (e) may be made subject to the same security interest held by
Security Assignee prior to any such rejection by a trustee or debtor-in
possession in any bankruptcy or insolvency proceeding; and, until such time as
such new lease is executed and delivered, the Security Assignee may enter, use
and enjoy the Leased Property and conduct operations thereon as if this Lease
were still in effect.


 


17.4                        Third Party
Beneficiary. For purposes of enforcing it rights and remedies
and the obligations of the Lessor and the Lessee under this Lease, Security
Assignee shall be an express third party beneficiary thereof and may enforce
such rights and remedies and such obligations of the Lessor and Lessee.


 


H-18

















 


17.5                        Subdivision/Separation. In order to
satisfy the financing and transactional requirements of the separate Lenders
and power purchasers of each Wind Energy Improvement, the Lessee may, upon
prior written notice to Lessor and subject to applicable law, (i) subdivide
the leasehold estate and all rights and obligations of Lessee granted hereby
into separate leasehold estates (the “Subdivided Leaseholds”), referencing
specific portions of the Premises to be included in each Subdivided Leasehold;
and (ii) assign each Subdivided Leasehold to a single purpose limited
liability company or legal entity that will own the Wind Energy Improvement
located within the Subdivided Leasehold. In lieu of such subdivisions, at the
request of Lessee, Lessor and Lessee will (i) amend this Lease to remove
portions of the Leased Property other than that required for the initial Wind
Energy Improvement; and (ii) cause Lessor and any designee of Lessee to
execute one or more separate leases with respect to such removed portions of
the Leased Property, each in form and substance materially identical to this
Lease (with such changes as shall be necessary to reflect such removal). In
order to comply with the separate financial and security requirements of
separate Wind Energy Improvements, the segregated leasehold estates will not be
subject to cross defaults with each other, allowing each lessee and its
Security Assignees to enjoy quiet title to their respective leasehold rights
and interests regardless of any default of another lessee.


 


18.                               DEFAULT AND
TERMINATION


 


18.1                        Lessee’s Right
to Terminate. In addition to its other termination rights herein,
Lessee shall have the right to terminate the Lease as to all or any part of the
Leased Property at any time, effective upon thirty (30) days’ written notice to
Lessor from Lessee.


 


18.2                        Lessor’s Right
to Terminate. Subject to Section 17.2.3, Lessor shall have
the right to terminate the Lease if (a) a material default in the
performance of Lessee’s obligations under this Lease shall have occurred and
remains uncured, (b) Lessor notifies Lessee and Security Assignee in
writing of the default, which notice sets forth in reasonable detail the facts
pertaining to the default, and (c)(i) if the default is a failure to pay
undisputed charges or sums due and payable, then if the default, shall not have
been remedied within sixty (60) days after Lessee and Security Assignee receive
notice thereof, or (ii) if the default is other than a payment default
described in clause (c)(i), then if the default shall not have been remedied
within one hundred twenty (120) days after Lessee and Security Assignee receive
notice thereof, or if the default will take longer than one hundred twenty (120)
days for Lessee to remedy, Lessee is not working diligently to remedy such
default.


 


18.3                        Effect of
Termination. Upon termination of the Lease, whether as to the
entire Leased Property or a portion thereof, Lessee shall, upon written request
by Lessor, prepare and place of record in the county or counties in which the
Leased Property is located, a release of all of Lessee’s right, title and
interest in and to the Leased Property, or to that part thereof as to which the
Lease has been terminated. Subject to Section 21, following termination of
the Lease as to all or any part of the Leased Property, Lessee shall peaceably
and quietly leave, surrender and return the Leased Property (or applicable
portion thereof) to Lessor. All further rights and obligations of Lessor and
Lessee under this Lease will cease and terminate as of the date of any
termination with respect or in regard to the Leased Property, or to that part
as to which the Lease has been terminated; except for the provisions of Section 21
and those obligations that expressly survive the termination of this Lease.


 


H-19

















 


18.4                        Remedies. If either
Lessor or Lessee breaches this Lease, the non-breaching Party shall have all
rights and remedies available to such non-breaching Party at law and in equity.
In consideration of the investment being made by Lessee in reliance on the
provisions herein, including Sections 3 and 4 hereto regarding coordination of
Lessor and Lessee activities on the Premises, Lessee shall have the special
remedy of specific enforcement with respect to Lessor breaches of this Lease
that adversely affect the operation of any Wind Energy Improvement. In order to
protect its investment in future agricultural installations, Lessor shall have
the special remedy of specific performance with respect to the bio-security
provisions set forth in Section 12.7.


 


18.5                        Safety
Risks/Emergency. Notwithstanding any other term hereof, each Party
may undertake such actions as may be reasonable under the circumstances to
avoid imminent death, injury or damage to the persons or property of themselves
or others, without incurring liability hereunder or to avoid violation of any
federal, state, or local government, agency, or other authority under any
applicable federal, state, or local law, rule, regulation, ordinance, statute,
order, or decree. Lessor may undertake any action it deems necessary under the
circumstances to cure a breach by Lessee of Lessor’s Bio-Security Management
System or Animal Welfare System requirements, and Lessee shall reimburse Lessor
the reasonable cost of any such cure.


 


19.                               CONDEMNATION.


 


19.1                        Complete Taking. If during the
Initial Term or any extension thereof there shall be taken for any public or
quasi-public use under any statute or by right of eminent domain or by private
purchase in lieu thereof, the entire Leased Property or any substantial portion
of the Leased Property which is sufficient to render the remaining portion
thereof unsuitable, in the sole judgment of Lessee, for restoration for
continued use by Lessee for the purposes of this Lease, Lessee shall have the
right to terminate this Lease as of the date of such taking. Such termination
shall be without prejudice to the rights of either Lessor or Lessee to recover
compensation from the condemning authority for any Loss caused by such
condemnation.


 


19.2                        Partial Taking. If during the
Term there shall be taken for any public or quasi-public use under any statute
or by right of eminent domain or by private purchase in lieu thereof, a portion
of the Leased Property which is not sufficient to require termination of this
Lease as provided in Section 19.1 above, then this Lease shall continue in
full effect as to the untaken portion notwithstanding such taking, and the rent
payable hereunder shall be equitably adjusted based on the circumstances. In
the event of any lesser taking as described in this Section 19.2, Lessee
shall be entitled to the portion of the net award for such taking (whether paid
by way of damages, rent or otherwise) allocable to the Improvements placed on
the Leased Property by Lessee, or to the relocation of the same.


 


19.3                        Apportionment,
Distribution of Award. On any taking, all sums awarded shall be
apportioned between the Parties in proportion to their respective: (i) costs
of relocating or removing property; (ii) anticipated lost revenues or
profits; (iii) other remaining values of their respective interests.


 


H-20














 


20.          RIGHTS UPON SALE. If Lessor
desires during the Initial Term or any extension thereof to sell, transfer or
otherwise dispose (a “Sale”) of all or any portion of its interest in the
Leased Property to a third party (“Purchaser”), Lessor shall (a) obtain
from the Purchaser a bona fide written offer to acquire such interest, stating
the terms and conditions upon which the Sale is to be made and the
consideration offered therefore, and (b) give written notification to
Lessee of its intention to so sell or otherwise dispose of its interest in the
Leased Property, which notification shall be accompanied by a copy of Purchaser’s
offer. Lessee shall have the option to purchase all but not less than all of
the interest in the Leased Property offered by Lessor upon the same terms and
conditions as offered by the Purchaser, which option may be exercised by giving
written notification to Lessor within twenty (20) days after notice of Lessor’s
intent to sell or otherwise dispose of the interest in the Leased Property. If
Lessee fails to timely exercise its purchase option, Lessor shall be entitled
to consummate the Sale to the Purchaser upon terms and conditions that are
materially no less favorable than are set forth in Purchaser’s offer, with such
Purchaser taking subject to this Lease. If Lessee timely elects to exercise its
purchase option, it shall designate the time, date, and place of closing,
provided that the date of closing shall be within sixty (60) days of the date
of Lessee’s exercise of its purchase option.


 


21.          REMOVAL UPON TERMINATION. Upon
termination of the Lease, Lessee shall, within ninety (90) days, remove its
building(s), equipment, cables, fixtures, and all personal property and
otherwise restore the Premises, reasonable wear and tear and casualty excepted,
it being understood that WTG foundations shall be removed to at least five feet
(5’) below grade and covered with topsoil, and at the request of Lessor, any
access roads and crane pads will be contoured to match the surrounding terrain
and seeded. Lessor agrees and acknowledges that all of the Improvements,
equipment, fixtures and personal property of Lessee shall remain the property
of Lessee, and Lessee shall have the right to remove the same, whether or not
said items are considered fixtures and attachments to real property under
applicable law. If such time for removal causes Lessee to remain on the
Premises after the 90th day following termination of this Lease, Lessee shall
pay Base Rent at the then existing monthly rate until such time as the removal
of the building(s), equipment, cables, fixtures and all personal property are
completed. Lessee shall be responsible to remove any hazardous materials or
environmental contamination from the Premises that it caused to be located
thereon.


 


22.          MISCELLANEOUS


 


22.1        Force Majeure. If
performance of this Lease or of any obligation hereunder (other than an
obligation to pay any amounts described in Section 10) is prevented or
substantially restricted or interfered with by reason of an event of Force Majeure
(defined below), the affected Party shall be excused from such performance to
the extent of and for the duration of such prevention, restriction, or
interference. The affected Party shall promptly notify the other Party in
writing of the event of Force Majeure and shall use its reasonable efforts to
avoid or remove such causes of nonperformance, and shall continue performance
hereunder whenever such causes are removed. The term “Force Majeure” means
causes beyond the reasonable control of and without the fault or negligence of
the Party claiming Force Majeure, including, but not limited to, acts of God,
labor unrest (including, but not limited to, slowdowns, picketing, boycotts or
strikes), floods, earthquakes, storms, fires, lightning, explosions, power
failures or power surges, vandalism, theft, terrorism, the unauthorized cutting
of power, transmission or other lines, wires or cables to a Wind Energy
Improvement, epidemics, wars,


 


H-21

















 


revolutions, riots, civil
disturbances, sabotage, changes in law or applicable regulations subsequent to
the date hereof and actions or inactions by any federal, state or local
legislative, executive, administrative judicial agency or body which in any of
the foregoing cases, by exercise of due foresight such Party could not
reasonably have expected to avoid, and which, by the exercise of due diligence,
it is unable to overcome.


 


22.2        Exclusion of Warranties. Lessor and
Lessee specifically acknowledge that Lessee is responsible to evaluate the
condition and suitability of the Leased Property for use by Lessee for the
purposes set out in this Lease. LESSOR EXPRESSLY EXCLUDES ANY WARRANTY THAT THE
PREMISES OR ANY IMPROVEMENTS OR EQUIPMENT LOCATED ON THE PREMISES ARE SUITABLE
OR FIT FOR LESSEE’S USE FOR THE PURPOSES INTENDED BY LESSEE OR FOR ANY PURPOSE.


 


22.3        Further Assurances. Each Party
shall, whenever reasonably requested by the other, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, all conveyances,
assignments and all other instruments and documents as may be reasonably
necessary in order to complete the transactions herein provided and to carry
out the terms and provisions of this Lease.


 


22.4        Severability. If, at any
time, any provision of this Lease is or becomes illegal, invalid, or
unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity, or enforceability of the remaining provisions hereof nor
shall the legality, validity, or enforceability of such provision under the law
of any other jurisdiction in any way be affected or impaired thereby and the
Parties shall promptly negotiate to restore this Lease as near as possible to
its original intent and economic effect.


 


22.5        Tax Credits. Lessee and
Lessor acknowledge and agree that as between Lessee and Lessor, Lessee is, to
the extent allowed by law, to have the benefit of all federal, state, and local
tax credits and other benefits associated with the generation of electricity
from a “clean” or renewable power source. Except as provided above, if under
applicable law the holder of a leasehold interest becomes ineligible for any
tax credit, benefit, or incentive for alternative energy expenditure
established by any local, state, or federal government, then, at Lessee’s
option, Lessor and Lessee, to the extent practicable, shall amend this Lease or
replace it with a different instrument, so as to convert Lessee’s interest in
the Leased Property to a substantially equivalent interest that makes Lessee
eligible for such tax credit, benefit, or incentive; provided, however, that
any such change shall not materially reduce Lessor’s rights or benefits
hereunder.


 


22.6        No Partnership. Nothing
contained in this Lease shall be construed to create a partnership or joint
venture between the Parties or their successors in interest and Lessor shall
not have any ownership in the Wind Energy Improvements or any rights to the
electricity generated thereby except and to the extent set forth in a written
agreement by and between Lessor and Lessee.


 


22.7        Construction. The Parties
acknowledge that their attorneys have reviewed and revised this Lease and that
any rule of construction to the effect that any ambiguities are to be
resolved against the drafting Party shall not be employed in the interpretation
of this Lease or


 


H-22

















 


any amendments or exhibits
hereto. Each Party was represented by legal counsel in the negotiations of this
Lease.


 


22.8        Counterparts. This Lease may
be executed by facsimile [provided that a duplicate copy with an original
signature is transmitted to the other Party within the following ten (10) days]
and in multiple counterparts, no one of which need be executed by all Parties
hereto, each of which shall constitute an original. Counterparts thus executed
shall together constitute one and the same instrument.


 


22.9        Integration. This Lease
contains all agreements, promises and understandings between the Lessor and the
Lessee and that no verbal or oral agreements, promises or understandings shall
be binding upon either the Lessor or the Lessee in any dispute, controversy or
proceeding at law, and any addition, variation or modification to this Lease
shall be void and ineffective unless made in writing and signed by the Parties.
This Lease supersedes in all respects that certain Option Agreement between the
Parties hereto, dated October 8, 2003, as subsequently amended on April 15,
2005 and April 1, 2006, and such Option Agreement is of no further effect.


 


22.10      Governing Law. This Lease
and the performance thereof shall be governed, interpreted, construed and
regulated in accordance with the laws of the State of Utah.


 


22.11      Notices. All notices
hereunder must be in writing and shall be deemed validly given if sent by
certified mail, return receipt requested, or by commercial courier, provided
the courier’s regular business is delivery service and provided further that it
guarantees delivery to the addressee by the end of the next business day
following the courier’s receipt from the sender, addressed as follows (or any
other address that the Party to be notified may have designated to the sender
by like notice):


 


	
  To the Lessor:

  	
   

  	
  Circle Four LLC

  
	
   

  	
   

  	
  ATTN: Jim Webb

  
	
   

  	
   

  	
  Circle Four Farms

  
	
   

  	
   

  	
  PO Box 100

  
	
   

  	
   

  	
  Milford, UT 84751-0100

  
	
   

  	
   

  	
   

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

  	
   

  	
  Waddingham &
  Associates, PC

  
	
   

  	
   

  	
  Attorney at Law

  
	
   

  	
   

  	
  362 West Main

  
	
   

  	
   

  	
  Delta, UT 84625

  
	
   

  	
   

  	
   

  
	
  To the Lessor:

  	
   

  	
  Milford Wind Corridor
  Phase II, LLC

  
	
   

  	
   

  	
  c/o First Wind Energy, LLC

  
	
   

  	
   

  	
  85 Wells Avenue,
  Suite 305

  
	
   

  	
   

  	
  Newton, MA 02459

  
	
   

  	
   

  	
   

  
	
  With Copy to:

  	
   

  	
  First Wind Energy, LLC

  
	
   

  	
   

  	
  85 Wells Avenue,
  Suite 305

  
	
   

  	
   

  	
  Newton, MA 02459

  



 


H-23

















 


Notice shall be effective
upon mailing or delivering the same to a commercial courier, as permitted
above.


 


22.12      Successors. This Lease
shall extend to and bind the heirs, personal representatives, successors,
trustees, and assigns of the Parties hereto.


 


22.13      Recording. Concurrent
with the execution of this Lease, the Parties shall each execute and
acknowledge an amended and restated memorandum to replace and supersede the
Original Memorandum and either Party may thereafter record such amended and
restated memorandum in the Official Records of the Millard County Recorder and
the Beaver County Recorder. The date set forth in any such amended and restated
memorandum is for recording purposes only and bears no reference to
commencement of either term or rent payments.


