Exhibit
10.91

     

    [*] =
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED FROM PUBLIC FILING PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT SUBMITTED TO THE U.S. SECURITIES AND EXCHANGE COMMISSION. THE OMITTED
INFORMATION, WHICH HAS BEEN IDENTIFIED WITH THE SYMBOL “[*],” HAS BEEN FILED
SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

     

    PURCHASE
AND SALE AND OPERATION AND MAINTENANCE AGREEMENT

     

    This
PURCHASE AND SALE AND OPERATION AND MAINTENANCE AGREEMENT (this “Agreement”), is
entered into as of December 23, 2008 between Hoku Solar, Inc., a Delaware
corporation (“Operator”) and Hoku Solar Power I, LLC a
California limited liability company  (“Owner”).

     

    RECITALS

     

    WHEREAS, Owner was formed for
the purpose of acquiring, owning, managing, operating, and, if appropriate or
desirable, selling or otherwise disposing of solar energy generation facilities
in Hawaii, in particular from the System, and to engage in the business of
acting as the owner of such solar energy facilities in a manner that will
qualify for the energy credit under Section 48 of the Internal
Revenue;

     

    WHEREAS, Operator and Owner
have entered into the Operating Agreement and Development Agreement, pursuant to
which Operator has agreed to construct, install, develop and commission the
System on behalf of Owner;

     

    WHEREAS, Owner desires to
purchase the System from the Operator after installation thereof pursuant to the
terms hereof and the terms of the Operating Agreement;

     

    WHEREAS, after such purchase
and sale of the System, the Owner will be the owner of the System and the solar
electric facilities at the Site;

     

    WHEREAS, in fulfillment of its
obligations as managing member of the Owner and in consideration of the payment
of the Service Fees, Operator has agreed to operate and maintain the System on
the terms and subject to the conditions of this Agreement; and

     

    WHEREAS, Capitalized terms
used and not otherwise defined herein shall have the meaning set forth in Exhibit A.

     

    NOW, THEREFORE, in
consideration of the foregoing an for other good and valuable consideration, the
receipt and sufficiency of where are hereby acknowledged, the Parties hereto
hereby agree as follows:

     

    
      
         


      

      
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    ARTICLE
1. PURCHASE AND SALE OF SYSTEM

     

    Section
1.1           Purchase and Sale of
System. The Operator hereby agrees to sell, convey and assign all of
its rights, title and interest in and to the System, including, without
limitation, all permits, licenses, certificates and warranties relating thereto,
to the Owner by a fully-executed bill of sale upon completion of construction
and installation of the System at the each of the buildings at the Site upon
such schedule as set forth in Section 5.1 of the Operating
Agreement.

     

    Section
1.2           Purchase
Price. The purchase price for the sale of the System shall be an
amount equal to [*] (the “Purchase Price”),
which is the difference between the total projected development costs of the
System and the development fee payable to the Operator as developer pursuant to
the Development Agreement.  The Purchase Price shall be payable by the
Owner from capital contributions and deemed contributions of the members of
Owner pursuant to the terms set forth in Section 5.01 of the Operating
Agreement.

     

    ARTICLE
2. SYSTEM SERVICES

     

    
      Section
2.1.           Engagement
of the Operator.

    

     

    (a)           Engagement
by Owner.  On the terms and conditions set forth in this
Agreement, Owner hereby engages the Operator to perform the System
Services.

     

    (b)           Acceptance
by the Operator.  On the terms and conditions set forth in this
Agreement, the Operator hereby accepts the engagement referred to in subsection
(a) and agrees to perform the System Services.

     

    
      Section
2.2.           System
Services.

    

     

    (a)           In
General. Throughout the Term, the Operator shall provide the System
Services to Owner.

     

    (b)           Non-Agreed
System Services.  If Owner desires that the Operator provide
any Non-Agreed System Services, then Owner shall submit to the Operator a
written request for such services.  If the Operator is reasonably
capable of providing and licensed to provide such Non-Agreed System Services,
the Operator shall provide the same to Owner in accordance with the provisions
of this Agreement.   Operator shall not perform Non-Agreed System
Services without the written agreement of Owner to the price of the Non-Agreed
System Services.

     

    (c)           Title.  Title
to all items, parts, materials and equipment supplied under or pursuant to this
Agreement to Owner shall transfer to Owner upon payment by Owner to Operator for
such items, parts, material and equipment.

     

    (d)           Spares.  Throughout
the Term; the Operator shall support the operation of the System
by:

     

    (i)           using
its commercially reasonable efforts to maintain in stock all Spares required for
the operation, maintenance and overhaul of the System, or

     

    
      
         


      

      
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    (ii)           procuring
the supply of all Spares required for the operation, maintenance and overhaul of
the System from other reputable providers reasonably acceptable to
Owner.

     

    All
Spares required by the Systems will be supplied by Operator at no additional
cost.

     

    (A)           Owner
may request modifications to any Spare for the System but all such modifications
shall be subject to the Operator’s approval, which approval shall not be
unreasonably withheld.

     

    (B)           To
the extent that Owner holds title to any Spares in the possession of the
Operator at a location other than the Site, the Operator shall clearly indicate
Owner’s title on the Spares themselves and any records relating to those
Spares.

     

    (C)           Upon
termination of this Agreement for any reason, the Operator shall, without
prejudice to any other obligation in this subsection (d), make all necessary
arrangements to enable Owner to collect any Spares held by or on behalf of the
Operator pursuant to this Agreement.  The provisions of this clause
(D) shall survive termination of this Agreement.

     

    
      Section
2.3.           Standards
of Performance.

    

     

    (a)           The
System Services shall be performed in accordance with good professional
practices applicable to the solar electric systems industry and, to the extent
applicable, Industry Standards.

     

    (b)           All
periodic maintenance and inspection services shall be performed at regular
intervals and all maintenance and inspection services shall be performed by
qualified technical personnel in accordance with the Manuals.

     

    
      Section
2.4.           Annual
Reports; Meetings.

    

     

    (a)           Annual
Reports. Throughout the Term, Operator shall furnish to Owner, in the
Operator’s then current standard format, annual maintenance/inspection reports
for the System (the “Annual Reports”) for
the twelve-month period ending on December 31 of each calendar year (or lesser
period in respect of the period from the Completion Date until the next
occurring December 31 and in respect of the year in which this Agreement expires
or terminates early in accordance with its terms) on or before February 15 of
the subsequent calendar year (or, in respect of the year in which this Agreement
expires or terminates early in accordance with its terms, within sixty (60) days
of such expiration or earlier termination).  Each Annual Report shall
include the following:

     

    (i)           Summary
of operations;

     

    (ii)          Weather
and data;

     

    (iii)         System
performance;

     

    
      
         


      

      
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    (iv)         Reports
of any environmental disturbances (e.g., chemical spills);

     

    (v)          Safety/accident
reports;

     

    (vi)        
Summary of Non-Agreed Systems Services;

     

    (vii)        Maintenance
and inspection reporting;

     

    (viii)       Proposal
of actions required; and

     

    (ix)          A
list of al Applicable Permits and any expiration dates

     

    
      Section
2.5.           Warranty
Claims.

    

     

    (a)           To
the extent that equipment warranties cover replacement and/or repair of covered
equipment during the Term, it shall be Operator’s responsibility to use
commercially reasonable efforts to submit, process and pursue, at Operator’s
sole cost and expense, warranty coverage; provided, however, that,
because it may be necessary that warranty claims are submitted in the name of
Owner, Owner shall provide such full and complete cooperation as Operator may
reasonably require in connection with the submission, processing and pursuit of
warranty coverage.

