POWER
PURCHASE AGREEMENT

    


    THIS
POWER PURCHASE AGREEMENT (the “Agreement”) is entered into this 5th day of
December 2010 between:

    


    Romblon State University, a
Philippine State University with principal office address at Odiongan, Romblon
herein represented by its President, DR. JETER S. SESPEÑE and
herein referred to as “OFFTAKER”.

    


    - And
-

     

    CLENERGEN CORPORATION, a
company organized and existing under the laws of the United States of America
with its principal offices at 5379 Lyons Road, Suite 301, Coconut Creek, Florida
33073 represented herein by its Chairman, MARK LM QUINN, hereinafter
referred to as the “SUPPLIER”.

     

    (Each a
“Party” and together the “Parties”).

    


    RECITALS:

    


    
      	
               
      

            	
              A.

            	
              OFFTAKER
      is a University located in Romblon Island, Philippines. The OFFTAKER is
      planning to increase the capacity of the University and requires an
      uninterrupted supply of electricity

            


    

    


    
      	
               
      

            	
              B.

            	
              SUPPLIER
      is engaged in the business of supplying power, but particularly energy
      from renewable resources, in other countries and now seeks to impart their
      technology to the Philippines.

            


    

    


    
      	
               
      

            	
              C.

            	
              The
      Parties desire then to enter into this Agreement to define their
      respective rights and obligations regarding the supply of electricity to
      OFFTAKER by SUPPLIER.

            


    

    


    NOW,
THEREFORE in view of the foregoing premises and in consideration of the mutual
covenants and agreements hereinafter set forth, the Parties hereby agree as
follows:

    


    
      	
              1.

            	
              Definitions
      and Interpretation

            


    

    


    
      	
            	
              1.1

            	
              Definitions.  Wherever
      used in this Agreement, Schedules, Attachments or Annexes, unless the
      context otherwise requires, will use definitions according to the
      Philippine Distribution Code.

            


    

    
      	
            	
              1.2

            	
              Ordinary
      words will use definitions according to the Webster
      dictionary.

            


    

    
      
        	
              	
                1.3 

              	
                Abbreviations
      in this agreement are based on standard engineering
      abbreviations

              


      

    

    


    
      	
              2.

            	
              Scope
      of Agreement

            


    

    


    
      	
            	
              2.1

            	
              General. It is
      understood that, except as otherwise expressly provided in this Agreement,
      the OFFTAKER shall only pay for actual energy
  delivered.

            


    

    


    
      	
            	
              2.2

            	
              Responsibilities of
      SUPPLIER.  At its own cost, SUPPLIER shall be responsible
      for the following:

            


    

    


    
      	
               
      

            	
              (a)

            	
              The
      control and possession, operation and maintenance of the Power Station,
      including obtaining all necessary government consents, including
      environmental approvals, required in connection with the Power Station, in
      accordance with good industry practice, the technical parameters set forth
      as required by the offtaker and in compliance with Applicable
      Law.  Provided that, the SUPPLIER shall not be held liable for
      any deficiency/ies arising from the requirements of any Government
      Consents, including but not limited to the Environmental Compliance
      Certificate (ECC), which occurred prior to the SUPPLIER’s control and
      possession of the Site;

            


    

    
      	
               
      

            	
              (b)

            	
              Making
      available for dispatch by OFFTAKER the generating capacity in accordance
      with the needs of the OFFTAKER of this
  Agreement;

            


    

    
      
      

    

    
      
      

    

    
      
      

    

    
      
      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      	
            	
              (c)

            	
              Acquisition
      of the Site by purchase, lease or any other arrangement entitling SUPPLIER
      to possession and occupation thereof until the termination of Commercial
      Operations Period;

            


      
        	
                 
      

              	
                (d)

              	
                Cooperate
      with and assist OFFTAKER in securing any contract with, consent of or
      approvals from the Energy Regulatory Commission (the “ERC”), and any other
      office or agency or Government Authority necessary for the operation of
      Power Station and implementation of this
  Agreement;

              


      

      
        	
                 
      

              	
                (e)

              	
                At
      its own cost, source, supply and arrange for the delivery of fuel to the
      Power Station, including providing for fuel storage facility, until the
      end of the Commercial Operations period;
and

              


      

      
        	
                 
      

              	
                (f)

              	
                Generate
      and supply the electricity requirements of OFFTAKER up to the Net Expected
      Energy level and deliver at the Delivery Point/s in accordance with the
      terms of this Agreement.

              


      

    

     

    
      	
            	
              2.3

            	
              Responsibilities of
      OFFTAKER. At its own cost, OFFTAKER shall be responsible for the
      following:

            


    

    


    
      	
            	
              (a)

            	
              Dispatch
      power from the Power Station in accordance with the Dispatch Protocols
      that will be agreed by both parties and will become apart of this
      PPA.