 


22.14      Casualty. In the event
of damage by fire or other casualty whatsoever to the Leased Property that
cannot reasonably be expected to be repaired within forty-five (45) days
following same or, if the Premises is damaged by fire or other casualty
whatsoever so that such damage may reasonably be expected to disrupt the Lessee’s
operations at the Premises for more than forty-five (45) days, or if any event
makes it impossible for the Lessee to effectively and practicably operate
Lessee’s business at a reasonable profit as determined by Lessee, then the
Lessee may at any time following such fire or other casualty or event,
terminate this Lease upon sixty (60) days written notice to the Lessor. Any
such notice of termination shall cause this Lease to expire with the same force
and effect as though the date set forth in such notice were the date originally
set as the expiration date of this Lease, and the Parties shall make an
appropriate adjustment, as of such termination date, with respect to payments
due to the other under this Lease.


 


22.15      Submission of Lease. The
submission of this Lease for examination does not constitute an offer to lease
the Premises, and this Lease becomes effective only upon the full execution of
this Lease by the Parties.


 


22.16      Authority to Execute
Agreement. Each of the Parties hereto warrants to the other
that the person or persons executing this Lease on behalf of such Party has the
full right, power and authority to enter into and execute this Lease on such
Party’s behalf and that no consent from any other person or entity is necessary
as a condition precedent to the legal effect of this Lease.


 


22.17      Applicable Legal
Requirements. The Lessee shall use the Leased Property as may be
required or as permitted by applicable Legal Requirements. The Lessee agrees to
keep the Leased Property in material conformance with all applicable Legal
Requirements and agrees to reasonably cooperate with the Lessor regarding any
compliance required by the Lessor in respect to its use of the Premises.


 


22.18      Arbitration.


 


22.18.1          Any claim shall, at the request
of either Party, be referred to a senior representative of each of the Parties
for resolution on an informal basis as promptly as


 


H-24

















 


practicable. If the senior
representatives are unable to resolve the dispute within thirty (30) calendar
days of such referral or such other period as the Parties may mutually agree,
the Parties may submit the matter to binding arbitration in accordance with
this Section 22.18.


 


22.18.2          Any controversy arising out
of or relating to this Lease, including but not limited to the interpretation
of the Lease, may be subject to arbitration upon the mutual agreement of the
Parties. Should the Parties elect to proceed with arbitration, an award shall
be final and judgment may be entered on the award. All Parties to this Lease
are bound, each to the other, by this arbitration clause, provided that each
such Party has signed this Lease or has signed another agreement or document
that incorporates this Lease by reference, or signs any other agreement to be
bound by this arbitration clause.


 


22.18.3          The Parties hereto agree to
be bound by the Utah Uniform Arbitration Act, Utah Code Ann. §§ 78-31a-101, et
seq., or any subsequent recodification or enactment of a replacement to these
provisions. The arbitrators shall apply Utah law in evaluating the evidence
presented.


 


22.18.4          Arbitration shall be in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association in effect at the time arbitration is initiated. The scope
of the arbitration shall be determined by the arbitrator or arbitrators
depending upon the size of the claim and the controlling Commercial Arbitration
Rules. The arbitration hearings shall be held at the Offices of the American
Arbitration Association located in Salt Lake City, Utah. Should any Party
refuse or neglect to appear or participate in the arbitration proceedings after
due notice, the arbitrator or arbitrators are empowered to decide the
controversy in accordance with whatever evidence is presented ex parte. Each
side shall bear its own costs and attorney fees incurred for the time, expense,
and trouble of the arbitration. The costs and fees associated with pursuing the
arbitration with the American Arbitration Association shall be borne equally by
all the Parties.


 


22.18.5          This Section 22.18
shall survive the termination or expiration of this lease.


 


22.18.6          Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction.


 


22.19      Captions. The captions
contained in this Lease are inserted for convenience only and are not intended
to be part of this Lease. They shall not affect or be utilized in the
construction or interpretation of this Lease.


 


22.20      Publicity. Neither Party
shall use the name, trademark, logo, or other identifying information of the
other Party or its affiliates in any publicity display or advertising without
the other Party’s prior written approval.


 


22.21      Survival. Any provision
of this Lease that expressly or by implication comes into or remains in force
following the termination of this Lease shall survive the termination or
expiration of this Lease for the period set forth in such provision, or if no
period is set forth in such provision, for the period that is coextensive with
the applicable statute of limitations. The provisions of the Lease relating to
indemnification from one Party to the other


 


H-25

















 


Party for events prior to
such termination shall survive any termination or expiration of this Lease.
Additionally, any provisions of this Lease which require performance subsequent
to the termination or expiration of this Lease shall also survive such
termination or expiration.


 


22.22      Attorneys Fees. Each Party
shall bear its own attorney’s fees and costs incurred in connection with any
claim, controversy or dispute arising under or in connection with this Lease.


 


[THIS
SPACE INTENTIONALLY LEFT BLANK]


 


H-26

















 


IN WITNESS WHEREOF, the
Parties hereto have set their hands and affixed their respective seals to this
Amended and Restated Land Lease Agreement the day and year set forth below to
be effective as of the Effective Date.


 


 


	
  WITNESS

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  CIRCLE FOUR LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
  April           ,
  2009

  



 


	
  WITNESS

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
  MILFORD WIND CORRIDOR
  PHASE II, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
  April           ,
  2009

  



 


H-27

















 


Acknowledgement
of Lessor


 


	
  STATE OF

  	
   

  	
  )

  	
   

  
	
   

  	
  :ss

  	
   

  	
   

  
	
  COUNTY OF

  	
   

  	
  )

  	
   

  



 


The Foregoing instrument was
acknowledged before me this
              
day of April, 2009, by
                                                                ,
as
                                                                    
of Circle Four LLC, a Delaware limited liability company.


 


 


	
   

  	
   

  
	
   

  	
  NOTARY
  PUBLIC

  
	
   

  	
  Residing at:

  	
   

  



 


	
  My
  Commission Expires:

  	
   

  
	
   

  	
   

  



 


 


Acknowledgement
of Lessee


 


	
  STATE OF

  	
   

  	
  )

  	
   

  
	
   

  	
  :ss

  	
   

  	
   

  
	
  COUNTY OF

  	
   

  	
  )

  	
   

  



 


The Foregoing instrument was
acknowledged before me this
              
day of April, 2009, by                                                                 ,
as
                                                                        
of Milford Wind Corridor Phase II, LLC, a Delaware limited liability company.


 


 


	
   

  	
   

  
	
   

  	
  NOTARY
  PUBLIC

  
	
   

  	
  Residing at:

  	
   

  



 


	
  My
  Commission Expires:

  	
   

  
	
   

  	
   

  



 


H-28

















 


	
  WITNESS

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  CIRCLE FOUR LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
  April           ,
  2009

  



 


	
  WITNESS

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
  MILFORD WIND CORRIDOR PHASE
  II, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
  April           ,
  2009

  



 


H-29

















 


	
  STATE OF

  	
   

  	
  )

  	
   

  
	
   

  	
  :ss

  	
   

  	
   

  
	
  COUNTY OF

  	
   

  	
  )

  	
   

  



 


The Foregoing instrument was
acknowledged before me this
              
day of April, 2009, 2007, by
                                                      ,
as
                                                                  
of Circle Four LLC, a Delaware limited liability company.


 


 


	
   

  	
   

  
	
   

  	
  NOTARY
  PUBLIC

  
	
   

  	
  Residing at:

  	
   

  



 


	
  My
  Commission Expires:

  	
   

  
	
   

  	
   

  



 


 


Acknowledgement
of Lessee


 


	
  COMMONWEALTH OF

  	
   

  	
  )

  	
   

  
	
   

  	
  :ss

  	
   

  	
   

  
	
  COUNTY OF

  	
   

  	
  )

  	
   

  



 


The Foregoing instrument was
acknowledged before me this
              
day of April, 2009, 2007, by                                                       ,
as
                                                                  
of Milford Wind Corridor Phase II, LLC, a Delaware limited liability company.


 


 


	
   

  	
   

  
	
   

  	
  NOTARY
  PUBLIC

  
	
   

  	
  Residing at:

  	
   

  



 


	
  My
  Commission Expires:

  	
   

  
	
   

  	
   

  



 


H-30














 


EXHIBIT A


TO


AMENDED AND RESTATED LAND LEASE AGREEMENT 


(Millard County)


 


PREMISES


 


The Premises consist of the
following Parcels located in Millard County and Beaver County, Utah:


 


PARCEL 1:


 


THE SOUTH HALF OF SECTION 31,
TOWNSHIP 25, SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN.


 


PARCEL 2:


 


ALL OF SECTION 32,
TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN


 


PARCEL 3:


 


THE NORTHEAST QUARTER OF SECTION 33,
TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN


 


PARCEL 4:


 


THE NORTHEAST QUARTER OF SECTION 33,
TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN


 


PARCEL 5


 


THE NORTH 120.32 ACRES OF
THE SOUTHEAST QUARTER OF SECTION 6, TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT
LAKE BASE AND MERIDIAN


 


PARCEL 6:


 


THE SOUTH HALF OF SECTION 29,
TOWNSHIP 25, SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN.


 


H-31

















 


APPENDIX I


 


TO THE


POWER PURCHASE AGREEMENT


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


GUARANTEED GENERATION AND PREPAYMENT AMOUNT TABLE


 


Guaranteed
Generation


 


	
   

  	
   

  	
  Through and

  	
   

  	
   

  	
   

  
	
  From (MWH)

  	
   

  	
  Including(MWH)

  	
   

  	
  Prepayment Amount

  	
   

  
	
  4,458,666

  	
   

  	
  4,467,600

  	
   

  	
  $

  	
  209,977,200

  	
   

  
	
  4,449,731

  	
   

  	
  4,458,665

  	
   

  	
  $

  	
  209,557,246

  	
   

  
	
  4,440,795

  	
   

  	
  4,449,730

  	
   

  	
  $

  	
  209,137,291

  	
   

  
	
  4,431,860

  	
   

  	
  4,440,794

  	
   

  	
  $

  	
  208,717,337

  	
   

  
	
  4,422,925

  	
   

  	
  4,431,859

  	
   

  	
  $

  	
  208,297,382

  	
   

  
	
  4,413,990

  	
   

  	
  4,422,924

  	
   

  	
  $

  	
  207,877,428

  	
   

  
	
  4,405,055

  	
   

  	
  4,413,989

  	
   

  	
  $

  	
  207,457,474

  	
   

  
	
  4,396,119

  	
   

  	
  4,405,054

  	
   

  	
  $

  	
  207,037,519

  	
   

  
	
  4,387,184

  	
   

  	
  4,396,118

  	
   

  	
  $

  	
  206,617,565

  	
   

  
	
  4,378,249

  	
   

  	
  4,387,183

  	
   

  	
  $

  	
  206,197,610

  	
   

  
	
  4,369,314

  	
   

  	
  4,378,248

  	
   

  	
  $

  	
  205,777,656

  	
   

  
	
  4,360,379

  	
   

  	
  4,369,313

  	
   

  	
  $

  	
  205,357,702

  	
   

  
	
  4,351,443

  	
   

  	
  4,360,378

  	
   

  	
  $

  	
  204,937,747

  	
   

  
	
  4,342,508

  	
   

  	
  4,351,442

  	
   

  	
  $

  	
  204,517,793

  	
   

  
	
  4,333,573

  	
   

  	
  4,342,507

  	
   

  	
  $

  	
  204,097,838

  	
   

  
	
  4,324,638

  	
   

  	
  4,333,572

  	
   

  	
  $

  	
  203,677,884

  	
   

  
	
  4,315,703

  	
   

  	
  4,324,637

  	
   

  	
  $

  	
  203,257,930

  	
   

  
	
  4,306,767

  	
   

  	
  4,315,702

  	
   

  	
  $

  	
  202,837,975

  	
   

  
	
  4,297,832

  	
   

  	
  4,306,766

  	
   

  	
  $

  	
  202,418,021

  	
   

  
	
  4,288,897

  	
   

  	
  4,297,831

  	
   

  	
  $

  	
  201,998,066

  	
   

  
	
  4,279,962

  	
   

  	
  4,288,896

  	
   

  	
  $

  	
  201,578,112

  	
   

  
	
  4,271,027

  	
   

  	
  4,279,961

  	
   

  	
  $

  	
  201,158,158

  	
   

  
	
  4,262,091

  	
   

  	
  4,271,026

  	
   

  	
  $

  	
  200,738,203

  	
   

  
	
  4,253,156

  	
   

  	
  4,262,090

  	
   

  	
  $

  	
  200,318,249

  	
   

  
	
  4,244,221

  	
   

  	
  4,253,155

  	
   

  	
  $

  	
  199,898,294

  	
   

  
	
  4,235,286

  	
   

  	
  4,244,220

  	
   

  	
  $

  	
  199,478,340

  	
   

  
	
  4,226,351

  	
   

  	
  4,235,285

  	
   

  	
  $

  	
  199,058,386

  	
   

  
	
  4,217,415

  	
   

  	
  4,226,350

  	
   

  	
  $

  	
  198,638,431

  	
   

  
	
  4,208,480

  	
   

  	
  4,217,414

  	
   

  	
  $

  	
  198,218,477

  	
   

  



 


I-1

















 


Guaranteed
Generation


 


	
   

  	
   

  	
  Through and

  	
   

  	
   

  	
   

  
	
  From (MWH)

  	
   

  	
  Including(MWH)

  	
   

  	
  Prepayment Amount

  	
   

  
	
  4,199,545

  	
   

  	
  4,208,479

  	
   

  	
  $

  	
  197,798,522

  	
   

  
	
  4,190,610

  	
   

  	
  4,199,544

  	
   

  	
  $

  	
  197,378,568

  	
   

  
	
  4,181,675

  	
   

  	
  4,190,609

  	
   

  	
  $

  	
  196,958,614

  	
   

  
	
  4,172,739

  	
   

  	
  4,181,674

  	
   

  	
  $

  	
  196,538,659

  	
   

  
	
  4,163,804

  	
   

  	
  4,172,738

  	
   

  	
  $

  	
  196,118,705

  	
   

  
	
  4,154,869

  	
   

  	
  4,163,803

  	
   

  	
  $

  	
  195,698,750

  	
   

  
	
  4,145,934

  	
   

  	
  4,154,868

  	
   

  	
  $

  	
  195,278,796

  	
   

  
	
  4,136,999

  	
   

  	
  4,145,933

  	
   

  	
  $

  	
  194,858,842

  	
   

  
	
  4,128,063

  	
   

  	
  4,136,998

  	
   

  	
  $

  	
  194,438,887

  	
   

  
	
  4,119,128

  	
   

  	
  4,128,062

  	
   

  	
  $

  	
  194,018,933

  	
   

  
	
  4,110,193

  	
   

  	
  4,119,127

  	
   

  	
  $

  	
  193,598,978

  	
   

  
	
  4,101,258

  	
   

  	
  4,110,192

  	
   

  	
  $

  	
  193,179,024

  	
   

  
	
  4,092,323

  	
   

  	
  4,101,257

  	
   

  	
  $

  	
  192,759,070

  	
   

  
	
  4,083,387

  	
   

  	
  4,092,322

  	
   

  	
  $

  	
  192,339,115

  	
   

  
	
  4,074,452

  	
   

  	
  4,083,386

  	
   

  	
  $

  	
  191,919,161

  	
   

  
	
  4,065,517

  	
   

  	
  4,074,451

  	
   

  	
  $

  	
  191,499,206

  	
   

  
	
  4,056,582

  	
   

  	
  4,065,516

  	
   

  	
  $

  	
  191,079,252

  	
   

  
	
  4,047,647

  	
   

  	
  4,056,581

  	
   

  	
  $

  	
  190,659,298

  	
   

  
	
  4,038,711

  	
   

  	
  4,047,646

  	
   

  	
  $

  	
  190,239,343

  	
   