     

    (b)           Operator
agrees to act as agent on behalf of Owner for purposes of this Section
2.5.  If, in the event the equipment manufacturer denies
responsibility for warranty service and Operator is instructed by Owner to
pursue action against the equipment manufacturer, whether through litigation or
otherwise, Owner shall reimburse Operator for any of the costs, expenses, or
repairs incurred by Operator in this context (even if and for whatever reason
such recovery from the equipment manufacturer finally fails).  Such
costs will be reimbursed by Owner to Operator within thirty (30) days of receipt
of invoice.

     

    (c)           Operator
shall ensure that it may assign, and shall assign, to Owner the agreements with
the equipment manufacturers for all equipment.

     

    (d)           Operator
agrees to provide Owner with a copy of manufacturers’ warranty agreements
regarding all equipment.  Operator agrees to confirm to Owner that:
the manufacturers’ warranties continue in full force and effect, should Owner so
request.

     

    
      Section
2.6.           Record-keeping
Documentation.

    

     

    (a)           Operator
shall keep and maintain a separate “Maintenance Specification
Log” for the System in a paper or electronic format, a copy of which will
be submitted, in paper or electronic format, to Owner along with the
corresponding Annual Reports, The Maintenance Specification Log shall be kept
available at the Site for Owner’s inspection.

     

    (b)           It
is expressly agreed between the Parties that any documentation prepared by
Operator during the Term for the purposes of this Agreement shall be directly
prepared for Owner’s benefit and immediately become Owner’s
property.  Any Such documentation shall be stored: by Operator on
behalf of Owner until its final delivery to Owner.  Operator may
retain a copy of all records related to the System for future
analysis.


    
      
         


      

      
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      Section
2.7.           Remote:
Monitoring.  For purposes of determining when repair services
are necessary, Operator shall monitor and evaluate the information gathered
through remote monitoring of the System as well as the maintenance and
inspection report, provided that no such monitoring or evaluating (or lack
thereof) shall relieve the Operator of any of its obligations under this
Agreement.

    

     

    
      Section
2.8.           Costs and
Expenses.

    

     

    (a)           Except
as specifically provided to the contrary in this Agreement, during the Term, the
Operator shall bear all costs and expenses of whatever nature for the
performance of the System Services, including travel and personnel expenses,
making repairs to the System as well as the costs of replacing materials,
equipment, components, parts and supplies save to the extent that the cost of
such materials, equipment, components, parts and supplies are recoverable under
any manufacturer’s warranties in which case the provisions of Section 1.5 shall
apply.

     

    (b)           Operator
shall document any Force Majeure Event and its consequences so that those costs
may be claimed back by Owner from any insurance carried by Owner.

     

    
      Section
2.9.           Insurance.  Throughout
the Term, Operator shall maintain in force insurance meeting the requirements
set forth in the PPA.

    

     

    
      Section
2.10.           General
Obligations of Owner.

    

     

    (a)           Right to
Access.  The Operator, or its authorized agents, employees or
subcontractors, shall have the right to access the Site, to the extent Owner has
such right to access under the Site Lease Agreement, in order to provide
scheduled or unscheduled maintenance activities, maintenance of the grounds,
emergency services, or to conduct other System Services, in all cases, to the
extent that such activities and/or services are within the scope of this
Agreement and are provided in accordance with the terms of this
Agreement.  Subject to the foregoing, Owner shall maintain control
over access to the Site by such persons.  Subject to the foregoing
provisions and to any limitations set forth in the PPA and the Site Lease
Agreement, the Operator shall: have the right to grant access to the Site to any
agent or employee of Operator for performance of the System Services and
additionally to Subcontractors for matters reasonably related to the System
Services.  In the event that the Operator determines that additional
easements, rights of way or the like are necessary for the performance of the
System Services, Owner will cooperate with the Operator in obtaining the
same.  Operator shall, and shall ensure that its agents, employees and
Subcontractors shall, comply with all reasonable requirements of Owner when on
Site and shall indemnify Owner for any losses arising out of or in connection
with a failure by the Operator to comply with its obligations
hereunder.

     

    (b)           Applicable
Permits; Changes in Applicable Law.

     

    (i)           Subject
to clause (ii), the Operator shall be responsible for procuring, obtaining,
maintaining and complying with all Applicable Permits required to own, maintain
and operate the System, and perform the System Services under this
Agreement.


    
      
         


      

      
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    (ii)           Owner
agrees to cooperate with and assist the Operator in obtaining the Applicable
Permits.  Notwithstanding anything in this Agreement to the contrary
(including but not limited to this subsection (b)), Operator shall be required
to comply with Applicable Law as in effect on the date of this Agreement at no
additional charge to Owner.  Following the date of this Agreement, any
costs incurred by the Operator in performing its obligations hereunder resulting
from changes in Applicable Permit conditions or requirements, or changes in
Applicable Law, shall be borne by Owner except to the extent it does not involve
an increase in the scope of System Services.

     

    (c)           Storage.  Subject
to the Site Lease Agreement, to the extent the Operator has been allowed to
establish space in any inverter or transformer building on the Site and to the
extent that any such use is permitted under Applicable Law and is consistent
with Industry Standards, the Operator may use such space (i) for storing parts
and supplies necessary for the performance of the System Services, and (ii) for
a small office with a desk and computer as required for the performance of the
System Services.  At the Operator’s option and upon the approval of
Owner, additional storage sheds may be installed at the Site at the Operator’s
expense, Operator must seek and obtain building permits and other local permits
and approvals required in connection therewith and Owner shall cooperate in
obtaining such permits and approvals.  Operator shall maintain any
space utilized by it under this subsection (c) in accordance with this Agreement
as if it were part of the System Services and shall be required (at its own
cost), if requested by Owner to remove any storage sheds installed at the Site
at the end of the Term.

     

    (d)           Duty to
Cooperate.  Owner shall cooperate with the Operator in taking
all actions reasonably requested by the Operator to ensure that parties with
whom Owner has agreements or relationships that are essential to the System
Services are available and able to perform as contemplated in this
Agreement.  Owner shall be directly responsible for all utility costs
of the System except to the extent that such costs arise as a result of the
omission, neglect or default of the Operator.

     

    (e)           Further
Obligations of Owner.  Throughout the Term, Owner shall agree
to review and approve in a timely fashion all reasonably recommended repairs
permitted under this Agreement in accordance with any schedule agreed in
relation to such repairs.

     

    
      Section
2.11.           Party
Representatives.

    

     

    (a)           Owner
Representative.  Owner designates and the Operator agrees to
accept, any authorized officer, representative or member of Hoku Solar, Inc. as
Owner Representative for all matters relating to Owner’s performance under this
Agreement.  The actions taken by Owner Representative regarding such
performance shall be deemed the acts of Owner and shall be fully binding for
Owner.  Owner may, upon written notice to the Operator pursuant to
Section 4.9, change the designated Owner Representative.

     

    (b)           Operator
Representative.  Operator designates, and Owner agrees to
accept, any authorized officer, representative or member of the Owner as
Operator Representative for all matters relating to Operator’s performance under
this Agreement.  The actions taken by Operator Representative shall be
deemed the acts of Operator and shall be fully binding for
Operator.  Operator may, upon written notice to Owner, pursuant to
Section 4.9, change the designated Operator Representative.


    
      
         


      

      
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      Section
2.12.           Metering.

    

     

    (a)           Responsibility
for Operator’s meters and related performance monitoring equipment including,
without limitation, those meters that relate to the inverters (but excluding all
utility meters) shall be as set out in this Section 2.12.

