Document:

Exhibit 10.7

 

EXECUTION VERSION

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF
THIS AGREEMENT. THE REDACTIONS ARE INDICATED WITH FIVE ASTERISKS (“*****”). A
COMPLETE VERSION OF THIS AGREEMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.

 

ENERGY MANAGEMENT SERVICES AGREEMENT

 

BY AND AMONG

 

EVERGREEN WIND POWER, LLC

 

AND

 

NEW BRUNSWICK POWER GENERATION CORPORATION

 

 

	
  ARTICLE
  1. DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.0

  	
  Definitions

  	
   

  	
  1

  
	
  1.1

  	
  Other
  Defined Terms

  	
   

  	
  8

  
	
  1.2

  	
  Rules of
  Construction

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  2. CONDITIONS PRECEDENT; TERM

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  2.0

  	
  Conditions
  Precedent of Buyer

  	
   

  	
  10

  
	
  2.1

  	
  Conditions
  Precedent of Seller

  	
   

  	
  10

  
	
  2.2

  	
  Closing

  	
   

  	
  11

  
	
  2.3

  	
  Term

  	
   

  	
  11

  
	
  2.4

  	
  Commercial
  Operation Date

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  3. PURCHASE OF ENERGY BY BUYER

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  3.0

  	
  Sale
  and Purchase Obligations

  	
   

  	
  12

  
	
  3.1

  	
  Deliveries

  	
   

  	
  12

  
	
  3.2

  	
  Delivered
  Electricity Price

  	
   

  	
  12

  
	
  3.3

  	
  Test
  Energy Price

  	
   

  	
  12

  
	
  3.4

  	
  Delivery
  Costs

  	
   

  	
  12

  
	
  3.5

  	
  Delivery
  Minimum

  	
   

  	
  13

  
	
  3.6

  	
  NERC
  Tags

  	
   

  	
  13

  
	
  3.7

  	
  Delivery
  to ISO-NE

  	
   

  	
  13

  
	
  3.8

  	
  Scheduling
  Fee

  	
   

  	
  14

  
	
  3.9

  	
  RECs

  	
   

  	
  14

  
	
  3.10 

  	
  Capacity
  Value

  	
   

  	
  14

  
	
  3.11 

  	
  Rates
  and Charges Not Subject to Review

  	
   

  	
  14

  
	
  3.12 

  	
  Costs
  and Charges

  	
   

  	
  14

  
	
  3.13

  	
  Title
  and Risk of Loss

  	
   

  	
  15

  
	
  3.14 

  	
  Standard
  of Operation

  	
   

  	
  15

  
	
  3.15 

  	
  Operating
  Procedures

  	
   

  	
  15

  
	
  3.16 

  	
  Outages

  	
   

  	
  16

  
	
  3.17 

  	
  Electricity
  Output Communications

  	
   

  	
  16

  
	
  3.18 

  	
  Power

  	
   

  	
  16

  
	
  3.19 

  	
  Taxes

  	
   

  	
  16

  
	
  3.20 

  	
  Exclusive
  Nature of Agreement

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  4. REPRESENTATIONS AND WARRANTIES

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  4.0

  	
  Representations
  and Warranties

  	
   

  	
  17

  
	
  4.1

  	
  Specified
  Authorizations

  	
   

  	
  18

  
	
  4.2 

  	
  No
  Immunity

  	
   

  	
  18

  
	
  4.3

  	
  No
  Other Representations and Warranties

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  5. EVENTS OF DEFAULT AND termination; REMEDIES and early TERMINATION

  	
   

  	
  18

  

 

i

 

	
  5.0

  	
  Events of Default

  	
   

  	
  18

  
	
  5.1

  	
  Events of Termination

  	
   

  	
  20

  
	
  5.2

  	
  Early Termination

  	
   

  	
  20

  
	
  5.3

  	
  Survival

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6. BILLING AND PAYMENT; RECORDS

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  6.0

  	
  Billing and Payment

  	
   

  	
  22

  
	
  6.1

  	
  Interest on Late Payments

  	
   

  	
  22

  
	
  6.2

  	
  Disputed Amounts

  	
   

  	
  22

  
	
  6.3

  	
  Records

  	
   

  	
  22

  
	
  6.4

  	
  Currency

  	
   

  	
  22

  
	
  6.5

  	
  Audit

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7. ASSIGNMENT; BINDING EFFECT

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  7.0 

  	
  Assignment

  	
   

  	
  24

  
	
  7.1

  	
  Binding Effect

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8. FORCE MAJEURE; INDEMNITY; LIMITATION OF LIABILITY

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  8.0 

  	
  Force Majeure

  	
   

  	
  24

  
	
  8.1

  	
  Indemnification

  	
   

  	
  25

  
	
  8.2

  	
  Limitations of Remedies, Liability and Damages

  	
   

  	
  25

  
	
  8.3

  	
  Duty to Mitigate

  	
   

  	
  25

  
	
  8.4

  	
  Interruption

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9. FINANCIAL ASSURANCES

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  9.0

  	
  Credit Support

  	
   

  	
  26

  
	
  9.1

  	
  Increases or Reductions in Credit Support

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10. CONFIDENTIALITY

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  10.0 

  	
  Confidentiality

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11. NOTICES AND ADDRESS FOR PAYMENT 

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  11.0 

  	
  Notices

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12. DISAGREEMENTS

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  12.0 

  	
  Negotiations

  	
   

  	
  31

  
	
  12.1 

  	
  Arbitration

  	
   

  	
  31

  
	
  12.2 

  	
  Settlement Discussions

  	
   

  	
  32

  
	
  12.3 

  	
  Preliminary Injunctive Relief

  	
   

  	
  33

  
	
  12.4 

  	
  Confidential Proceedings

  	
   

  	
  33

  
	
  12.5 

  	
  Submission to Jurisdiction

  	
   

  	
  33

  

 

ii

 

	
  ARTICLE 13. MISCELLANEOUS

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  13.0

  	
  Entirety

  	
   

  	
  33

  
	
  13.1

  	
  Choice of Law

  	
   

  	
  33

  
	
  13.2

  	
  Non-Waiver

  	
   

  	
  33

  
	
  13.3

  	
  Headings; Attachments

  	
   

  	
  34

  
	
  13.4

  	
  Counterparts

  	
   

  	
  34

  
	
  13.5

  	
  Forward Contract

  	
   

  	
  34

  
	
  13.6

  	
  Other

  	
   

  	
  34

  

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  SCHEDULE A 

  	
  Delivered Electricity Price

  
	
  SCHEDULE B 

  	
  Minimum Delivered Electricity Amount 

  
	
  SCHEDULE C 

  	
  Scheduling Fee

  
	
  SCHEDULE D 

  	
  Exposure Amount Calculation

  
	
  SCHEDULE E

  	
  Initial Mass Hub Index

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  EXHIBIT A 

  	
  Operating Procedures

  
	
  EXHIBIT B 

  	
  Form of Initial Seller LC

  
	
  EXHIBIT C 

  	
  Form of Initial Buyer LC

  
	
  EXHIBIT D

  	
  Form of Assignment Agreement

  

 

iii

 

ENERGY MANAGEMENT SERVICES AGREEMENT

 

This Energy Management Services Agreement is entered into as of the
31st day of July, 2006, by and between Evergreen Wind Power, LLC, a Delaware
limited liability company with principal offices located c/o UPC Wind
Management, LLC, 100 Wells Ave., Suite 201, Newton, MA, USA (“Seller”),
and New Brunswick Power Generation Corporation, a corporation created under the
Business Corporations Act of New Brunswick, having its head office at 515 King
Street, P.O. Box 2040, Fredericton, New Brunswick, Canada (“Buyer”).

 

RECITALS

 

1.             Seller
is the operator of a wind generation facility that is located on the Premises
(as defined below) owned by Seller.

 

2.             Buyer
wishes to purchase and Seller wishes to sell electric energy from the Facility
delivered to the Delivery Point (as defined below) in accordance with the terms
herein.

 

3.             Buyer
wishes to transfer energy produced by the Seller to the New England market.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, Buyer and Seller agree as follows:

 

ARTICLE 1.

 DEFINITIONS

 

1.0          Definitions.  As used in this Agreement, the following terms
shall have the respective meanings set forth below.

 

“Acceptable
Financial Institution” means a United States commercial bank or
foreign commercial bank with a United States office, with a minimum of one
billion U.S. dollars capital and surplus, in each case with a credit rating of
at least A- by S&P or A3 by Moody’s.

 

“Affiliate”
means any Person that directly or indirectly Controls, is Controlled by, or is
under common Control with the Person in question.

 

“Agreement”
means this Energy Management Services Agreement, including all Schedules and
Exhibits attached hereto.

 

“Affected
Party” means the party declaring a Force Majeure event as set forth
in Section 8.0.

 

 

“Business
Day” means a day on
which Federal Reserve member banks in New York, New York are open for business.

 

“Buyer
Credit Support” means
the Initial Buyer LC or any replacement credit support provided by Buyer pursuant
to Article 9, as such Initial Buyer LC or replacement credit support is
reduced or increased pursuant to Article 9.

 

“Buyer
Electricity Index”
shall mean the ***** used to calculate the Buyer Exposure Amount pursuant to
Schedule D attached hereto. An example of the Buyer Electricity Index is
included as Schedule D attached hereto.

 

“Buyer
Exposure Amount”
means, at any given time, the amount determined in accordance with Part I
of Schedule D attached hereto. A sample calculation of the Buyer Exposure
Amount is also set forth in Part I of Schedule D.

 

“Capacity
Value” shall mean all
credits or value associated to the forced or unforced capacity of the Facility.

 

“COD
Deadline” shall mean July 31,
2007, except that the COD Deadline shall be extended day for day for any
extension of the Scheduled Commercial Operation Date pursuant to the definition
thereof.

 

“Commercial
Operation Date” means
2 days after the Seller provides written notice to the Buyer that all of the
following conditions have been satisfied: (i) the Interconnection
Agreement has been executed and delivered, (ii) all Turbines at the
Facility have been installed and are able to generate Excess Electricity, and (iii) a
third party engineer has certified that the Facility is complete and ready for
commercial operation and all related facilities and rights have been completed
or obtained, including such facilities and rights contemplated by the
Interconnection Agreement, to allow regular operation.

 

“Construction
Delay Damages” means,
for any given calculation period from the Scheduled Commercial Operation Date
until the Commercial Operation Date, *****. For the avoidance of doubt, for any
given calculation period from the Scheduled Commercial Operation Date until the
Commercial Operation Date, *****.

 

“Control” means the possession or ownership, directly
or indirectly, of the following: (a) in the case of (i) a
corporation, 50% or more of the outstanding voting securities thereof, (ii) a
limited liability company, partnership, limited partnership or joint venture,
the right to 50% or more of the distributions therefrom (including liquidating
distributions), (iii) a trust or estate, 50% or more of the beneficial
interest therein or (iv) any other entity, 50% or more of the

 

2

 

economic or beneficial interest therein; and (b) the
power or authority, through the ownership of voting securities, by agreement or
otherwise, to direct the management, activities or policies of the applicable
Person. The terms “Controlled by” and “under common Control with” have correlative meanings.

 

“Costs” means any brokerage fees,
commissions and other transactional costs and expenses reasonably incurred by a
party either as a result of terminating any hedges, forward energy or attribute
sales or other risk management agreements and/or entering into new arrangements
to replace this Agreement (following the early termination thereof) or the
deliveries of electricity that were to have been made hereunder, and, in the
case of an Event of Default, reasonable legal costs incurred by the
Non-Defaulting Party in enforcing its rights under this Agreement.

 

“Credit Support” means Buyer Credit Support and/or Seller
Credit Support.

 

“Credit Support Calculation Date” means the last Business Day of any calendar
quarter and, if applicable, any interim Margin Call Date or interim Credit
Support Reduction Date occurring during any calendar quarter, whether such
Margin Call Date or Credit Support Reduction Date, as the case may be, is declared
by the Seller or the Buyer pursuant to the
applicable definitions thereof.

 

“Credit Support Reduction Date” means any Business Day on which (a) the
sum of the Baseline Buyer Credit Support Amount plus the applicable Seller Exposure Amount on such
Business Day is less than the Buyer Credit Support posted on such Business Day
by $***** or more or (b) the sum of the Baseline
Seller Credit Support Amount plus the
applicable Buyer Exposure Amount on such Business Day is less than the Seller
Credit Support posted on such Business Day by $***** or more.

 

“Creditworthy Affiliate” means an affiliate of a party with an
Investment Grade credit rating.

 

“Current Mass Hub Index” means the Mass Hub Index determined on any
given Credit Support Calculation Date.

 

“Defaulting Party” means, in the case of an Event of Default,
the party that is in default under Section 5.0.

 

“Default Rate” means the lesser of (a) Interest Rate plus three percent (3%) or (b) the
maximum rate permitted by applicable law.

 

“Deficient Electricity” means, commencing on the Commercial
Operation Date, the difference between actual Delivered Electricity during a
calendar quarter and the Minimum Delivered Electricity Amount for that calendar
quarter, if the amount of Delivered Electricity during a calendar quarter is
less than the Minimum Delivered Electricity Amount for that calendar quarter.

 

“Deficient Electricity Price” shall mean, during any calendar quarter, the
arithmetic average of the FHMC Prices during such calendar quarter as posted on
the NBSO’s Website,

 

3

 

which such value shall then be converted into US Dollars using the
arithmetic average of the daily exchange rates during such quarter (as posted
by on the NBSO’s Website).

 

“Delivered
Electricity” means all of the Excess Electricity delivered to the
Delivery Point over the System. The Delivered Electricity amount shall not
exceed the Nameplate Capacity of the Facility less losses to the Delivery
Point.

 

“Delivery
Point” means any point where the MPS and New Brunswick Power
Transmission Corporation high-voltage transmission facilities interconnect on
the Maine – New Brunswick border.

 

“Evergreen”
means Evergreen Wind Power, LLC, a Delaware limited liability company, its
successors and assigns.

 

“Excess
Electricity” means all of the electricity generated at the Facility
by means of wind generation other than that needed for the operation of the
Facility.

 

“Exposure
Amount” means the Buyer Exposure Amount or the Seller Exposure
Amount.

 

“Facility”
means the wind electric generation facility owned by Seller and located at the
Premises.

 

“FERC”
means the Federal Energy Regulatory Commission and its predecessor and
successor agencies.

 

“FHMC
Price” means the “Final Hourly Marginal Cost,” as published on the
NBSO Website.

 

“Force
Majeure” means an event not anticipated as of the Effective Date,
which is not within the reasonable control of the party affected thereby, and
which by the exercise of due diligence the affected party is unable to overcome
or obtain or cause to be obtained a commercially reasonable substitute
therefore. Force Majeure includes, but is not restricted to: failure of
transmission facilities; acts of God; fire; explosion; civil disturbance;
sabotage; action or restraint by court order or public or government authority,
so long as the affected party has not applied for or assisted in the
application for, and has opposed where and to the extent reasonable, such
government action; provided that none of the following shall constitute an
event of Force Majeure: (a) the loss of Buyer’s markets nor Buyer’s
inability economically to use or resell energy purchased hereunder; (b) the
Buyer’s inability economically to procure necessary transmission capacity; (c) the
loss or failure of Seller’s ability to sell energy to a market at a more
advantageous price; or (d) the Seller’s inability economically to procure
necessary transmission capacity. A Force Majeure as defined in this Agreement
that affects a contractor or supplier to a party, with the effect that the party cannot perform
its obligations hereunder, shall be deemed to be a Force Majeure for the
affected party hereunder.

 

“Forced
Outage” shall mean an unplanned component failure or other condition
that requires the Facility (or portion thereof) to be removed from service
immediately, within six hours, or before the end of the next weekend.

 

4

 

“Initial Mass Hub Index” means the series of electricity prices set
forth in Schedule E attached hereto.

 

“Interconnection Agreement” means the FERC large generator
interconnection agreement executed by MPS and Evergreen, dated as of April 14,
2006.

 

“Interconnection Facilities” means all the facilities installed for the
purpose of interconnecting the Facility to the System and owned by Seller,
including, but not limited to all transformers and associated equipment, relay
and switching equipment, and safety equipment.

 

“Interest Rate” means, on any date, the lesser of (a) the per annum rate of
interest equal to the prime lending rate as may from time to time be published
in the Wall Street Journal under “Money Rates,” or (b) the maximum rate
permitted by applicable law.

 

“Investment Grade” means, with respect to any Person, a credit rating (i.e., the rating assigned to an entity’s unsecured, senior long-term debt
obligations) by S&P or Moody’s of at least BBB- by S&P or Baa3 by Moody’s.

 

“ISA”
means the Northern Maine Independent System Administrator, or its successor. 

 

“ISO-NE” means the New England Independent System Operator.

 

“LMP”
means locational marginal price.

 

“Maine Zone” means the load zone for the area in Maine included in ISO-NE as
further defined by Market Rule 1 of the ISO-NE tariff.

 

“Maintenance Outage” means the removal of the Facility from service to perform work on
specific components that can be deferred beyond the end of the next weekend,
but requires the Facility to be removed from service before the next Planned
Outage. Maintenance Outages may occur any time during the year, have flexible
start dates, and may or may not have predetermined durations.

 

“Margin Call Date” means any Business Day on which (a) the sum of the Baseline Buyer
Credit Support Amount plus the applicable Seller Exposure Amount on such
Business Day exceeds by $***** or more the Buyer Credit Support posted on
such Business Day or (b) the sum of the Baseline Seller Credit Support
Amount plus the applicable Buyer Exposure Amount on such
Business Day exceeds by $***** or more the Seller Credit Support posted on
such Business Day.

 

“Market Delivery Point” means the delivery point at which Buyer
sells or transfers title to Delivered Electricity to an Affiliate or third
party.

 

“Mass Hub” means the specific set of pre-defined nodes in Massachusetts for which
an LMP is calculated by ISO-NE, as further defined in Market Rule 1 of the
ISO-NE tariff.

 

“Mass Hub Index” means the forward flat (around-the-clock) day-ahead LMP prices for
NEPOOL for the remainder of the Term as provided by ICAP Energy LLC or any
successor or

 

5

 

replacement thereto agreed to by the Parties.
An example of the NEPOOL Index is shown in Schedule E attached hereto.

 

“MEPCO” means the Maine Electric Power
Company, its successors and assigns. 

 

“Month” means one calendar month.