  
	
  4,029,776

  	
   

  	
  4,038,710

  	
   

  	
  $

  	
  189,819,389

  	
   

  
	
  4,020,841

  	
   

  	
  4,029,775

  	
   

  	
  $

  	
  189,399,434

  	
   

  
	
  4,011,906

  	
   

  	
  4,020,840

  	
   

  	
  $

  	
  188,979,480

  	
   

  
	
  4,002,971

  	
   

  	
  4,011,905

  	
   

  	
  $

  	
  188,559,526

  	
   

  
	
  3,994,035

  	
   

  	
  4,002,970

  	
   

  	
  $

  	
  188,139,571

  	
   

  
	
  3,985,100

  	
   

  	
  3,994,034

  	
   

  	
  $

  	
  187,719,617

  	
   

  
	
  3,976,165

  	
   

  	
  3,985,099

  	
   

  	
  $

  	
  187,299,662

  	
   

  
	
  3,967,230

  	
   

  	
  3,976,164

  	
   

  	
  $

  	
  186,879,708

  	
   

  
	
  3,958,295

  	
   

  	
  3,967,229

  	
   

  	
  $

  	
  186,459,754

  	
   

  
	
  3,949,359

  	
   

  	
  3,958,294

  	
   

  	
  $

  	
  186,039,799

  	
   

  
	
  3,940,424

  	
   

  	
  3,949,358

  	
   

  	
  $

  	
  185,619,845

  	
   

  
	
  3,931,489

  	
   

  	
  3,940,423

  	
   

  	
  $

  	
  185,199,890

  	
   

  
	
  3,922,554

  	
   

  	
  3,931,488

  	
   

  	
  $

  	
  184,779,936

  	
   

  
	
  3,913,619

  	
   

  	
  3,922,553

  	
   

  	
  $

  	
  184,359,982

  	
   

  
	
  3,904,683

  	
   

  	
  3,913,618

  	
   

  	
  $

  	
  183,940,027

  	
   

  
	
  3,895,748

  	
   

  	
  3,904,682

  	
   

  	
  $

  	
  183,520,073

  	
   

  
	
  3,886,813

  	
   

  	
  3,895,747

  	
   

  	
  $

  	
  183,100,118

  	
   

  
	
  3,877,878

  	
   

  	
  3,886,812

  	
   

  	
  $

  	
  182,680,164

  	
   

  
	
  3,868,943

  	
   

  	
  3,877,877

  	
   

  	
  $

  	
  182,260,210

  	
   

  
	
  3,860,007

  	
   

  	
  3,868,942

  	
   

  	
  $

  	
  181,840,255

  	
   

  
	
  3,851,072

  	
   

  	
  3,860,006

  	
   

  	
  $

  	
  181,420,301

  	
   

  



 


I-2

















 


Guaranteed
Generation


 


	
   

  	
   

  	
  Through and

  	
   

  	
   

  	
   

  
	
  From (MWH)

  	
   

  	
  Including(MWH)

  	
   

  	
  Prepayment Amount

  	
   

  
	
  3,842,137

  	
   

  	
  3,851,071

  	
   

  	
  $

  	
  181,000,346

  	
   

  
	
  3,833,202

  	
   

  	
  3,842,136

  	
   

  	
  $

  	
  180,580,392

  	
   

  
	
  3,824,267

  	
   

  	
  3,833,201

  	
   

  	
  $

  	
  180,160,438

  	
   

  
	
  3,815,331

  	
   

  	
  3,824,266

  	
   

  	
  $

  	
  179,740,483

  	
   

  
	
  3,806,396

  	
   

  	
  3,815,330

  	
   

  	
  $

  	
  179,320,529

  	
   

  
	
  3,797,461

  	
   

  	
  3,806,395

  	
   

  	
  $

  	
  178,900,574

  	
   

  
	
  3,788,526

  	
   

  	
  3,797,460

  	
   

  	
  $

  	
  178,480,620

  	
   

  
	
  3,779,591

  	
   

  	
  3,788,525

  	
   

  	
  $

  	
  178,060,666

  	
   

  
	
  3,770,655

  	
   

  	
  3,779,590

  	
   

  	
  $

  	
  177,640,711

  	
   

  
	
  3,761,720

  	
   

  	
  3,770,654

  	
   

  	
  $

  	
  177,220,757

  	
   

  
	
  3,752,785

  	
   

  	
  3,761,719

  	
   

  	
  $

  	
  176,800,802

  	
   

  
	
  3,743,850

  	
   

  	
  3,752,784

  	
   

  	
  $

  	
  176,380,848

  	
   

  
	
  3,734,915

  	
   

  	
  3,743,849

  	
   

  	
  $

  	
  175,960,894

  	
   

  
	
  3,725,979

  	
   

  	
  3,734,914

  	
   

  	
  $

  	
  175,540,939

  	
   

  
	
  3,717,044

  	
   

  	
  3,725,978

  	
   

  	
  $

  	
  175,120,985

  	
   

  
	
  3,708,109

  	
   

  	
  3,717,043

  	
   

  	
  $

  	
  174,701,030

  	
   

  
	
  3,699,174

  	
   

  	
  3,708,108

  	
   

  	
  $

  	
  174,281,076

  	
   

  
	
  3,690,239

  	
   

  	
  3,699,173

  	
   

  	
  $

  	
  173,861,122

  	
   

  
	
  3,681,303

  	
   

  	
  3,690,238

  	
   

  	
  $

  	
  173,441,167

  	
   

  
	
  3,672,368

  	
   

  	
  3,681,302

  	
   

  	
  $

  	
  173,021,213

  	
   

  
	
  3,663,433

  	
   

  	
  3,672,367

  	
   

  	
  $

  	
  172,601,258

  	
   

  
	
  3,654,498

  	
   

  	
  3,663,432

  	
   

  	
  $

  	
  172,181,304

  	
   

  
	
  3,645,563

  	
   

  	
  3,654,497

  	
   

  	
  $

  	
  171,761,350

  	
   

  
	
  3,636,627

  	
   

  	
  3,645,562

  	
   

  	
  $

  	
  171,341,395

  	
   

  
	
  3,627,692

  	
   

  	
  3,636,626

  	
   

  	
  $

  	
  170,921,441

  	
   

  
	
  3,618,757

  	
   

  	
  3,627,691

  	
   

  	
  $

  	
  170,501,486

  	
   

  
	
  3,609,822

  	
   

  	
  3,618,756

  	
   

  	
  $

  	
  170,081,532

  	
   

  
	
  3,600,887

  	
   

  	
  3,609,821

  	
   

  	
  $

  	
  169,661,578

  	
   

  
	
  3,591,951

  	
   

  	
  3,600,886

  	
   

  	
  $

  	
  169,241,623

  	
   

  
	
  3,583,016

  	
   

  	
  3,591,950

  	
   

  	
  $

  	
  168,821,669

  	
   

  
	
  3,574,081

  	
   

  	
  3,583,015

  	
   

  	
  $

  	
  168,401,714

  	
   

  
	
  3,565,146

  	
   

  	
  3,574,080

  	
   

  	
  $

  	
  167,981,760

  	
   

  
	
  3,556,211

  	
   

  	
  3,565,145

  	
   

  	
  $

  	
  167,561,806

  	
   

  
	
  3,547,275

  	
   

  	
  3,556,210

  	
   

  	
  $

  	
  167,141,851

  	
   

  
	
  3,538,340

  	
   

  	
  3,547,274

  	
   

  	
  $

  	
  166,721,897

  	
   

  
	
  3,529,405

  	
   

  	
  3,538,339

  	
   

  	
  $

  	
  166,301,942

  	
   

  
	
  3,520,470

  	
   

  	
  3,529,404

  	
   

  	
  $

  	
  165,881,988

  	
   

  
	
  3,511,535

  	
   

  	
  3,520,469

  	
   

  	
  $

  	
  165,462,034

  	
   

  
	
  3,502,599

  	
   

  	
  3,511,534

  	
   

  	
  $

  	
  165,042,079

  	
   

  
	
  3,493,664

  	
   

  	
  3,502,598

  	
   

  	
  $

  	
  164,622,125

  	
   

  



 


I-3

















 


Guaranteed
Generation


 


	
   

  	
   

  	
  Through and

  	
   

  	
   

  	
   

  
	
  From (MWH)

  	
   

  	
  Including(MWH)

  	
   

  	
  Prepayment Amount

  	
   

  
	
  3,484,729

  	
   

  	
  3,493,663

  	
   

  	
  $

  	
  164,202,170

  	
   

  
	
  3,475,794

  	
   

  	
  3,484,728

  	
   

  	
  $

  	
  163,782,216

  	
   

  
	
  3,466,859

  	
   

  	
  3,475,793

  	
   

  	
  $

  	
  163,362,262

  	
   

  
	
  3,457,923

  	
   

  	
  3,466,858

  	
   

  	
  $

  	
  162,942,307

  	
   

  
	
  3,448,988

  	
   

  	
  3,457,922

  	
   

  	
  $

  	
  162,522,353

  	
   

  
	
  3,440,053

  	
   

  	
  3,448,987

  	
   

  	
  $

  	
  162,102,398

  	
   

  
	
  3,431,118

  	
   

  	
  3,440,052

  	
   

  	
  $

  	
  161,682,444

  	
   

  
	
  3,422,183

  	
   

  	
  3,431,117

  	
   

  	
  $

  	
  161,262,490

  	
   

  
	
  3,413,247

  	
   

  	
  3,422,182

  	
   

  	
  $

  	
  160,842,535

  	
   

  
	
  3,404,312

  	
   

  	
  3,413,246

  	
   

  	
  $

  	
  160,422,581

  	
   

  
	
  3,395,377

  	
   

  	
  3,404,311

  	
   

  	
  $

  	
  160,002,626

  	
   

  
	
  3,386,442

  	
   

  	
  3,395,376

  	
   

  	
  $

  	
  159,582,672

  	
   

  
	
  3,377,507

  	
   

  	
  3,386,441

  	
   

  	
  $

  	
  159,162,718

  	
   

  
	
  3,368,571

  	
   

  	
  3,377,506

  	
   

  	
  $

  	
  158,742,763

  	
   

  
	
  3,359,636

  	
   

  	
  3,368,570

  	
   

  	
  $

  	
  158,322,809

  	
   

  
	
  3,350,701

  	
   

  	
  3,359,635

  	
   

  	
  $

  	
  157,902,854

  	
   

  
	
  3,341,766

  	
   

  	
  3,350,700

  	
   

  	
  $

  	
  157,482,900

  	
   

  
	
  3,332,831

  	
   

  	
  3,341,765

  	
   

  	
  $

  	
  157,062,946

  	
   

  
	
  3,323,895

  	
   

  	
  3,332,830

  	
   

  	
  $

  	
  156,642,991

  	
   

  
	
  3,314,960

  	
   

  	
  3,323,894

  	
   

  	
  $

  	
  156,223,037

  	
   

  
	
  3,306,025

  	
   

  	
  3,314,959

  	
   

  	
  $

  	
  155,803,082

  	
   

  
	
  3,297,090

  	
   

  	
  3,306,024

  	
   

  	
  $

  	
  155,383,128

  	
   

  
	
  3,288,155

  	
   

  	
  3,297,089

  	
   

  	
  $

  	
  154,963,174

  	
   

  
	
  3,279,219

  	
   

  	
  3,288,154

  	
   

  	
  $

  	
  154,543,219

  	
   

  
	
  3,270,284

  	
   

  	
  3,279,218

  	
   

  	
  $

  	
  154,123,265

  	
   

  
	
  3,261,349

  	
   

  	
  3,270,283

  	
   

  	
  $

  	
  153,703,310

  	
   

  
	
  3,252,414

  	
   

  	
  3,261,348

  	
   

  	
  $

  	
  153,283,356

  	
   

  
	
  3,243,479

  	
   

  	
  3,252,413

  	
   

  	
  $

  	
  152,863,402

  	
   

  
	
  3,234,543

  	
   

  	
  3,243,478

  	
   

  	
  $

  	
  152,443,447

  	
   

  
	
  3,225,608

  	
   

  	
  3,234,542

  	
   

  	
  $

  	
  152,023,493

  	
   

  
	
  3,216,673

  	
   

  	
  3,225,607

  	
   

  	
  $

  	
  151,603,538

  	
   

  
	
  3,207,738

  	
   

  	
  3,216,672

  	
   

  	
  $

  	
  151,183,584

  	
   

  
	
  3,198,803

  	
   

  	
  3,207,737

  	
   

  	
  $

  	
  150,763,630

  	
   

  
	
  3,189,867

  	
   

  	
  3,198,802

  	
   

  	
  $

  	
  150,343,675

  	
   

  
	
  3,180,932

  	
   

  	
  3,189,866

  	
   

  	
  $

  	
  149,923,721

  	
   

  
	
  3,171,997

  	
   

  	
  3,180,931

  	
   

  	
  $

  	
  149,503,766

  	
   

  
	
  3,163,062

  	
   

  	
  3,171,996

  	
   

  	
  $

  	
  149,083,812

  	
   

  
	
  3,154,127

  	
   

  	
  3,163,061

  	
   

  	
  $

  	
  148,663,858

  	
   

  
	
  3,145,191

  	
   

  	
  3,154,126

  	
   

  	
  $

  	
  148,243,903

  	
   

  
	
  3,136,256

  	
   

  	
  3,145,190

  	
   

  	
  $

  	
  147,823,949

  	
   

  



 


I-4














 


Guaranteed
Generation


 


	
   

  	
   

  	
  Through and

  	
   

  	
   

  	
   

  
	
  From (MWH)

  	
   

  	
  Including(MWH)

  	
   

  	
  Prepayment Amount

  	
   

  
	
  3,127,321

  	
   

  	
  3,136,255

  	
   

  	
  $

  	
  147,403,994

  	
   

  
	
  3,118,386

  	
   

  	
  3,127,320

  	
   

  	
  $

  	
  146,984,040

  	
   

  
	
  3,109,451

  	
   

  	
  3,118,385

  	
   

  	
  $

  	
  146,564,086

  	
   

  
	
  3,100,515

  	
   

  	
  3,109,450

  	
   

  	
  $

  	
  146,144,131

  	
   

  
	
  3,091,580

  	
   

  	
  3,100,514

  	
   

  	
  $

  	
  145,724,177

  	
   

  
	
  3,082,645

  	
   

  	
  3,091,579

  	
   

  	
  $

  	
  145,304,222

  	
   

  
	
  3,073,710

  	
   

  	
  3,082,644

  	
   

  	
  $

  	
  144,884,268

  	
   

  
	
  3,064,775

  	
   

  	
  3,073,709

  	
   

  	
  $

  	
  144,464,314

  	
   

  
	
  3,055,839

  	
   

  	
  3,064,774

  	
   

  	
  $

  	
  144,044,359

  	
   

  
	
  3,046,904

  	
   

  	
  3,055,838

  	
   

  	
  $

  	
  143,624,405

  	
   

  
	
  3,037,969

  	
   

  	
  3,046,903

  	
   

  	
  $

  	
  143,204,450

  	
   

  
	
  3,029,034

  	
   

  	
  3,037,968

  	
   

  	
  $

  	
  142,784,496

  	
   

  
	
  3,020,099

  	
   

  	
  3,029,033

  	
   

  	
  $

  	
  142,364,542

  	
   

  
	
  3,011,163

  	
   

  	
  3,020,098

  	
   

  	
  $

  	
  141,944,587

  	
   

  
	
  3,002,228

  	
   

  	
  3,011,162

  	
   

  	
  $

  	
  141,524,633

  	
   

  
	
  2,993,293

  	
   

  	
  3,002,227

  	
   

  	
  $

  	
  141,104,678

  	
   

  
	
  2,984,358

  	
   

  	
  2,993,292

  	
   

  	
  $

  	
  140,684,724

  	
   

  
	
  2,975,423

  	
   

  	
  2,984,357

  	
   

  	
  $

  	
  140,264,770

  	
   

  
	
  2,966,487

  	
   

  	
  2,975,422

  	
   

  	
  $

  	
  139,844,815

  	
   

  
	
  2,957,552

  	
   

  	
  2,966,486

  	
   

  	
  $

  	
  139,424,861

  	
   

  
	
  2,948,617

  	
   

  	
  2,957,551

  	
   

  	
  $

  	
  139,004,906

  	
   

  
	
  2,939,682

  	
   

  	
  2,948,616

  	
   

  	
  $

  	
  138,584,952

  	
   

  
	
  2,930,747

  	
   

  	
  2,939,681

  	
   

  	
  $

  	
  138,164,998

  	
   

  
	
  2,921,811

  	
   

  	
  2,930,746

  	
   

  	
  $

  	
  137,745,043

  	
   

  
	
  2,912,876

  	
   

  	
  2,921,810

  	
   

  	
  $

  	
  137,325,089

  	
   

  
	
  2,903,941

  	
   

  	
  2,912,875

  	
   

  	
  $

  	
  136,905,134

  	
   

  
	
  2,895,006

  	
   

  	
  2,903,940

  	
   

  	
  $

  	
  136,485,180

  	
   

  
	
  2,886,071

  	
   

  	
  2,895,005

  	
   

  	
  $

  	
  136,065,226

  	
   

  
	
  2,877,135

  	
   

  	
  2,886,070

  	
   

  	
  $

  	
  135,645,271

  	
   

  
	
  2,868,200

  	
   

  	
  2,877,134

  	
   

  	
  $

  	
  135,225,317

  	
   

  
	
  2,859,265

  	
   

  	
  2,868,199

  	
   

  	
  $

  	
  134,805,362

  	
   

  
	
   

  	
   

  	
  2,859,264

  	
   

  	
  $

  	
  134,385,408

  	
   

  



 


I-5

















 


APPENDIX J


 


TO THE


POWER PURCHASE AGREEMENT


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


QUALITY ASSURANCE PROGRAM


 


Seller shall implement a
Quality Assurance (“Q/A”) Program to ensure that the performance of the
development, design and construction of the Facility fulfills the requirements
of this Agreement. The Q/A Program shall provide assurance that design,
purchasing, manufacturing, shipping, storage, construction, testing and
examination of all equipment, materials, services and maintenance of the
Facility will comply with the requirements of this Agreement, all applicable
Requirements of Law and the manufacturers and/or suppliers requirements for
successful operation of the Facility.