            


    

    
      	
            	
              (b)

            	
              Provide
      the Payment Security and make payments in
  accordingly,

            


    

    
      	
            	
              (c)

            	
              Obtain
      any contract with OFFTAKER or such other parties, the consent of or
      approvals from necessary government authorities to enable OFFTAKER’s
      system to take electricity from the Power Station and in implementation of
      this Agreement;

            


    

    
      	
            	
              (d)

            	
              Cooperate
      with and assist SUPPLIER in providing information, acknowledgements,
      confirmations and consents necessary for SUPPLIER to obtain financing for
      the Power Station;

            


    

    
      	
            	
              (e)

            	
              Cooperate
      with and assist SUPPLIER in identifying and making available for lease
      suitable generation sites for the Power Station that may be owned by
      OFFTAKER at mutually agreed prices;

            


    

    
      	
            	
              (f)

            	
              Cooperate
      with and assist SUPPLIER (at SUPPLIER’s cost) in procuring any required
      rights of way to enable SUPPLIER to connect to the
      Sub-transmission  System or distribution system, as the case may
      be; and

            


    

    
      	
            	
              (g)

            	
              Operate
      and maintain its distribution system on its plant as to achieve the
      reliability indices set by the ERC in compliance with the Philippine
      Distribution Code.

            


    

    


    
      	
            	
              2.4

            	
              Control of the Power
      Station.  SUPPLIER shall at all times maintain possession
      and control of the Power Station and all the structures, fixtures,
      fittings, machinery and equipment on the Site or used in connection with
      the Power Station.

            


    

    


    
      	
              3.

            	
              Term
      and Effective Date

            


    

    


    
      	
               
      

            	
              3.1.
      Term.  This Agreement shall be valid for fifteen (15)
      years from the effectivity date agreed upon by both parties, unless
      extended or earlier terminated upon mutual consent by both Parties.
      “Effectivity date” shall commence on the first business day immediately
      following the day when corporate approvals and other requirements, and
      government consents, as well as performance bonds have been
      delivered/secured.

            


    

    


    
      	
               
      

            	
              3.2. Failure to Achieve
      Effective Date.  In the event that Effective Date does
      not occur within three  (3) months from the date agreed in this
      Agreement, this Agreement shall be deemed terminated, unless the Parties
      agree in writing to a waiver of any or all the conditions in Section 3.1
      above or to an extension of the period to achieve Effective
      Date.  In case of termination pursuant to this Section, the
      confidentiality provisions of Section 15 shall survive for two (2) years
      following the Termination Date.

            


    

    


    
      	
              4.

            	
              Commercial
      Operations

            


    

    


    
      	
               
      

            	
              4.1. Commencement of Commercial
      Operations Period.   Commercial Operations period
      shall begin no later than twelve (12) months from Effective Date (“Target
      Commercial Operations Date”).  Failure to meet the Target
      Commercial Operations Date shall be governed by the provision to be
      established by both parties within thirty days from the signing of this
      agreement and will become part of this
PPA.

            


    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
              5.

            	
              Supply
      of Electricity

            


    

    


    
      	
               
      

            	
              5.1.
      Supply.  SUPPLIER agrees to sell electricity and OFFTAKER
      agrees to take up to 1MW/h of electricity delivered from the Power Station
      in accordance with the Delivery Procedures that will be set out in a
      schedule that will be established when the OFFTAKER’S PLANT operating load
      and procedures have been established. This schedule will then be set as
      part of the Dispatch Protocols.

            


    

    


    
      	
               
      

            	
              5.2. Delivery
      Points.  The place for delivery of electricity shall be
      at designated metering points.  Title to and all risk associated
      with electricity from the Power Station shall pass to OFFTAKER at the
      Delivery Points.  Each Party shall be responsible for the
      maintenance and operation of the equipment owned by it or under its
      dominion and control.

            


    

    


    
      	
              6.

            	
              Total
      Fee and Charges

            


    

    


    
      	
               
      

            	
              6.1. Total
      Fee.  SUPPLIER is entitled to receive payment for the
      supply of electricity from the Power Station during a Billing Month, equal
      to the Total Fee calculated using Formula 1 as
  follows:

            


    

    


    Total Fee = Cost of delivered Power +
Value Added Taxes.

    


    Total Fee  = PhP 6.50 +
VAT    (in US$ @ 43:1)     = US$
0.151 + VAT

    


    
      	
               
      

            	
              6.2. Billing to
      OFFTAKER.  Within five (5) business days from the end of
      each Billing Month during the Commercial Operations Period, SUPPLIER shall
      deliver to OFFTAKER the SUPPLIER invoice setting forth the amount out of
      the Total Fee that is due from OFFTAKER for the preceding Billing
      Month.

            


    

    


    6.4. Payments.  Each
SUPPLIER Invoice shall be due and payable no later than 30 calendar days from
receipt of SUPPLIER invoice by OFFTAKER (“Payment Period”).  All sums
indicated in the SUPPLIER invoice shall be paid by OFFTAKER in Philippine Pesos,
free and clear of any deductions, bank draft  delivery charges,
set-offs, counterclaims, taxes, etc.. Delayed payments shall be subject to
interest at the rate of 12% per annum from the due date.