 

“Moody’s” means Moody’s Investors
Service, Inc.

 

“MPS” means Maine Public Service
Company, its successors and assigns.

 

“MW” means megawatt.

 

“MWh” means megawatt hour.

 

“Nameplate Capacity Rating” of the
Facility shall be up to 42.0 MW.

 

“NBP” means the New Brunswick Power
Generation Corporation, its successors and assigns.

 

“NBSO” means the New Brunswick System
Operator, its successors and assigns.

 

“NBSO Website” means http://www.nbso.ca/en/,
or any replacement website used by the NBSO.

 

“NEPOOL” means the New England Power
Pool.

 

“NERC Tags” means certificates
evidencing delivery of electricity pursuant to the standards set forth by the
North American Electric Reliability Council, as such may be amended from time
to time.

 

“Non-Affected Party” means, in the
case of a Force Majeure, the party that is not declaring such Force Majeure.

 

“Non-Defaulting Party” means, in the
case of an Event of Default, the party that is not the Defaulting Party.

 

“Person” shall mean any individual,
entity, corporation, general or limited partnership, limited liability company,
joint venture, estate, trust, association or other entity or governmental
authority.

 

“Planned Outage” means the removal of
the Facility from service to perform work on specific components that is
scheduled well in advance and has a predetermined start date and duration
(e.g., annual overhaul, inspections or testing).

 

“PPSA” means the Personal Property
Security Act of New Brunswick.

 

“Premises” shall mean the real
property where the Facility is located in, Mars Hill, Aroostook County, Maine.

 

6

 

“Prudent
Utility Practice” means any of the practices, methods and acts required or
approved by the ISA or engaged in or approved by a significant portion of the
electric utility industry in the same general geographic location as the
Facility during the relevant time period, or any of the practices, methods and
acts which, in the exercise of reasonable judgment in light of the facts known
at the time the decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business practices,
reliability, safety and expedition.  “Prudent
Utility Practice” is not intended to be limited to the optimum practice, method
or act to the exclusion of all others, but rather to be acceptable practices,
methods or acts generally accepted in the general geographic location of the
Facility.

 

“RECs”
means Renewable Energy Certificates.

 

“Renewable Energy Certificates” means any credits, credit
certificates or similar environmental or “green” energy attributes such as
those for greenhouse gas reduction, or the generation of green power or
renewable energy, created by any governmental agency and/or independent
certification board or group generally recognized in the electric power
generation industry, and generated by or associated with the Facility, but
specifically excluding any and all state and federal production tax credits,
investment tax credits and any other tax credits which are or will be generated
by the Facility.

 

“Requirement of Law” means any federal, state, provincial and
local law, statute, regulation, rule, code or ordinance enacted, adopted,
issued or promulgated by any federal, state, provincial, local or other
governmental authority or regulatory body (including those pertaining to
electrical, building, zoning, environmental and occupational safety and health
requirements).

 

“Scheduled Commercial Operation Date” means March 31, 2007,
except that the Scheduled Commercial Operation Date shall be extended to the
extent necessary to compensate for any delay in the occurrence of the
Commercial Operation Date caused by (a) a Force Majeure event or (b) an
act, error or omission of Buyer.

 

“Seller Credit Support” means the Initial Seller LC or any
replacement credit support provided by Seller pursuant to Article 9, as
such Initial Seller LC or replacement credit support is reduced or increased
pursuant to Article 9.

 

“Seller Electricity Index” shall mean the ***** used to calculate the Seller Exposure Amount pursuant to Schedule D
attached hereto.  An example of the Seller
Electricity Index is included as Schedule D attached hereto.

 

“Seller Exposure Amount” means, at any given time, the amount
determined in accordance with Part II of Schedule D attached hereto.  A sample calculation of the Seller Exposure
Amount is also set forth in Part II of Schedule D.

 

“S&P”
means Standard and Poor’s Corporation.

 

“Specified Authorizations” means, collectively: (i) authorization
from FERC to make wholesale sales of energy, capacity and ancillary services at
market-based rates pursuant to Section 205 of the Federal Power Act; and (ii) authorization
from the United States Department

 

7

 

of
Energy to transmit electric energy from the United States to Canada pursuant to
Section 202(e) of the Federal Power Act.

 

“Specified Notices” mean, collectively, the following notices to
FERC: (i) a Notice of Self-Certification of Exempt Wholesale Generator
Status; and (ii) a Notice of Self-Certification of Status as a Qualifying
Small Power Production Facility.

 

“System” means the electric transmission system owned by MPS, or
its successor, and administered by the ISA, or its successor.

 

“Terminating Party” means the party, subject to Section 5.2(a) or
5.2(b), that declares an event of early termination upon either an Event of
Default or an Event of Termination.  In
the case of an Event of Default, the Non-Defaulting Party is the Terminating
Party.  In the case of an Event of
Termination with a single Affected Party, the Non-Affected Party is the Terminating
Party.  In the case of an Event of
Termination with two Affected Parties, either Party may be the Terminating
Party.

 

“Threshold Amount” means USD $*****.

 

“Transaction Documents” means, collectively, the Agreement, the
Assignment Agreement, the Buyer Credit Support and the Seller Credit Support.

 

“Turbines” means the General Electric 1.5 MW wind turbine
generators at the Facility.

 

“UCC” means the Uniform Commercial Code as in effect in the
State of New York.

 

“Unsatisfactory” means, with respect to any Person, a credit
rating (i.e., the rating assigned to an entity’s unsecured,
senior long-term debt obligations) below Investment Grade, or a lack of credit
rating for such Person by S&P or Moody’s.

 

1.1             Other
Defined Terms. The
following terms shall have the meanings defined for such terms in the Sections
set forth below:

 

	
  Defined Term

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Alternate”

  	
   

  	
  Exhibit A

  	
   

  
	
  “Assignment
  Agreement”

  	
   

  	
  2.1(d)

  	
   

  
	
  “Authorized
  Representative”

  	
   

  	
  Exhibit A

  	
   

  
	
  “Bankruptcy
  Code”

  	
   

  	
  13.5(a)

  	
   

  
	
  “Baseline
  Buyer Credit Support Amount”

  	
   

  	
  9.0(b)

  	
   

  
	
  “Baseline
  Seller Credit Support Amount”

  	
   

  	
  9.0(a)

  	
   

  
	
  “Buyer”

  	
   

  	
  Preamble

  	
   

  
	
  “Canadian
  Bankruptcy Act”

  	
   

  	
  13.5(b)

  	
   

  
	
  “Closing”

  	
   

  	
  2.2

  	
   

  
	
  “Confidential
  Business Information”

  	
   

  	
  10.0

  	
   

  
	
  “Daily
  Production Schedule”

  	
   

  	
  Exhibit A

  	
   

  
	
  “Delivery
  Costs”

  	
   

  	
  3.4

  	
   

  
	
  “Delivered
  Electricity Price”

  	
   

  	
  3.2

  	
   

  

 

8

 

	
  “Effective Date”

  	
   

  	
  2.3

  	
   

  
	
  “Event of Default”

  	
   

  	
  5.0

  	
   

  
	
  “Initial Buyer LC”

  	
   

  	
  9.0(b)

  	
   

  
	
  “Initial Seller LC”

  	
   

  	
  9.0(a)

  	
   

  
	
  “Liabilities”

  	
   

  	
  8.1(a)

  	
   

  
	
  “Minimum Delivered Electricity Amount”

  	
   

  	
  3.5(a)

  	
   

  
	
  “Operating Procedures”

  	
   

  	
  3.15

  	
   

  
	
  “Scheduling Deadline”

  	
   

  	
  Exhibit A

  	
   

  
	
  “Scheduling Fee”

  	
   

  	
  3.8

  	
   

  
	
  “Seller”

  	
   

  	
  Preamble

  	
   

  
	
  “Term”

  	
   

  	
  2.3

  	
   

  
	
  “Termination Amount”

  	
   

  	
  5.2(c)

  	
   

  
	
  “Transmission Curtailment Event”

  	
   

  	
  8.4

  	
   

  

 

1.2           Rules of Construction. Unless the context otherwise requires:

 

(a)           Words
singular and plural in number shall be deemed to include the other and pronouns
having masculine or feminine gender shall be deemed to include the other.

 

(b)           Any
reference in this Agreement to any Person includes its successors and assigns
and, in the case of any government authority, any Person succeeding to its
functions and capacities.

 

(c)           Unless
otherwise indicated, any reference in this Agreement to any Article, Section,
Schedule or Exhibit means and refers to the Article or Section contained
in, or Scheduled or Exhibit attached to, this Agreement.

 

(d)           Other
grammatical forms of defined words or phrases have corresponding meanings.

 

(e)           Unless
otherwise indicated, a reference to a document or agreement, including this
Agreement, includes a reference to that document or agreement as novated,
amended, supplemented or restated from time to time.

 

(f)            Unless
otherwise indicated, a reference to a Requirement of Law includes a reference
to that Requirement of Law as amended, modified, supplemented, extended or
restated from time to time.

 

(g)           The
terms “include,” “includes” and “including” shall be deemed to be followed by
the words “without limitation.”

 

(h)           The
words “hereof,” “herein,” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.

 

9

 

ARTICLE 2.

 

CONDITIONS PRECEDENT; TERM

 

2.0           Conditions Precedent of Buyer. Buyer’s
obligations under this Agreement shall be conditioned upon the satisfaction, at
the Closing, of each of the following conditions:

 

(a)           Agreement.  Buyer shall have received this Agreement,
executed and delivered by one or more duly authorized officers of Seller;

 

(b)           Closing Certificate.  Buyer shall have received a closing
certificate, executed and delivered by one or more duly authorized officers of
Seller, certifying that all representations and warranties made by Seller in
the Transaction Documents are true and correct in all material respects on and
as of the date hereof, except for representations and warranties expressly
stated to relate to a specific earlier date, in which case such representations
and warranties were true and correct in all material respects as of such
earlier date; and

 

(c)           Initial Seller LC.  The Initial Seller LC in substantially the
form of Exhibit B hereto shall have been issued to the Buyer.

 

Seller shall use commercially
reasonable efforts to cause the conditions described in this Section 2.0
to be satisfied as promptly as practicable and in no event later than five (5) Business
Days after the date of this Agreement.

 

2.1           Conditions Precedent of
Seller. Seller’s obligations under this Agreement shall be
conditioned upon the satisfaction, at the Closing, of each of the following
conditions:

 

(a)             Agreement.  Seller shall have received this Agreement,
executed and delivered by one or more duly authorized officers of Buyer;

 

(b)             Closing
Certificate.  Seller shall have received
a closing certificate, executed and delivered by one or more duly authorized
officers of Buyer, certifying that all representations and warranties of Buyer
made in the Transaction Documents are true and correct in all material respects
on and as of the date hereof, except for representations and warranties
expressly stated to relate to a specific earlier date, in which case such
representations and warranties were true and correct in all material respects
as of such earlier date;

 

(c)             Initial Buyer LC.  The Initial Buyer LC in substantially the
form of Exhibit C hereto shall have been issued to the Seller;

 

(d)             Assignment
Agreement.  One or more duly
authorized officers of Buyer shall have executed and delivered an assignment
agreement in favor of Seller, substantially in the form of Exhibit D
hereto, pursuant to which Buyer assigns to Seller certain transmission rights
over the transmission facilities that NBSO controls (the “Assignment
Agreement”);

 

(e)             Filings,
Registrations and Recordings.  The
Seller shall ensure that each document (including, without limitation, any UCC
financing statement or PPSA financing statement) required by the Assignment
Agreement or otherwise reasonably requested by the Seller to be filed,
registered or recorded in order to create in favor of the Seller a perfected
security interest on the collateral described therein, prior and superior in
right to any other Person, shall be in proper form for filing, registration or
recordation;

 

10

 

(f)            Legal Opinion.  Buyer
shall have delivered to Seller a customary opinion of counsel relating, among
other things, to the enforceability of the security interests created pursuant
to the Assignment Agreement, and otherwise in a form reasonably acceptable to
Seller and its counsel; and

 

(g)           Notice to NBSO.  At
the time of Closing, Buyer shall have provided the NBSO with a copy of the
executed Assignment Agreement and shall have received an acknowledgement from
the NBSO of its receipt of the Assignment Agreement and its concurrence with
its terms.  Buyer shall have provided
such acknowledgement to Seller, in such form as shall be reasonably requested
by Seller.

 

Buyer shall use commercially
reasonable efforts to cause the conditions described in this Section 2.1
(other than subsection (e) hereof) to be satisfied as promptly as
practicable and in no event later than five (5) Business Days after the
date of this Agreement.

 

2.2           Closing. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall be held on the
Effective Date.

 

2.3           Term. The term of this Agreement
(the “Term”) shall begin on the date (the “Effective Date”) upon which the parties shall have
caused (or waived) the conditions precedent in Sections 2.0 and 2.1 to be
satisfied and shall, unless sooner terminated as provided herein, end at 11:59 p.m.
on December 31, 2011.  The
termination of this Agreement shall be without prejudice to all rights and
obligations of the parties accrued under this Agreement prior to such
termination.  Notwithstanding the
foregoing or anything to the contrary set forth herein, the terms and
conditions of Section 2.0, Section 2.1, the first sentence of Section 9.0(a) and
the first sentence of Section 9.0(b), in each case, shall become fully
effective and binding on the parties (as applicable) on the date of this
Agreement.

 

2.4           Commercial Operation Date. Seller shall
take all commercially reasonable steps to ensure that the Commercial Operation
Date is no later than the Scheduled Commercial Operation Date.  If the Commercial Operation Date does not
occur until after the Scheduled Commercial Operation Date, the Seller shall pay
to Buyer Construction Delay Damages for each day that the Commercial Operation
Date is delayed beyond the Scheduled Commercial Operation Date.  In no event will the aggregate amount of
Construction Delay Damages paid by the Seller to Buyer exceed ***** dollars (US$*****).  In the event that the Commercial Operation
Date does not occur by the COD Deadline, Buyer shall be entitled to terminate
this Agreement by giving Seller prior written notice of ten (10) Business
Days.  Payment of Construction Delay
Damages shall be Buyer’s sole and exclusive remedy for any failure to achieve
the Commercial Operation Date by the Scheduled Commercial Operation Date, and
the right to terminate (as set forth in this Section 2.4) shall be Buyer’s
sole and exclusive remedy for any failure to achieve the Commercial Operation
Date by the COD Deadline.  THE
PARTIES AGREE THAT BUYER MAY BE SUBSTANTIALLY DAMAGED IN AMOUNTS THAT MAY BE
DIFFICULT OR IMPOSSIBLE TO DETERMINE IN THE EVENT THAT SELLER FAILS TO ACHIEVE
THE COMMERCIAL OPERATION DATE BY THE SCHEDULED COMMERCIAL OPERATION DATE.
THEREFORE, THE PARTIES HAVE AGREED ON SUMS THAT THE PARTIES AGREE ARE
REASONABLE AS LIQUIDATED DAMAGES FOR THE DAMAGE IDENTIFIED IN THE PRECEDING

 

11

 

SENTENCE,
AND IT IS FURTHER UNDERSTOOD AND AGREED THAT PAYMENT OF SUCH SUMS IS IN LIEU OF
ACTUAL DAMAGES FOR SUCH FAILURE. SELLER HEREBY WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ANY DEFENSE AS TO THE VALIDITY OF ANY LIQUIDATED DAMAGES IN
THIS AGREEMENT ON THE GROUNDS THAT SUCH LIQUIDATED DAMAGES ARE VOID AS
PENALTIES.

 

ARTICLE 3.

PURCHASE OF ENERGY BY BUYER

 

3.0           Sale and Purchase
Obligations. Commencing on the Commercial Operation Date and for the
remainder of the Term and subject to the provisions hereof, Seller shall sell
and deliver, or cause to be delivered, and Buyer shall purchase and receive, or
cause to be received, all Delivered Electricity.  Buyer shall be under no obligation to
purchase any Delivered Electricity generated by means other than the Facility
(other than balancing power purchased by the Seller from the NBSO).

 

3.1           Deliveries. Delivery of all
energy sold and purchased hereunder shall be made at the Delivery Point.

 

3.2           Delivered Electricity Price. For all
Delivered Electricity delivered to the Delivery Point on and after the
Commercial Operation Date, Buyer shall pay the Seller a price for all Delivered
Electricity (and all balancing
power purchased by the Seller from the NBSO) (the “Delivered Electricity Price”). 
The Delivered Electricity Price is set forth in Schedule A
attached hereto.  Seller shall also pay
Buyer a Scheduling Fee as set forth in Section 3.8 below.

 

3.3           Test Energy Price. For all
Delivered Electricity delivered to the Delivery Point before the Commercial
Operation Date, the Buyer shall pay the Seller a price equal to the product of (a) ***** multiplied by (b) the
Keswick real-time LMP as determined by ISO-NE for the same hours.  Seller shall also pay Buyer a Scheduling Fee
as set forth in Section 3.8 below.

 

3.4           Delivery Costs. Buyer shall be
responsible for all transmission arrangements associated with moving Delivered
Electricity from the Delivery Point to the location where the Buyer ultimately
sells or transfers ownership of the Delivered Electricity, and Buyer shall be
responsible for all associated Delivery Costs. 
The term “Delivery Costs”
shall include actual tariff and related direct costs associated with moving
Delivered Electricity from the Delivery Point to the location where the Buyer
ultimately sells or transfers ownership of the Delivered Electricity.  The applicable tariffs and related costs
shall include, without limitation, the NBSO tariff, MEPCO tariff, ISO-NE
tariff, and Transenergie tariff (Quebec). 
The applicable tariff and related direct costs include, but are not
limited to, transmission tariff rates, losses, and ISA administrative charges,
but will not include administrative, labor, or other costs.  Delivery Costs shall not include MPS tariff
or ISA tariff costs which will be the responsibility of the Seller.  Delivery Costs shall not include energy
imbalance costs assessed by NBSO which will be the responsibility of the Seller.  Buyer shall document and record all Delivery
Costs and make available to Seller upon request.

 

12

 

3.5             Delivery Minimum.

 

(a)           Beginning on the Commercial Operation Date, other
than for events of Force Majeure or Transmission Curtailment Events, in the
event the Delivered Electricity amount is less than the applicable volumes
shown in Schedule B (the “Minimum
Delivered Electricity Amount”) in any calendar quarter, Seller will reimburse Buyer
an amount equal to the product of the Deficient Electricity amount and the Deficient
Electricity Price.