 


Quality at
Seller


 


What is quality? Seller
believes that quality is the unit of measure for assessing fulfillment of
project goals.  A quality project meets
or exceeds the contract requirements and accepted standards of professional and
industry practice. Furthermore, high quality projects are those that address
client and societal needs more successfully than “low” quality projects. While
this may seem like a straightforward definition, the process to ensure quality
is much more involved and includes quality management, quality planning,
quality control, quality assurance, a quality system, and total quality
management.


 


“Quality assurance” refers
to a process that reduces the potential for error throughout the phases of a
project.  On projects with a Q/A Program,
the chances of producing a poor quality deliverable are substantially reduced.
Quality control procedures are an integral part of quality assurance.  Historically, industry has used the term “quality
control” to indicate a checking procedure for verifying the quality of
deliverables. This checking commonly occurs at the end of the process, long
after an error may have been made and compounded by subsequent work. While
quality control checks at the end of a project are an essential exercise,
scheduled periodic reviews at each phase of project conceptual and final design
are integral to Seller’s Q/A Program.  In
addition, quality maintenance which meet or exceed manufacturers’ and/or
suppliers’ requirements and best industry practices must be an integral part of
Seller’s Q/A Program.


 


The Quality
Management Process


 


The surest way to achieve
satisfactory quality is to adhere to a proven quality process. The term “quality”
most accurately refers to a project’s ability to satisfy needs when considered
as a whole and each part of the process meets or exceeds the standards of
Prudent Utility Practices.


 


J-1

















 


Seller project management
team is responsible for proactively planning and directing the quality of the
work process, services, and deliverables. Seller’s project management team will
target six (6) areas to monitor quality:


 


1)            A written work plan with
accompanying Q/A Manual (as defined below).


 


2)            Detailed review of the
project design at the planning and conceptual design phase.


 


3)            Detailed review of project
final design prior to construction.


 


4)            A quality control program
during construction to verify implementation is in compliance with design documents
and document any changes.


 


5)            Independent engineering
review of the entire project process, from design review through commercial
operation.


 


6)            A written maintenance manual
for the Facility for the duration of the commercial operation that complies
with the maintenance manuals of the manufacturers and suppliers from whom the
Seller has purchased equipment and/or material and best industry practices.


 


Written
Work Plan and Q/A Manual


 


The idea of a written work
plan and Q/A manual is to incorporate quality assurance in all areas of project
execution. Seller has found that quality needs to be institutionalized into the
project process, not only in the budgeting process, but everywhere.  For example, specific tasks and duties need
to be allocated to specific individuals; roles and interface points need to be
clearly defined; individual assignments need to be realistic; special attention
needs to be paid to complex areas within projects; schedules need to be
realistic and achievable; and, lastly, the work culture needs to be enjoyable
and open so that employees are empowered to react quickly to symptoms of
quality problems before they actually manifest.


 


Seller’s quality program
shall be documented in a written work plan and Quality Assurance manual (the “Q/A
Manual”). The form and the format of the Q/A Manual shall be developed by
Seller, but must comply with Prudent Utility Practices and follow manufacturers
and suppliers recommendations without deviation.  The content of the Q/A Manual shall provide
written descriptions of policies, procedures and methodology to accomplish a
quality project.  Seller shall submit
three (3) copies of the Q/A Manual within ninety (90) days after the
Effective Date to Buyer or Buyer’s Agent. The Q/A Manual shall be kept current
by Seller throughout the term of this Agreement through the submittal of
revisions, as appropriate, by Seller to Buyer or Buyer’s Agent.


 


The Q/A Manual shall
describe the authority and the responsibility of the Persons in charge of the
Q/A Program and inspection activities. It shall also provide the plan for
detailed review of project conceptual design and final design, hold points, and
methodology for document control and comment. Furthermore, it shall provide the
plan and strategy for quality control and review during the construction of the
project and for maintenance and operations during commercial


 


J-2

















 


operation. The Q/A Manual
shall strive; at a minimum, to define control procedures or methods to assure
the following:


 


(a)           The design
documents, drawings, specifications, Q/A procedures, records, inspection
procedures and purchase documents are maintained to be current, accurate and in
compliance with all applicable law.


 


(b)           The purchased
materials, equipment and services comply with the requirements of this
Agreement and all applicable Requirements of Law.


 


(c)           The materials
received at the site are inspected for compliance with specifications.


 


(d)           The
subcontracted work is adequately inspected by third parties.


 


(e)           Proper methods
are employed for the qualification of personnel who are performing work for the
development, design and construction of the Facility.


 


(f)            Proper
documentation, control and disposition of nonconforming equipment and materials
is maintained.


 


(g)           Proper records
are kept and available following project completion to ensure accurate
documentation of as-built conditions.


 


(h)           Detailed and
complete plan for maintenance and operation during commercial operations
consistent with manufacturers and suppliers recommendations and best industry
practices.


 


Conceptual
Design Review


 


Seller shall have a team of
professionals who develop and review the project layout and project conceptual
design.  The team shall consist of
specialists in land-use and planning, permitting, meteorology, engineering,
construction, project management, and finance. 
A preliminary site plan is developed and meetings are held to assess
optimization of the resource, constructability, minimization of cultural and biological
impacts, land use restrictions, and landowner requirements. Preliminary road
design will also be started and access to the site will be reviewed in detail.
When this plan is ready for review, a formal plan and map shall be created and
a final internal review is conducted. Following that shall be detailed studies
for biological, cultural and other types of impacts by third parties. The site
plan will be reviewed, modified as necessary, and then used to begin the
permitting and public review process. The site plan shall be further modified
based on comments in that process.  At
that point, the site plan can be issued for construction, and final engineering
can commence.


 


In parallel with this
process, preliminary conceptual design will start for the major areas of the
project, including the substation, transmission line, foundations, underground
collection system, and communications system; and road and grading done to
develop construction estimates as well as materials specifications. All of
these areas of conceptual designs shall be used to check and verify the
assumptions used for development of the site plan.


 


J-3

















 


Final
Engineering Design


 


Following finalization of
the site plan, the detailed design will be done for the collection system,
fiber-optic network, foundations, roads and grading, transmission line, and
substation by third party engineering firms licensed to practice in the state
in which the project is to be constructed. Each firm shall have its own quality
assurance and checking procedures, however, Seller shall review the final work
products in detail to check with conformance with this Agreement and provide
comments as a second round of quality assurance. When Seller’s comments have
been incorporated, the design of each area will be considered final, and that
design will then be submitted to an independent engineer for review and
comment. This ensures that another entity, in addition to Seller, has done a
comprehensive review of all project areas and details to ensure conformance
with this Agreement.


 


In parallel with final
design and checking activities, final geotechnical studies will be conducted at
the site, and a final resource assessment will be performed with the
issued-for-construction project layout. 
If existing subsurface conditions are different from what is expected,
the foundation locations could be slightly modified or the foundation design on
a specific turbine could be modified. Any changes of this nature would be
documented in as-built design drawings and approved of in advance by Seller.


 


Quality
Assurance at the Construction Site


 


Seller will hire a third
party general contractor to construct the project. This contractor will be
required to have its own quality assurance program in place using its own
staff, as well as third party inspectors. The two primary areas of focus at the
site will be (1) assuring conformance of construction to design drawings,
and (2) conformance of materials to specifications. The general contractor
will be required to provide third party inspectors and testing for materials
including concrete slump testing, rebar and concrete placement, cable
trenching, soil compaction testing, etc. The general contractor will also
be required to maintain a set of red-line drawings during the course of
construction to document any changes to the design documents.  Proposed project changes would be reviewed
and approved in the field by Seller construction management team prior to
implementation.


 


Quality assurance of turbine
erection shall be achieved through a combination of procedures and processes.
The general contractor will provide rigorous inspection of its installation
crew. The turbine supplier will have technical advisors on site to inspect and
sign off on turbine components received, oversee and monitor turbine erection,
and approve mechanical completion. In addition, Seller will have its own
construction management team on site, consisting of a construction manager and
quality inspectors who will observe performance of all areas of the work and
ensure compliance with design documents. A team consisting of the turbine
supplier, Seller, and the general contractor will walk down each turbine at
mechanical completion to develop a comprehensive punchlist of any un-finished
or incorrect work.  This punchlist is
maintained by the contractor, and is signed off by Seller upon completion of
the punchlist items. Lastly, the independent engineer shall perform periodic
audits during construction to oversee critical items, spot check individual
turbines, confirm construction progress, report on any perceived issues, and
provide independent reporting and assessments to the project stakeholders.


 


J-4

















 


Following completion of the project,
the general contractor will be required to provide as-built all design drawings
and records of all materials testing conducted at the site. This documentation
will be maintained at the project site during operation of the Facility.


 


Quality
Assurance During Commercial Operation


 


Seller shall supply a
Quality Assurance Plan for Buyer’s review and approval, such approval not to be
unreasonably withheld, no less than sixty (60) days prior to the anticipated
Commercial Operation Date.


 


J-5

















 


APPENDIX K


 


TO THE


POWER PURCHASE AGREEMENT


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


PERMITS


 


	
   

  	
  Federal

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FAA Determination of No
  Hazard to Air Navigation

  	
   

  
	
   

  	
  BLM FONSI &
  Decision Record — EA-UT-0400-8035

  	
   

  
	
   

  	
  BLM Right-of-Way for the
  Phase II facilities located on BLM land. Note subject to 30-day appeal
  period.

  	
   

  
	
   

  	
  BLM Right-of-Way for the
  Transmission Line

  	
   

  
	
   

  	
  BLM Notice to Proceed
  (General)

  	
   

  
	
   

  	
  BLM Notice to Proceed (Cultural
  Resource Sites)

  	
   

  
	
   

  	
  BLM approval of assignment
  by MWC Phase I to MWC Phase II of undivided interest in BLM Right of Way for
  the Transmission Line. Note subject to 30-day appeal period

  	
   

  
	
   

  	
  ACOE Nationwide Permit 12:
  Utility Line Activities

  	
   

  
	
   

  	
  ACOE Nationwide Permit 14:
  Linear Transportation Crossings

  	
   

  
	
   

  	
  BATFE, ATF Explosives
  Permit if needed during construction

  	
   

  
	
   

  	
  State and
  Local

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UPDES Storm Water Permit
  UTR302754 (Coverage under Storm Water General Construction Permit
  No. UTR300000)

  	
   

  
	
   

  	
  Millard Co. Conditional
  Use Permit - CUP #Z-2008-012

  	
   

  
	
   

  	
  UDAQ, Batch Plant and
  Temporary Relocation Permit DAQC-368-09; Site ID: 12575(B)

  	
   

  



 


K-1

















 


	
   

  	
   

  	
   

  
	
   

  	
  Millard Co. Building
  Permit

  	
   

  
	
   

  	
  Utah DWR, Approval of
  Temporary Change of Use of Water Right

  	
   

  
	
   

  	
  SITLA cultural resource
  clearance and consent to POD amendment

  	
   

  
	
   

  	
  Beaver Co. Conditional Use
  Permit No. 2006-09 Amended

  	
   

  
	
   

  	
  Beaver Co. Building Permit

  	
   

  



 


K-2

















 


APPENDIX L


 


TO THE


POWER PURCHASE AGREEMENT 


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


CLOSING CONDITIONS FOR PURCHASE OF FACILITY


 


The closing for the purchase
and sale (the “Closing”)
of the Facility and Related Interests and Rights shall take place at the
offices of Southern California Public Power Authority, 225 South Lake Ave,
Pasadena, CA 91101 on the third Business Day after the conditions to Closing
have been satisfied or waived, or at such place as Buyer and Seller mutually
agree in writing (“Closing
Date”).  The Closing shall
be deemed effective as of 11:59 p.m. (Pacific Prevailing Time) on the date
of the Closing. The obligation of Buyer to purchase the Facility and Related
Interests and Rights shall be subject to the following terms and conditions:


 


1.             Representations and
Warranties.  Seller
shall provide representations and warranties customary for transactions
involving the purchase and sale of wind generating facilities, including,
without limitation, those identified on Appendix L-1.


 


2.             Adjustments. All items
relating to the ownership and operation of the Facility and Related Interests
and Rights, which are customarily prorated, including without limitation Taxes,
insurance premiums, permit fees, utilities, and rentals or other payments under
leases and property agreements, shall be prorated as of the date of the
Closing, with Seller being liable therefor to the extent such items relate to
any time period prior to the Closing Date and Buyer being liable therefor to
the extent that Buyer is not exempt therefrom and such items related to period
on or after the Closing Date with, to the extent practicable, a cash settlement
on the Closing Date.  Any unknown or
disputed adjustments will not delay the Closing, but will be estimated and
escrowed for post-Closing resolution.


 


3.             Assumed Liabilities.  At the Closing, Buyer shall assume, and agree
to pay, perform, fulfill and discharge, all obligations of Seller and the
contracts required for the ownership and operation of the Facility and Related
Interests and Rights and to be assumed by Buyer, as determined by Buyer in its
sole discretion (the “Assumed
Contracts”) and the Permits required for the ownership,
operation and maintenance of the Facility and Related Interests and Rights (the
“Transferred Permits”)
but only to the extent such obligations (i) arise after the Closing, (ii) do
not arise from or relate to any breach by Seller of any provision of any of
such Assumed Contracts or Transferred Permits, (iii) do not arise from or
relate to any event, circumstance or condition occurring or existing prior to
the Closing that, with notice or lapse of time, could constitute or result in a
breach of any of such Assumed Contracts or Transferred Permits, and (iv) are
ascertainable, in nature and amount, solely by reference to the express


 


L-1

















 


written terms of such
Assumed Contracts or Transferred Permits. The Obligations of Seller to be so
assumed by Buyer are herein referred to as the “Assumed Liabilities.”