     

    (b)           Testing.

     

    (i)           Operator
shall arrange for the testing and calibration of all meters referred to in
subsection (a) above (“Operator Meters”) on
installation and thereafter on a regularly scheduled basis, but no more than
once every twelve (12) months unless the applicable manufacturer’s
recommendations do not recommend such frequency of testing and calibration, in
which case, the Operator shall comply with the such manufacturer’s
recommendations.

     

    (ii)           No
more than once in any 12-month period, Owner shall have the right to direct
Operator to arrange for the testing of any Operator Meter or measuring
equipment; provided, however, that (1)
Owner has reasonable grounds to suspect that such Operator Meter or measuring
equipment is not accurate in any respect and (2) Owner shall have notified
Operator of the discrepancy or suspected discrepancy in writing along with any
evidence in support of such claim.  Operator shall not hamper, impair
or otherwise improperly manipulate any Operator Meters in order to affect their
performance analysis.

     

    (c)           Testing
Costs.  The costs of all testing pursuant to this Section 2.12
shall be borne by the Operator except in the case of testing carried out at the
instigation of Owner which shall be borne by the Operator, if such testing
reveals the relevant Operator Meters to be outside the accuracy standards
referred to in this Section 2.12, and by Owner if within such accuracy
standards.

     

    (d)           Meters.  Owner
shall grant to the Operator read-only access to meters as allowed under the Site
Lease Agreement.  Owner and the Operator shall be permitted (following
reasonable notice of the testing dates) to be present during the calibration
activities with respect to meters.

     

    Section
2.13.           Service
Fees.   As
compensation for provision of the System Services by Operator, Owner shall pay
Operator an annual fee in an amount equal to [*], inflating at [*]% annually,
for each year during the Term, which fee shall be paid in equal quarterly
installments on the last Business Day of each March, June, September and
December in each Measurement Year (all such fees, collectively the “Service
Fees”).


    
      
         


      

      
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    ARTICLE
3. TERM

     

    
      Section
3.1.           Term.

    

     

    (a)           Subject
to the provisions of subsections (c) to (e) of this Section 3.1, the term of
this Agreement (the “Term”), including,
without limitation, the period during which System Services are to be provided
for the System.

     

    (i)           Shall
commence on Completion Date (as defined in the Operating Agreement);
and

     

    (ii)           shall,
subject to the provisions of Section 3.2(f) and any earlier termination in
accordance with Section 3.2, terminate on the ten (10) year anniversary of the
Completion Date (the “Initial
Term”).

     

    (b)           Termination
of this Agreement shall be without prejudice to the Operator’s right to receive
a proportional amount of the Service Fees that have accrued up to the date of
termination.

     

    (c)           No
later than ninety (90) days prior to the end of the Initial Term, Owner may
request that the term of this Agreement be extended by an additional period
specified in such request

     

    (d)           If
Owner delivers a request under subsection (c), then not later than sixty (60)
days prior to the end of the Initial Term, the Operator may, in its sole and
absolute discretion, provide to Owner its proposals as to the fee applicable for
the additional period and as to any other amendments to this Agreement that are
proposed by the Operator for any extension of the Agreement.

     

    (e)           Not
more than thirty (30) days after submission by the Operator of its proposals as
to the fee, and any proposed amendments to this Agreement Owner shall inform the
Operator whether any such proposals are rejected or accepted and the Parties
shall then;

     

    (i)           in
good faith and in a timely fashion, negotiate and use their reasonable efforts
to determine whether they can agree upon the terms of any such extension (though
neither Party shall be under any obligation to do so); and

     

    (ii)           to
the extent a mutually acceptable a cement is reached, execute such further
documents as may be necessary to give effect thereto.

     

    
      Section
3.2.           Termination
on Default.

    

     

    (a)           By
Owner. Owner may terminate this Agreement in the event of any of the
following:

     

    (i)           the
Operator becomes Insolvent; or


    
      
         


      

      
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    (ii)           any
failure by the Operator to perform any of its material obligations under this
Agreement, which failure is not remedied within thirty (30) days of written
notice of such failure from Owner to Operator; provided that (1) if
such failure can be remedied, (A) such failure cannot reasonably be remedied
within such thirty (30) day period and (B) Operator commences cure of such
failure within such thirty (30) day period and thereafter diligently seeks to
remedy such failure, then Owner shall not be entitled to terminate this
Agreement until such time as the Operator ceases all reasonable endeavors to
cure such failure unless such failure continues, for a period of a ninety (90)
days from the original written notice from Owner, and (2) where such failure is
incapable of remedy at the end of the thirty (30) day period, the Operator has
not taken all steps reasonably necessary so as to prevent any further failure by
it to perform its obligations under this Agreement, or

     

    (iii)           a
Force Majeure Event occurs which prevents the Operator from providing a material
part of the System Services for a continuous period of at least ninety (90) days
and Owner reasonably concludes such prevention is not reasonably likely to be
remedied within a further period of ninety (90) days.

     

    (b)           By
Operator.  Operator may terminate this Agreement in the event
of any of the following:

     

    (i)           Owner
fails to pay to the Operator any amounts due under this Agreement (other than
any amounts which are the subject of a bona fide dispute) within thirty (30)
days of written notice of such failure from the Operator to Owner;
or

     

    (ii)           Material
breach by Owner of any of its obligations under this Agreement which materially
impairs Operator’s ability to perform its obligations under this Agreement which
breach is not remedied within thirty (30) days of written notice of such failure
from the Operator to Owner; provided that (1) if
such failure can be remedied, (A) such failure cannot reasonably be remedied
within such thirty (30) day period, and (B) Owner commences cure of such failure
within such thirty (30) day period and thereafter diligently seeks to remedy
such failure, then the Operator shall not be entitled to terminate this
Agreement until such time as Owner ceases reasonable efforts to cure such
failure unless such failure continues for a period of ninety (90) days from the
original written notice from the Operator, and (2) where such failure is
incapable of remedy at the end of the thirty (30) day period, Owner has not
taken all steps reasonably necessary so as to prevent any further failure, by it
to perform its obligations under this Agreement; or

     

    (iii)           Owner
becomes Insolvent.

     

    
      Section
3.3.           Termination
Generally.

    

     

    (a)           Without
prejudice to its other rights under this Agreement, Owner shall be entitled to
terminate this Agreement on giving one hundred and eighty (180) days written
notice to the Operator.

     

    (b)           A
notice of termination given pursuant to the foregoing provisions of this Section
3.2 (the “Termination
Notice”) shall specify in reasonable detail the circumstances giving rise
to the Termination Notice.  Except to the extent otherwise provided
herein, this Agreement shall terminate on the date specified in the Termination
Notice, which date shall not be earlier than the date upon which the applicable
Party is entitled to effect such termination as provided above.


    
      
         


      

      
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    (c)           Termination
of this Agreement shall not affect any rights or obligations as between the
Parties which may have accrued prior to such termination or which expressly or
by implication are intended to survive termination whether resulting from the
event giving rise to termination or otherwise.

     

    
      Section
3.4.           Access to
Data and Meters.  Throughout the Term, and thereafter to the
extent relevant to calculations necessary for periods prior to the end of the
Term and subject to any confidentiality obligation owed to any third party
and/of any restrictions on the disclosure of information which may be subject to
intellectual property rights restricting disclosure:

    

     

    (a)           Owner
shall allow the Operator access to all data relating to the electricity
production of the System and the weather conditions at the Site, it being
understood: it is the Operator’s responsibility to determine the performance of
the System, and any other calculations as required under this Agreement, and
that it is Owners’ responsibility to handle all accounting and invoicing
activities; and

     

    (b)           Owner
shall allow the Operator access to air data from all meters which measure
conditions at the Site or for the System, or which measure the electricity
production of the System.