    


    
      	
              7.

            	
              Force
      Majeure.  Both Parties shall be excused from performing
      their respective obligations under this Agreement upon the occurrence of
      an Event of Force Majeure for a period not exceeding 30
      days.  In case of Force Majeure, the Commercial Operations
      Period shall be extended, without need of further agreement or consent, by
      such number of days necessary to allow SUPPLIER to supply the
      kWh-shortfall in the Net Expected Energy during the Temporary Force
      Majeure Period.

            


    

    


    
      	
              8.

            	
              Insurance

            


    

    


    Upon
Commercial Operations Date, the Parties shall obtain and maintain, or cause to
obtain and maintain through its contractor/s, the insurance policies required by
Applicable Law and such other insurance covers under commercially reasonable
terms.  Such policies should cover insurable events affecting or
causing damage to the Power Station and determining, with both parties’
agreement, where the insurance proceeds will be
directed.  Indemnification procedures shall follow standard insurance
policies, as agreed upon by both parties.

    


    
      	
              9.

            	
              Disputes
      and Arbitration.

            


    

    


    In case
of failure to settle disagreements and disputes between the PARTIES, either
Party may refer the matter for arbitration under UNCITRAL
Rules.   The proceedings shall be conducted in English and the
decision of the arbitration panel shall be final and binding on the
Parties.  The arbitration shall take place in Metro
Manila.  Judgment on the award may be entered by any court of
competent jurisdiction.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              13.

            	
              Assignment

            


    

    


    This
Agreement shall be binding upon the Parties hereto, their successors and
assignees.  Each Party may assign its respective rights and
obligations under this Agreement subject to prior written notice and consent of
the other party.

    


    
      	
              14. 

            	
              Confidentiality

            


    

    


    Each
Party agrees that it, its employees, officers, directors, and agents will hold
in confidence all information, documentation, data or know-how disclosed to it
by the other Party and designated in writing as “confidential” (“Confidential
Information”), and will not disclose to any third party or use Confidential
Information or any part thereof without the other Party’s prior written
approval;

    


    
      	
              15. 

            	
              Miscellaneous

            


    

    


    
      	
            	
              15.1

            	
              Governing
      Law.  This Agreement shall be governed by and construed in
      accordance with the laws of the Republic of the
    Philippines.

            


    

    


    
      	
            	
              15.2

            	
              No
      Partnership.  Nothing contained in this Agreement shall be
      construed to create an association, trust, partnership, or joint venture
      or impose a trust or partnership duty, obligation, or liability on or with
      regard to either Party, or to create any principal/agent relationship
      between the Parties, or to create any duty, standard of care or liability
      to any person or entity not a Party hereto.  Each Party shall be
      liable individually and severally for its own obligations under this
      Agreement.

            


    

    


    
      	
            	
              15.2.

            	
              Notices.  Unless
      otherwise stated, each communication to be made hereunder shall be made in
      writing and delivered in person, by hand, air mail, telex, facsimile or
      established courier service to the other Party and which notice shall be
      effective upon receipt.

            


    

    


    
      	
            	
              15.3.

            	
              Separability.   If
      any provision of this Agreement shall be determined to be invalid, such
      provision shall be deemed separate and distinct, and the remainder of this
      Agreement shall remain in full force and effect, provided that the
      remaining provisions are sufficient to render to each Party the benefits
      contemplated hereby.

            


    

    


    
      	
            	
              15.4.

            	
              Amendments
      and Additions.  This Agreement will serve as the basic and
      general guideline for the supply and use of electric power by both
      PARTIES. Both PARTIES agree that provisions will be added or amended as
      both PARTIES proceed with the establishment of their plants and
      facilities. Each additional provisions, amendment or modifications may be
      included in this main agreement only after extensive consultations and
      discussions that will lead to mutual agreement and a written instrument
      signed by both of the Parties.

            


    

    


    IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in
more than one copy each of which shall be deemed to be an original as of the
date of this Agreement.

    


    
      
        
          
            
              	
                      CLENERGEN
      CORPORATION

                    	 
      	
                      ROMBLON
      STATE UNIVERSITY

                    
	
                      By

                    	 
      	
                      By

                    
	 
      	 
      	 
      
	
                      /s/Mark LM Quinn

                    	 
      	
                      /s/ Jeter Sespene

                    
	
                      MARK
      LM QUINN

                    	 
      	
                      JETER
      SESPENE

                    
	
                      Chief
      Executive Officer

                    	 
      	
                      President

                    


            

          

        

      

    

    


    Signed in
the presence of :

    


    
      
        
          
            	
                                             

                  	
                      

                  	
                                             

                  


          

        

      

    

     

    
      
         

      

      
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