 


4.             Excluded Liabilities.  Anything in this Agreement to the contrary notwithstanding,
Buyer shall not assume, and shall not be deemed to have assumed, any liability
or obligation of any nature, fixed or contingent or known or unknown, of Seller
whatsoever other than as specifically set forth in this Paragraph 4 (with all
such unassumed obligations referred to in this Agreement as the “Excluded Liabilities”).  Without limiting the generality of the
preceding sentence, it is agreed that Buyer shall have no liability with
respect to any of the following liabilities or obligations (whether asserted
before or after the Closing and regardless of whether the same or the basis
therefor may have been disclosed to Buyer by Seller or otherwise be known to
Buyer), all of which are included in the Excluded Liabilities:


 


(a)           Any liability or obligation
of Seller in respect of Taxes;


 


(b)           Any liability or obligation
of Seller, other than the Assumed Liabilities, arising out of Seller’s
ownership and operation of the Purchased Assets (as defined below) or the
Facility and Related Interests and Rights prior to the Closing;


 


(c)           Any liability or obligation
of Seller arising out of Seller’s ownership and operation of any assets other
than the Purchased Assets (as defined below) or the Facility and Related
Interests and Rights;


 


(d)           Any liability or obligation
of Seller under this Agreement;


 


(e)           Any liability or obligation
of Seller under any Assumed Contract or Transferred Permit other than as expressly
set forth in Paragraph 3;


 


(f)            Any liability or obligation
of Seller with respect to the employment or termination of any employee or
group of employees by Seller, or the terms thereof, whether union or nonunion,
whether the liability or obligation calls for performance or observance before
or after the Closing and whether the liability or obligation arises from a
collective bargaining agreement, pension trust fund plan or other agreement or
arrangement to which Seller is a party or by which the Seller is bound (whether
oral or written and whether express or implied in fact or in law) or any past
practice or custom or otherwise, it being understood and agreed that Buyer will
itself be specifying the terms on which it offers employment to any individual
to whom it, in its sole discretion, chooses to offer employment and will not be
bound by any term of employment in effect at or at any time prior to the
Closing;


 


(g)           Any liability or obligation
of Seller for pension fund payments or unfunded pension fund liabilities; and


 


(h)           Any liability or obligation
arising from or related to any asset that will not be purchased by Buyer, as
determined by Buyer in its sole discretion (collectively, the “Excluded Assets”).


 


L-2

















 


5.             Conditions to Closing.  The obligation of Buyer to Close will be
subject to satisfaction of the following conditions:


 


(a)           Default. Seller shall
not be in Default under the Agreement.


 


(b)           Resolutions;
Incumbency Certificates. Buyer shall have received copies of all
requisite resolutions and incumbency certificates of Seller and any other
documents evidencing all actions taken by Seller to authorize the consummation
of the transactions contemplated by the Closing, such resolutions to be
certified as of the Closing Date by an Authorized Representative of Seller..


 


(c)           Consents.  Each approval, consent, ratification, waiver,
license, permit, certification, registration or other authorization (including
any governmental approval by a Governmental Authority) (“Consent”) as
identified in Schedule
     must
have been obtained and must be in full force and effect.


 


(d)           Deliveries. Each of the
following documents must have been delivered to Buyer:


 


(i)        an opinion of Seller’s
Counsel dated the Closing Date, substantially in the form of Exhibit     ;


 


(ii)           Seller shall have delivered
to Buyer in writing, at and as of the Closing, a certificate, in form and
substance satisfactory to Buyer, executed by an officer of Seller certifying
that each of the conditions specified in this Paragraph 5 have been satisfied;


 


(iii)          a Bill of Sale, dated the
Closing Date, substantially in the form of Exhibit     ;


 


(iv)          transfer documents for the
Facility Premises, dated the Closing Date, substantially in the form of Exhibit     ;


 


(v)           an Assignment and Assumption
Agreement, dated the Closing Date, substantially in the form of Exhibit     ;


 


(vi)          a title insurance policy is
in form and substance and containing such requirements, modifications and
endorsements as Buyer may reasonably approve; and


 


(vii)         such other documents as
Buyer may reasonably request for the purpose of (i) evidencing the
accuracy of any of Seller’s representations and warranties, (ii) evidencing
the performance by Seller of, or the compliance by Seller with, any covenant or
obligation required to be performed or complied with by Seller, or (iii) evidencing
the satisfaction of any condition referred to in this Paragraph 5.


 


(e)           Litigation.  No action, order, writ, judgment or decree
outstanding, arbitration, audit, hearing, investigation, claim, litigation, or
suit (whether civil, criminal, regulatory, administrative, investigative, or
informal) commenced, brought, conducted, or heard


 


L-3

















 


by or before, or otherwise
involving, any Person (“Proceeding”)
shall have been instituted by any Governmental Authority or by any other Person
and, at what would otherwise have been the Closing Date, remain pending to
delay, restrain or prohibit any part of the transactions contemplated by this
Agreement or to seek any divestiture or to revoke or suspend any Permit by
reason of any or all of the transactions contemplated by this Agreement; nor
shall any Governmental Authority have notified either Party or any of their
respective Affiliates that consummation of any part of the transactions
contemplated by this Agreement would constitute a violation of any Requirements
of Law of any jurisdiction or that it intends to commence a Proceeding to
restrain or prohibit any part of the transactions contemplated by this
Agreement or to require such divestiture, revocation or suspension; unless, in
any such case, such Governmental Authority or other Person shall have withdrawn
such notice and abandoned such Proceeding to the satisfaction of Buyer.


 


(f)            Assets and
Property.  From the
date hereof to the Closing Date, there must not have been damage to or
destruction or loss of the machinery or equipment in the Facility or the
Purchased Assets (as defined below), whether or not covered by insurance, or
any taking which could reasonably be expected to materially and adversely
affect the operation and use of the Facility or the Purchased Assets as of the
Closing Date.


 


(g)           No Material
Adverse Effect.  Buyer shall
have confirmed, in its reasonable determination, that since the date hereof,
that no facts or circumstances exist that do or could reasonably be expected to
have, and no action shall have been taken or omitted and no event shall have
occurred or be threatened which has had or could reasonably be expected to
result in, a Material Adverse Effect.


 


(h)           Title. Title to the
Facility and Related Interests and Rights shall be good and marketable, subject
only to Permitted Encumbrances.


 


(i)            Permits. Buyer shall
have obtained or Seller shall have validly assigned to Buyer at Closing, all
Permits necessary or desirable for Buyer’s ownership and operation of the
Facility.


 


(j)            All amounts owed by Seller
to Buyer under the Agreement, including if any Shortfall Energy or Replacement
Energy has not been made up by Seller as of the closing date, an amount equal
to the product of (x) the amount of such Shortfall Energy (measured in
MWh), or the amount of such Replacement Energy (measured in MWh), as the case
may be, multiplied by (y) the Prepaid Energy Price; and (iii) any
amounts owed to Buyer under Section 10.3 for Replacement Energy purchased
by Buyer in accordance with Section 10.3, or if Buyer has not purchased
such Replacement Energy in accordance with Section 10.3, such Replacement
Energy (measured in MWh) multiplied by the Prepaid Energy Price.


 


6.             Actions at Closing.  Buyer shall release and return to Seller the
Performance Security provided under the Agreement, and Seller shall transfer
the Facility and Related Interests and Rights to Buyer free and clear of all
liens and encumbrances, other than Permitted Encumbrances. Seller shall assign
and transfer to Buyer all of its right, title and interest in the “Purchased Assets,”
which means the following:


 


L-4

















 


(a)           all Assumed Contracts;


 


(b)           all fixtures, equipment
(including turbines, control rooms and other auxiliaries, furniture, office
equipment, communications equipment, fixtures, furnishings, machinery,
vehicles, equipment, computers, air conditioning ventilation and heating
equipment and control stations) and other tangible personal property owned or
used by Seller in connection with the operation of the Facility and listed on Exhibit     
(the “Fixtures and
Equipment”);


 


(c)           the Facility Premises;


 


(d)           to the extent relating to
periods of time prior to the Closing, (i) all books, records, purchasing
records, lists, files and papers in the possession of Seller or its agents
pertaining to the Purchased Assets and the Facility, and all records and lists
concerning suppliers to and personnel of the Facility, (ii) all ledgers,
and reports, plans, drawings, maps, photographs, technical manuals and
operating records of every kind maintained by Seller with respect to the
Facility, whether in hard copy or computer format, and (iii) all software
used by Seller primarily in connection with the operation of the Facility, to
the extent transferable (the “Books and Records”);


 


(e)           all Transferred Permits;


 


(f)            all patents, patent
applications, inventions, improvements, computer programs, computer
applications, operating programs, other programs and software, including
without limitation, system documentation and instructions, engineering,
construction and other drawings (other than drawings not needed for the
operation, maintenance or repair of the Facility), designs, technology,
know-how, trade secrets, trademarks, trademark applications, trade names,
copyrights and other proprietary rights and proprietary information (to the
extent any of the foregoing are used at the Facility) (the “Intellectual Property Assets”);


 


(g)           the supplies, inventories
and spare parts used or held for use by Seller in connection with the operation
of the Facility (the “Supplies”);


 


(h)           all Facility Transmission
Line Interests;


 


(i)            all rights of Seller under
or pursuant to all warranties, representations and guarantees made by
manufacturers and suppliers in connection with the Purchased Assets or services
furnished to Seller pertaining to the Facility or affecting the Purchased
Assets, as more particularly described on Schedule        (the
“Warranties”);


 


(j)            all common or joint
ownership, construction and operating agreements entered into by Seller with
respect to the Facility and Related Interests and Rights, and


 


(k)           all other agreements for third-party
operation of the Facility and Related Interests and Rights or any portion
thereof or of any capacity or capability of the Facility Transmission Line
Interests, all of which shall be assignable and transferable to Buyer in
accordance with the terms thereof.


 


L-5

















 


7.             Further Assurances. At any time
or from time to time after the Closing, at either Party’s request and without
further consideration, the other Party shall execute and deliver to the requesting
Party such other instruments of sale, transfer, conveyance, assignment and
confirmation, provide such materials and information and take such other
actions as the requesting Party may reasonably deem necessary or desirable in
order to more effectively (i) transfer, convey and assign to Buyer, and
confirm Buyer’s title to, all of the transferred assets, free and clear of all
liens other than Permitted Encumbrances; (ii) to the full extent permitted
by law, put Buyer in actual possession of the transferred assets and assist
Buyer in exercising all rights with respect to such transferred assets; (iii) include
within the transferred assets, and transfer, convey and assign to Buyer, free
and clear of all liens other than Permitted Encumbrances, any assets that are
held or owned by Seller but that have not been expressly identified in
paragraph (4) of this Appendix L and that Buyer has requested be
transferred to it; and (iv) otherwise to consummate the transactions
contemplated by this Agreement.


 


L-6

















 


APPENDIX L-1


 


TO THE


POWER PURCHASE AGREEMENT 


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


REPRESENTATIONS AND WARRANTIES


 


Seller represents and
warrants to Buyer as follows:


 


1.     Organization
and Good Standing.  Seller is a
corporation or limited liability company duly organized, validly existing and
in good standing under the laws of its state of incorporation or organization,
is qualified to do business in the State of California and the state where
Facility is located, if different, and has the legal power and authority to own
its properties, to carry on its business as now being conducted and to enter
into and perform its obligations under the Agreement and each agreement between
the Parties (the “Operative
Documents”).


 


2.     Authority;
Absence of Conflict or Breach.  The execution, delivery and performance by
Seller of its obligations under each of the Operative Documents have been duly
authorized by all necessary action on the part of Seller and the owners of any
interest in Seller, and do not and will not require any consent or approval
other than those which have already been obtained. Each of the Operative
Documents constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws relating to
or affecting the enforcement of creditors’ rights generally or by general
equitable principles, regardless of whether such enforceability is considered
in a proceeding in equity or at law. The execution and delivery of the
Operative Documents, the consummation of the transactions contemplated thereby
and the fulfillment of and compliance with the provisions of the Operative
Documents, do not and will not conflict with or constitute a breach of or a
default under, any of the terms, conditions or provisions of any Requirements
of Law, or any organizational documents, agreement, deed of trust, mortgage,
loan agreement, other evidence of indebtedness or any other agreement or
instrument to which Seller is a party or by which it or any of its property is
bound, or result in a breach of or a default under any of the foregoing or
result in or require the creation or imposition of any Lien upon any of the
properties or assets of Seller (except as contemplated hereby), and Seller has
obtained or shall timely obtain all permits, licenses, approvals and consents
of Governmental Authorities required for the performance of its obligations
thereunder and operation of the Facility in accordance with the requirements of
the Operative Documents and all applicable Requirements of Law.


 


3.     Purchased
Assets.  Schedule        (with
respect to the Assumed Contracts), Schedule       
(with respect to the Fixtures and Equipment), Schedule        (with
respect to the Facility Premises), Schedule       
(with respect to the Books and Records), Schedule       
(with


 


L-1-1














 


respect to the Transferred
Permits), Schedule       
(with respect to the Intellectual Property Assets), Schedule       
(with respect to the Supplies), Schedule       
(with respect to Facility Transmission Line Interests), Schedule       
(with respect to the Warranties), Schedule        (with
respect to the common or joint ownership, construction and operating
agreements); and Schedule
       (with respect to other
agreements for third-party operation of the Facility and Related Interests and
Rights or any portion thereof or of any capacity or capability of the Facility
Transmission Line Interests) contain a true and complete listing of the
Purchased Assets. The Fixtures and Equipment are in good repair and operating
condition, ordinary wear and tear excepted, and are suitable for continued use
in the ordinary course of the Facility and Related Interests and Rights.


 


4.               Title to
Purchased Assets. Prior to the Closing, Seller has good and
marketable title to the Purchased Assets, free and clear of all Liens except
for Permitted Encumbrances. At the Closing, Buyer will acquire good and
marketable title to the Purchased Assets free and clear of all Liens, except
for Permitted Encumbrances solely of the type described in clause (iv) of the
definition thereof.


 


5.               Assets of
the Business.  The
Purchased Assets constitute all of the assets, properties, rights, privileges,
claims and contracts of every kind and nature, real or personal, tangible or
intangible, absolute or contingent, wherever located, owned or used (including
those necessary to access and utilize any common use facilities), necessary to
operate the Facility and to sell and deliver Energy generated by the Facility
in substantially the same manner as it has historically been operated.


 


6.               Environmental.


 


(a)                                     Except as set
forth in Schedule        , there are no
pending or outstanding notices of violation, complaints, orders, consent
orders, consent agreements, assessments of a fine or penalty or other similar
demands for action brought by a Governmental Authority having the requisite
authority and jurisdiction to bring such action (“Agency Actions”) concerning the Facility
or the Facility Premises with respect to any current or future treaty,
constitution, law, statute, ordinance, rule, order, decree, regulation or other
directive which is legally binding and has been enacted, issued or promulgated
by any Governmental Authority that imposes liability for or standards of
conduct or compliance or other requirements or obligations concerning
protection of health, or safety (in each case, to the extent relating to
exposure to Hazardous Substances), natural resources or the environment and
includes all Hazardous Substances Law (as defined below) (collectively, “Environmental Laws”)
applicable to Seller, the Facility or the Facility Premises, and Seller’s
operation and use of the Facility and the Facility Premises have at all times
been in compliance with all Environmental Laws. 
There are no writs, injunctions, decrees, orders or judgments
outstanding, or any notices, actions, suits, Proceedings or investigations
pending or threatened involving Seller relating to (i) its compliance with any
Environmental Laws with respect to any of the Purchased Assets or the Facility
Premises, or (ii) the release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Substances in the indoor or outdoor environment, including the
movement of Hazardous Substances through or in the air, soil, surface water,
ground water or property (“Release”)
of any substance, material or waste that is regulated by or


 


L-1-2

















 


forms the basis of liability
now or hereafter under, any current or future treaty, constitution, law,
statute, ordinance, rule, order, decree, regulation or other directive which is
legally binding and has been enacted, issued or promulgated by any Governmental
Authority that imposes liability for or standards of conduct or compliance
concerning the generation, distribution, use, treatment, storage, disposal,
cleanup, transport or handling of Hazardous Substances, including, the Federal
Water Pollution Control Act, the Resource Conservation and Recovery Act of
1976, CERCLA, the Toxic Substances Control Act, the Oil Pollution Act, the Safe
Drinking Water Act, and includes the Occupational Safety and Health Act of
1970, to the extent that it relates to the handling of and exposure to
hazardous or toxic materials or similar substances (collectively, “Hazardous Substances Law”),
including any material, substance or waste that is (1) defined as a “solid
waste,” “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely
hazardous waste,” “restricted hazardous waste,” “pollutant,” “contaminant,” “hazardous
constituent,” “special waste,” “toxic substance” or other similar term or
phrase under any Environmental Law, (2) petroleum or any fraction or by-product
thereof, asbestos, polychlorinated biphenyls (PCB’s), or any radioactive
substance (collectively, “Hazardous
Substances”) at the Facility Premises.