     

    (c)           Operator
shall be entitled to use the foregoing data for its internal purposes and, with
the written agreement of Owner (not to be unreasonably withheld), make such data
available to third parties for analysis.

     

    
      Section
3.5.           Indemnities.

    

     

    (a)           Operator
shall fully indemnify, save harmless and defend Owner from and against any and
all costs, claims, and expenses .incurred by Owner in connection with or arising
from any claim by a third party for physical damage to or physical destruction
of property, or death of or bodily injury to any person, but only to the extent
howsoever caused or arising out of or related to Operator’s performance under
this Agreement except in the event of (i) gross negligence or willful misconduct
of Owner or its agents or employees or others under Owner’s control or (ii) a
breach by Owner of its obligations hereunder; provided, that the
aggregate liability of the Operator in any event shall be subject to the
provisions of Section 3.6.

     

    (b)           Owner
shall fully indemnify, save harmless and defend Operator from and against any
and all costs, claims, and expenses incurred by Operator in connection with or
arising from any claim by a third party for physical damage to or physical
destruction of property, or death of or bodily injury to any person, but only to
the extent howsoever caused or arising out of or related to Owner’s performance
under this Agreement except in the event of (i) gross negligence or willful
misconduct of Operator or its agents or employees or others under Operator’s
control or (ii) a breach by Operator of its obligations hereunder; provided,
that the aggregate liability of Owner in any event shall be subject to the
provisions of Section 3.6.


    
      
         


      

      
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    (c)           Each
Party shall indemnify, defend and hold the other Party, and its present and
future direct and indirect parents, subsidiaries and affiliates and their
directors, officers, shareholders, employees, agents and representatives
harmless from and against any and all claims, actions suits, proceedings,
losses, liabilities, penalties, damages, costs or expenses (including reasonable
attorneys’ fees and disbursements) of any kind whatsoever arising from (a)
actual or alleged infringement or misappropriation by such Party (or in the case
of Operator, any Subcontractor) of any patent, copyright, trade secret,
trademark, service mark, trade name, or other intellectual property right in
connection with the System, including without limitation, any deliverable, (b)
such Party’s (or in the case of Operator, any Subcontractor’s) violation of any
third-party license to use intellectual property in connection with the System
Services, including, without limitation, any deliverable,

     

    (d)           If
any claim is brought against a Party (the “Indemnifying Party”),
then the other Party (the “Indemnified Party”)
shall be entitled to participate in, and, unless in the opinion of counsel for
the Indemnifying Party a conflict of interest between the Parties may exist with
respect to such claim, assume the defense of such claim, with counsel reasonably
acceptable to the Indemnifying Party.  If the Indemnified Party does
not assume the defense of the Indemnifying Party, or if a conflict precludes the
Indemnified Party from assuming the defense, then the Indemnified Party shall
reimburse the Indemnifying Party on a monthly basis for the Indemnifying Party’s
defense through separate counsel of the Indemnifying Party’s choice, Even if the
Indemnified Party assumes the defense of the Indemnifying Party with acceptable
counsel, the Indemnifying Party, at its sole option, may participate in the
defense, at its own expense, with counsel of its own choice without relieving
the Indemnified Party of any of its obligations hereunder.

     

    
      Section
3.6.           Limitation
of Liability.

    

     

    (a)           IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THE TERMS OF
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, COSTS OF PROCUREMENT
OF SUBSTITUTE GOODS OR SERVICES OR BUSINESS INTERRUPTION, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT FOR LOSS OR DAMAGE
ARISING OUT OF SUCH PARTY’S WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE.  IN ADDITION, WHETHER AN ACTION OR CLAIM IS BASED ON
WARRANTY, CONTRACT, TORT OR OTHERWISE, UNDER NO CIRCUMSTANCE SHALL SUCH PARTY’S
TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED FIVE HUNDRED
THOUSAND DOLLARS ($500,000), WHICH AMOUNT SHALL BE SEPARATE AND APART FROM THE
PAYMENT OF THE PURCHASE PRICE.

     

    (b)           The
exclusions of liability in subsection (a) above shall not limit the liability of
either Party under any section where one Party is required to indemnify the
other Party.

     

    
      Section
3.7.           Force
Majeure Event.

    

     

    (a)           Neither
Party shall be considered to be in default of its obligations under this
Agreement when and to the extent that performance of such obligations is
prevented by any Force Majeure Event which arises after the date of this
Agreement.


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    (b)           If
either Party shall rely on the occurrence of a Force Majeure Event as a basis
for being excused from the performance of its obligations under this Agreement,
then the Party relying on the event or condition shall (i) provide prompt
written notice, in any event within forty-eight (48) hours from the occurrence
of the Force Majeure Event, to the other Party of the occurrence of the Force
Majeure Event giving an estimation of its expected duration and the probable
impact on the performance of its obligations hereunder; (ii) exercise all
commercially reasonable efforts to continue to perform its obligations
hereunder; (iii) expeditiously take any action within its reasonable control to
correct or cure the Force Majeure Event excusing performance; (iv) exercise all
commercially reasonable efforts to mitigate or limit damages to the other Party
to the extent such action will not adversely affect its own interests; and (v)
provide periodic notices tithe other Party with respect to its actions and plans
for actions in accordance with (ii), (in) and (iv) above and promptly notify to
the other Party of the cessation of the event or condition giving rise to it
being excused from performance.

     

    (c)           In
the event that the Operator is prevented from providing all or part of the
System Services as a result of a Force Majeure Event for a continuous period of
thirty (30) days and it is reasonably expected that the Operator will not be
able to resume full performance of the System Services within an additional
thirty (30) days, Owner shall be entitled to require the Operator to reduce the
scope of the System Services commencing as from the date notified by Owner until
such time as the Operator can demonstrate to the reasonable satisfaction of
Owner that the Operator is able to resume full performance of the System
Services.

     

    ARTICLE
4. MISCELLANEOUS

     

    
      Section
4.1.           Governing
Law.  This.  Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard
to its choice of law provisions.

    

     

    
      Section
4.2.           Amendments.  No
amendment to this Agreement shall be binding on the Parties unless set out in
writing, expressed to vary this Agreement, and signed by authorized
representatives of each of the Parties.

    

     

    
      Section
4.3.           No
Waiver.  No provision of this Agreement shall be considered
waived by either Party except when such waiver is made in writing executed by
the Party so waiving.  The failure of either Party to insist, on one
or more occasions, upon strict performance of any of the provisions of this
Agreement or to take advantage of its rights hereunder or the delay or failure
in exercising totally or partially any right or remedy under this Agreement,
shall not be construed as a waiver of any such provisions or the relinquishment
of any such rights or any other rights for the future, but the same shall
continue and remain in full force and effect.

    

     

    
      Section
4.4.           Successors
and Assigns.

    

     

    (a)           Except
as set forth in subsection (b) of this Section 4.4, no Party shall be entitled
to assign this Agreement or any of its rights or obligations under this
Agreement, not; shall it enter into any transaction as a result of which it may
transfer, assign, charge or dispose by any title of any of those rights and
obligations, without the prior written consent of the other Party, which may be
withheld in its acme and absolute discretion.