 

(b)           Notwithstanding the above, the maximum aggregate
amount Seller shall reimburse Buyer for Deficient Electricity during any
calendar quarter shall be ***** dollars (US $*****).

 

(c)           Payment of the amounts set forth in this Section 3.5
shall be Buyer’s sole and exclusive remedy for any failure by Seller to produce
and deliver the Minimum Delivered Electricity Amount in any calendar quarter.  THE PARTIES AGREE THAT BUYER MAY BE SUBSTANTIALLY
DAMAGED IN AMOUNTS THAT MAY BE DIFFICULT OR IMPOSSIBLE TO DETERMINE IN THE
EVENT THAT SELLER FAILS TO DELIVER THE MINIMUM DELIVERED ELECTRICITY AMOUNT IN
ANY CALENDAR QUARTER. THEREFORE, THE PARTIES HAVE AGREED ON SUMS THAT THE
PARTIES AGREE ARE REASONABLE AS LIQUIDATED DAMAGES FOR THE DAMAGE IDENTIFIED IN
THE PRECEDING SENTENCE, AND IT IS FURTHER UNDERSTOOD AND AGREED THAT PAYMENT OF
SUCH SUMS IS IN LIEU OF ACTUAL DAMAGES FOR SUCH FAILURE. SELLER HEREBY WAIVES, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY DEFENSE AS TO THE VALIDITY OF ANY
LIQUIDATED DAMAGES IN THIS AGREEMENT ON THE GROUNDS THAT SUCH LIQUIDATED
DAMAGES ARE VOID AS PENALTIES.

 

3.6             NERC Tags. Buyer agrees to
generate and/or transfer all NERC Tags necessary for and associated with the
delivery of the Delivered Electricity into ISO-NE. Any NERC Tags and associated
rights shall remain the property of the Seller at all times, and Seller shall
have the right to sell, assign or transfer such NERC Tags and associated rights
at Seller’s sole discretion.

 

3.7             Delivery to ISO-NE.

 

(a)           Buyer shall deliver any Delivered Electricity into
ISO-NE (unless otherwise directed by Seller and approved by Buyer), including
Delivered Electricity produced prior to the Commercial Operation Date.  If Buyer fails to deliver any Delivered
Electricity to ISO-NE for any reason (other than as a result of a Transmission
Curtailment Event), then Buyer shall indemnify and reimburse Seller for any
direct costs, damages and/or alternative compliance payments, including
electrical energy, REC and/or Capacity Value lost revenue.  Other than a Transmission Curtailment Event,
lack of available transmission capacity shall not excuse performance under this
Section.  Upon request, Seller shall provide
Buyer with a reasonable estimate (if prior to such non-delivery) or written
evidence (if subsequent to such non-delivery) of any damages, costs, payments,
credits, or lost electrical energy, REC and/or Capacity Value revenue to be
reimbursed hereunder.  Buyer shall
reimburse Seller for all such amounts in the Month following the non-delivery,
upon written request from Seller.

 

13

 

(b)           Buyer shall ensure that
no other energy deliveries to ISO-NE scheduled by Buyer are treated under more
favorable terms.

 

3.8           Scheduling Fee.
The Buyer shall deduct from amounts otherwise due Seller hereunder an amount as
set forth in Schedule C for each MWh of Delivered Electricity (the “Scheduling
Fee”).  Subject to a pro rata
reduction in the case of a Force Majeure occurring during the applicable
calendar quarter, the Minimum Scheduling Fee for each calendar quarter of the
year will be US$*****.  Partial periods
will be pro-rated.  Notwithstanding the
foregoing, if a Transmission Curtailment Event precludes Buyer from delivering
Delivered Electricity through New Brunswick to ISO-NE, then for the duration of
the Transmission Curtailment Event, Buyer shall not be entitled to a Scheduling
Fee and the Minimum Scheduling Fee shall be reduced pro rata to reflect the
duration of the Transmission Curtailment Event(s) during the applicable
calendar quarter.

 

3.9           RECs. All RECs generated by the
Facility shall remain the property of the Seller and are specifically excluded
from the scope of Buyers’ purchase obligations hereunder.  Seller shall have the right to sell, assign
or transfer such RECs at Seller’s sole discretion.  Buyer agrees to use all commercially
reasonable efforts to assist Seller in demonstrating delivery of Delivered Electricity
to ISO-NE for the purpose of creating associated RECs, including, but not
limited to, producing relevant reports, certifications and releasing data.

 

3.10         Capacity Value. All Capacity Value available in
connection with the Facility shall remain the property of the Seller and is
specifically excluded from the scope of Buyer’s purchase obligations hereunder.  Seller shall have the right to sell, assign
or transfer such Capacity Value at Seller’s sole discretion.

 

3.11         Rates and Charges Not Subject to Review. The rates and
charges for services specified in this Agreement shall remain in effect for the
Term, and shall not be subject to change for any reason, including regulatory
review, absent agreement of the parties. 
Absent the agreement of both parties to any proposed change of rates,
the standard of review for changes to any section of this Agreement specifying
the rate(s) or other material economic terms and conditions agreed to by
the parties herein, whether proposed by a party, a non-party or FERC acting
sua sponte, shall be the “public interest” standard of review set forth in United
Gas Pipe Line Co., v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal
Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956).  The parties, for themselves and their
successors and assigns, (i) agree that this “public interest” standard
shall apply to any proposed changes in any other documents, instruments and
other agreements executed or entered into by the parties in connection with
this Agreement and (ii) hereby expressly and irrevocably waive any rights
they can or may have to the application of any other standard of review,
including the “just and reasonable” standard.

 

3.12         Costs and Charges. Seller shall be responsible for all costs
or charges imposed in connection with the delivery of Excess Electricity to the
Delivery Point, subject to Section 3.4. 
Buyer shall be responsible for all costs or charges imposed in
connection with the Delivered Electricity delivered under this Article 3
at and from the Delivery Point, subject to Section 3.4

 

14

 

3.13       Title and Risk of Loss. Seller shall be
deemed to be in exclusive control of, and responsible for, any damage or injury
caused by, Delivered Electricity delivered under this Article 3 prior to
delivery at the Delivery Point; and Buyer shall be deemed to be in exclusive
control of, and responsible for, any damages or injury caused by, Delivered
Electricity delivered hereunder at and from the Delivery Point.  Seller shall have exclusive right, title and
interest in the Delivered Electricity sold to Buyer and warrants that it will
deliver Delivered Electricity to Buyer under this Article 3 free and clear
of all liens, claims and encumbrances.  Title
to and risk of loss of all Delivered Electricity delivered under this Article 3
shall transfer from Seller to Buyer upon delivery of the Delivered Electricity
to Buyer at the Delivery Point.

 

3.14       Standard of Operation. Seller shall
operate the Facility in accordance with (i) the applicable practices,
methods, acts, guidelines, standards and criteria of FERC and the ISA and any
successors to the functions thereof; (ii) all applicable Requirements of
Law; and (iii) Prudent Utility Practice. 
Seller will obtain all certifications, permits, licenses and approvals
necessary to construct, operate and maintain the Facility and to perform its
obligations under this Agreement during the Term.  Seller will be responsible for the
coordination and synchronization of the Facility’s equipment with the System,
and shall be solely responsible for any damage that may occur as a direct
result of Seller’s improper coordination or synchronization of such equipment
with the System.

 

3.15       Operating Procedures. The operating
procedures attached hereto as Exhibit A (the “Operating Procedures”)
establish the protocols under which the parties will perform their respective
obligations under this Agreement and include procedures concerning the
following: (1) the method of day-to-day communications; (2) the
method of providing output forecasts and scheduling, both day ahead and
intraday; (3) key personnel lists for Seller and Buyer; (4) Forced
Outage and Planned Outage reporting; (5) optimization for Seller of
Delivered Energy sales; and (6) assessing changes in the New Brunswick and
New England energy markets.  Buyer and
Seller agree to amend and update the Operating Procedures from time to time to
reflect the actual operation of the Facility.

 

15

 

3.16           Outages.

 

(a)           Maintenance Outages.  If
during the Term Seller needs to schedule a Maintenance Outage of the Facility
which will effect more then *****
of the Nameplate Capacity Rating, Seller shall, at least 3 days prior to such
outage, notify Buyer of such proposed Maintenance Outage and the parties shall
plan such outage of capacity to mutually accommodate the reasonable
requirements of Seller and service obligations of Buyer.  Notice of a proposed Maintenance Outage shall
include the expected start date of the outage, the amount of capacity of the
Facility that will not be available and the expected completion date of the
outage, and shall be given to Buyer at the time the need for the Maintenance
Outage is determined by Seller.  Buyer
shall promptly respond to such notice and may request reasonable modifications
in the schedule for the outage.  Seller
shall use all reasonable commercial efforts to comply with such a request to
reschedule a Maintenance Outage.  Seller
shall notify Buyer of any subsequent changes in such capacity not available to
Buyer or any subsequent changes in such Maintenance Outage completion date.  As soon as practicable, any such
notifications given orally shall be confirmed in writing.

 

(b)           Planned Outages.  The
Buyer and Seller agree that Seller will use commercially reasonable efforts to
ensure that no Planned Outages occur between the dates of December 1st and February 28th during the Term.  Seller shall notify Buyer quarterly of its
Planned Outage schedule.

 

(c)           Forced Outages.  Seller
shall promptly provide to Buyer an oral report of a Forced Outage which has
effected more then ***** of the
Nameplate Capacity Rating of the Facility, which report shall include the
amount of the capacity of the Facility that will not be available because of
such Forced Outage and the expected return date of such capacity, and shall
update such report as necessary to advise Buyer of changed circumstances.  As soon as practicable, all such oral reports
shall be confirmed in writing.

 

3.17           Electricity Output
Communications. Seller will provide telemetering equipment and
facilities capable of transmitting the following information with respect to
the Facility to Buyer and to the control center of Buyer and will operate such
equipment when requested by Buyer:

 

(i)            Excess Electricity;
and

 

(ii)           Delivered Electricity.

 

3.18         Power.  All Delivered Electricity
delivered by Seller to the Delivery Point (a) shall be in the form of
three-phase alternating current having a nominal frequency of sixty cycles per
second and a harmonic content consistent with the requirements of the Institute
of Electrical and Electronic Engineers Standard No. 519 and a voltage content
consistent with guidelines with respect to the System, and (b) shall be in
material compliance with all requirements in the Interconnection Agreement.

 

3.19           Taxes. Seller shall be responsible
for all existing and any new sales, use, excise, ad valorem, and any other
similar taxes, imposed or levied by any federal, state, provincial or local
governmental agency on the Delivered Electricity sold and delivered under this Article 3

 

16

 

before the delivery of such
Delivered Electricity to the Delivery Point. 
Buyer shall be responsible for all existing and any new sales, use,
excise, ad valorem, and any other similar taxes, imposed or levied by any
federal, state, provincial or local government agency on the Delivered
Electricity sold and delivered under this Article 3 upon and after the
delivery of such Delivered Electricity to the Delivery Point.  For the avoidance of doubt Buyer shall be
responsible for any harmonized sales tax and any goods and services tax.  Each party shall indemnify, release, defend
and hold harmless the other party from and against any and all liability for
taxes imposed or assessed by any taxing authority with respect to the Delivered
Electricity sold, delivered and received hereunder that are the responsibility
of the first party pursuant to this Section 3.19.

 

3.20           Exclusive Nature of
Agreement. The relationship between the Buyer and Seller with respect
to energy produced by the Facility for the Term of this Agreement is exclusive.  As long as Buyer is not in default of this
Agreement and as long as there is not a Force Majeure or Transmission
Curtailment Event that impacts a party’s ability to perform under this
Agreement, the Seller shall not sell or make energy available from the Facility
to any other Person (except for balancing power that is sold to the NBSO).  If Buyer is in default of this Agreement or
if there is a Force Majeure or Transmission Curtailment Event that impacts a
party’s ability to perform under this Agreement, Seller shall be entitled to
sell or make energy available from the Facility to any other Person.

 

ARTICLE 4.

 

REPRESENTATIONS AND WARRANTIES

 

4.0             Representations and
Warranties. As a material inducement to execution of this Agreement,
each party hereby represents and warrants to the other party that:

 

(a)           It is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation, and is qualified to conduct its business in all jurisdictions
necessary to perform its obligations hereunder;

 

(b)           The execution, delivery
and performance of this Agreement are within its powers, have been duly
authorized by all necessary action and do not violate any of the terms or
conditions in its governing documents or any agreement to which it is a party,
or any law, rule, regulation, order, writ, judgment, decree or other legal or
regulatory determination applicable to such party;

 

(c)           This Agreement
constitutes a legal, valid and binding obligation of such party, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
reorganization and other laws affecting creditor’s rights generally, and with
regard to equitable remedies, to the discretion of the court before which
proceedings to obtain same may be pending;

 

(d)           There are no
bankruptcy, insolvency, reorganization, receivership or other arrangement
proceedings pending or being contemplated by it, or to its knowledge threatened
against it;

 

17

 

(e)                                  To such party’s
knowledge, there are no actions, proceedings, judgments, rulings or orders,
issued by or pending before any court or other governmental body that would
materially adversely affect its ability to perform this Agreement; and

 

(f)                                    Except for the
Specified Authorizations and the Specified Notices in the case of Seller, no
consent, approval or authorization of, or registration, filing or declaration
with, any federal, provincial or state governmental authority or other
regulatory agency (which has not been received, waived or satisfied as of the
date hereof), as the case may be, or other person is required for the valid
execution and delivery by such party of this Agreement, the consummation by
such party of the transactions contemplated thereby or compliance by such party
with the terms and provisions thereof.

 

4.1                                 Specified Authorizations.
Seller will obtain, at its sole cost and expense, the Specified
Authorizations and issue the Specified Notices, in each case, on or before the
Commercial Operation Date. Upon procuring the Specified Authorizations and
providing the Specified Notices, Seller will promptly notify Buyer.

 

4.2                                 No Immunity. Buyer warrants and covenants that
with respect to its contractual obligations hereunder and performance thereof,
it will not claim immunity on the grounds of sovereignty or similar grounds
with respect to itself or its revenues or assets from (a) suit, (b) jurisdiction
of any arbitral panel or court (including an arbitral panel or court located
outside the jurisdiction of its organization), (c) relief by way of
injunction, order for specific performance or recovery of property, (d) attachment of assets, or (e) execution
or enforcement of any judgment.

 

4.3                                 No Other Representations and
Warranties. Each party acknowledges that it has entered into this
Agreement in reliance upon only the representations and warranties set forth in
this Agreement, and that no other representations or warranties have been made
by the other party with respect to the subject matter hereof.

 

ARTICLE
5.

 

EVENTS
OF DEFAULT AND TERMINATION; REMEDIES AND EARLY TERMINATION

 

5.0                                 Events of Default. The following
occurrences shall constitute “Events
of Default” (except to the extent caused by a Force Majeure or a
Transmission Curtailment Event):

 

(a)                                  Failure by a party to
make any payment required hereunder or under any other Transaction Document
when due if such failure is not remedied within ten (10) Business Days
after receipt by the Defaulting Party of written notice of such failure,
provided that if the payment in question is the subject of a good faith
dispute, such payment may be paid into an independent
escrow account pursuant to Section 6.2 (pending resolution of such
dispute);

 

(b)                                 Failure by a party to
perform any other material obligation hereunder or under any other Transaction
Document and such failure is not remedied within thirty (30) days after receipt
by the Defaulting Party of written notice of such failure by the Non-Defaulting
Party; provided that, with written notice from such Defaulting Party such
thirty (30) day period shall be extended by an additional ninety (90) days as
shall be necessary for the Defaulting Party

 

18

 

to
cure such failure and as long as (i) such default is subject to cure
within such additional period, (ii) the Defaulting Party commences such
cure within the thirty day period after receipt of the written notice by the
Non-Defaulting Party and is at all times thereafter diligently and continuously
proceeding to cure such failure and (iii) if the Buyer is the Defaulting
Party, the security interests granted pursuant to the Assignment Agreement
would not be impaired by such an extension;

 

(c)                                  Any representation or warranty made by a
party pursuant to Article 4 or in any other Transaction Document shall
have been false in any material respect when made;

 

(d)                                 The Buyer’s acts or omissions cause the
security interest created under the Assignment Agreement to cease to be
enforceable and of the same effect and priority purported to be created
thereunder;

 

(e)                                  A party:

 

(i)                                     commences a voluntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization or other similar
law or consents to the filing of a petition to such effect or to the appointment
of or taking possession by a custodian, receiver or similar official of such
party of all or substantially all its property or assets, or admits in writing
its inability to pay its debts generally as they become due, or takes corporate
action in furtherance of any such action, or is the subject of an entry by a
court having jurisdiction of a decree or order for relief in an involuntary
case or proceeding under any such law or a decree or order making such an
appointment; or

 

(ii)                                  takes advantage of any law or governmental
regulation relating to bankruptcy or insolvency in any jurisdiction; or

 

(iii)                               has a receiver or receiver manager or a court
appointed official appointed for all or substantially all of its property or
assets; or

 

(iv)                              makes an assignment or attempted
assignment  for the benefit of its creditors, subject to
a party’s rights to make a permitted assignment pursuant to Section 7.0 or

 

(v)                                 institutes any proceedings for the cessation
of its business or corporate existence; or

 

(vi)                              consolidates, reorganizes, reincorporates or
reconstitutes into or as, amalgamates with, or merges into or with, or transfers substantially all of its assets to another entity and either

 

a.                                       the resulting or surviving entity fails to
assume all of such party’s obligations hereunder by operation of law or
pursuant to an agreement reasonably satisfactory to the other party; or

 

b.                                      the resulting or surviving entity’s
creditworthiness is, in the reasonable opinion of the Non-Defaulting Party,
materially weaker than that of the transferring entity immediately prior to
such action;

 

19

 

(vii)                           has any governmental authority or other third
party seize, expropriate or confiscate all or a substantial part of its
property or assets.

 

5.1                                 Events of Termination. The following occurrence shall constitute an
Event of Termination: failure of either party to substantially perform its
obligations under this Agreement on account of Force Majeure for a period
exceeding 180 days.

 

5.2                                 Early Termination.

 

(a)                                  Upon the occurrence of, and during the
continuation of, an Event of Default, the Non-Defaulting Party (as the
Terminating Party) may terminate this Agreement by written notice to the other
party designating the date of early termination and delivered to the Defaulting
Party no less than ten (10) days before such early termination date.