 


(b)                                 All Permits
required by Environmental Laws and necessary for the operation of the Facility
as configured and as operated by Seller, have been obtained, are currently in
effect, and are set forth in Schedule       ; Seller’s
operations at the Facility Premises and in connection with the Purchased Assets
are in compliance with all the requirements of such Permits; and there is no
circumstance or condition that would preclude continued operation of the
Purchased Assets, including the Facility Premises, by Buyer under any of these
Permits.


 


(c)                                  Schedule        
sets forth all Agency Actions relating to Environmental Laws and
involving Seller’s operation and use of the Facility.  Schedule          
sets forth all information, reports, notices or inquiries from
any Governmental Authority received by Seller relating to the presence of
Hazardous Substances which have been released into the Environment or the
presence of Hazardous Substances which pose a threat of release of Hazardous
Substances into the Environment (“Environmental Conditions”) at, upon or
beneath the Facility or the Facility Premises regardless of whether such
Environmental Conditions were caused by or arose from Seller’s operation of the
Facility.


 


(d)                                 The Purchased
Assets and Seller each are in compliance with all applicable Environmental
Laws. There are no circumstances, conditions or proposed regulations which
could reasonably be expected to prevent or substantially interfere with Buyer’s
compliance with Environmental Laws in connection with Buyer’s operation of the
Facility in the foreseeable future in a manner consistent with Seller’s
operation of the Facility during the term of the Agreement.


 


(e)                                  Hazardous
Substances have not been generated, used, treated or stored on, or transported
to or from, any of the Facility Premises in violation of applicable
Environmental Laws.


 


(f)                                    There is no
asbestos contained in or forming any part of any building, building component,
structure or other asset that is part of the Purchased Assets, and no asbestos


 


L-1-3

















 


is or has been stored,
disposed of or otherwise been present at the Facility Premises or on or in any
of the Purchased Assets and Seller does not have any liability for asbestos in
connection with the use, operation, renovation or demolition of any of the
Purchased Assets.


 


(g)                                 There has been
no Release or threatened Release of Hazardous Substances at, on, under or from
any of the Facility Premises or at, on, under or from any property adjoining
any of the Facility Premises.


 


(h)                                 In connection
with its ownership and operation of the Purchased Assets, Seller has disposed
of all wastes, including those containing any Hazardous Substances, in compliance
with all applicable Environmental Laws, and Seller has not received any notice
or claim of liability for any on- or off-site Release or threatened Release of
Hazardous Substances.


 


(i)                                     There are not
now, and never have been, any above-ground or underground storage tanks or
PCB-containing transformers or equipment located at the Facility Premises.


 


(j)                                     Seller has
provided Buyer with all reports, surveys, studies, correspondence,
investigations, tests and environmental sampling and analyses (whether commissioned
by Seller or otherwise) relating in any way to the environmental condition of
any of the Purchased Assets or Seller’s compliance with applicable
Environmental Laws in the operation of the Facility, the use of the Purchased
Assets or otherwise.


 


(k)                                  Seller has not
received any written request for information nor any written notification that
it is a potentially responsible party under the federal Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”) or any
similar state law, including any such request or notification relating directly
or indirectly to any of the Purchased Assets and none of the Facility Premises
is proposed to be listed or is listed on the National Priorities List under
CERCLA or any similar state law requiring environmental investigation or
cleanup.


 


7.               No
Undisclosed Liabilities. 
Seller has no liabilities (absolute, accrued, contingent or otherwise),
except for (i) those set forth Seller’s “Financial Statements” (the unaudited
statements of income, cash flow and changes in shareholder/member equity for
such month and for the period from the beginning the then current fiscal year
of Seller to the end of such month, and a balance sheet of Seller as at the end
of such month, setting forth in comparative form figures for the corresponding
period of the preceding fiscal year, accompanied by a certificate signed by the
chief financial officer of Seller stating that such financial statements
present fairly the financial condition of Seller and that the same have been
prepared in accordance with GAAP, subject in the case of financial statements
other than Seller’s annual financial statement to the absence of footnote
disclosure and to normal, recurring end-of-period adjustments, the effect of
which, both individually and in the aggregate, will not be material, and copies
of all financial statements or other financial information delivered to any
Facility Lender contemporaneously with the delivery thereof to such Facility
Lender)  most recently delivered to
Buyer by Seller, (ii) those set forth in Schedule        ,
(iii) those arising under the Assumed Contracts, and (iv) those associated with
any litigation listed in Schedule
      .  All Financial


 


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Statements delivered by
Seller to Buyer are true and correct and have been prepared in accordance with
GAAP applied on a basis consistent with prior periods; each balance sheet
included in such Financial Statements fairly represents the financial condition
of Seller as of its respective date; and each statement of income and retained
earnings and cash flow included in such Financial Statements fairly represents
the results of operations and retained earnings and cash flow of Seller for the
period covered thereby; subject, with respect to any unaudited Financial
Statements other than Seller’s unaudited annual Financial Statements, to the
absence of footnote disclosure and to normal, recurring end-of-period
adjustments, the effect of which, both individually and in the aggregate, will
not be material.


 


8.               Consents. No Consent of,
or registration, qualification or filing with any Person, including any
Governmental Authority, is required for the execution and delivery by Seller of
this Agreement other than those that have been obtained. Except for those set
forth in Schedule         , no Consent of, or registration,
qualification or filing with any Person, including any Governmental Authority,
is required for the consummation by Seller of any of the transactions which
this Agreement or any of the other Operative Documents requires to be
consummated by Seller at the Closing.


 


9.               Taxes. Seller has
filed or caused to be filed with the appropriate Governmental Authorities all
returns, reports, information return or other documents (including any related
or supporting information) required to be supplied to any authority with
respect to Taxes (“Tax
Returns”) and reports relating to Seller required to be filed,
all such Tax Returns were correct and complete in all respects and all Taxes of
Seller due and payable have been paid whether or not shown to be due on such
Tax Returns and reports. Seller has not received any notice from any
Governmental Authority of any outstanding claims or assessments with respect to
any Tax relating to the Purchased Assets and no such claim is pending or is
presently being asserted against the Seller or with respect to any of the
Purchased Assets. Seller knows of no proposed tax assessment against the
Purchased Assets that is not being actively contested by it in good faith and
by appropriate proceedings. Seller has timely paid all Taxes shown to be due on
such Tax Returns, all Tax assessments received, and all Taxes that have or may
become due under applicable Law with respect to all periods or portions thereof
ending on or prior to the Closing Date. There are no Liens for Taxes on any of
the Purchased Assets. The Purchased Assets do not include any equity interest
in any corporation or other entity. 
Seller is not a party to any pending Tax audit, investigation, action or
Proceeding with any Governmental Authority, and there is no threatened audit,
investigation, action or Proceeding by any Governmental Authority with respect
to any of the Purchased Assets. Seller has not received written notice of any
claim by any Governmental Authority in any jurisdiction where it does not file
Tax Returns or pay Taxes that it is or may be subject to Tax by that
jurisdiction.  Seller has timely withheld
and timely paid all Taxes that are required to have been withheld and paid by
it in connection with amounts paid or owing to any employee, independent
contractor, creditor or other Person. Seller is not a party to or bound by any
Tax sharing agreement, Tax allocation agreement, or Tax indemnity agreement.  Seller is not presently liable for the Taxes
of another Person under applicable Law, as transferee or successor, or by
contract, indemnity or otherwise. None of the Assumed Liabilities is an
obligation to make a payment that will not be deductible by reason of the
limitations of Code Sections 280G or 162(m).


 


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10.         Compliance
With Requirements of Law. Except as set forth on Schedule        ,
Seller is in compliance with all Requirements of Law (other than Environmental
Laws) applicable to the Purchased Assets and operation and use of the
Facility.  There are no condemnations or
similar proceedings applicable to any part of the Facility.


 


11.         Litigation.


 


(a)                                  Except as set
forth in Schedule        ,
there are no Proceedings pending, or to Seller’s knowledge threatened in
writing, against Seller.


 


(b)                                 Except as set
forth in Schedule       
there are no existing orders, writs, injunctions, judgments or decrees of any
court, arbitrator, tribunal or other Governmental Authority against Seller.


 


12.         Assumed
Contracts.  All Assumed
Contracts are in full force and effect, and neither Seller, nor to Seller’s
knowledge, any other party thereto, is in default under or breach of any of
them, nor does any event or condition exist that after notice or lapse of time
or both could constitute a default thereunder or breach thereof on the part of
Seller, or to Seller’s knowledge, any other party thereto. No approval,
consent, or waiver of or by any Person that has not already been obtained is
needed in order that the Assumed Contracts continue in full force and effect
following the consummation of the transactions contemplated by this Agreement,
and no Assumed Contract includes any provision, the effect of which may be to
terminate (or give rise to a right of termination under) such Assumed Contract,
to give rise to, enlarge, or accelerate any obligations of Seller thereunder,
or to give additional rights to any other Person, upon or by reason of the
consummation of the transactions contemplated by this Agreement.  Seller has delivered or made available to the
Buyer true and complete copies of all Assumed Contracts.


 


13.         Intellectual
Property.


 


(a)                                  Seller is the
licensee of, or has, such rights under the Intellectual Property Assets
necessary to operate and maintain the Facility in substantially the same manner
as it has historically been operated and maintained.  Seller has not received notice that any of
the Intellectual Property Assets infringes on or conflicts with the
intellectual property of others. No assignment or Consent of third parties is
necessary to transfer, license, assign or convey to Buyer, as appropriate, any
of the Intellectual Property Assets. 
Seller has the right to use, and from and after the Closing Date, Buyer
will have the right to use, the Intellectual Property Assets in connection with
the ongoing operation and maintenance of the Facility.


 


(b)                                 There have been
no claims, and, to Seller’s knowledge, there is no basis for any claim,
challenging the scope, validity or enforceability of any of the Intellectual
Property Assets.  There are no instances
where it has been held, or to Seller’s knowledge claimed or alleged, whether
directly or indirectly, and, to Seller’s knowledge, there is no basis upon
which a claim may be made, that any activity of Seller relating to the
operation or maintenance of the Facility, infringes or may infringe upon, is in
violation of, or misappropriates, any rights of a third party.


 


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(c)                                  Schedule         lists the
software currently used in connection with the operation of the Facility[, INCLUDING CONTROL ROOM OPERATING SYSTEM SOFTWARE,]
all of which will remain available at the Facility for use by Buyer.


 


14.         Brokers or
Finders. Neither Seller nor any of its officers, directors, employees,
shareholders or Affiliates has employed or made any agreement with any broker,
finder or similar agent or any Person which will result in the obligation of
Buyer or any of its Affiliates to pay any finder’s fee, brokerage fees or
commission or similar payment in connection with the transactions contemplated
hereby.


 


15.         Permits.  All non-environmental Permits required by
Requirement of Law and necessary or useful for the operation of the Facility as
configured and operated by Seller have been obtained, are currently in effect
and are final and non-appealable, and are set forth in Schedule        .
 Seller’s operations at
the Facility Premises and in connection with the Purchased Assets are in
compliance with all the requirements of such Permits; and there is no
circumstance or condition that could preclude continued operation of the
Purchased Assets, including the Facility Premises, by the Buyer under any of
these Permits. Seller has made available to Buyer complete and correct copies
of each Permit, together with all amendments thereto. No suspension,
cancellation of termination of any such Permit is threatened or imminent.


 


16.         Investment
Company Act. Seller is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act.


 


18.         Employees
and Employee Benefit Plans.  Seller does not have and has never had any
employees. Seller does not now maintain or contribute to, and has not ever
maintained or contributed to, any pension, profit-sharing, deferred
compensation, bonus, stock, option, share, appreciation right, severance, group
or individual health, dental, medical, life, insurance, survivor benefit or
similar plan, policy or arrangement for the benefit of any director, officer,
consultant or employee, whether active or terminated of Seller.


 


19.         General
Representation. The representations and warrantees made by Seller,
its agents and representatives, in this Agreement, the Operative Documents or
in any certificate or other agreement delivered by Seller to Buyer in
connection with the transactions contemplated by this Agreement, when taken as
a whole, do not contain any untrue statement of a material fact, or omit to
state a material fact necessary in order to make the statements contained
herein, in light of the circumstances under which they were made and at the
time they were made, not misleading in any material respect. At Buyer’s
request, Seller has provided various documents, other materials and information
to Buyer and its representatives during the course of the negotiations and
documentation, and Buyer’s investigation and evaluation, of the transactions
contemplated by the Agreement and will from time to time provide various
documents, other materials and information to Buyer and its representatives
(collectively, the “Provided
Materials”). The Provided Materials which are in written or
recorded form are and will be true and correct copies of what they purport to
be and all information contained in the Provided Materials: (i) was and will be
drawn from the books and records of Seller; (ii) is or will be, or is or will
be in all material respects consistent with, the information which has been
used by Seller in the operation and management of the Facility and the Related
Rights and Interests and also


 


L-1-7

















 


with what has been or will
be reported to Seller’s management, equity holders and the Facility Lender in
connection with the Facility and the Related Rights and Interests; and (iii) is
or will be, or is or will be in all material respects consistent with,
information provided or to be provided to Seller’s auditors in connection with
their audit of Seller’s financial statements.


 


L-1-8

















 


APPENDIX M


 


TO THE


POWER PURCHASE AGREEMENT

BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


FORM OF LETTER OF CREDIT


 


IRREVOCABLE AND UNCONDITIONAL DOCUMENTARY

LETTER OF CREDIT NO.               


 


Applicant:


 


Beneficiary:


 


SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY


225 S. Lake Avenue, Suite
1250

Pasadena, California 91101

Telephone:     (626) 793-9364

Facsimile:      (626) 793-9461


 


Amount:


Expiry Date:


Expiration Place:


 


Ladies and Gentlemen:


 


We hereby issue our
Irrevocable Unconditional Documentary Letter of Credit in favor of the
beneficiary by order and for the account of the applicant which is available at
sight for USD $XX,XXX,XXX by sight payment


 


M-1

















 


(a)          upon
presentation to us at our office at [bank’s
address],(1) of: (i) your written demand for payment containing the
text of Exhibit I and (ii) your signed statement containing the
text of Exhibit II; or


 


(b)         upon both your
telephone or fax advice of demand to the attention of                                       
at telephone and/or fax number                                  
and presentation to us by fax of: (i) your written demand for payment
containing the text of Exhibit I and (ii) your statement containing the
text of Exhibit II.(2) Funds may be drawn under this Letter of Credit,
from time to time, in one or more drawings, in amounts not exceeding in the
aggregate the amount specified above.


 


Upon presentation to us in
conformity with the foregoing, we will, within sixty (60) minutes after such
presentation (unless such presentation occurs after 3:00 p.m., Pacific Standard
Time, on the day of such presentation, in which event payment will be made
within sixty (60) minutes after the opening of business at the office specified
above on the next business day), but without any other delay whatsoever,
irrevocably and without reserve or condition: (a) if the office set forth above
for presentation is in Los Angeles, California, pay to your order in the
account at the bank designated by you in the demand, the full amount demanded
by you in the same-day funds which are immediately available to you, or (b) if
the office set forth above for presentation is not in Los Angeles, California,
issue payment instructions to the Federal Reserve wire transfer system in
proper form to transfer to the account at the bank designated by you in the
demand, the full amount demanded by you in the same-day funds which are
immediately available to you in Los Angeles, California.  We agree that if, on the expiration date of
this Letter of Credit, the office specified above is not open for business,
this Letter of Credit will be duly honored if the specified statements are
presented by you within three (3) full banking days after such office is
reopened for business.