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    (b)           Notwithstanding
the foregoing, (i) Owner shall be entitled to assign its right, title and
interest in and to this Agreement (and, in particular, any rights arising in
relation to any insurance policy and any other right to collect any amount from
Operator) to any lenders by way of security for the performance of obligations
to such lenders without the consent of the Operator; and (ii) either Party shall
be entitled to assign its right, obligation, title and interest in and to this
Agreement to any of its affiliates or in connection with a merger or acquisition
of the Party so long as such Party’s assignee shall agree to be bound by the
terms and conditions hereof

     

    
      Section
4.5.           Nondisclosure.  Each
Party (the “Receiving Party”)
shall not use for any purpose other than performing the System Services under
this Agreement or divulge, disclose, produce, publish, or permit access to,
without the prior written consent of the other Party (the “Disclosing Party”), any confidential
information of the Disclosing Party.  Confidential information
includes, without limitations, this Agreement and exhibits hereto, all
information or materials prepared in connection with the System Services
performed under this or any related subsequent Agreement, designs, drawings,
specifications, techniques, models, data documentation, source code, object
code, diagrams, flow charts, research, development, processes, procedures
know-how, manufacturing, development or marketing techniques and materials,
development or marketing timetables, strategies and development plans, customer,
supplier or personnel names and other information related to customers,
suppliers or personnel, pricing policies and financial information, and other
information of a similar nature, whether or not reduced to writing or other
tangible form, and any other trade secrets.  Confidential information
does not include (a) information known to the Receiving Party prior to obtaining
the same Disclosing Party; (b) information in the public domain at the time of
disclosure by the Receiving Party; or (c) information obtained by the Receiving
Party from a third party who did not receive same, directly or indirectly, from
the Disclosing Party.  the Receiving Party shall use the higher of the
standard of care that the Receiving Party uses to preserve its own confidential
information or a reasonable standard of care to prevent unauthorized use or
disclosure of such confidential information.  Notwithstanding anything
herein to the contrary, the Receiving Party has the right to disclose
Confidential Information without the prior written consent of the Disclosing
Party: (i) as requested or required by any court or other Governmental Authority
or by any stock exchange the shares of any Party are listed on, (ii) as
otherwise required by law, (iii) as advisable required in connection with any
government or regulatory filings, including without limitation, filings with any
regulating authorities covering the relevant financial markets, (iv) to its
attorneys, accountants, financial advisors or other agents, in each case bound
by confidentiality obligations, (v) to banks, investors and other financing
sources and their advisors, in each case bound by confidentiality obligations,
(vi) in connection with an actual prospective merger or acquisition or similar
transaction where the party receiving the Confidential Information is bound by
confidentiality obligations, or (vii) to the extent necessary or appropriate to
allow a Party to enforce its rights under this Agreement.  If a
Receiving Party believes that it will be compelled by a court or other
Governmental Authority to disclose Confidential Information of the Disclosing
Party, it shall give the Disclosing Party prompt written notice so that the
Disclosing Party may determine whether to take steps to oppose such disclosure
at Disclosing Party’s discretion and sole cost.

    


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    
      Section
4.6.           Representations
and Warranties.

    

     

    (a)           Representations
and Warranties of Owner.

     

    Owner is
a limited liability company duly organized and existing in good standing under
the laws of the State of California and is qualified to do business in the State
of Hawaii.

     

    Owner
possesses all requisite power and authority to enter into and perform this
Agreement and to carry out the transactions contemplated herein.

     

    Owner’s
execution, delivery and performance of this Agreement have been duly authorized
and this Agreement has been duly executed and delivered and constitutes Owner’s
legal, valid and binding obligation, enforceable against Owner in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency and other legal principles pertaining to creditor’s
rights.

     

    Except as
otherwise contemplated herein, no material consent or approvals are required in
connection with the execution, delivery and performance by Owner of this
Agreement.

     

    The
execution, delivery and performance by Owner of this Agreement will not (A)
violate any Applicable Law applicable to Owner, (B) result in any breach of, or
constitute any default under, and contractual obligation of Owner or (C) result
in, or require, the imposition of a Lien on any of the properties or revenues of
Owner.

     

    (b)           Representations
and Warranties of Operator.

     

    (i)           Operator
is a corporation duly organized and existing in good standing under the laws of
the State of Delaware and is qualified to do business in the State of
Hawaii.

     

    (ii)           Operator
possesses all requisite power and authority to enter into and perform this
Agreement and to carry out the transactions contemplated herein

     

    (iii)           Operator’s
execution, delivery and performance of this Agreement have been duly authorized
and this Agreement has been duly executed and delivered and constitutes
Operator’s legal, valid and binding obligation, enforceable against Operator in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency and other legal principles pertaining to creditor’s
rights.

     

    (iv)           Except
as otherwise contemplated herein, n material consent or approvals are required
in connection with the execution, delivery and performance, by Operator of this
Agreement.

     

    (v)           The
execution, delivery and performance, by Operator of this Agreement will not (A)
violate any Applicable Law applicable to Operator, (B) result: in any breach of
or constitute any default under, and contractual obligation of Operator or (C)
result ire or require, the imposition of a Lien on any of the properties or
revenues of Operator.

    

      
        
           


        

        
          14

          
            

          

        

        
           


        

      

    

    
       

      Section
4.7.           Additional
Documents and Acts; Financial Statements of Operator.  Each
Party agrees to execute and deliver such additional documents and instruments
and to perform such additional acts as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions, and conditions
of this Agreement and the transactions contemplated by this
Agreement.  Operator shall provide to Owner during the Term its latest
audited annual financial statements as soon as those are available (which shall
be deemed to be upon public disclosure thereof to the extent Operator is the
wholly owned subsidiary of a publicly traded company, and has financial
statements consolidated with those of its parent
corporation).

    


    
      Section
4.8.           Independent
Contractors.  The Parties acknowledge that, save as expressly
set out in this Agreement to the contrary, each Party is entering into this
Agreement as an independent contractor and nothing in this Agreement shall be
interpreted or applied so as to make the relationship of any of the Parties that
of partners, joint ventures or anything other than independent
contractors.

    

     

    
      Section
4.9.           Notices.  Any
notice, request, demand or other communication required or permitted under this
Agreement, shall be deemed to be properly given by the sender and received by
the addressee if made in writing and (a) if personally delivered; (b) three (3)
days after deposit in the mail if mailed by certified or registered air mail,
post prepaid, with a return receipt requested; or (c) if sent by facsimile with
confirmation.  Mailed notices and facsimile notices shall be addressed
as follows to:

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Owner:

                              	 
      	
                                Hoku
      Solar, Inc.