 

(b)                                 Upon the occurrence of, and during the
continuation of, an Event of Termination,

 

(i)                                     Either

 

a.                                       in the event of one Affected Party, the
Non-Affected Party (as the Terminating Party), or

 

b.                                      in the event of two Affected Parties, either
party (as the Terminating Party), 

 

in either case, may terminate this Agreement by notice to the other
party designating the date of early termination and delivered to the other
party no less than ten (10) days before such early termination date.

 

(c)                                  In the event of an early termination of this
Agreement pursuant to Section 5.2(b), no Termination Amount shall be
payable by either party. In the event of an early termination of this Agreement
pursuant to Section 5.2(a), the applicable Terminating Party shall
calculate in good faith an amount (if any) to be received by it as a result of
the termination of this Agreement (the “Termination Amount”) equal to:

 

(i)                                     If the Buyer is the Terminating Party, the
then-applicable Buyer Exposure Amount plus any Costs
incurred by the Buyer; and

 

(ii)                                  If the Seller is the Terminating Party, the
then-applicable Seller Exposure Amount plus any  Costs incurred by the Seller.

 

(d)                                 The other Party shall pay the Terminating
Party an amount equal to the applicable Termination Amount, together with
interest at the Default Rate from the early termination date until the date of
payment. The Terminating Party shall calculate such amount as of the early termination
date or promptly thereafter, and promptly notify the other party of the
Termination Amount showing in reasonable detail how such amount was calculated.
The owing party shall pay the Terminating Party the required amount within 30
Business Days of notification of the Termination Amount. For the avoidance of
doubt, in the event of an early

 

20

 

termination of this Agreement pursuant to
Section 5.2(a), the Defaulting Party shall not be entitled to receive any
Termination Amount.

 

(e)                                  In the event of an early termination of this
Agreement pursuant to Section 5.2(a), the Terminating Party may exercise
and enforce each and all of the rights and remedies available to it under this
Agreement and, in accordance with Article 9, the applicable Credit Support provided by the other party. In addition, in the event of an early termination of this Agreement
pursuant to Section 5.2(a), if the Terminating Party is the Seller, Seller
may exercise and enforce, in any order, (i) each and all of the rights and
remedies available to a secured party under the UCC, the PPSA or other
applicable law and (ii) each and all of the rights and remedies available
to it under the Assignment Agreement.

 

(f)                                    In the event of a termination of this
Agreement, the parties’ respective obligations under this Agreement shall
terminate (other than those obligations which expressly are to be
performed after termination or which survive termination pursuant to
Section 5.3 hereof).

 

(g)                                 (i) In the event of a termination of this Agreement, each party shall pay to the other all
amounts due the other under this Agreement for all periods prior to
termination.

 

(ii)                                  The amounts due pursuant to subsection
(i) shall be paid within thirty (30) days of the billing date for such
charges plus interest thereon from the date of early termination until the date
paid. Interest shall be calculated at,

 

a.                                       in the case of an Event of Default, the
Default Rate, or

 

b.                                      in the case of an Event of Termination, the
Interest Rate

 

(iii)                               The amounts payable under this
Section 5.2 shall constitute the only amounts due upon the termination of
this Agreement by either party, and no party shall be required to pay any
amounts upon termination in excess of the amounts specified in this
Section 5.2. The right to terminate this Agreement and recover the amounts
and exercise the rights specified in this Section 5.2 shall constitute the
sole and exclusive remedies of the parties in the event of an early termination
of this Agreement as a result of an Event of Default or Event of Termination.

 

(h)                                 THE PARTIES AGREE THAT THE
NON-DEFAULTING PARTY MAY BE SUBSTANTIALLY DAMAGED IN AMOUNTS THAT MAY BE
DIFFICULT OR IMPOSSIBLE TO DETERMINE IN THE EVENT THAT THIS AGREEMENT IS
TERMINATED AS A RESULT OF AN EVENT OF DEFAULT PRIOR TO THE END OF THE SCHEDULED
TERM. THEREFORE, THROUGH THE CALCULATION OF THE TERMINATION AMOUNT AS SET FORTH
HEREIN, THE PARTIES HAVE AGREED ON SUMS THAT THE PARTIES AGREE ARE REASONABLE
AS LIQUIDATED DAMAGES FOR THE DAMAGE IDENTIFIED IN THE PRECEDING SENTENCE, AND
IT IS FURTHER UNDERSTOOD AND AGREED THAT PAYMENT OF SUCH SUMS IS IN LIEU OF
ACTUAL DAMAGES FOR SUCH FAILURE. EACH PARTY HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY DEFENSE AS TO THE VALIDITY OF ANY TERMINATION
AMOUNT IN THIS

 

21

 

AGREEMENT ON THE GROUNDS THAT SUCH
LIQUIDATED DAMAGES ARE VOID AS PENALTIES.

 

5.3                                 Survival.  The expiration or termination of this Agreement shall be without
prejudice to all rights and obligations of the parties accrued under this
Agreement prior to the date of such expiration or termination. The provisions
of Sections 3.12, 3.19, 4.2, 4.3, 5.2, 6.2, 6.3, 6.4, 6.5, 8.1, 8.2, 8.3, 8.4,
9.1(f) and Articles 10, 12 and 13 shall survive the termination of this
Agreement.

 

ARTICLE
6.

 

BILLING
AND PAYMENT; RECORDS

 

6.0                                 Billing and Payment. Each Month during the Term, Buyer shall send
to Seller a statement setting forth the total amount due for Delivered
Electricity delivered to Buyer during the immediately preceding Month, the
quantity of Delivered Electricity that was delivered to Buyer during such
Month, and any other amounts due to Seller or to Buyer under this Agreement. In
the event that Buyer fails to send Seller such a statement in any given Month,
Seller shall be entitled to prepare such statement and deliver it to Buyer.
Payments pursuant to invoices due from either party shall be due on or before
the latter of the twentieth (20th) day of each Month, or tenth (10th) day after
receipt of the invoice or, if such day is not a Business Day, then on the next
Business Day. Payment shall be made by wire transfer to the other party’s
account.

 

6.1                                 Interest on Late Payments. Amounts not paid when due shall accrue
interest from, and including, the due date to, and excluding, the date of
payment at the Default Rate.

 

6.2                                 Disputed Amounts. If either party, in good faith, disputes any
amount due pursuant to a statement rendered hereunder, such party shall (i) notify
the other party of the specific basis for the dispute, (ii) pay that
portion of the statement that is undisputed on or before the due date and (iii) pay
into an independent escrow account (in accordance with escrow arrangements
reasonably acceptable to the parties) the portion of the statement in dispute,
pending resolution of such dispute. Any dispute notice shall be provided within
one year of the date of the invoice in which the error first occurred. If any
amount disputed by such party is determined to be due the other party through
arbitration in accordance with Section 12.1, or if the parties resolve the
payment dispute, the amount due shall be paid out of escrow within five (5) days
of such determination or resolution, along with interest accrued at the Default
Rate from the date due until the date paid.

 

6.3                                 Records. Each party shall keep and maintain all
records as may be necessary or useful in performing or verifying any
calculations made pursuant to this Agreement, or in verifying such party’s
performance hereunder. All such records shall be retained by each party for at
least three calendar years following the calendar year in which such records
were created.

 

6.4                                 Currency. All amounts set forth in this Agreement are
denominated in US dollars, and all payments under this Agreement shall be made
in US dollars.

 

22

 

6.5                                 Audit.

 

(a)                                  Each party, through
an internationally-recognized accounting firm (reasonably acceptable to the
other party), shall have the right, at its sole expense and during normal
business hours, to examine and copy the records of the other party to the
extent reasonably necessary to verify the accuracy of any statement, charge or
computation made hereunder or to verify the other party’s performance of its
obligations hereunder. Upon request, each party shall provide to the other
party statements evidencing the quantities of energy delivered at the Delivery
Point and delivered to ISO-NE (or other Market Delivery Point). If any
statement is found to be inaccurate, a corrected statement shall be issued and
any amount due thereunder will be promptly paid and shall bear interest
calculated at the Default Rate from the date of the overpayment or underpayment
to the date of receipt of the reconciling payment. Notwithstanding the above,
no adjustment shall be made with respect to any statement or payment hereunder
unless a party questions the accuracy of such payment or statement within one
year after the date of such statement or payment.

 

(b)                                 In addition, Seller
will provide to Buyer from time to time the following information with respect
to the Facility:

 

(i)                                     The manufacturers’
guidelines and recommendations for maintenance of the Facility equipment;

 

(ii)                                  A report
summarizing the results of maintenance performed during each Planned Outage and
any Forced Outage, and upon request of Buyer any of the technical data obtained
in connection with such maintenance; and

 

(iii)                               From the start of
construction of the Facility but before the Commercial Operation Date, a
monthly progress report stating the percentage completion of the Facility and a
brief summary of construction activity during the prior Month.

 

(iv)                              A report
summarizing the operating results from the Facility.

 

(v)                                 A report detailing
the upcoming Maintenance and Planned Outages.

 

(c)                                  Upon reasonable
prior notice (in light of the circumstances) and subject to the safety rules and
regulations of Seller, Seller will provide Buyer and its authorized agents,
employees and inspectors with reasonable access to the Premises and the
Facility: (i) for the purpose of reading or testing metering equipment, (ii) in
connection with the operation and maintenance of the Interconnection
Facilities, (iii) to provide tours of the Facility to customers and other
guests of Buyer, and (iv) for other reasonable purposes at the reasonable
request of Buyer.

 

23

 

ARTICLE
7.

 

ASSIGNMENT;
BINDING EFFECT

 

7.0                                 Assignment.

 

(a)                                  Neither party shall
assign this Agreement or any of its rights or obligations hereunder without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, Seller may,
without the consent of Buyer, assign this Agreement or the accounts, revenues
or proceeds hereof in connection with any financing or other financial
arrangements in accordance with subsection (b) below.

 

(b)                                 Seller may assign,
pledge or mortgage its rights hereunder for security of any indebtedness and (i) upon
giving notice to the Buyer of such assignment, pledge or mortgage, (A) the
assignee, pledgee or mortgagee shall be entitled to exercise all rights and
remedies it may have with respect to this Agreement without the further consent
of the Buyer, to receive a copy of any notice given by the Buyer or the Seller
pursuant to the terms hereof, and to deliver any notice permitted under this
Agreement on the Seller’s behalf, and (B) the Buyer shall be entitled to
assume the due authority of the assignee, pledgee or mortgagee in taking any
action or authorizing any notice without the necessity of independently
reviewing the assignment, pledge, mortgage, or other security instrument
delivered by the Seller to the assignee, pledgee or mortgagee and to accept
performance by the assignee, pledgee or mortgagee of any duty or obligation of
the Seller hereunder, and (ii) upon giving the Buyer a copy of a trustee’s
deed, deed in lieu of foreclosure, or other instrument pursuant to which the
assignee, pledgee, mortgagee, or other party acquires legal title to this
Agreement, (A) the assignee, pledgee, mortgagee, or other party shall
assume the Seller’s duties and obligations hereunder, provided that the
liability of any such assignee, pledgee or mortgagee under this Agreement
following such assumption shall be limited to its interests under the
Agreement, and (B) Buyer shall accept the assignee, pledgee, mortgagee, or
other party as the successor to the Seller under the Agreement. At the request
of Seller, Buyer agrees to execute and deliver a consent in a form reasonably
acceptable to the party(ies) providing financing to the Seller.

 

7.1                                 Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective successors and
permitted assigns.

 

ARTICLE
8.

 

FORCE
MAJEURE; INDEMNITY; LIMITATION OF LIABILITY

 

8.0                                 Force Majeure. If either party
is rendered unable by Force Majeure to carry out, in whole or in part, its
obligations under this Agreement, then, during the pendency of such event of
Force Majeure, but for no longer period, the obligations of the Affected Party
(other than the obligation to make payments hereunder when due) shall be
suspended to the extent required. The Affected Party shall (a) endeavor to
give the other Party oral notice as soon as reasonably practicable following
such event of Force Majeure and, in any case, give the other Party written
notice within 48 hours of the commencement of the Force Majeure event, with
details to be

 

24

 

supplied within 3 Business Days after the commencement of the Force
Majeure event further describing the particulars of the occurrence of the Force
Majeure event, and (b) take all reasonable steps to remedy the cause of
the Force Majeure with all reasonable dispatch; provided, however, that this
provision shall not require Seller to deliver, or Buyer to receive, Delivered
Electricity at points other than the Delivery Point. Notwithstanding the
foregoing, in no event will any Force Majeure event extend this Agreement
beyond its Term.

 

8.1                                 Indemnification.

 

(a)                                  Each party shall
indemnify and hold harmless the other party and its officers, directors, agents
and employees from and against any and all claims, demands, actions, losses,
liabilities, expenses (including reasonable legal fees and expenses), suits and
proceedings of any nature whatsoever for personal injury, death or property
damage to each other’s property or facilities or personal injury, death or
property damage to third parties (collectively “Liabilities”) caused by the breach or gross negligence
or willful misconduct of the indemnifying party that arise out of or are in any
manner connected with the performance of this Agreement except to the extent
such injury or damage is attributable to the gross negligence or willful
misconduct or breach of this Agreement by the party seeking indemnification
hereunder.

 

(b)                                 Without limiting the
foregoing, Buyer shall indemnify Seller from all Liabilities related to
Delivered Electricity once sold and delivered to Buyer at the Delivery Point
and Seller shall indemnify Buyer for all Liabilities related to Delivered
Electricity prior to its delivery by Seller at the Delivery Point.

 

(c)                                  Any fines, penalties
or other costs incurred by either party or such party’s agents, employees or
subcontractors for non-compliance by such party, its agents, employees or
subcontractors with the Requirements of Law will not be reimbursed by the other
party but will be the sole responsibility of such non-complying party.

 

8.2                                 Limitations of Remedies,
Liability and Damages. The parties agree that the remedies
and measures of damages provided in this Agreement satisfy the essential
purposes hereof and, where this Agreement expressly provides for an exclusive
remedy in favor of any party for breach, default or failure to perform
hereunder, such remedy shall constitute the sole and exclusive remedy of the
non-breaching party for the liabilities of such breaching party arising out of
or in connection with this Agreement, notwithstanding any remedy otherwise available
at law or in equity. If no measure of damages or other remedy is expressly
provided herein, the obligor’s liability shall be limited to direct actual
damages only, which direct actual damages shall be the sole and exclusive
remedy and all other remedies or damages at law or in equity are waived. Except
where this Agreement provides for an exclusive remedy, neither party shall be
liable for consequential, incidental, punitive, exemplary or indirect damages,
lost profits or other business interruption damages, whether such damages are
allowed or provided by statute, in tort, under this Agreement, under any indemnity provision or otherwise.

 

8.3                                 Duty to Mitigate. Each party
agrees that it has a duty to mitigate damages and covenants that it will use
commercially reasonable efforts to minimize any damages it may incur as a
result of the other party’s default or non-performance of this Agreement.

 

25

 

8.4                                 Interruption. MPS, ISA, NBSO, or MEPCO may physically interrupt
or curtail the physical flow of energy from the Facility to the Delivery Point or from the Delivery Point to
Market Delivery Point (individually a “Transmission Curtailment Event”),
provided, however, that a
Transmission Curtailment Event shall not be deemed to occur (a) with
respect to the flow of energy between the Facility and the Delivery Point if
the interruption or curtailment arose from or was attributable to Seller’s
acts, errors or omissions, and (b) with respect to the flow of energy
between the Delivery Point and the Market Delivery Point if the interruption or curtailment arose from or was
attributable to Buyer’s acts, errors or omissions. Each Party shall use
commercially reasonable efforts to limit the negative impact of any such
Transmission Curtailment Event on the other Party. The Parties shall convene a
meeting within 5 Business Days to review their actions. In the event any such
Transmission Curtailment Event presents an opportunity to maximize the value of
sales of Delivered Electricity, each party shall use commercially reasonable
efforts to take advantage of any such opportunity.

 

ARTICLE 9.

 

FINANCIAL ASSURANCES

 

9.0                                 Credit Support.

 

(a)                                  On or before the date that is five (5) Business
Days after the date of this Agreement, Seller shall provide to Buyer or arrange
for the provision of, in the form of Exhibit B, an irrevocable letter of
credit from an Acceptable Financial Institution (the “Initial Seller LC”) in an amount equal to $***** (the “Baseline Seller Credit
Support Amount”). The Baseline
Seller Credit Support Amount assumes an amount of Costs equal to $***** but is based on a Buyer Exposure Amount equal to zero (0). Except as
otherwise provided in this Article 9, Seller shall maintain or arrange for
the maintenance of the Initial Seller LC in effect for the remainder of the
Term, provided that at any time Seller may replace or cause to be replaced the
Initial Seller LC (or any subsequent Seller Credit Support) with (i) cash,
(ii) a replacement irrevocable letter of credit from an Acceptable
Financial Institution in substantially the form of the Initial Seller LC, (iii) a
guarantee from a Creditworthy Affiliate in form and substance reasonably
satisfactory to Buyer, or (iv) some combination of the foregoing, in each
case, for a value equivalent to the Seller Credit Support being replaced.

 

(b)                                 On or before the date that is five (5) Business
Days after the date of this Agreement, Buyer shall provide to Seller, in the
form of Exhibit C, an irrevocable letter of credit from an Acceptable
Financial Institution (the “Initial Buyer LC”) in an amount equal to $***** (the “Baseline Buyer Credit Support Amount”). The Baseline Buyer Credit Support Amount
assumes an amount of Costs equal to $***** but is based on a
Seller Exposure Amount equal to zero (0). Except as otherwise provided in this Article 9,
Buyer shall maintain the Initial Buyer LC in effect for the remainder of the
Term, provided that at any time Buyer may replace the Initial Buyer LC (or any
subsequent Buyer Credit Support) with (i) cash, (ii) a replacement
irrevocable letter of credit from an Acceptable Financial Institution in
substantially the form of the Initial Buyer LC, (iii) a guarantee from a
Creditworthy Affiliate in form and substance reasonably satisfactory to Seller,
or (iv) some combination of the foregoing, in each case, for a value
equivalent to the Buyer Credit Support being replaced.