 


Payment hereunder shall be
made regardless of: (a) any written or oral direction, request, notice or other
communication now or hereafter received by us from the Applicant or any other
person except you, including without limitation any communication regarding
fraud, forgery, lack of authority or other defect not apparent on the face of
the documents presented by you, but excluding solely an effective written order
issued otherwise than at our instance by a court of competent jurisdiction,
which order is legally binding upon us and specifically orders us not to make
such payment;  (b)  the solvency, existence or condition,
financial or other, of the


 






(1) Note to Issuer: The
Letter of Credit must be payable in U.S. dollars within the continental U.S.


 


(2) Note to Issuer: If the
office specified for presentation is outside of Los Angeles, California,
alternative (b) must appear in the Letter of Credit when issued. If the office
is in Los Angeles, California, alternative (b) may be included only if the bank
establishes and maintains with Southern California Public Power Authority the
necessary electronic arrangements.


 


M-2

















 


Applicant or any other person
or property from whom or which we may be entitled to reimbursement for such
payment; and (c) without limiting clause (b) above, whether we are in receipt
of or expect to receive funds or other property as reimbursement in whole or in
part for such payment.  We agree that we
will not take any action to cause the issuance of an order described in clause
(a) of the preceding sentence.  We agree
that the time set forth herein for payment of any demand(s) for payment is
sufficient to enable us to examine such demand(s) and the related documents(s)
referred to above with care so as to ascertain that on their face they appear
to comply with the terms of this credit and that if such demand(s) and
document(s) on their face appear to so comply, failure to make any such payment
within such time shall constitute dishonor of such demand(s) and this credit.


 


The stated amount of this
Letter of Credit may be increased or decreased, and the expiration date of this
Letter of Credit may be extended, by an amendment to this Letter of Credit in
the form of Exhibit III.  Any such
amendment shall become effective only upon acceptance by your signature on a
hard copy amendment.


 


You shall not be bound by
any written or oral agreement of any type between us and the Applicant or any
other person relating to this credit, whether now or hereafter existing.


 


We hereby engage with you
that your demand(s) for payment in conformity with the terms of this credit
will be duly honored as set forth above. All fees and other costs associated with
the issuance of and any drawing(s) against this Letter of Credit shall be for
the account of the Applicant. All of the rights of the Southern California
Public Power Authority (“SCPPA”) set forth above shall inure to the benefit of
your successors.  In this connection, in
the event of a drawing made by a party other than SCPPA, such drawing must be
accompanied by the following signed certification:


 


“The undersigned does hereby
certify that [drawer] is the successor by operation of law to SCPPA, a beneficiary
named in [name of Bank] Letter of Credit no.                   .


 


	
   

  	
  [name and title]

  



 


 


Except so far as otherwise
expressly stated herein, this documentary credit is subject to the “Uniform
Customs and Practices for Documentary Credits,” International Chamber of
Commerce, in effect on the date of issuance of this credit.


 


	
   

  	
  Yours faithfully,

  
	
   

  	
   

  
	
   

  	
  (name of issuing bank)

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Title

  	
   

  



 


M-3






 










 


EXHIBIT I


Demand for Payment


 


Re:                               Irrevocable and
Unconditional Documentary Letter of Credit


 


No.                                       Dated
                  ,
20    


 


To Whom It May Concern:


 


Demand is hereby made upon
you for payment to us of $                 
by deposit to our account no.                        
at [insert name of bank]. This demand is made under, and is subject to and
governed by, your Irrevocable and Unconditional Documentary Letter of Credit
no.                           
dated                     ,
20     in the amount of $                        
established by you in our favor for the account of                                   
as the Applicant.


 


DATED:                                          ,
20   .


 


 


	
   

  	
  SOUTHERN CALIFORNIA PUBLIC
  POWER

  
	
   

  	
  AUTHORITY

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  



 


M-4

















 


EXHIBIT II


Statement


 


Re:                               Your
Irrevocable and Unconditional Documentary Letter of Credit


 


No.                                    
Dated                 ,
20               


 


To Whom It May Concern:


 


Reference is made to your
Irrevocable and Unconditional Documentary Letter of Credit no.                       ,
dated                      
, 20      in the amount of $                            
established by you in our favor for the account of                                           .


 


We hereby certify to you
that $                                           
is payable to us as provided in our agreement with the Applicant.


 


DATED:                             ,
20    .


 


	
   

  	
  SOUTHERN CALIFORNIA PUBLIC
  POWER

  
	
   

  	
  AUTHORITY

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  



 


M-5

















 


EXHIBIT III


Amendment


 


Re:                               Irrevocable and
Unconditional Documentary Letter of Credit


 


No.                                     
Dated                               ,
20    


 


	
  Beneficiary:

  	
   

  	
  Applicant:

  



 


Southern California Public
Power Authority


225 S. Lake Avenue, Suite
1250


Pasadena, CA 91101


 


To Whom It May Concern:


 


The above referenced
Irrevocable and Unconditional Documentary Letter of Credit is hereby amended as
follows: by increasing / decreasing / leaving unchanged (strike two) the stated amount by $                                 
to a new stated amount of $                                 
or by extending the expiration date to                                     
from                                  .  All other terms and conditions of the Letter
of Credit remain unchanged.


 


This amendment is effective
only when accepted by Southern California Public Power Authoirty, which
acceptance may only be valid by a signature of an authorized representative.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Yours faithfully,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (name of issuing bank)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACCEPTED

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Southern
  California Public Power Authoirty

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
   

  
						



 


M-6

















 


APPENDIX N


 


TO THE


POWER PURCHASE AGREEMENT

BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


FACILITY OPERATOR


 


First Wind O&M, LLC.


 


N-1

















 


APPENDIX O


 


TO THE


POWER PURCHASE AGREEMENT

BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


FORM OF CONSENT AND AGREEMENT


 


This CONSENT AND AGREEMENT,
dated as of                     ,
                  
(“Consent”) by and among Southern California Public Power Authority (“Buyer”),
                    
(in its capacity as agent for the lenders under the credit Agreement, as
defined below, “Agent”) and Milford Wind Corridor Phase II, LLC, a
Delaware limited liability company (“Seller”). Each of Buyer, Seller and
Agent is referred to under this Agreement as a “Party” and together they
are referred to as the “Parties”.


 


RECITALS


 


A.                                   Seller entered
into a Credit Agreement with Agent and certain other lenders, dated as of                 ,
20     (the “Credit Agreement”), under which Seller
will finance the construction of a nominal 102 MW electric generating and
transmission facility (the “Facility” as defined in the Contract (as
defined below)).  Seller and Agent also
entered into a Security Agreement (the “Security Agreement”), under
which Seller assigned its interest under the Contract (as defined below) to
Agent as collateral for the credit facilities under the Credit Agreement and a
deed of trust or mortgage under which Seller has granted to Agent a lien on the
Facility to be recorded in the real property records of the county in which the
Facility is located (the “Deed of Trust”).  Additionally, [Insert name of Seller’s immediate
parent entity] (“Pledgor”) has entered into a
Pledge and Security Agreement pursuant to which it has pledged to Agent all of
the membership interests in Seller, to secure Seller’s obligations under the
Credit Agreement (the “Pledge Agreement” and, together with the Security
Agreement and Deed of Trust, the “First Lien Collateral Documents”).  A copy of each of the First Lien Collateral
Documents has been furnished to Buyer.


 


B.                                     Buyer and
Seller entered into that certain Power Purchase Agreement, dated as of                  ,
20      (the “Contract”), pursuant to which
Seller will develop, finance, construct, own, and operate the Facility, and
will sell the Energy (as defined in the Contract), except as otherwise provided
in the Contract.


 


O-1

















 


C.                                     Pursuant to
Section 15.7(e) of the Contract, Seller has requested Buyer’s consent to the
assignment, pursuant to the Security Agreement, by Seller to Agent of Seller’s
interest under the Contract. In addition, this Consent is entered into in
compliance with Section 15.7(g) of the Contract.


 


AGREEMENT


 


1.                                      Assignment and Agreement.


 


1.1                                 Consent to Assignment. Buyer hereby consents to
the collateral assignment to Agent pursuant to the Security Agreement of
Seller’s rights to and under the Contract, pursuant to the Deed of Trust of
Seller’s interests in the Facility and pursuant to the Pledge Agreement of
Pledgor’s membership interests in Seller (together, the “Assigned Interests”)
as security for Seller’s obligations under the Credit Agreement. Subject to the
terms and conditions of this Consent, Buyer agrees that in exercising its
remedies, Agent may exercise Seller’s rights under the Contract.


 


1.2                                 Subsequent Owner. Subject to the terms and conditions of this
Consent, the Parties agree that if Agent notifies Buyer in writing that it has
foreclosed on the Assigned Interests pursuant to the First Lien Collateral
Documents, or taken a “deed in lieu of foreclosure,” Agent or its successor,
any assignee of Agent, or any other purchaser of the Assigned Interests shall
be recognized as a party substituting for Seller under the Contract so long as
it meets the qualifications set forth below for a Qualified Purchaser (as
defined below) (each, a “Subsequent Owner”), and the terms and
conditions of the Contract as in effect on such date of assignment or
foreclosure shall continue to apply to such Subsequent Owner.  For purposes of the previous sentence, “Qualified
Purchaser” means an entity that (a) is, or has contracted with an operator
who is, at least as experienced as Seller and its ultimate parent  on the date hereof in the ownership and
operation of windpower and electric transmission facilities, (b) has invested
at least [$100 million] of equity
capital in the Facility, minus any equity capital already invested therein by
Pledgor, (c) agrees to assume and perform the obligations of Seller under the
Contract and to otherwise comply with the terms and provisions of the Contract,
and (d) is not then in litigation or arbitration against Buyer or any member of
Buyer that is a purchaser from Buyer of electric energy produced by the
Facility.


 


 


1.3                                 Buyer’s Purchase in Lieu of Foreclosure.


 


(a)                                  In the event of
any default by Seller under the Credit Agreement that has not been cured as
provided thereunder, prior to taking any action, whether judicial or
non-judicial to foreclose upon and sell the Facility or the membership
interests in Seller (a “Foreclosure Sale”) pursuant to the First Lien
Collateral Documents, or to taking a deed in lieu of foreclosure, Agent shall
give notice in writing to Buyer in the form of, and containing the information
specified in, Exhibit A hereto (the “Foreclosure Notice”)
concurrent with any


 


O-2

















 


statutory notice required to
be delivered to Seller, which notice shall be given not less than ninety (90)
days prior to the date of such Foreclosure Sale or taking of a deed in lieu of
foreclosure.


 


(b)                                 In the event
that Buyer shall, within sixty (60) days following Buyer’s receipt of the
Foreclosure Notice, furnish written notice to Agent in the form of, and
containing the information specified in, Exhibit B hereto (the “Purchase
Notice”), that Buyer will exercise its option under Section 15.21 of the
Contract, Buyer shall purchase the Facility from Seller in accordance with
Section 15.21 of the Contract prior to the end of the ninety (90) day period
following receipt of the Foreclosure Notice, and will give Agent fifteen (15)
days’ notice of the date of such purchase. Upon such purchase, Buyer shall pay
to an account designated by Agent the purchase price for the Facility in an
amount equal to the Facility Debt, as defined in the Contract, which amount
shall be provided by Agent to Buyer as an estimate at the time of the Purchase
Notice by Buyer, and as a fixed amount immediately prior to the purchase.  In consideration of such payment, Agent shall
release of record all of the liens and security interests under the First Lien
Collateral Documents.


 


(c)                                  If Buyer
believes that the purchase of the Facility will not take place within such
ninety (90) day period, and, prior to the end of such ninety (90) day period
provides notice to Agent in the form of Exhibit C, then the Foreclosure
Sale (or, as applicable, the taking of a deed in lieu of foreclosure) shall not
be held and Buyer shall, within ten (10) days after the end of such ninety (90)
day period, purchase from the Facility Lenders all of their right, title and
interest in, to and under the Credit Agreement and the First Lien Collateral
Documents, free and clear of all liens, claims and encumbrances. Upon such
purchase, Agent agrees to cause the transfer, sale and assignment of all of the
right, title and interest of the Facility Lenders in, to and under the Credit
Agreement, related promissory notes, and the First Lien Collateral Documents to
be made to Buyer (or, if and to the extent designated by Buyer, to a member of
Buyer that is a purchaser from Buyer of Energy (as defined under the Contract)
produced by the Facility) upon the payment by Buyer (and/or such member) to
Agent of the amount of the Facility Debt.


 


(d)                                 If Buyer has
not provided Agent a notice in the form of Exhibit C prior to the end of
such ninety (90) day period, then the Facility Lenders may effect the
Foreclosure Sale or take a deed in lieu of foreclosure at any time after the
end of such ninety (90) day period.


 


1.4                               Foreclosure
Sale. In the event Buyer does not exercise its option or rights as provided
under Section 1.3 above, and a Foreclosure Sale under the First Lien
Collateral Documents shall take place, (a) Buyer and/or any member of Buyer
that is a purchaser from Buyer of Energy (as defined under the Contract)
produced by the Facility shall have the right to bid at such Foreclosure Sale
for the purchase of the Facility or the membership interests in Seller, as
applicable, and (b) failing a successful bid by Buyer and/or any such member of
Buyer


 


O-3

















 


at such Foreclosure Sale, Agent
may sell the Assigned Interests pursuant to such Foreclosure Sale, free of any
rights of Buyer under this Section 1.4, and, in each such case, Seller
waives, to the extent permitted by law, all rights of redemption, stay or
appraisal.


 


1.5                               Notices; Right
to Cure by Agent.  Upon the
occurrence of a Default (as defined under the Contract) by Seller under the
Contract, Buyer shall give notice of such Default to Agent. Buyer shall not
terminate or suspend its performance under the Contract until Agent has been
given thirty (30) days from receipt of such notice to cure a monetary Default
or, if such Default is a nonmonetary Default, forty-five (45) days from receipt
of such notice to cure such Default (or up to one hundred twenty (120) days, so
long as Agent is diligently pursuing appropriate action to cure and has made
progress toward curing such Default). Failure of Buyer to provide such notice
to Agent shall not constitute a breach of the Contract or this Consent by Buyer
and Agent agrees that Buyer shall have no liability to Agent for such failure
whatsoever; provided that no claim of Default or termination of the
Contract by Buyer shall be binding without such notice and the lapsing of the
applicable cure period. If Agent fails to cure a Default within the applicable
cure period, Buyer shall have all its rights and remedies with respect to such
Default as set forth in the Contract.


 


1.6                                 No Assignment. Buyer agrees that it shall not, without the
prior written consent of Agent (such consent to not be unreasonably withheld,
conditioned or delayed, and Agent shall be deemed to have consented forty-five
(45) days after receiving notice from Buyer if Agent does not indicate
otherwise), sell, assign or transfer any of its rights under the Contract other
than in accordance with Section 15.7 of the Contract.


 


2.                                      Payments under the Contract. Without limiting the
rights of Buyer under the Contract, Buyer shall pay any amounts owed in the
manner and when required under the Contract directly to the account specified
by Agent to Buyer in writing.  From and
after such time as an entity qualifies as a Subsequent Owner, Buyer shall pay
all such amounts owed directly to such Subsequent Owner.


 


3.                                      Right
to Cure by Buyer.  Buyer’s
rights to cure defaults by Seller under the Credit Agreement shall be set forth
in Section        of the Credit Agreement.


 


4.                                      Representations
and Warranties.


 


4.1                                 Buyer. To Buyer’s knowledge, Seller is not in default
under the Contract and all applicable milestone dates have been met under the
Contract.