                              
	 
      	 
      	
                                1288
      Ala Moana Blvd.

                              
	 
      	 
      	
                                Suite
      220

                              
	 
      	 
      	
                                Honolulu,
      HI  96814

                              
	 
      	 
      	
                                Attention:
      Dustin Shindo

                              
	 
      	 
      	
                                Telephone:
      (808) 682-7800

                              
	 
      	 
      	
                                Facsimile:  (808)
      440-0357

                              
	 
      	 
      	 
      
	
                                With copies to: 

                              
	 	 
	
                                 

                              	
                                UFA
      Renewable Energy Fund I

                              
	 
      	 
      	
                                c/o
      United Fund Advisors, LLC

                              
	 
      	 
      	
                                24
      NW 1st
      Avenue, Suite 470

                              
	 
      	 
      	
                                Portland,
      OR 97209

                              
	 
      	 
      	
                                Attention:
      ITC Asset Manager

                              
	 
      	 
      	
                                Telephone:
      (503) 226-1370

                              
	 
      	 
      	
                                Facsimile:
      (503) 796-5865

                              
	
                                and 

                              	 	 
	 	 	 
	
                                 

                              	 
      	
                                Firstar
      Development LLC

                              
	 
      	 
      	
                                1307
      Washington Avenue, Suite 300

                              
	 
      	 
      	
                                Saint
      Louis, MO 63103

                              
	 
      	 
      	
                                Attention:  Director
      of Asset Management—Solar

                              
	 
      	 
      	
                                Telephone:  (314)
      335-2600

                              
	 
      	 
      	
                                Facsimile:  (314)
      335-2602

                              


                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         


      

      
        15

        
          

        

      

      
         


      

    


    
      
        
          
            
              	
                      Operator:

                    	 
      	
                      Hoku
      Solar Power I, LLC

                    
	 
      	 
      	
                      1288
      Ala Moana Blvd.

                    
	 
      	 
      	
                      Suite
      220

                    
	 
      	 
      	
                      Honolulu,
      HI  96814

                    
	 
      	 
      	
                      Attention:
      Dustin Shindo

                    
	 
      	 
      	
                      Telephone:
      (808) 682-7800

                    
	 
      	 
      	
                      Facsimile:  (808)
      440-0357

                    


            

          

        

      

    

     

    
      Section
4.10.           Dispute
Resolution.

    

     

    (a)           Good Faith
Negotiations.  In the event that any question, dispute,
difference or claim arises out of or is in connection with this Agreement,
including any question regarding its existence, validity, performance or
termination (a “Dispute”), which
either Party has notified to the other, senior management personnel from both
the Operator and Owner shah meet and diligently attempt in good faith to resolve
the Dispute for a period of thirty (30) days following one Party’s written
request to the other Party for, such a meeting.  If, however, either
Party refuses or fails to so meet, or the Dispute is not resolved by
negotiation, the provisions of subsections (b) and (c) of this Section 4.10
shall apply.

     

    (b)           Technical
Dispute.  All Disputes of a purely technical nature (“Technical Disputes”)
shall be resolved on an accelerated basis by one of the following institutions
unless otherwise agreed in writing by the Operator and Owner;

     

    Sandia National
Laboratories;

     

    National Renewable Energy Laboratory;
and

     

    Arizona State University Photovoltaic
Test Lab.

     

    (c)           Arbitration.  Any
Dispute that is not settled to the mutual satisfaction of the Parties within the
applicable notice or cure periods provided in this Agreement or settled pursuant
to subsection (b) of this Section 4.10 shall be settled by arbitration between
the Parties conducted in San Francisco, California, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
on the date that a Party gives notice of its demand for arbitration under this
Section.  The submitting Party Shall submit such Dispute to
arbitration by providing a written demand for arbitration to the other Party and
the Parties shall select a single neutral arbitrator with significant contract
resolution experience and experience and understanding of the contemporary solar
photovoltaic power industry and photovoltaic systems.  If the Parties
cannot agree on a single neutral arbitrator within fifteen (15) Business Days
after the written demand for arbitration is provided, then the arbitrator shall
be selected pursuant to the Commercial Arbitration Rules of the American
Arbitration Association in effect on the date such selection is to be
made.  Once at arbitrator has been selected, the Parties may then
commence with and engage in discovery in connection with the arbitration as
provided by Delaware statutes and shall be entitled to submit expert testimony
or written documentation in such arbitration proceeding.  The decision
of the arbitrator shall be final and binding upon Owner and Operator and shall
be set forth in a reasoned opinion, and any award may be enforced by Owner or
Operator, as applicable, in a court of competent jurisdiction.  Any
award of the arbitrator shall include interest from the date of any damages
incurred for breach or other violation of this Agreement, and from the date of
the award until paid in full, at the rate of the lesser of one percent (1%) per
month and the maximum rate allowed by Applicable Law.  Each of Owner
and Operator shall bear its own cost of preparing and presenting its case; provided, however, the Parties
agree that the prevailing party in such arbitration shall be awarded its
reasonable attorney’s fees, expert fees, expenses and costs incurred in
connection with the Dispute.  The cost of the arbitration, however,
including the fees and expenses of the arbitrator, shall initially be shared
equally by Owner and Operator, subject to reimbursement of such arbitration
costs and attorney’s fees and costs to the prevailing party.  The
arbitrator shall be instructed to establish procedures such that a decision can
be rendered within sixty (60) days of the appointment of the
arbitrator.


    
      
         


      

      
        16

        
          

        

      

      
         


      

    


    
      Section
4.11.           Time of
Essence. Time expressly agreed to be of the essence of this Agreement and
each, every and all of the terms, conditions and provisions
herein.

    

     

    
      Section
4.12.           Construction.  The
billowing rules of construction and interpretation shall govern the construction
and interpretation of this Agreement:

    

     

    (a)           Days.  Any
reference to days in this Agreement shall mean calendar days unless otherwise
specified.

     

    (b)           Number
and Gender.  Whenever, in this Agreement, the singular number
is used, the same shall include the plural and the neuter, masculine and
feminine genders shall include each other, as the context may
require.  All numbering in this Agreement shall use English numbering
conventions.

     

    (c)           Interpretation
and Joint Drafting.  The Patties expressly agree that this
Agreement was jointly drafted and that each had the opportunity to negotiate its
ter es and to obtain the assistance of counsel in reviewing its terms prior to
execution.  The language in all parts of` this Agreement shall be in
all cases construed according to its fair meaning and not strictly for or
against any of the Parties.  In the event any claim is made by any
Party relating to any conflict, omission or ambiguity in this Agreement no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular Party
or counsel for any particular Party.

     

    (d)           Completed
Agreement.

     

    (i)           This
Agreement, including all Exhibits and Schedules attached hereto and incorporated
herein by this reference, and any agreements executed by the Parties on the date
of this Agreement contain the whole agreement between the Parties relating to
the transactions contemplated by this Agreement and supersedes all previous
agreements between the Parties relating to these transactions.

     

    (ii)           Each
party acknowledges that, in agreeing to enter into this Agreement, it has not
relied on any representation, warranty, collateral contract or other assurance
(except those repeated in this Agreement and any other agreement entered into on
the date of this Agreement between the Parties) made by or on behalf of any
other party at any time before the signature of this Agreement.  Each
party waives all rights and remedies which, but for this clause (ii), might
otherwise be available to it in respect of any such representation, warranty,
collateral contract or other assurance.


    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    (e)           Article
and Section References.  All cross-references in this Agreement
to articles, sections and subsections, unless specifically directed to another
agreement or document, refer to articles, sections and subsections of this
Agreement,

     

    (f)           Cautions.  The
titles of the various exhibits, schedules or attachments to this Agreement and
of the various articles, sections or subsections of this Agreement;

     

    (i)           are
inserted for convenience, identification and ease of reference purposes
only,

     

    (ii)           do
not form part of this Agreement, and

     

    (iii)           are
in no way intended to define or limit the scope, extent or intent of this
Agreement or any of the provisions of this Agreement and shall not in any way
affect the interpretation, application or construction of this Agreement or any
of the provisions of this Agreement.

     

    (g)           Severability.  The
provisions contained in each section, subsection and clause of this Agreement
shall be enforceable independently of each of the others and their validity
shall not be affected if any of the others are invalid.  If any of
those provisions is void but would be valid if some part of the provision were
deleted, the provision in question shall apply with such modification as may be
necessary to make it valid.

     

    (h)           Multiple
Counterparts.  This Agreement and any amendments of this
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.

     

    [Signature
Page Follows]


    
      
         


      

      
        18

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first above
written.