 

26

 

(c)           The Credit Support posted or caused to be
posted by a party may be drawn by the other party if the party posting the
Credit Support has (i) failed to pay any undisputed amounts due under this
Agreement (or failed to pay disputed amounts into an independent escrow account
as required by Section 6.2, pending resolution of the dispute) within ten (10) days
after such amounts are due or (ii) failed to pay any amount disputed and
found to be due under Article 12 within ten (10) days after such
party’s receipt of notice resolving such dispute. If the Credit Support posted
or caused to be posted by either party is drawn pursuant to this Section 9.0(c),
the party posting or causing the posting of such Credit Support shall have the
obligation to replenish or arrange the replenishment of the Credit Support to
the amount required pursuant to Section 9.1 within ten (10) days
after receipt of notice that the Credit Support has been drawn.

 

(d)           In the event that the Credit Support posted
or caused to be posted by a party is in the form of a letter of credit, such
letter of credit may be drawn by the beneficiary if such letter of credit is
due to expire within thirty (30) days and the
party providing such letter of credit has failed to deliver or cause to be
delivered to the other party an extended or replacement letter of credit (or
alternative replacement Credit Support in the form specified in Sections 9.0(a) or
9.0(b), as the case may be) meeting the requirements of this Agreement. In the
event that the Credit Support posted or caused to be posted by a party is drawn
pursuant to this Section 9.0(d), the party drawing on such Credit Support
shall hold such amounts in trust as cash collateral and may use such cash
collateral, or any portion thereof, for the purposes described in Section 9.0(c);
provided, however, that if the other party shall thereafter replace or cause to
be replaced such cash collateral with replacement Credit Support meeting the
requirements of this Agreement, the party holding such cash collateral shall
return the cash collateral, or any remaining portion thereof, to the other
party as soon as practicable.

 

9.1           Increases or Reductions in Credit Support.

 

(a)           On each Credit Support Calculation Date, each
party shall review (i) the credit rating of the other party (if any), and (ii) the
amount of the Credit Support posted by the other party as compared to the
applicable Exposure Amount as of such Credit Support Calculation Date.

 

(b)           If on any Credit Support Calculation Date,
Buyer determines, acting reasonably, Seller’s creditworthiness to be
Unsatisfactory, then Buyer may continue to require that Seller Credit Support
be provided, and Seller agrees to provide such Seller Credit Support, in an
amount equal to the applicable Baseline Seller Credit Support Amount plus the applicable
Buyer Exposure Amount. If on any Credit Support Calculation Date, Seller
determines, acting reasonably, Buyer’s creditworthiness to be Unsatisfactory,
then Seller may continue to require that Buyer Credit Support be provided, and
Buyer agrees to provide such Buyer Credit Support, in an amount equal to the
Baseline Buyer Credit Support Amount plus the applicable Seller Exposure Amount.
However, if either party’s credit rating is determined to be Investment Grade,
then the other party shall return any undrawn Credit Support to such party
within five (5) Business Days after such determination.

 

(c)           If on any Credit Support Calculation Date, (i) the
sum of the applicable Baseline Seller Credit Support Amount plus the applicable
Buyer Exposure Amount is greater

 

27

 

than the amount of Seller Credit Support and
the amount of such difference exceeds the Threshold Amount, then Buyer may by
written notice require that, within five (5) Business Days, Seller
increase the amount of Seller Credit Support provided, and Seller agrees to
provide such increased Seller Credit Support, by the amount the applicable
Baseline Seller Credit Support Amount plus
the applicable Buyer
Exposure Amount exceeds the amount of Seller Credit Support then-posted. Any
incremental Seller Credit Support required from Seller may be in the form of (i) cash,
(ii) an irrevocable letter of credit from an Acceptable Financial
Institution in substantially the
form of the Initial Seller LC, (iii) a guarantee from a Creditworthy
Affiliate in form and substance reasonably satisfactory to Buyer, or (iv) some
combination of the foregoing, in each case, for a value equivalent to the
Seller Credit Support being provided. Alternatively, if on any Credit Support
Calculation Date, the sum of the applicable Baseline Seller Credit Support
Amount plus the
applicable Buyer Exposure Amount is less than the amount of Seller Credit
Support (by more than the Threshold Amount), then Seller shall be entitled to
reduce the amount of Seller Credit Support provided by the amount such Seller
Credit Support exceeds the sum of the applicable Baseline Seller Credit Support
Amount plus the
applicable Buyer Exposure Amount, and Buyer shall cooperate with Seller as
necessary to return or modify the undrawn Seller Credit Support no longer
required within five (5) Business Days.

 

(d)           If on any Credit Support Calculation Date, (i) the sum of the
applicable Baseline Buyer Credit Support Amount plus
the applicable Seller
Exposure Amount is greater than the amount of Buyer Credit Support and the
amount of such difference exceeds the Threshold Amount, then Seller may by
written notice require that, within five (5) Business Days, Buyer increase
the amount of Buyer Credit Support provided, and Buyer agrees to provide such
increased Buyer Credit Support, by the amount the applicable Baseline Buyer
Credit Support Amount plus the applicable Seller Exposure Amount exceeds
the amount of Buyer Credit Support then-posted. Any incremental Buyer Credit
Support required from Buyer may be in the form of (i) cash, (ii) an
irrevocable letter of credit from an Acceptable Financial Institution in
substantially the form of the Initial Buyer LC, (iii) a guarantee from a
Creditworthy Affiliate in form and substance reasonably satisfactory to Seller,
or (iv) some combination of the foregoing, in each case, for a value
equivalent to the Buyer Credit Support being provided. Alternatively, if on any
Credit Support Calculation Date, the sum of the applicable Baseline Buyer
Credit Support Amount plus the applicable Seller Exposure Amount is less
than the amount of Buyer Credit Support (by more than the Threshold Amount),
then Buyer shall be entitled to reduce the amount of Buyer Credit Support provided
by the amount such Buyer Credit Support exceeds the sum of the applicable
Baseline Buyer Credit Support Amount plus the applicable Seller Exposure Amount, and
Seller shall cooperate with Buyer  as necessary  to return or modify the undrawn  Buyer Credit Support no longer required within five (5) Business Days.

 

(e)           If at any time, the credit rating of a financial institution providing
Credit Support in the form of a letter of credit no longer qualifies as an
Acceptable Financial Institution or the credit rating of an Affiliate providing
Credit Support in the form of a guarantee no longer qualifies as a Creditworthy
Affiliate, then in either case the party posting such Credit Support shall
provide replacement Credit Support in the form specified in Sections 9.0(a) or
9.0(b), as the case may be.

 

(f)            Each party shall return to the other party,
as applicable, any undrawn Credit Support on or before the date that is the
later of (i) thirty (30) days after the date of

 

28

 

termination
of this Agreement, and (ii) five (5) Business Days after the date on
which the party providing the Credit Support has paid the other party all
amounts owed to such party under this Agreement.

 

ARTICLE 10.

 

CONFIDENTIALITY

 

10.0         Confidentiality.  The parties agree that the
parties’ proposals and negotiations prior to the date hereof concerning this Agreement, the terms of this Agreement, and the actual charges billed to
Buyer or Seller under this Agreement, constitute the confidential business
information (“Confidential Business Information”) of both parties. Except as set forth herein,
Seller and Buyer each agree to hold such Confidential Business Information
wholly confidential. Such Confidential Business Information may only be used by
the parties for purposes related to the approval, administration or enforcement
of this Agreement and for no other purpose.

 

Each party agrees not to disclose
Confidential Business Information to any other person (other than its
Affiliates, counsel, consultants, lenders (including prospective lenders),
equity investors (including potential equity investors), employees, officers
and directors), without the prior written consent of the other party, provided
that either party may disclose Confidential Business Information, if such
disclosure is required by law or pursuant to an order of a court or regulatory
agency or in order to enforce this Agreement or to seek approval of this
Agreement. In the event a party is required by law or by a court or regulatory agency
to disclose Confidential Business Information, such party shall to the extent
possible notify the other party at least three (3) Business Days in
advance of such disclosure.

 

Each party agrees that violation of the terms
of Article 10 constitutes irreparable harm to the other, and that the
harmed party may seek any and all remedies available to it at law or in equity,
including but not limited to injunctive relief.

 

ARTICLE 11.

 

NOTICES AND ADDRESS FOR PAYMENT

 

11.0         Notices.  All notices, requests, statements or payments shall be made
to the addresses set out below. Notices required to be in writing shall be
delivered by letter, facsimile or other documentary form. Notice by facsimile
or hand delivery shall be deemed to have been received by the close of the
Business Day during which the notice is received or hand delivered. Notice by
overnight mail or courier shall be deemed to have been received upon delivery
as evidenced by the delivery receipt. A party may change its address by
providing notice of same in accordance herewith:

 

	
  To Buyer:

  	
   

  	
  515 King Street

  
	
   

  	
   

  	
  P. O. Box 2040

  
	
   

  	
   

  	
  Fredericton, New Brunswick

  
	
   

  	
   

  	
  Canada

  
	
   

  	
   

  	
  E3B 5G4

  
	
   

  	
   

  	
  Attn: Rick McGivney

  

 

29

 

	
  to Seller:

  	
   

  	
  Evergreen Wind Power, LLC

  
	
   

  	
   

  	
  c/o UPC Wind Management, LLC

  
	
   

  	
   

  	
  100 Wells Ave., Suite 201

  
	
   

  	
   

  	
  Newton, MA 02459

  

 

(a)           All
amounts due Seller under this Agreement must be sent via United States mail to
the address specified below:

 

	
   

  	
   

  	
  Evergreen Wind Power, LLC

  
	
   

  	
   

  	
  c/o UPC Wind Management, LLC

  
	
   

  	
   

  	
  100 Wells Ave., Suite 201

  
	
   

  	
   

  	
  Newton, MA 02459

  

 

or (ii) wire transfer to the following Account:

 

	
   

  	
   

  	
  Maine Wind Partners, LLC

  
	
   

  	
   

  	
  Bank of America

  
	
   

  	
   

  	
  ABA:

  	
  026 009 593

  
	
   

  	
   

  	
  Account:

  	
  0046 0490 2995

  

 

(b)           All
amounts due Buyer under this Agreement must be sent via United States mail to
the address specified below:

 

	
   

  	
   

  	
  515 King Street

  
	
   

  	
   

  	
  P. O. Box 2040

  
	
   

  	
   

  	
  Fredericton, New Brunswick

  
	
   

  	
   

  	
  Canada

  
	
   

  	
   

  	
  E3B 5G4

  
	
   

  	
   

  	
  Attn: Rick McGivney

  

 

or (ii) wire transfer to the following Account:

 

	
   

  	
   

  	
  DESTINATION:

  	
  CHASUS33

  
	
   

  	
   

  	
  (IBK)

  	
  JP Morgan Chase

  
	
   

  	
   

  	
   

  	
  NEW YORK, NY

  
	
   

  	
   

  	
   

  	
  ABA 021000021

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PAY TO BANK:

  	
  ROYCCAT2

  
	
   

  	
   

  	
  (BBK)

  	
  ROYAL BANK OF

  
	
   

  	
   

  	
   

  	
  CANADA

  
	
   

  	
   

  	
   

  	
  TORONTO, ONTARIO

  
	
   

  	
   

  	
   

  	
  UID 055253

  

 

30

 

	
   

  	
   

  	
  BENEFICIARY:

  	
  00884 4001178

  
	
   

  	
   

  	
  (BNF)

  	
  NEW BRUNSWICK

  
	
   

  	
   

  	
   

  	
  POWER

  
	
   

  	
   

  	
   

  	
  CORPORATION

  
	
   

  	
   

  	
   

  	
  ATTENTION:

  
	
   

  	
   

  	
   

  	
  GENERATION

  

 

(c)           The
address or addressee to which notices or invoices shall be mailed may be
changed from time to time by either party by notice served as hereinabove
provided.

 

ARTICLE 12.

 

DISAGREEMENTS

 

12.0         Negotiations.  The
parties shall attempt in good faith to resolve all disputes arising out of or
related to or in connection with this Agreement promptly by negotiation, as
follows. Any party may give the other party written notice of any dispute not
resolved in the normal course of business. Executives of both parties at levels
one level above the personnel who have previously been involved in the dispute
shall meet at a mutually acceptable time and place within ten (10) days
after delivery of such notice, and thereafter as often as they reasonably deem
necessary, to exchange relevant information and to attempt to resolve the
dispute. If the matter has not been resolved within thirty (30) days from the
referral of the dispute to senior executives, or if no meeting of senior
executives has taken place within fifteen (15) days after such referral, either
party may initiate arbitration as provided hereinafter. All negotiations
pursuant to this clause are confidential.

 

12.1         Arbitration.

 

(a)           If the negotiation
process provided for in Section 12.0 has not resolved the dispute, the
dispute shall be decided by binding arbitration in the City of New York, New
York in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (except as expressly provided otherwise herein). The
arbitration shall be governed by the United States Arbitration Act (9 U.S.C. §
1 et  seq.), and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
This agreement to arbitrate and any other agreement or consent to arbitrate
entered into in accordance herewith will be specifically enforceable under the
prevailing arbitration law of any court having jurisdiction. Notice of demand
for arbitration must be filed in writing with the other party to this
Agreement. The demand must be made within a reasonable time after dispute has
arisen. In no event may the demand for arbitration be made if the institution
of legal or equitable proceedings based on such dispute is barred by the applicable
statute of limitations. Any arbitration may be consolidated with any other
arbitration proceedings between the parties commenced under this Section 12.1.
The results of the arbitration shall be binding, and the award of the
arbitrator shall be specifically enforceable in a court of competent
jurisdiction.

 

31

 

(b)           Either party may commence the arbitration by giving to the other
written notice in sufficient detail of the existence and nature of any dispute
proposed to be arbitrated. The parties shall attempt to agree on a person with
respect to the matter at issue to serve as arbitrator. If the parties cannot
agree on an arbitrator within ten (10) days of such notice, each shall
then appoint one individual to serve as an arbitrator within 30 days of such
notice and the two (2) thus appointed shall select a third arbitrator to
serve as chairman of the panel of arbitrators; and such three (3) arbitrators
shall determine all matters by majority vote; provided however, if the two (2) arbitrators
appointed by the parties are unable to agree upon the appointment of the third
arbitrator within ten (10) days after their appointment, both shall give
written notice of such failure to agree to the parties, and, if the parties
fail to agree upon the selection of such third arbitrator within five (5) days
of such notice, then either of the parties upon written notice to the other may
require such appointment from, and pursuant to the rules of, the American
Arbitration Association for commercial arbitration. Any arbitrator appointed
shall be a present or former executive of an electric utility, or private power
company, or an attorney, in each case with substantial experience in electric
power purchase agreements. Prior to appointment, each arbitrator shall agree to
conduct such arbitration in accordance with the terms of this Agreement.

 

(c)           The parties shall have sixty (60) calendar days after appointment of
all arbitrators to perform discovery and present evidence and argument to the
arbitrators. During that period, the arbitrators shall be available to receive
and consider all such evidence as is relevant and, within reasonable limits due
to the restricted time period, to hear as much argument as is feasible, giving
a fair allocation of time to each party to the arbitration. The arbitrators
shall use all reasonable means to expedite discovery and to sanction
noncompliance with reasonable discovery requests or any discovery order. The
arbitrators shall not consider any evidence or argument not presented during
such period and shall not extend such period except by the written consent of
both parties. At the conclusion of such period, the arbitrators shall have
forty-five (45) calendar days to reach a determination.

 

(d)           The arbitrators shall have the right only to interpret and apply the
terms and conditions of this Agreement and to order any remedy allowed by this
Agreement, but may not change any term or condition of this Agreement, deprive
either party of any right or remedy expressly provided hereunder, or provide
any right or remedy that has been excluded hereunder.

 

(e)           The arbitrators shall give a written decision to the parties stating
their findings of fact, conclusions of law and order, and shall furnish to each
party a copy thereof signed by them within five (5) calendar days from the
date of their determination. Each party shall pay the cost of the arbitrator or
arbitrators, with respect to those issues as to which they do not prevail, as
determined by the arbitrator or arbitrators.

 

12.2         Settlement
Discussions.  The
parties agree that no statements of position or offers of settlement made in
the course of the dispute process described in this Article 12 above will
be offered into evidence for any purpose in any litigation or arbitration
between the parties, nor will any such statements or offers of settlement be
used in any manner against either party in any such litigation or arbitration.
Further, no such statements or offers of settlement shall constitute an admission
or waiver of rights by either party in connection with any such litigation

 

32

 

or arbitration. At the request of either party, any such statements and
offers of settlement, and all copies thereof, shall be promptly returned to the
party providing the same.

 

12.3         Preliminary Injunctive
Relief.  Nothing in this Article 12 shall preclude,
or be construed to preclude, the resort by either party to a court of competent
jurisdiction solely for the purposes of securing a temporary or preliminary
injunction to preserve the status quo or avoid irreparable harm pending
arbitration pursuant to this Article 12.

 

12.4         Confidential Proceedings.  The
fact that either party has invoked the provisions of this Article 12, the
arbitration proceedings and related communications, and the decision of the
arbitrators shall all be considered Confidential Business Information subject
to Article 10 hereof, and the arbitrators shall make no disclosure of any
confidential information that would not be permitted by a party under Article 10.

 

12.5         Submission to Jurisdiction.  Each
party hereby irrevocably consents to the non-exclusive jurisdiction of the
United States District Court of the Southern District of New York and the
courts of New York State sitting in the Borough of Manhattan in New York City,
in each case, for any action or proceeding filed by the other party (a) to
enforce any award or decision of any arbitration panel duly appointed under
this Agreement to resolve any dispute between the parties, and (b) regarding
any matter or issue that an arbitration panel declines to hear, and each party
waives any objection which it may now or hereafter have regarding the choice of
such forum, whether based on personal jurisdiction, venue, forum non conveniens
or on any other grounds. Buyer and Seller irrevocably consent to the service of
process outside of the territorial jurisdiction of such courts by mailing
copies thereof
by registered or certified mail, postage prepaid, to Buyer’s or Seller’s,
as the case may be, last known address as shown in this Agreement with the same
effect as if such party were a resident of the State of New York and had been
lawfully served in such State. Nothing in this Agreement shall affect the right
to service of process in any other manner permitted by law. THE PARTIES HEREBY
WAIVE ALL RIGHTS TO A TRIAL BY JURY WITH RESPECT TO ANY CONTROVERSY, DISPUTE OR
CLAIM UNDER THIS AGREEMENT.