 


4.2                                 Agent. Agent is duly authorized under the Credit
Agreement and the First Lien Collateral Documents to enter into and perform its
obligations thereunder and otherwise comply with the terms of this Consent on
behalf of the lenders under the Credit Agreement and the First Lien Collateral
Documents.


 


O-4

















 


5.                                      Miscellaneous.


 


5.1                                 Governing Law; Submission to Jurisdiction.


 


(a)                                  This Consent
shall be governed by, interpreted and enforced in accordance with the laws of
the State of California, without regard to conflict of law principles.


 


(b)                                 All litigation
arising out of, or relating to this Consent, shall be brought in a State or
Federal court in the County of Los Angeles in the State of California. The
Parties irrevocably agree to submit to the exclusive jurisdiction of such
courts in the State of California and waive any defense of forum non conveniens.


 


5.2                                 Counterparts.  This
Consent may be executed in any number of counterparts and by the different
Parties on separate counterparts, each of which, when so executed and
delivered, shall be an original, but all of which shall together constitute one
and the same instrument.


 


5.3                                 Amendment, Waiver. Neither this Consent nor
any of the terms hereof may be terminated, amended, supplemented, waived or
modified except by an instrument in writing signed by Buyer and Agent.


 


5.4                                 Successors
and Assigns. This Consent shall bind and benefit Buyer and
Agent, and their respective successors and permitted assigns.


 


5.5                                 No
Attorneys’ Fees. Each Party agrees that in any action to enforce
the terms of this Consent, each Party shall be responsible for its own
attorneys’ fees and costs.


 


5.6                                 Representation by Counsel. Each of the Parties was represented by its respective
legal counsel during the negotiation and execution of this Consent.


 


5.7                                 Notices.  Any
communications between the Parties or notices provided herein to be given may
be given to the following addresses:  


 


	
  If to Seller:

  	
   

  	
  If to Buyer:

  
	
   

  	
   

  	
   

  
	
  Milford Wind Corridor
  Phase II, LLC

  	
   

  	
  Southern California.
  Public Power Authority

  
	
  [                       ]

  	
   

  	
  225 S. Lake Avenue, Suite
  1250

  
	
  Telephone:  [               ]

  	
   

  	
  Pasadena, CA 91101

  
	
  Facsimile:   [               ]

  	
   

  	
  Facsimile:  (626)
  793-9461

  
	
  Attn: [                         ]

  	
   

  	
  Telephone:  (626)
  793-9364

  
	
   

  	
   

  	
  Attention:      Executive
  Director

  



 


O-5

















 


	
  If to Agent:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [                       ]

  	
   

  	
   

  
	
  [                       ]

  	
   

  	
   

  
	
  Telephone:  [               ]

  	
   

  	
   

  
	
  Facsimile:   [               ]

  	
   

  	
   

  
	
  Attn: [                         ]

  	
   

  	
   

  



 


All notices or other
communications required or permitted to be given hereunder shall be in writing
and shall be considered as properly given (a) if delivered in person, (b) if
sent by overnight delivery service, (c) if mailed by first class United States
Mail, postage prepaid, registered or certified with return receipt requested,
(d) if sent by prepaid telegram or by facsimile, or (e) if sent by other
electronic means confirmed by facsimile or telephone.  Any Party may change its address for notice
hereunder by giving written notice of such change to the other Parties.


 


IN WITNESS WHEREOF, the
Parties have caused this Consent and Agreement to be duly executed and
delivered as of the date first above written.


 


	
   

  	
  SOUTHERN CALIFORNIA PUBLIC

  
	
   

  	
  POWER AUTHORITY,

  
	
   

  	
  a California joint powers
  authority

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [AGENT]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MILFORD WIND CORRIDOR
  PHASE II,

  
	
   

  	
  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  



 


O-6






 










 


	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


O-7

















 


EXHIBIT A


 


FORM OF FORECLOSURE NOTICE


 


[Letterhead of Agent]


 


[Insert date]


 


Via Certified Mail, Return
Receipt Requested


 


Southern California Public
Power Authority


225 South Lake Avenue


Suite
1250


Pasadena,
CA 91101


Attn:
Executive Director


 


Re:                             [       ]
Project


 


Ladies and Gentlemen:


 


This notice is provided to
you pursuant to the Consent and Agreement (“Consent”) dated as of                  
20    , among Southern California Public Power Authority (“Buyer”),
[Agent] (“Agent”)
and [     ] (“Seller”).  This is a Foreclosure Notice, as defined in
the Consent. Capitalized terms used herein and not defined herein have the
respective meanings given in the Consent.


 


As of the date hereof, the
following amounts are due and owing by Seller under the Credit Agreement:


 


	
  Principal
  amount of loans:

  	
   

  	
  $

  	
   

  	
   

  
	
  Accrued
  Interest:

  	
   

  	
  $

  	
   

  	
   

  
	
  Reimbursable
  Amounts

  	
   

  	
  $

  	
   

  	
   

  
	
  Fees:

  	
   

  	
  $

  	
   

  	
   

  



 


As of the date hereof,
interest is accruing at the rate of       % per
annum [Insert if
applicable: and fees are accruing at the rate of      
% per annum]. This interest rate
will apply until [insert date which is end
of current interest period], from which time the interest rate may
be higher or lower. A default rate of interest equal to 2% above the otherwise
applicable rate [does/does not]
currently apply [If does not currently
apply, add: but may be


 


O-8

















 


applied at
any time]. [If applicable, state: The
principal amount of loans shown above does not reflect the entire loan
commitment under the Credit Agreement. Additional loans may be made, with or
without the Seller’s consent, and such additional loans will accrue interest as
provided in the Credit Agreement.]


 


An Event of Default, as
defined in the Credit Agreement, has occurred and is continuing. The Agent
intends to foreclose upon the Assigned Interests or take a deed in lieu of
foreclosure on a date estimated to be [insert day no less than ninety (90) days from the date of
notice]. Such date may be modified as permitted by law, but will
in no event be prior to ninety (90) days after the date hereof.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Agent]

  



 


O-9

















 


EXHIBIT B


 


FORM OF PURCHASE NOTICE


 


[Letterhead of SCPPA]


 


[Insert date]


 


Via Certified Mail, Return
Receipt Requested


[Agent]


Attn:


 


Re:                             [      ]
Project


 


Ladies and Gentlemen:


 


This notice is provided to
you pursuant to the Consent and Agreement (“Consent”), dated as of                 ,
20    , among Southern California Public Power Authority (“Buyer”),
[Agent] (“Agent”)
and [      ] (“Seller”). This is a Purchase
Notice, as defined in the Consent. Capitalized terms used and not defined
herein have the respective meanings given in the Consent.


 


We have received your
foreclosure Notice, dated [insert
date of Foreclosure Notice].
By this Purchase Notice, we hereby notify Agent that we will exercise our
option and purchase the Facility pursuant to our rights under Section 15.21 of
the Contract no later than ninety (90) days from the date of the Foreclosure
Notice, and upon consummation of such purchase, pay to Agent, for the account
of the Facility Lenders, the Facility Debt (as defined in the Contract).


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  SOUTHERN CALIFORNIA PUBLIC
  POWER

  
	
   

  	
  AUTHORITY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


O-10

















 


EXHIBIT C


 


[Letterhead of SCPPA]


 


[Insert date]


 


Via Certified Mail, Return
Receipt Requested


 


[Agent]


Attn:


 


Re:                             [      ]
Project


 


Ladies and Gentlemen:


 


This notice is provided to
you pursuant to the Consent and Agreement (“Consent”), dated as of                ,
20     , among Southern California Public Power
Authority, [Agent]
(“Agent”) and [       ] (“Seller”). Capitalized terms used
herein and not defined herein have the respective meanings given in the
Consent.


 


We have received your
Foreclosure Notice, dated [insert
date of Foreclosure Notice]. By
this notice, we hereby notify Agent that we believe that the purchase of the
Facility pursuant to Section 15.21 of the Contract will not take place within
the ninety (90) day period following our receipt of such Foreclosure Notice. We
will, within ten (10) days after the end of such ninety (90) day period,
purchase from the Facility Lenders all of their right, title and interest in,
to and under the Credit Agreement, related promissory notes, and First Lien
Collateral Documents, for a price equal to the Facility Debt.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  SOUTHERN CALIFORNIA PUBLIC
  POWER

  
	
   

  	
  AUTHORITY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


O-11

















 


APPENDIX P


 


TO THE


POWER PURCHASE AGREEMENT


BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


BUYER’S SYSTEM PROTECTION DESIGN


 


	
  Line or Apparatus

  	
   

  	
  Position Trip

  	
   

  	
  Current

  	
   

  	
  Other

  	
   

  	
  Relays

  
	
  J28      250
  VDC Intermountain

  	
   

  	
  Delta,
  Utah Delta UT

  	
   

  	
  (000)
  279-0000 / none

  
	
  46/7.2KV Reserve Aux Bank
  1&2

  	
   

  	
  EA268

  	
   

  	
  EA267

  	
   

  	
   

  	
   

  	
  ITE51, LOR, MBCH, RFL6745
  TT, SUDD PRESS

  
	
  Bank K 345/46KV

  	
   

  	
  EA105

  	
   

  	
  EA105

  	
   

  	
   

  	
   

  	
  CO-8, RADSE

  
	
  Bank L 345/46KV

  	
   

  	
  EA105

  	
   

  	
  EA105

  	
   

  	
   

  	
   

  	
  CO-8, RADSE

  
	
  Bank M 345/230KV

  	
   

  	
  EA168

  	
   

  	
  EA167

  	
   

  	
   

  	
   

  	
  CO-8, HU, IAV, RADSE

  
	
  345KV Bus I

  	
   

  	
  EA94

  	
   

  	
  EA94

  	
   

  	
   

  	
   

  	
  RADSS

  
	
   

  	
   

  	
  EA95

  	
   

  	
  EA95

  	
   

  	
   

  	
   

  	
  LOR/ER, SBD

  
	
  345KV Bus 2

  	
   

  	
  EA96

  	
   

  	
  EA96

  	
   

  	
   

  	
   

  	
  RADSS

  
	
   

  	
   

  	
  EA97

  	
   

  	
  EA97

  	
   

  	
   

  	
   

  	
  LOR/ER, SBD

  
	
  46kV Buses 1 & 2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  J28-EA2828

  	
   

  	
  IAC, LOR

  
	
  46kV lines

  	
   

  	
  EA126

  	
   

  	
  EA126

  	
   

  	
   

  	
   

  	
  CO-8

  
	
  Generator Tie Line 1 &
  2

  	
   

  	
  EA133

  	
   

  	
  EA132

  	
   

  	
   

  	
   

  	
  GEL90

  
	
   

  	
   

  	
  EA134

  	
   

  	
  EA132

  	
   

  	
   

  	
   

  	
  RFL GARD FOTT, SEL311L

  
	
  IPP-Gonder Line 1

  	
   

  	
  EA189

  	
   

  	
  EA169

  	
   

  	
   

  	
   

  	
  CRQ, K-10, KD-11, TCF-10

  
	
   

  	
   

  	
  EA170

  	
   

  	
  EA169

  	
   

  	
   

  	
   

  	
  KD-10, KRQ, RFL6745

  
	
  IPP-Milford Wind Line 1

  	
   

  	
  EA623

  	
   

  	
  EA622

  	
   

  	
   

  	
   

  	
  GE L90

  
	
   

  	
   

  	
  EA624

  	
   

  	
  EA622

  	
   

  	
   

  	
   

  	
  GE D60, RFL GARD MWTT,
  SEL421

  
	
  IPP-Mona Line 1

  	
   

  	
  EA138

  	
   

  	
  EA137

  	
   

  	
   

  	
   

  	
  71A PLC PILOT, 71A PLC TT,
  KD-11, KRQ EM BU, SLYP-SLCN, TYPE 40 MW PILOT, TYPE 40 MW TT

  
	
  IPP-Mona Line 2

  	
   

  	
  EA138

  	
   

  	
  EA137

  	
   

  	
   

  	
   

  	
  71A PLC PILOT, 71A PLC TT,
  KD-11, KRQ EM BU, SLYP-SLCN, TYPE 40 MW PILOT, TYPE 40 MW TT

  
	
  46kV Cable

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  J28-EA2828

  	
   

  	
  CO-8, RFL6745

  
	
  Over/Under Frequency

  	
   

  	
  EDR117

  	
   

  	
  EDR117

  	
   

  	
   

  	
   

  	
  BEI-81 O/U

  
	
  Converter Filter

  	
   

  	
  EA121

  	
   

  	
  EA121

  	
   

  	
  EDR116

  	
   

  	
  RADSB, RXEG, RXKE

  
	
  Black Trip Reclosure
  (RVAR)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  J28-EA35

  	
   

  	
  AR, BEI-27, BEI-79S

  



 


P-1

















 


	
  Contingency Arming Trigger

  	
   

  	
  EA165

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Contingency Arming Trip

  	
   

  	
  EA171

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  RFL6745

  
	
  Converter Pole

  	
   

  	
  EA145

  	
   

  	
  EA145

  	
   

  	
   

  	
   

  	
  RADSB

  
	
  Station Block Diagram

  	
   

  	
  EA109, EA110

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  345KV
  Brkr Fail E12, E13

  	
   

  	
  EA117

  	
   

  	
  EA117

  	
   

  	
   

  	
   

  	
  LOR, SBFU

  
	
  345KV
  Brkr Fail E5, E6, E8

  	
   

  	
  EA119

  	
   

  	
  EA119

  	
   

  	
   

  	
   

  	
  LOR, SBFU

  
	
  345KV
  Brkr Fail E9, E10, E11

  	
   

  	
  EA118

  	
   

  	
  EA118

  	
   

  	
   

  	
   

  	
  LOR, SBFU

  
	
  45kV Breaker Vailure

  	
   

  	
  EA193, EA194

  	
   

  	
  EA192

  	
   

  	
   

  	
   

  	
  LOR, SBF-1

  



 


P-2

















 


APPENDIX Q


 


TO THE


POWER PURCHASE AGREEMENT

BETWEEN


SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY


AND


MILFORD WIND CORRIDOR PHASE II, LLC


 


METERING PROCEDURES


 


Milford
Phase II Metering Solution


 


This document outlines the
method to be used for metering the Facility (referred to in this Appendix Q as,
“Phase II”)
turbines being connected to the Milford Wind Phase I Facility (referred to in
this Appendix Q as, “Phase
I”) Substation bus 1.  The
Energy from the Phase II turbines is also to be purchased by Buyer pursuant to
the terms and conditions of this Agreement. 
The metering scheme proposed for Phase II is outlined below.


 


·                  Setup a master/slave
scheduling arrangement for Energy metered by the two phases.


 


·                  Implement a method for split
metering of the Energy produced at the substation as shown below. This will
provide the net Energy delivered for Phase II and Phase I at the Point of
Delivery.


 


The split metering method
takes the ratio of the Phase II power at Milford over total Milford power and
applies it to the net metered value at the Point of Delivery. This ratio varies
dynamically based on generation and all losses are split in accordance with the
amount of Energy each phase is producing.


 


To accomplish the split metering,
the two new Phase II collector circuits and the station service circuit will
each be equipped with revenue class CTs and individual meters. The gross Energy
values for each feeder are then added together and reduced by the Phase II
station service power to determine the total generation of Phase II. The Phase
II station service power will be deemed to be one third of the total station
service power. This total generation of Phase II is divided by the total Phase
I and II power determined by adding the values of the two 34.5kV bus meters.


 


The meters are shown in
Figure 1. The following equations show the math to be used for the splitting:


 


Q-1

















 


Phase II
Net Energy = Energy @ Interconnect Meter × (Energy @ F1 Meter
+ Energy @ F2 Meter – (Energy @ Station Service Meter × 1/3)) / (Energy @ Bus 1 Meter + Energy @ Bus 2 Meter)


 


Phase I Net
Energy = Energy @ Interconnect Meter – Phase II Net Energy


 


Q-2

















 


FIGURE
1


 





 


Q-3