     

    
      
        	
                HOKU
      SOLAR POWER I, LLC

              	 
      	
                HOKU
      SOLAR, INC.

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                Hoku
      Solar, Inc. its managing member

              	 
      	
                By:

              	
                /s/ Scott Paul

              
	 
      	 
      	 
      	
                Name:

              	
                Scott
      Paul

              
	
                By:

              	
                /s/ Scott Paul

              	 
      	
                Title:

              	
                Chief
      Operating Officer

              
	
                Name:

              	
                Scott
      Paul

              	 
      	 
      	 
      
	
                Title:

              	
                Chief
      Operating Officer

              	 
      	 
      	 
      


      

    

     

    
      Hoku
Solar

      Signature
Page to Purchase and Sale and Operation and Maintenance
Agreement

    

    
      
         


      

      
        19

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the
undersigned has executed this Agreement as of the date first above written
solely for the limited purpose set forth below.


     

    
      
        	
                INVESTOR MEMBER (solely to evidence
      its

                consent
      to the execution of this Agreement by

                the
      Owner):

              
	 
      	 
      
	
                UFA
      RENEWABLE ENERGY FUND I, LLC, a Delaware limited liability
      company

              
	 
      	 
      
	
                By:

              	
                United
      Fund Advisors LLC, its

                Managing
      Member

              
	 
      	 
      
	
                By:

              	
                /s/ Chris Hasle

              
	
                Name:

              	
                Chris
      Hasle

              
	
                Title:

              	
                Senior
      Vice President

              


      

    

     

    
      Hoku
Solar

      Signature
Page to Purchase and Sale and Operation and Maintenance
Agreement

    

    
      
         


      

      
        20

        
          

        

      

      
         


      

    


    EXHIBIT
A

    to

     

    OPERATION
AND MAINTENANCE AGREEMENT

     

    DEFINED
TERMS

     

    As used
in the Agreement to which this Exhibit A is attached, the following terms shall
have the meanings set forth below:

     

    Agreement
means this Operation and Maintenance Agreement as it may be amended and/or
restated from time to time.

     

    Annual
Reports has the meaning given in Section 2.4(a).

     

    Applicable
Law shall mean, with respect to any Governmental Authority, any
constitutional provision, law, statute, rule, regulation, ordinance, treaty,
order, decree, judgment, decision, certificate, injunction, registration,
license, permit, authorization, guideline, governmental approval, consent or
requirement of such Governmental Authority, as construed from time to time by
any Governmental Authority.

     

    Applicable
Permits shall mean all permits, waivers, authorizations or licenses
issued or required to be issued by any Governmental Authority having
jurisdiction over the System and its ownership, operation and
maintenance.

     

    Business
Day means a day (other than a Saturday or Sunday) on which banks are
generally open in Delaware for normal business.

     

    Completion
Date means the date on which construction of the System is sufficiently
complete as such term is defined in the Operating Agreement.

     

    Development
Agreement shall mean the Development Services Agreement between Owner and
Operator dated as of even date herewith.

     

    Disclosing
Party has the meaning given in Section 4.5.

     

    Dispute
has the meaning given in Section 4.10(a).

     

    Force
Majeure Event shall mean, when used in connection such the performance of
a Party’s obligations under this Agreement, any act or event (to the extent not
caused by such Party or its agents or employees) which is unforeseeable, or
being foreseeable, unavoidable and outside the control of the Party which
invokes it, and which renders said Party unable to comply totally or partially
with its obligations under this Agreement.  In particular, any of the
following shall be considered a Force Majeure Event:

     

    (a)           nets
(whether or not war is declared), hostilities, revolution, rebellion,
insurrection against any Governmental Authority, riot, terrorism, acts of a
public exit my or other civil disturbance; and


    
      
         


      

      
        21

        
          

        

      

      
         


      

    


    (b)           acts
of God, including but not limited to, storms, floods, lightning, earthquakes,
hailstorms, ice storms, tornados, typhoons, hurricanes, landslides, volcanic
eruptions, fires, winds in excess of ninety (90) miles per hour, and objects
striking the earth front space (such as meteorites), sabotage or destruction by
a third party (other than any contractor retained by or on behalf of the Party)
of facilities and equipment relating to the performance by the affected Party of
its obligations under this Agreement.

     

    Governmental
Authority Shall mean any national, autonomic, regional, province, town,
city, or municipal government, whether domes tic or foreign, or other
administrative, regulatory or judicial body of any of the
foregoing.

     

    Indemnified
Party has the meaning given in Section 3.5(d).

     

    Indemnifying
Party has the meaning given in Section 3.5(d).

     

    Industry
Standards shall mean those standards of care and diligence normally
practiced by solar engineering, construction and installation firms in
performing services of a similar nature in jurisdictions in which the System
Services will be performed and in accordance with good engineering design
practices, Applicable Permits, and other standards established for such System
Services.  Industry Standards are not intended to be limited to
optimum practice or methods to the exclusion of all others, but rather to be a
spectrum of reasonable and prudent practices and methods that must take the
conditions specific to any given facility into consideration.

     

    Initial
Term has the meaning given in Section 3.1(a)(ii).

     

    Insolvent
means (i) a Party shall file a voluntary petition in bankruptcy or shall be
adjudicated as bankrupt or insolvent, or shall file any petition or answer or
consent seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under the present or
future applicable Federal, state or other statute or law relative to bankruptcy,
insolvency or other relief for debtors, or shall seek or consent to or acquiesce
in the appointment of any trustee, receiver, conservator or liquidator of such
party or of all or any substantial part of its properties (the term “acquiesce”, as used
in this definition, includes the failure to file a petition or motion to vacate
or discharge any order, judgment or decree within fifteen (15) days after entry
of such order, judgment or decree); (ii) a court of competent jurisdiction shall
enter an order, judgment or decree approving a petition filed against a Party
seeking a reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future Federal bankruptcy
act, or any other present or future applicable Federal, state or other statute
or law relating to bankruptcy, insolvency or other relief for debtors, and such
party shall acquiesce and such decree shall remain unvacated and stayed for an
aggregate of sixty (60) days (whether or not consecutive) from the date of entry
thereat or a trnstee, receiver, conservator or liquidator of such party shall be
appointed with the consent or acquiescence of such party and such appointment
shall remain unvacated and unstayed for an aggregate of sixty (60) days, whether
or not consecutive; (iii) a Party shall admit in writing its inability to pay
its debts as they mature; (iv) a Party shall give notice to any governmental
body of insolvency or pending insolvency, or suspension or pending suspension of
operations; or (v) a Party shall make an assignment for the benefit of creditors
or take any other similar action for the protection or benefit of
creditors.


    
      
         


      

      
        22

        
          

        

      

      
         


      

    


    Intellectual
Property means all intellectual property or other proprietary rights of
every kind, including without limitation all patents, registered designs,
unregistered design rights, works subject to the laws of copyright, trade
secrets, processes, trademarks and service marks whether registered or not,
goodwill and know-how and any associated or similar rights (including, in all
cases, applications and right to apply therefor and documentation
thereof).

     

    Lieu
means any mortgage, attachment, claim, charge (fixed or floating), pledge, lien,
option, right to acquire, right of pre-emption, assignment by way of security or
trust agreement for the purpose of providing Lien of any kind (including any
retention arrangement) or any other encumbrances having similar effect, or any
agreement to create any of the foregoing,

     

    Maintenance
Specification Log has the meaning given to it Section 2.6(a) of this
Agreement.

     

    Manuals
means the operation and maintenance procedures manuals prepared from time to
time by the Operator (acting reasonably) and approved by Owner in respect of the
System.