 

ARTICLE 13.

 

MISCELLANEOUS

 

13.0         Entirety.  This
Agreement and the Schedules and Exhibits hereto constitute the entire agreement
between the parties and supersede any prior or contemporaneous agreements or
representations of the parties affecting the same subject matter.

 

13.1         Choice of Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to any principles of conflicts of law
other than Section 5-1401 of the New York General  Obligations
Law.

 

13.2         Non-Waiver.  No
waiver by either party hereto of any one or more defaults by the other party in
the performance of any of the provisions of this Agreement shall be construed
as a waiver of any other default or defaults whether of a like kind or
different nature.

 

33

 

13.3         Headings; Attachments.  The headings used for the
sections and articles herein are for convenience and reference purposes only
and shall in no way affect the meaning or interpretation of the provisions of
this Agreement. Any and all attachments referred to in this Agreement are, by
such reference, incorporated herein and made a part hereof for all purposes.

 

13.4         Counterparts.  This Agreement may be executed in
two counterparts, each of which is an original and all of which constitute one
and the same instrument.

 

13.5         Forward Contract.

 

(a)           Without limiting the applicability of any other provision of Title 11
of the United States Code (as amended, the “Bankruptcy Code”),
the Parties acknowledge and agree that (i) this Agreement constitutes a “forward
contract” as defined in Section 101 (25) of the Bankruptcy Code; (ii) Purchaser
and Seller are “forward contract merchants” within the meaning of Section 101
(26) of the Bankruptcy Code; (iii) that the rights of the Parties under
the termination provisions of this Agreement will constitute contractual rights
to liquidate transactions hereunder; (iv) that any payment related thereto
will constitute a “settlement payment” as defined in Section 101 (51A) of
the Bankruptcy Code; and (v) that the Parties are entitled to the rights
under, and protections afforded by, Sections 362, 546, 556, and 560 of the
Bankruptcy Code.

 

(b)           Without limiting the applicability of any other provision of the
Bankruptcy and Insolvency Act (Canada) (as amended, the “Canadian Bankruptcy Act”), the Parties acknowledge and agree that (i) this Agreement
constitutes an “eligible financial contract” as defined in Section 65.1(8) of
the Canadian Bankruptcy Act; (ii) that the rights of the Parties under the
termination provisions of this Agreement may be used to calculate the net
termination value within the meaning of Section 65.1(8) of the
Canadian Bankruptcy Act; and (iii) that the Parties are entitled to the
rights under, and protections afforded by Section 65.1 of the Canadian
Bankruptcy Act.

 

13.6         Other.  This Agreement (i) shall not be altered
or amended except by an instrument in writing executed by authorized
representatives of the parties; (ii) does not confer any rights upon any
person other than the parties and their respective successors and permitted
assigns; and (iii) may be performed by Seller through the use of agents
and subcontractors (but such use  shall not relieve Seller of any obligation hereunder). Any provision of
this Agreement which is prohibited or unenforceable in a specific situation in
any jurisdiction shall not affect the validity or enforceability of (a) that
provision in another situation or in any other jurisdiction, or (b) the
other provisions of this Agreement if such other provisions could then continue
to conform with the purposes of this Agreement and the terms and requirements
of applicable law. The parties shall execute and deliver all documents and
perform all further acts that may be reasonably necessary to effectuate the
provisions of this Agreement.

 

* * Signature Page to Follow * *

 

34

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set out above. This Agreement shall not become effective as to either party
unless and until executed  by both parties.

 

 

	
   

  	
   

  	
  EVERGREEN WIND POWER,

  
	
   

  	
   

  	
  LLC, as SELLER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul Gaynor

  
	
   

  	
   

  	
  Name:

  	
  PAUL GAYNOR

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEW BRUNSWICK POWER

  
	
   

  	
   

  	
  GENERATION CORPORATION,

  
	
   

  	
   

  	
  as BUYER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daryl Bishop

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael Gorman

  
	
   

  	
   

  	
  Name:

  	
  MICHAEL GORMAN

  
	
   

  	
   

  	
  Title:

  	
  VP.—Legal

  
							

 

Signature
Page to Energy Management Services Agreement

 

 

SCHEDULE A

 

DELIVERED ELECTRICITY PRICE

 

	
  Delivery Year

  	
   

  	
  Delivered Electricity Price (US$ /MWh)

  	
   

  
	
  2006

  	
   

  	
  *****

  	
   

  
	
  2007

  	
   

  	
  *****

  	
   

  
	
  2008

  	
   

  	
  *****

  	
   

  
	
  2009

  	
   

  	
  *****

  	
   

  
	
  2010

  	
   

  	
  *****

  	
   

  
	
  2011

  	
   

  	
  *****

  	
   

  

 

 

SCHEDULE B

 

MINIMUM
DELIVERED ELECTRICITY AMOUNT

 

	
  Calendar Quarter

  	
   

  	
  Minimum Delivered Electricity Amount

  	
   

  
	
  January-March

  	
   

  	
  *****
  MWh

  	
   

  
	
  April-June

  	
   

  	
  *****
  MWh

  	
   

  
	
  July-September

  	
   

  	
  *****
  MWh

  	
   

  
	
  October-December

  	
   

  	
  *****
  MWh

  	
   

  
	
  Annual Total

  	
   

  	
  *****
  MWh

  	
   

  

 

 

SCHEDULE C

 

SCHEDULING FEE

 

	
  Delivery Year

  	
   

  	
  Scheduling Fee (US$ /MWh)

  	
   

  
	
  2006

  	
   

  	
  *****

  	
   

  
	
  2007

  	
   

  	
  *****

  	
   

  
	
  2008

  	
   

  	
  *****

  	
   

  
	
  2009

  	
   

  	
  *****

  	
   

  
	
  2010

  	
   

  	
  *****

  	
   

  
	
  2011

  	
   

  	
  *****

  	
   

  

 

 

SCHEDULE D

 

EXPOSURE AMOUNT CALCULATION

 

Part I

 

Determination of the Buyer Exposure Amount

 

The
Buyer Exposure Amount shall be calculated as the product of (a) the difference
between the ***** starting in the second quarter of calendar year 2007 and for
the remainder of the Term. The resulting amount shall be rounded upwards for
any fractional amount to the next $10,000. If the Buyer Exposure Amount is
determined to be a negative number, the Buyer Exposure Amount shall be deemed
to be zero (0).

 

Sample Calculation of the Buyer Exposure
Amount

 

For
example, if there are eight calendar quarters remaining in the Term, and the
Initial Mass Hub Index and the current Mass Hub Index are:

 

	
   

  	
   

  	
   

  	
   

  	
  A

  	
   

  	
   

  	
   

  	
  B

  	
   

  	
  B–A

  	
   

  	
   

  	
   

  
	
  Quarter

  	
   

  	
  Initial

  Mass Hub

  Index

  ($ /MWh)

  	
   

  	
  Initial

  Mass Hub

  Index less

  *****%

  ($ /MWh)

  	
   

  	
  Current

  Mass Hub

  Index

  ($ /MWh)

  	
   

  	
  Buyer

  Electricity

  Index

  ($ /MWh)

  	
   

  	
  Difference

  ($ /MWh)

  	
   

  	
  Minimum

  Delivered

  Electricity

  Amount

  (MWh)

  	
   

  
	
  Q110

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q210

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q310

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q410

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q111

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q211

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q311

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q411

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  

 

Then the Buyer Exposure Amount
shall be calculated as:

 

(***** * *****) + (***** * *****)
+ (***** * *****) + (***** * *****) + (***** * *****) + (***** * *****) + (*****
* *****) + (***** * *****) = US$*****,

 

which is then rounded to US$*****.

 

 

Part II

 

Determination of Seller Exposure Amount

 

The Seller Exposure Amount shall be calculated as the product of (a) the
difference between *****
starting in the second quarter of calendar year 2007 and for the remainder of
the Term. The resulting amount shall be rounded upwards for any fractional
amount to the next $10,000. If the Seller Exposure Amount is determined to be a
negative number, the Seller Exposure Amount shall be deemed to be zero (0).

 

Sample Calculation of the Seller Exposure Amount

 

For example, if there are eight calendar quarters remaining in the
Term, and the current Mass Hub Index is:

 

	
   

  	
   

  	
  C

  	
   

  	
   

  	
   

  	
  D

  	
   

  	
  C-D

  	
   

  	
   

  	
   

  
	
  Quarter

  	
   

  	
  Delivered

  Electricity

  Price

  ($/MWh)

  	
   

  	
  Current

  Mass Hub

  Index

  ($/MWh)

  	
   

  	
  Seller

  Electricity

  Index

  ($/MWh)

  	
   

  	
  Difference

  ($/MWh)

  	
   

  	
  Minimum

  Delivered

  Electricity

  Amount

  (MWh)

  	
   

  
	
  Q110

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q210

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q310

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q410

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q111

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q211

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q311

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  Q411

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  

 

Then the Seller Exposure Amount shall be calculated as:

 

(***** * *****) + (***** * *****) + (***** * *****) + (***** * *****) +
(***** * *****) + (***** * *****) + (***** * *****) + (***** * *****) =
US$*****,

 

which is then rounded to US$*****

 

 

SCHEDULE E

 

INITIAL MASS HUB INDEX

 

	
  Calendar Quarter

  	
   

  	
  Price (US$/MWh)

  	
   

  
	
  Q207

  	
   

  	
  *****

  	
   

  
	
  Q307

  	
   

  	
  *****

  	
   

  
	
  Q407

  	
   

  	
  *****

  	
   

  
	
  Q108

  	
   

  	
  *****

  	
   

  
	
  Q208

  	
   

  	
  *****

  	
   

  
	
  Q308

  	
   

  	
  *****

  	
   

  
	
  Q408

  	
   

  	
  *****

  	
   

  
	
  Q109

  	
   

  	
  *****

  	
   

  
	
  Q209

  	
   

  	
  *****

  	
   

  
	
  Q309

  	
   

  	
  *****

  	
   

  
	
  Q409

  	
   

  	
  *****

  	
   

  
	
  Q110

  	
   

  	
  *****

  	
   

  
	
  Q210

  	
   

  	
  *****

  	
   

  
	
  Q310

  	
   

  	
  *****

  	
   

  
	
  Q410

  	
   

  	
  *****

  	
   

  
	
  Q111

  	
   

  	
  *****

  	
   

  
	
  Q211

  	
   

  	
  *****

  	
   

  
	
  Q311

  	
   

  	
  *****

  	
   

  
	
  Q411

  	
   

  	
  *****

  	
   

  

 

For the remainder of the Term, when
calculating exposure amounts, quarterly prices shall be determined by the
hourly-weighted average of daily prices, if available, or if daily prices are
not available, monthly prices, in either case of both peak and off-peak
mid-market prices as appropriate. Mid-market prices shall be the arithmetic
average of offer and bid prices. For example, if the appropriate
broker-provided prices are:

 

	
  Month

  	
   

  	
  Peak/Off-

  Peak

  	
   

  	
  Hours in

  Period

  	
   

  	
  Bid Price

  ($/MWh)

  	
   

  	
  Offer Price

  ($/MWh)

  	
   

  	
  Mid-Price

  ($/MWh)

  	
   

  
	
  January

  	
   

  	
  Peak

  	
   

  	
  336

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  January

  	
   

  	
  Off-Peak

  	
   

  	
  408

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  February

  	
   

  	
  Peak

  	
   

  	
  320

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  February

  	
   

  	
  Off-Peak

  	
   

  	
  352

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  March

  	
   

  	
  Peak

  	
   

  	
  368

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  March

  	
   

  	
  Off-Peak

  	
   

  	
  376

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
   

  	
   

  	
  Total Hours

  	
   

  	
  2160

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Then
the price to be used for this quarter shall be calculated as: *****

 

 

EXHIBIT A

 

OPERATING PROCEDURES

 

1.                                       For
each Day during the Term, Seller shall advise Buyer in writing by fax or
electronic mail or internet posting of the anticipated Delivered Electricity by
the Facility for each hour of each such Day based upon the Seller’s good faith
estimates (the “Daily Production
Schedule”) on or before 10:00 o’clock a.m. Atlantic Prevailing
Time on the day preceding such Day. The Seller authorizes the Buyer to schedule
transmission service with transmission providers (either utilizing the firm
transmission capacity reserved by the Buyer, or, if such capacity has not been
reserved or is insufficient, interruptible transmission service obtained by the
Buyer) between the Delivery Point and the Market Delivery Point and to re-sell
the Delivered Electricity purchased under this Agreement into ISO-NE at the
Market Delivery Point based on the Seller’s Daily Production Schedules.

 

2.                                       The
Seller may request changes to a Daily Production Schedule after it is delivered
to the Buyer. Provided such request is made at least 120 minutes prior to the
deadline for the Buyer to adjust its nominations and schedules with
transmission providers, ISO-NE and other system operators based on the then
prevailing market rules, policies, tariffs, procedures and protocols of such
entities (the “Scheduling Deadline”),
the Buyer will revise such nominations and schedules in accordance with the
Seller’s request and the Daily Production Schedule shall be adjusted
accordingly.

 

3.                                       If
the Seller’s request to change its Daily Production Schedule is made less than
90 minutes prior to the Scheduling Deadline, the Buyer will use reasonable
efforts in the circumstances to adjust its nominations and schedules with
Transmission Providers, ISO-NE and other system operators and if it is able to
do so, the Daily Production Schedule shall be adjusted accordingly

 

4.                                       Authorized Representatives. As a means of
securing effective cooperation and interchanges of information and of providing
consultation on a prompt and orderly basis between the parties in connection
with various administrative, commercial and technical issues which may arise
during the performance of this Agreement, the Operating Procedures also provide
that both parties appoint an authorized representative (with respect to each
party, the “Authorized Representative”)
and may appoint an alternate (with respect to each party, the “Alternate”) to act in its
Authorized Representative’s absence. The Authorized Representatives and
Alternates shall be managers well-experienced with regard to matters relating
to the implementation of the parties’ rights and obligations under this
Agreement with full authority to act for and on behalf of the parties
appointing them. Each party will notify the other in writing of its Authorized
Representative and Alternate and these appointments will remain in full force
and effect until written notice of substitution is delivered to the other
party.

 

 

The
Authorized Representatives (and/or the Alternates) shall meet on a regular
basis, but no more frequently than semi-annually during the Term. Such meetings
may be conducted in person or via telephone or other electronic means, as the
Parties may agree. During these meetings, the Parties shall specifically
discuss any changes in the New Brunswick and New England energy markets that
may impact the calculation of damages and costs payable under Section 3.7
of this Agreement in the case of a non-delivery of Delivered Electricity into
1SO-NE.

 

5.                                       Scheduling and Settlement.

 

a.                             Since the scheduling of energy is required by
NBSO, ISA, MPS, NBP, MEPCO, Transenergie (Quebec), and ISO-NE, (i) the
Seller will provide to the Buyer a forecast, day ahead and at regular intraday
intervals pursuant to these Operating Procedures, as well as provide metering
information pursuant to Article 3 of this Agreement, (ii) each
party shall designate Authorized Representatives to communicate hereunder with
regard to scheduling and related matters, and (iii) Buyer will be
responsible for arranging for the scheduling of Delivered Electricity to be
sold and delivered. The Buyer will schedule the Delivered Electricity pursuant
to the tariff, market rules and the operating procedures of each transmission
provider(s)/administrator(s) and/or market administrator(s), as applicable.
Each party shall comply with the applicable operating policies, criteria and/or
guidelines of FERC and any regional or subregional reliability council.

 

b.                            Buyer shall indemnify and make whole Seller
for any increased costs or loss of revenue, including but not limited to
imbalancing costs incurred by Seller or loss of electrical energy, REC and/or
Capacity Value revenue caused by Buyer’s scheduling errors.

 

c.                             Buyer shall use commercially reasonable
efforts to transfer any and all ISO-NE settlement account data or other data
necessary to create RECs in the NEPOOL GIS system for the Seller’s account for
all Delivered Electricity delivered to ISO-NE. From time to time, a third party
may be necessary to transfer such settlement account data or other data. At
Seller’s reasonable request, Buyer shall enter into an agreement with such
third party in order to create RECs in the NEPOOL GIS system for the Seller’s
account for all Delivered Electricity delivered to ISO-NE. During the Term,
Buyer agrees to take any further reasonable action involving ISO-NE or the
NEPOOL GIS or otherwise to ensure that the entire amount of RECs which Seller receives or is credited (or
should receive or be credited)
through generation at the Facility and/or as owner of the Facility will be
deposited into Seller’s NEPOOL GIS account and, in no event, shall Buyer take
any action which would or could cause such RECs to be issued to any other party
or transferred to any account other than Seller’s account within the NEPOOL
GIS, except in accordance with the foregoing provisions of this paragraph.

 

 

EXHIBIT B

 

FORM OF INITIAL SELLER LC

 

 

230 Park Avenue

New York, New York 10169-0005

Telephone: (212) 407-6000

Telecopy: (212) 407-6133

 

	
  Irrevocable Standby Letter of Credit No.:

  	
   

  	
  [SB             ]

  	
   

  	
   

  
	
  Date of Issue:

  	
   

  	
  [        ,
  2006]

  
	
  Currency and Amount:

  	
   

  	
  [                  ]

  
	
  Expiration Date:

  	
   

  	
  [                  ]

  
	
  Place of Expiry:

  	
   

  	
  At our office

  

 

	
  BENEFICIARY: New Brunswick Power 

  Generation Corporation

  	
   

  	
  APPLICANT: UPC Wind Partners, LLC

  

 

Dear Madam or Sir:

 

We hereby establish for the account of UPC Wind
Partners, LLC, a Delaware limited liability company (“Applicant”), our
Irrevocable Standby Letter of Credit (this “Letter of Credit”) in your
favor for an amount of [USD $[           ]
([             
dollars,
United States currency). Applicant has advised us that this Letter of Credit is
issued in connection with that certain Energy Management Services Agreement
dated as of [              ,
2006]
by and among New Brunswick Power Generation Corporation, a corporation created
under the Business Corporations Act of New Brunswick (“Beneficiary”) and
Evergreen Wind Power, LLC, a Delaware limited liability company and
wholly-owned subsidiary of Applicant (as amended or restated from time to time,
the “Agreement”). This Letter of Credit (i) shall become effective
immediately for the term of one (1) year and shall expire at our counters
in New York on
[           , 2007] at
[               a.m./p.m.]
(the “Expiration Date”), and (ii) is subject to the following:

 

1.                                       Funds under this
Letter of Credit shall be made available to Beneficiary against its draft drawn
on us in the form of Annex I hereto, dated the date of presentation,
accompanied by (a) a certificate in the form of Annex 2 hereto,
appropriately completed and purporting to be signed by an authorized officer of
Beneficiary, and (b) the original of this Letter of Credit (the “Accompanying
Documents”) and presented at our office located at 230 Park Avenue, New
York, New York 10169, Attention: Loan Operations (or at any other office which
may be designated by us by written notice delivered to you). A presentation
under this Letter of Credit may be made only on a day, and during hours of 9:00
AM and 5:00 PM, New York time in which such office is open for business (a “Business
Day”). If we receive your draft and the Accompanying Documents at such
office on any Business Day, all in strict conformity with the terms and
conditions of this Letter of Credit, we will honor the same by making payment
in accordance with your payment instructions on the third succeeding Business
Day after presentation. If the amount of the drawing, together with all
previous drawings pursuant to this Letter of Credit, is less than the aggregate
amount of this Letter of Credit, we will return this Letter of Credit to you
with a notation of the remaining amount available hereunder.

 

 

2.                                  Absent occurrence
of events (i), (ii) and (iii) of Clause 3 below, the Expiration Date
of this Letter of Credit may be extended without amendment for periods of one
(1) year from its present Expiration Date, or any future Expiration Date,
if Applicant provides us with a written request for renewal at least ninety
(90) days prior to any Expiration Date unless at least sixty (60) days prior to
any Expiration Date we send Applicant and you notice by registered mail, return
receipt requested, or courier service or hand delivery at your above address
that we elect not to consider the Expiration Date of this Letter of Credit
extended for any such additional period. In no event shall the Expiration Date
extend beyond [                 ].

 

3.                                  This Letter of
Credit terminates upon the earliest to occur of (i) our receipt of a
notice in the form of Annex 3 hereto purporting to be signed by an authorized
officer of Beneficiary, accompanied by this Letter of Credit for cancellation,
(ii) our honoring of one or more drafts presented hereunder in an
aggregate amount equal to the amount of this Letter of Credit, and
(iii) our close of business at our aforesaid office on the Expiration
Date, or if the Expiration Date is not a Business Day, then on the preceding
Business Day, this Letter of Credit shall be surrendered to us by you.

 

4.                                  This Letter of
Credit is not transferable and, except as otherwise expressly stated herein, is
subject to the Uniform Customs and Practice for Documentary Credits (1993
revision), International Chamber of Commerce Publication No. 500.

 

5.                                  This Letter of
Credit sets forth in full our undertaking, and such undertaking shall not in
any way be modified, amended, amplified, or limited by reference to any
document, instrument, or agreement referred to herein, except for Annexes 1, 2
and 3 hereto and the notices referred to herein; and any such reference shall
not be deemed to incorporate herein by reference any document, instrument, or
agreement except as provided in this paragraph 5.

 

6.                                  Communications with
respect to this Letter of Credit shall be in writing and shall be addressed to
us at the address referred to in paragraph 1 above, and shall specifically
refer to this Letter of Credit No. [SB              ].

 

Very truly yours,

HSH NORDBANK AG, NEW YORK BRANCH

 

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  

 

 

ANNEX 1

TO LETTER
OF CREDIT NO. [SB                  ]

 

Draft under Irrevocable Standby Letter of
Credit No. [SB                   ]
(“Letter of Credit”)

 

[ Month,
Day, Year ]

 

On [third business day next succeeding
date of presentation]

 

Pay  to New Brunswick Power Generation
Corporation, having its head office in the City of Fredrickton, New Brunswick,
Canada USD $                           
[not to exceed amount available to be drawn]

 

[insert any
wire instructions]

 

For value received and charge to account of
Letter of Credit No. [SB                      ]
of HSH Nordbank AG, New York Branch, 230 Park Avenue, New York, New York
10169-0005.

 

 

	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

ANNEX 2

TO LETTER
OF CREDIT NO. [SB                  ]

 

Drawing under Irrevocable Standby Letter of
Credit No. [SB                   ]

 

The undersigned, a duly authorized officer of New
Brunswick Power Generation Corporation (“Beneficiary”), hereby certifies
on behalf of Beneficiary to HSH Nordbank AG, New York Branch with reference to
the Irrevocable Standby Letter of Credit No. [SB               
] (the “Letter of Credit”) issued for the account of UPC Wind
Partners, LLC (“Applicant”), that:

 

1)                                     CHOOSE ONE

 

(a)                            pursuant to Section 9.0(c)(i) of
that certain Energy Management Services Agreement dated as of [              ,
2006] by and among Beneficiary and Evergreen Wind Power, LLC (“Evergreen”),
a wholly-owned subsidiary of Applicant (as amended or restated from time to
time, the “Agreement”), Beneficiary is entitled to draw under the Letter
of Credit due to the fact that Evergreen has failed to pay an undisputed amount
due under the Agreement within ten (10) days after such amount was due;

 

(b)                           pursuant to
Sections 6.2 and 9.0(c)(i) of the Agreement, Beneficiary is entitled to
draw under the Letter of Credit due to the fact that Evergreen has failed to
pay a disputed amount into an independent escrow account, pending resolution of
the dispute, within ten (10) days after such amount was due;

 

(c)                            pursuant to Section 9.0(c)(ii)
of the Agreement, Beneficiary is entitled to draw under the Letter of Credit
due to the fact that Evergreen has failed to pay an amount disputed and found
to be due under Article 12 of the Agreement within ten (10) days
after Evergreen’s receipt of notice resolving such dispute;

 

(d)                           pursuant to Section 9.0(d),
the Credit Support posted by Applicant is due to expire within thirty (30) days
and the Applicant has failed to deliver or cause to be delivered to Beneficiary
an alternative replacement Credit Support as specified in Sections 9.0(a) or
9.0(b); or

 

(e)                            the Expiration Date
of the Letter of Credit will occur no more than thirty (30) days after the date
of this certificate, and the Applicant has not provided a replacement letter of
credit in form and substance as required by the Agreement in an amount required
pursuant to the Agreement.

 

2)                                     by presenting this
certificate and the accompanying sight draft, Beneficiary is requesting that
payment in the amount of $                     
as specified on said draft, be made under the Letter of Credit by wire transfer
or deposit of funds into the account specified on said draft;

 

 

3)                                     the amount specified on the sight draft
accompanying this certificate does not exceed the amount to which Beneficiary
is entitled to draft under said Section [9.0(c)(i)/ 9.0(c)(ii)] of the
Agreement;

 

4)                                     Beneficiary, on or prior to the date hereof,
has transmitted by facsimile (with receipt confirmed) a copy of this
certificate to Applicant, to the attention of President at facsimile number
(617) 964-3342 or such number as has been designated by Applicant in a written
notice delivered to us, and has deposited, postage-prepaid, another copy hereof
with a reputable overnight delivery courier service for delivery overnight to
Applicant at the following address:

 

UPC
Wind Partners, LLC

c/o
UPC Wind Management, LLC

100
Wells Avenue, Suite 201

Newton,
MA 02459

Attn:
President

 

All
capitalized terms used herein which are defined in the above-referenced Letter
of Credit have the same meanings when used herein.

 

In
witness whereof, Beneficiary has caused this certificate to be duly executed
and delivered by its duly authorized officer as of the date and year written
below.

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  

 

 

ANNEX 3

TO LETTER OF CREDIT NO. [SB                  ]

 

Notice of surrender of Irrevocable Standby Letter of
Credit No. [SB                   ]

 

	
  Date: 

  	
   

  	
   

  	
   

  

 

HSH Nordbank AG, New York Branch 

230 Park Avenue

New York, New York 10169

Attention: Loan Administration

 

Re:    Letter of Credit No. [SB                   ]
issued for the account of UPC Wind Partners, LLC (“Applicant”).

 

 

Ladies and Gentlemen: 

 

We refer to your above-mentioned Irrevocable Standby
Letter of Credit (the “Letter of Credit”). The undersigned hereby
surrenders the Letter of Credit to you for cancellation as of the date hereof.
No payment is demanded of you under this Letter of Credit in connection with
this surrender.

 

Very truly yours,

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

EXHIBIT C

 

FORM OF INITIAL BUYER LC

 

 

ISSUING BANK: ROYAL BANK OF CANADA, NEW YORK, N.Y.

 

	
  Irrevocable Standby Letter of Credit No.:

  	
   

  	
   

  
	
  Date of issue:

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  1 year from issue date 

  
	
  Place of Expiry:

  	
   

  	
  At our office specified below

  
	
   

  	
   

  	
   

  
	
  Beneficiary:

  	
   

  	
   

  
	
  Evergreen Wind Power, LLC

  	
   

  	
   

  
	
  c/o
  UPC Wind Management, LLC

  	
   

  	
   

  
	
  100 Wells
  Ave., Suite 201

  	
   

  	
   

  
	
  Newton,
  MA 02459

  	
   

  	
   

  

 

We hereby issue this Irrevocable Standby Letter of Credit
(this “Letter of Credit”) for the account of and on behalf of NEW BRUNSWICK
POWER GENERATION CORPORATION, 515 KING STREET, P.O. BOX 2040 , FREDERICTON
, NEW BRUNSWICK, CANADA , E3B 5G4, ( the “Applicant” ) in favour of EVERGREEN
WIND POWER LLC , (“the Beneficiary”) in an amount equal to USD [                          
(
                     
U.S. dollars only ), available against presentation of the following document(s):

 

1.              The original
of this Letter of Credit.

 

2.              Beneficiary’s certificate
purportedly signed by an authorized signing officer representing Evergreen Wind
Power, LLC specifying the amount claimed and certifying the Beneficiary is
entitled to draw under this Letter of Credit pursuant to the terms and
conditions set forth in that certain Energy Management Services Agreement
entered into as of the                   
day of July, 2006, by and between the Beneficiary and the Applicant.

 

Partial drawing(s) permitted.

 

If presentation of a drawing is made in compliance with the
terms and conditions hereof on a Business Day at our counters at or before
10:00 a.m., New York, New York time, we shall honor such drawing on the
same Business Day. If a demand is presented in compliance with the terms and
conditions hereof at our counters after 10:00 a.m., New York, New York,
time, we shall honor such drawing on the next Business Day. For the purposes of
this section, Business Day means a day, other than a Saturday or Sunday, on
which commercial banks are not authorized or required to be closed in New York,
New York.

 

The following additional terms and conditions apply:

 

This Letter of Credit shall expire with our close of business
at 5:00 p.m., New York, New York time, on ( 1 year from issue date) ,
unless extended as hereinafter provided.

 

 

ASSIGNMENT OF TRANSMISSION RIGHTS

 

THIS ASSIGNMENT OF TRANSMISSION RIGHTS (as amended, modified, supplemented, restated
or replaced from time to time, this “Assignment Agreement”), dated as of                        ,
2006, made by NEW BRUNSWICK POWER GENERATION CORPORATION, a corporation under
the laws of the Province of New Brunswick (the “Assignor”), in favour of EVERGREEN WIND POWER, LLC, a
Delaware limited liability company (the “Assignee”) (together with any successor(s) thereto).

 

W I T N E S S E T H:

 

WHEREAS:

 

A.                                   Assignee is developing, financing,
constructing, owning and operating a wind generation facility (the “Facility”)
located on Mars Hill Mountain and the surrounding areas of Mars Hill, Aroostook
County, Maine;

 

B.                                     Assignor has transmission rights in the form
of long-term firm point-to-point transmission service from the New Brunswick
System Operator (“NBSO”) to allow the transmission of electric power
over the transmission facilities that NBSO controls (the “Grid”) from
New Brunswick to the point of interconnection between the NBSO controlled Grid
and the transmission facilities that the Maine Electric Power Company (“MEPCO”) controls (the “Interconnection
Point”);

 

C.                                     Assignor and Assignee have entered into that
certain Energy Management Services Agreement, dated as of the date hereof (as
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms, the “EMSA”), pursuant to which, among
other things, Assignor has agreed to purchase electric energy from Assignee at
the EMSA Delivery Point and transmit such energy through the Interconnection
Point and into the ISO-NE system; and

 

D.                                    As a condition precedent to Assignee entering
into its obligations under the EMSA, Assignee requires that Assignor shall have
executed and delivered this Assignment Agreement as security for Assignor’s
obligations pursuant to the EMSA and to ensure in the event of an Event of Default
that Assignee shall have access to electricity transmission rights sufficient
to allow Assignee to deliver electricity from the Facility to the Interconnection Point (and ultimately,
pursuant to separate contractual arrangements, to ISO-NE) as contemplated by
the EMSA;

 

NOW THEREFORE for good and valuable consideration the
receipt of which is hereby acknowledged, and in order to induce the Assignee to
enter into the EMSA, the Assignor agrees, for the benefit of the Assignee, as
follows:

 

 

ARTICLE 1 -  DEFINITIONS

 

1.01                           Certain Terms. The following terms when used in this Assignment Agreement, including its preamble and recitals, shall
have the following meanings
(such definitions to be equally
applicable to the singular and plural forms thereof):

 

(a)                                  “Assignee” has the meaning given in
the preamble to this Assignment Agreement.

 

(b)                                 “Assignor” has the meaning given in
the preamble to this Assignment Agreement.

 

(c)                                  “EMSA” has the meaning given in the recitals
to this Assignment Agreement.

 

(d)                                 “EMSA Delivery Point” means the
delivery point at which Assignor takes title and risk of loss to the power sold
from Assignee to Assignor as specified in the EMSA.

 

(e)                                  “Event of Default” means any event of
default described in Article 5 of the EMSA in respect of which the
Assignor is the Defaulting Party.

 

(f)                                    “Grid” has the meaning given in the recitals
to this Assignment Agreement.

 

(g)                                 “Interconnection Point” has the
meaning given in the recitals to this Assignment Agreement.

 

(h)                                 “MEPCO” has the meaning given in the recitals
to this Assignment Agreement.

 

(i)                                     “NBSO” has the meaning given in the recitals
to this Assignment Agreement.

 

(j)                                     “OATT” means the Open Access
Transmission Tariff issued by the NBSO effective May 1, 2005 as the same
may be amended, modified, supplemented, restated or replaced from time to time.

 

(k)                                  “Transmission Rights” means rights
given by the Transmission Service Agreement as described in Schedule “A” hereto
(a true copy of which is annexed hereto as Schedule A-1) as the same may be amended,
supplemented, restated or replaced from time to time and all rights and
benefits related thereto as described in Section 2.01.

 

(l)                                     “Transmission Service Agreement” means
that certain Long-Term Firm Point-to-Point Transmission Service Agreement dated
as of July 21, 2006 by and between the NBSO and the Assignor (a true copy
of which is annexed hereto as Schedule A-1).

 

 

1.02                          EMSA
Definitions. Unless otherwise
defined herein or the context otherwise requires, capitalized terms used in
this Assignment Agreement, including its preamble and recitals, have the
meanings ascribed thereto in the EMSA.

 

1.03                          PPSA
Definitions. Unless otherwise
defined herein or in the EMSA or the context otherwise requires, terms for
which meanings are provided in the Personal Property Security Act (New Brunswick) are used in this Assignment Agreement,
including its preamble and recitals, with such meanings.

 

ARTICLE 2 -  ASSIGNMENT

 

2.01                          Assignment. Upon and subject to the terms, conditions
and provisions herein contained, the Assignor hereby unconditionally and
irrevocably grants a security interest in and assigns, transfers and sets over
to and in favour of the Assignee, as collateral security for its benefit, as
and by way of a fixed and specific assignment and security interest in all of
its right, title, estate and interest in, to, under and in respect of:

 

(a)                                 the Transmission Rights, and all benefits,
powers and advantages of the Assignor to be derived therefrom and all
covenants, obligations and agreements of the parties thereunder and otherwise
to enforce the rights of the Assignor thereunder in the name of the Assignor;

 

(b)                                all instruments, documents, writings, papers,
books, books of account and other records relating to the Transmission Rights;
and

 

(c)                                 all revenues and other moneys now due and
payable or hereafter to become due and payable to the Assignor thereunder or in
connection therewith by the other parties to the Transmission Rights or
receivable by the Assignor pursuant to or in connection with the Transmission
Rights,

 

to
be held by the Assignee for the benefit of the Assignee as general and
continuing security for the performance payment and satisfaction of all
obligations of the Assignor under the EMSA.

 

2.02                          Notice
to NBSO. The Assignor and Assignee
mutually agree to execute and deliver to the NBSO the Notice of Assignment of
Transmission Rights in the form annexed hereto as Schedule “B” promptly after
execution of this Assignment
Agreement by both parties and to execute such further notices, documents or
assurances as may be necessary
or desirable under the OATT.

 

2.03                          Consents. The Assignor agrees that it will, upon the
request of the Assignee, use all commercially reasonable efforts to obtain and
provide any additional consent or acknowledgement required to permit the
Transmission Rights to be assigned hereunder.

 

2.04                          Performance
of Obligations. Until notice is
given to the NBSO following an Event of Default, the Assignor covenants to
observe and enforce the terms,

 

 

covenants, conditions and obligations to be observed
and enforced by the Assignor pursuant to the Transmission Service Agreement
which grants the Transmission Rights.

 

2.05                          No Liability. Nothing herein
contained shall render the Assignee, its respective agents, directors,
officers, employees or any other Persons for whom the Assignee is at law
responsible, liable to any Person for the fulfilment or non-fulfilment of the
obligations, covenants and agreements, including but not limited to the payment
of any moneys thereunder or in respect thereto, of the Assignor under the
Transmission Service Agreement which grants the Transmission Rights.
Notwithstanding the foregoing, the Assignor hereby indemnifies and agrees to
save and hold harmless the Assignee and its respective directors, officers and
employees from and against any and all claims, demands, actions, causes of
action, losses, suits, damages and costs whatsoever of any Person arising
directly or indirectly from or out of the Transmission Service Agreement which
grants the Transmission Rights.

 

2.06                           Notice:
Registration. Upon the occurrence of an Event of Default, the Assignee shall have the
right to advise the NBSO of the Assignee’s exercise of its rights under this
Assignment Agreement or give notice thereof to the NBSO. The Assignee shall
also have the right at any time and without notice to the Assignor to cause
this Assignment Agreement or notice thereof to be registered or filed in any
place or office where the Assignee or its counsel deem advisable or necessary.