     

    Measurement
Year means:

     

    (a)           in
the case of the first Measurement Year the period from the Completion Date (as
such term is defined in the Operating Agreement) until (and including) the next
occurring 31st
December;

     

    (b)           in
the case of each successive Measurement Year, the 12 calendar month period from
and including 1st January
blanch year until (and including) the next occurring 31st
December;

     

    (c)           in
respect of the last Measurement Year the period from and including 1st January
in the calendar year in which this Agreement expires or terminates in accordance
with its terms until the date that this Agreement expires or terminates in
accordance with its terms; and

     

    (d)           in
respect of any Measurement Year winch experiences a Force Majeure Event, the
periods otherwise applicable under clauses (a) through (c) above shall be
proportionately reduced to account for the duration of such Force Majeure
Event,

     

    Non-Agreed
System Services means any service other than the System
Services.

     

    Operator
has the meaning given in the preamble to this Agreement.

     

    Operator
Meters has the meaning given in Section 2.12(b)(i).

     

    Operator
Representative shall mean the representative of Operator appointed
pursuant to Section 2.11(b).


    
      
         


      

      
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    Parties
means each of Operator and Owner.

     

    Party
means either Operator or Owner.

     

    Operating
Agreement means the Operating Agreement of even date herewith between
Owner and Operator for the design, construction and installation of the System
and governing the obligations of Operator as a managing member of the
Owner.

     

    PPA
means the those certain Power Purchase Agreements between Operator and Hawaii
Department of Transportation Division dated as of September 30, 2008 for the
sale of all power generated from the System, and assigned to the Owner pursuant
to the Operating Agreement.

     

    Project
Documents means (a) Photovoltaic System Supply: and Installation
Agreement, (b) the PPA, and (c) the Site Lease Agreement.

     

    Receiving
Party has the meaning given in Section 4.5.

     

    Site
means those certain parcels of real properly and buildings in the State of
Hawaii, as further described on
Exhibit D hereto.

     

    Site
Lease Agreement mans those certain Use and Occupancy Agreements between
Operator and the State of Hawaii dated as of September 30, 2008 for the lease of
certain rooftop space of each building at the Site, and assigned to the Owner
pursuant to the Operating Agreement.

     

    Owner
has the meaning given in the preamble of this Agreement.

     

    Owner
Representative shall mean the representative of Operator appointed
pursuant to Section 2.11(a).

     

    Service
Fees has the meaning given in Section 2.13.

     

    Spares
means the types of spares set forth in Exhibit C hereto.

     

    Subcontract
means a subcontract under which the Operator subcontracts any of its obligations
under this Agreement.

     

    Subcontractor
means any person to whom the Operator subcontracts any of its obligations under
this Agreement, including the suppliers and any person to whom such obligations
are further subcontracted of any tier.

     

    System
means the photovoltaic systems to be installed, operated and maintained at the
Site.

     

    System
Services means collectively, the services set forth in Exhibit B and Section
12(d).

     

    Technical
Dispute has the meaning given in Section 4.10.


    
      
         


      

      
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    Term
has the meaning given in Section 3.1(a) as the same maybe extended pursuant to
Section 3.1(e).

     

    Termination
Date means
the date at which this Agreement ends.

     

    Termination
Notice has the meaning given in: Section 3.3(b).


    
      
         


      

      
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    Exhibit
B

     

    To

     

    OPERATION
AND MAINTENANCE AGREEMENT

     

    SERVICES

     

    
      	
               
      

            	
              1.

            	
              Preventive
      Maintenance Site Visits: At a minimum, these site visits will be quarterly
      in the first year of operations following the Completion Date and annually
      thereafter,

            


    

     

    
      	
               
      

            	
              ·

            	
              System
      testing (string voltage/amperage)

            


    

    
      	
               
      

            	
              ·

            	
              system
      visual inspection

            


    

    
      	
               
      

            	
              ·

            	
              routine
      system maintenance to include correction of loose electrical connections,
      ground connections, replacement of defective modules found during testing,
      other minor maintenance repair work and field service
      repair.  Landscaping works not
  included

            


    

    
      	
               
      

            	
              ·

            	
              Routine
      DAS maintenance to include sensor calibration and data integrity
      check

            


    

    
      	
               
      

            	
              ·

            	
              Routine
      sensor calibration

            


    

     

    
      	
               
      

            	
              2.

            	
              Troubleshooting
      and repairs

            


    

     

    
      	
               
      

            	
              ·

            	
              Dispatch
      of PI, resources (48 hour response) for
repairs

            


    

    
      	
               
      

            	
              ·

            	
              Major
      system repairs

            


    

     

    
      	
               
      

            	
              3.

            	
              Customer
      Service Support

            


    

     

    
      	
               
      

            	
              ·

            	
              Technical
      support line (8 a.m.- 5 p.m, local
M-F)

            


    

     

    
      	
               
      

            	
              4.

            	
              Major
      components

            


    

     

    
      	
               
      

            	
              ·

            	
              Customer
      advocacy with vendors (PV modules and
Inverters)

            


    

     

    
      	
               
      

            	
              5.

            	
              Reporting

            


    

     

    
      	
               
      

            	
              ·

            	
              Annual
      Performance report

            


    

    
      	
               
      

            	
              ·

            	
              O&M
      Manual updates

            


    

     

    
      	
               
      

            	
              6.

            	
              Other
      System Services

            


    

     

    
      	
               
      

            	
              ·

            	
              Facility
      staff training one time

            


    

    
      	
               
      

            	
              ·

            	
              Performance
      characterization (I-V curve trace) , as determined by
    Operator

            


    

    
      	
               
      

            	
              ·

            	
              O&M
      Manuals – additional copies, as
needed

            


    

    
      	
               
      

            	
              ·

            	
              Management
      of long term service and warranty agreements,
  ongoing

            


    

     

    
      
         


      

      
        26

        
          

        

      

      
         


      

    


    EXHIBIT
C

     

    TO

     

    OPERATION
AND MAINTENANCE AGREEMENT

     

    SPARES


     

    [To be
Inserted]


    
      
         


      

      
        27

        
          

        

      

      
         


      

    


    EXHIBIT
D

     

    TO

     

    OPERATION
AND MAINTENANCE AGREEMENT

     

    DESCRIPTION
OF THE SITE

    


    The seven
buildings at locations set forth below.

    


    Lihue
Airport Passenger Terminal (Building 1)

    Address:
3901 Mokulele Loop # 6, Lihue, Hawaii 96766

    TMK:
350011350000

    


    Kauai
Highways Baseyard (Building 2)

    Address:
1680 Haleukana St., Lihue, Hawaii 96766

    TMK:
330120170000

    


    Kauai
Harbors Baseyard (Building 3)

    Address:
3242 Waapa Road, Lihue, Hawaii 96766

    TMK:
320040480000

    


    Hilo
Airport Passenger Terminal (Building 4)

    Address:
2400 Kekuanaoa St., Hilo, Hawaii 96720

    TMK:
210120910000

    


    Kona
Airport Cargo-ASAP Building (Building 5)

    Address:
73-200 Kupipi Street, Kona, Hawaii 96745

    TMK:
730430030000

    


    Kahului
Airport Cargo-ASAP (Building 6)

    Address:1
Kahului Airport Road, Kahului, Hawaii 96732

    TMK:
380010190000

    


    Kahului
Airport T-Hangar (Building 7)

    Address:1
Kahului Airport Road, Kahului, Hawaii 96732

    TMK:
380010190000



    
      
         


      

      
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