 

2.07                          Performance Until
Default and Attorney of the Assignor. The Assignor hereby irrevocably appoints
the Assignee the Assignor’s attorney-in-fact, with effect following the
occurrence of an Event of Default, with full authority in the place and stead
of the Assignor and in the name of the Assignor or otherwise, from time to time
in the Assignee’s discretion, to take any action and to execute any instrument
which the Assignee may reasonably deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation, (i) to exercise
any of the rights, powers, authority and discretions which, under the terms of
the Transmission Service Agreement which grants the Transmission Rights, could
be exercised by the Assignor with respect thereto, (ii) to ask, demand,
collect, sue for, recover, compromise, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of the
Transmission Rights, (iii) to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper, in connection with clause (ii),
and (iv) to file any claims or take any action or institute any
proceedings which the Assignee may deem necessary or desirable for the exercise
of the Transmission Rights or otherwise to enforce the rights of the Assignor
with respect to any of the Transmission Rights, all of which is consented to by
the Assignor. The Assignor hereby acknowledges, consents and agrees that the
power of attorney granted pursuant to this Section is irrevocable and
coupled with an interest.

 

2.08                          Dealing with the
Transmission Rights. Until the occurrence of an Event of Default, the
Assignor shall be entitled to deal with the Transmission Rights and

 

 

collect
and receive all monies payable to the Assignor under or in connection with the
Transmission Rights in the ordinary course of its business and to enforce all
of the benefits, advantages and powers thereunder as though this Agreement had
not been made.

 

2.09                          Termination,
Surrender, Alteration, Etc. Without
the prior written consent of the Assignee, which consent shall not be
unreasonably withheld or delayed, the Assignor covenants and agrees that it
shall not nor shall it agree at any time to (a) terminate, forfeit or
cancel the Transmission Rights, (b) amend or modify the Transmission
Rights in any material respect, (c) waive any failure of any party thereto
to perform any material obligation thereunder or (d) suffer or permit
anything allowing any party to terminate the Transmission Rights or any of
them.

 

2.10                          Notice
of Default. The Assignor shall
cause notice to be given to the Assignee of any material default by the
Assignor in any way relating to the Transmission Rights promptly upon becoming
aware of the occurrence of such default, but in all events, if the Assignor is
aware of any default that could give rise to the right of NBSO to terminate
such Transmission Service Agreement, in sufficient time to afford the Assignee
a reasonable opportunity to cure any such default before NBSO has any right to
terminate the Transmission Rights by reason of such default; but nothing herein
shall obligate the Assignee to cure any such default.

 

ARTICLE 3 -  REPRESENTATIONS AND
COVENANTS

 

3.01                          Representations. The Assignor represents and warrants to the
Assignee that:

 

(a)                                 the Assignor has provided the Assignee with a
true and complete copy of the Transmission Service Agreement which grants the
Transmission Rights;

 

(b)                                the Transmission Service Agreement is a valid
and subsisting agreement, in full force and effect and unmodified and there are
no defaults thereunder by the Assignor or any other party thereto;

 

(c)                                 as at the date hereof the Transmission
Service Agreement constitutes the entire agreement between the Assignor and
NBSO in respect of the Transmission Rights;

 

(d)                                it is organized, validly existing and in good
standing under the laws of New Brunswick and has the right, power and authority
to enter into the Transmission Service Agreement and this Assignment Agreement
and to perform its obligations thereunder and hereunder;

 

(e)                                 every notice, authorization, approval, order
and consent necessary for the execution, delivery and performance by it of this
Assignment Agreement and the assignment of Transmission Rights hereunder has
been obtained and is in full force and effect, unamended, at the date hereof;

 

 

(f)                                   each of the Transmission Service Agreement
and this Assignment Agreement has been duly executed and delivered by it and is
a valid and binding obligation of it enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency and other laws of
general application limiting the enforceability of creditors’ rights generally and
to the fact that specific performance, injunction and other equitable remedies
are available only in the discretion of the court; and

 

(g)                                it has not granted to any other Person rights
in respect of the Transmission Rights which are to the same effect as any of
the rights granted herein.

 

3.02                          Further
Assurances. The Assignor hereby
covenants and agrees with the Assignee that it shall from time to time and at
all times hereafter upon written request so to do, make, do, execute and
deliver or cause to be made, done, executed and delivered all such further
acts, deeds, assurances and things as may be reasonably required by the
Assignee for more effectually implementing and carrying out the true intent and
meaning of this Agreement. The Assignor will ensure that the representations
and warranties set forth in Section 3.01 will be true and correct at all
times.

 

3.03                          Opinion. The Assignor agrees to provide to the
Assignee at the time of execution of this Assignment of Agreement a legal
opinion of its counsel, duly authorized to practice in New Brunswick opining as
to the matters set out in section 3.01 (d), (e) and (f).

 

ARTICLE 4 -  DEFAULT

 

4.01                          Rights
of Assignee Upon a Default.
Whenever an Event of Default shall have occurred that has not been waived under
the EMSA, without limiting the rights of the Assignee under or pursuant to this
Assignment Agreement, the EMSA, or otherwise provided by applicable law, the
Assignee shall be entitled and shall have the authority:

 

(a)                                 to renew, amend or otherwise deal with the
Transmission Rights on such terms as it may deem appropriate;

 

(b)                                to perform, at the Assignor’s expense any and
all obligations or covenants of the Assignor and take all benefit of the
Assignor under the Transmission Service Agreement which grants the Transmission
Rights;

 

(c)                                 without limiting the generality of Section 4.01(a) hereof,
to deal with the Transmission Rights to the same extent as the Assignor could
do;

 

(d)                                to take possession of and collect the
revenues and other moneys of all kinds payable to the Assignor in respect of
the Transmission Rights and pay therefrom all reasonable expenses and charges,
the payment of which may be necessary to preserve and protect the Transmission
Rights; and

 

 

(e)                                 to exercise any other or additional rights or
remedies in respect of the Transmission Rights granted to Assignee under any
other provision of this Assignment Agreement or any related agreement, or
exercisable by a secured party under the Personal Property Security Act (New Brunswick) or under any other applicable law.

 

4.02                          Exercise of Powers.
Where any discretionary powers hereunder are vested in the Assignee, the same
may be exercised by an officer or manager.

 

ARTICLE 5 -  GENERAL

 

5.01                          No Release. This Assignment
Agreement shall remain in full force and effect without regard to, and the
obligations of the Assignor shall not be affected or impaired by:

 

(a)                                 any amendment, modification, replacement of
or addition or supplement to the EMSA or the Transmission Service Agreement; or

 

(b)                                any exercise or non-exercise of any right,
remedy, power or privilege in respect of this Assignment Agreement, the
Transmission Service Agreement or the EMSA; or

 

(c)                                 any waiver, consent, extension, indulgence or
other action, inaction or admission under or in respect of this Assignment
Agreement, the Transmission Service Agreement or the EMSA; or

 

(d)                                any default by the Assignor under, or any
invalidity or unenforceability of, or any limitation of the liability of the
Assignor or on the method or terms of payment under, or
any irregularity or other defect in the EMSA or the Transmission Service
Agreement; or

 

(e)                                 any merger, consolidation or amalgamation of
the Assignor into or with any other Person; or

 

(f)                                   any insolvency, bankruptcy, liquidation,
reorganization, arrangement, composition, winding-up, dissolution or similar
proceeding involving or affecting the Assignor.

 

5.02                          No Partnership.
Nothing herein contained shall be deemed or construed by the parties hereto or
by any third party as creating the relationship of partnership or of joint
venture among the Assignor and the Assignee it being understood and agreed that
none of the provisions herein contained or any acts of any of the Assignee or
of the Assignor, shall be deemed to create any relationship between any of the
Assignee and the Assignor other than the relationship of assignee and assignor.

 

5.03                          Time of Essence.
Time shall be of the essence of this Assignment Agreement.

 

 

5.04                          Waiver. No consent or waiver, express or implied, by the Assignee to
or of any breach or default by the Assignor in performance of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by the Assignor hereunder. Failure
on the part of the Assignee to complain of any act or failure to act of the
Assignor or to declare the Assignor in default, irrespective of how long such
failure continues, shall not, by itself, constitute a waiver by such Assignee
of its rights hereunder.

 

5.05                          Counterparts. This Assignment Agreement may be
executed in any number of separate counterparts, each of which shall be deemed
an original and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

 

5.06                          Enforcement. Assignor agrees to pay on demand to Assignee all costs and
expenses incurred by Assignee (including the fees and disbursements of counsel)
in connection with Assignee’s enforcement, protection or preservation of any of
its rights or claims under this Assignment Agreement, in the manner prescribed
herein and in the EMSA.

 

ARTICLE 6 -  MISCELLANEOUS PROVISIONS

 

6.01                          Document. This Assignment Agreement is executed pursuant to the EMSA and
shall (unless otherwise expressly indicated herein) be construed, administered
and applied in accordance with the terms and provisions thereof.

 

6.02                          Amendments, etc. No amendment to or waiver of any
provision of this Assignment Agreement nor consent to any departure by the
Assignor herefrom shall in any event be effective unless the same shall be in writing
and signed by the Assignee, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it is
given.

 

6.03                          Addresses for Notices. Any notice or communication to be
given under this Assignment Agreement to the Assignee or the Assignor shall be
effective if given in accordance with the provisions of the EMSA as to the
giving of notice to each, and the Assignee and the Assignor may change their
respective address for notices in accordance with the said provisions.

 

6.04                          Section Captions. Section captions used in this
Assignment Agreement are for convenience of reference only, and shall not
affect the construction of this Agreement.

 

6.05                          Severability.
Wherever possible, each provision of this Assignment Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Assignment Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

 

6.06                          Conflicts. In the
event of any conflict between the provisions hereunder and the provisions of
the EMSA then, notwithstanding anything contained herein, the provisions
contained in the EMSA shall prevail and the provisions of this agreement will
be deemed to be amended to the extent necessary to eliminate such conflict. If
any act or omission of the Assignor is expressly permitted under the EMSA but
is expressly prohibited hereunder, such act or omission shall be permitted. If
any act or omission is expressly prohibited hereunder, but the EMSA does not
expressly permit such act or omission, or if any act is expressly required to
be performed hereunder but the EMSA does not expressly relieve the Assignor
from such performance, such fact shall not constitute a conflict between the
applicable provisions hereunder and the provisions of the EMSA.

 

6.07                          Assignment. Neither party shall assign this Assignment Agreement or any of its
rights or obligations hereunder without the prior written consent of the other
party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Assignee may, without the consent of Assignor,
assign this Assignment Agreement or any of its rights or interest hereunder in
connection with any financing or other financial arrangements as follows:
Assignee may assign, pledge or mortgage its rights hereunder for security of
any indebtedness and (i) upon giving notice to the Assignor of such
assignment, pledge and mortgage, (A) the assignee, pledgee or mortgagee
shall be entitled to exercise all rights and remedies it may have with respect
to this Assignment Agreement without the further consent of the Assignor, to
receive a copy of any notice given by the Assignor or the Assignee pursuant to
the terms hereof, and to deliver any notice permitted under this Assignment
Agreement on the Assignee’s behalf, and (B) the
Assignor shall be entitled to assume the due authority of the assignee, pledgee
or mortgagee in taking any action or authorizing any notice without the
necessity of independently reviewing the assignment, pledge, mortgage, or other
security instrument delivered by the Assignee to the assignee, pledgee or
mortgagee and to accept performance by the assignee, pledgee or mortgagee of
any duty or obligation of the Assignee, and (ii) upon giving the Assignor
a copy of a trustee’s deed, deed in lieu of foreclosure, or other instrument
pursuant to which the assignee, pledgee, mortgagee, or other party acquires
legal title to this Assignment Agreement, (A) the assignee, pledgee,
mortgagee, or other party shall assume the Assignee’s duties and obligations
hereunder, provided that the liability of any such assignee, pledgee or
mortgagee under this Assignment Agreement following such assumption shall be
limited to its interests under the Assignment Agreement, and (B) Assignor
shall accept the assignee, pledgee, mortgagee, or other party as the successor
to the Assignee under the Assignment Agreement. At the request of the Assignee,
the Assignor agrees to execute and deliver a consent in a form reasonably
acceptable to the party(ies) providing financing to the Assignee.

 

 

6.08                          Governing
Law. This Assignment Agreement
shall be governed by and construed in accordance with the internal laws of the
Province of New Brunswick and the federal laws of Canada applicable therein.

 

IN WITNESS WHEREOF the parties hereto have duly executed this
Assignment Agreement on the date first written above.

 

 

	
   

  	
   

  	
   

  	
  NEW BRUNSWICK POWER

  
	
   

  	
   

  	
   

  	
  GENERATION CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  EVERGREEN WIND POWER, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE A

 

TRANSMISSION RIGHTS

 

Forty-two (42) megawatts of long-term firm point-to-point transmission
service available under the Transmission Service Agreement.

 

 

SCHEDULE A-1

 

TRUE COPY OF TRANSMISSION SERVICE AGREEMENT

 

See
attached.

 

 

SCHEDULE B

 

NOTICE OF ASSIGNMENT OF TRANSMISSION RIGHTS

 

[DATE]

 

New
Brunswick System Operator

77
Canada Street

Fredericton,
New Brunswick E3B 5G4

 

Attention:
Kevin Roherty, Secretary & General Counsel

 

Dear
Mr. Roherry:

 

Re:                              Notice of Assignment of Transmission Service
under that certain Service Agreement dated as of July 21, 2006 by and
between NBSO and NBPGC covering 60 megawatts of long-term firm point-to-point
transmission service from New Brunswick to the Maine Electric Power Company
(“MEPCO”) Interface (the “Service Agreement”)

 

New
Brunswick Power Generation Corporation (“NBPGC”) and Evergreen Wind Power, LLC
(“Assignee”) hereby notify the New Brunswick System Operator (the “NBSO”) of
the assignment of 42 megawatts of transmission service covered by the Service
Agreement from NBPGC to Assignee, as collateral security for obligations
pursuant to an Energy Management Services Agreement dated the         day
of               ,
2006 (the “EMSA”), in accordance with Section 23 of the New Brunswick
System Operator Open Access Transmission Tariff (“OATT”).

 

Upon
delivery to the NBSO of a Notice of Default by Assignee in respect of NBPGC’s
duties or obligations under the EMSA, the Assignee will assume the obligations
including scheduling and payment obligations from NBPGC for this assigned
transmission.

 

This
notice is given pursuant to Section 23.1 of OATT.

 

	
  EXECUTED:

  	
   

  	
  EXECUTED:

  
	
   

  	
   

  	
   

  
	
  NEW BRUNSWICK POWER

  	
   

  	
  EVERGREEN WIND POWER, LLC

  
	
  GENERATION CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  (Print/Type)

  	
   

  	
  (Print/Type)

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NEW BRUNSWICK SYSTEM OPERATOR

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DateExhibit 10.8

 

Execution Copy

 

POWER PURCHASE
AGREEMENT

 

BETWEEN

 

SOUTHERN
CALIFORNIA PUBLIC POWER AUTHORITY

AND

MILFORD WIND
CORRIDOR PHASE I, LLC

 

DATED AS OF MARCH 16,
2007

 

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS
  AND INTERPRETATION

  	
  1

  
	
  Section 1.1
  Definitions

  	
  1

  
	
  Section 1.2
  Interpretation

  	
  14

  
	
  ARTICLE
  II EFFECTIVE DATE, TERM, PRODUCTION TAX CREDITS, EARLY  TERMINATION AND FACILITY PROPERTIES

  	
  15

  
	
  Section 2.1
  Effective Date

  	
  15

  
	
  Section 2.2
  Agreement Term and Delivery Term

  	
  15

  
	
  Section 2.3 Survivability

  	
  15

  
	
  Section 2.4 Early
  Termination by Seller

  	
  15

  
	
  Section 2.5
  Extension of Production Tax Credits; Early Termination by Buyer or

  	
   

  
	
  Exercise of Purchase
  Option

  	
  15

  
	
  Section 2.6 Early
  Termination for Change in Requirement of Law

  	
  20

  
	
  Section 2.7 Early
  Termination by Mutual Agreement

  	
  21

  
	
  Section 2.8 Early
  Termination for Certain Force Majeure

  	
  22

  
	
  Section 2.9
  Milestone Schedule

  	
  22

  
	
  Section 2.10 The
  Facility Generating Premises

  	
  22

  
	
  Section 2.11 Site
  Common Facilities and Facility Common Facilities’ Interests

  	
  23

  
	
  Section 2.12
  Transmission Line and Facility Transmission Line Interests

  	
  23

  
	
  ARTICLE III PURCHASE
  AND SALE OF POWER

  	
  24

  
	
  Section 3.1
  Purchases by Buyer

  	
  24

  
	
  Section 3.2
  Dispatch Procedures

  	
  25

  
	
  Section 3.3 Energy
  to Come Exclusively from Facility

  	
  25

  
	
  ARTICLE IV POINT OF
  DELIVERY AND INTERCONNECTION AGREEMENT

  	
  25

  
	
  Section 4.1 Point
  of Delivery

  	
  25

  
	
  Section 4.2
  Interconnection Agreement

  	
  25

  
	
  Section 4.3
  Transmission Service Agreement

  	
  26

  
	
  Section 4.4 Use of
  Transmission Line

  	
  26

  
	
  ARTICLE V OWNERSHIP OF
  THE FACILITY

  	
  26

  
	
  Section 5.1
  Ownership of the Facility

  	
  26

  
	
  Section 5.2
  Certification of Commercial Operation Date

  	
  27

  
	
  Section 5.3
  Additional Capacity after Early Completion in the Early Completion Facility  Configuration 

  	
  27 

  
	
  Section 5.4 Other
  Information

  	
  27

  
	
  ARTICLE VI OPERATION
  AND MAINTENANCE OF THE FACILITY

  	
  28

  
	
  Section 6.1
  Compliance with Electrical Service Requirements

  	
  28

  
	
  Section 6.2
  General Operational Requirements

  	
  28

  
	
  Section 6.3 Taxes

  	
  28

  
	
  Section 6.4
  Environmental Credits

  	
  29

  
	
  Section 6.5
  Scheduling of Energy and Scheduled Outages

  	
  29

  
	
  Section 6.6
  Performance Security

  	
  31

  
	
  ARTICLE VII COMPLIANCE
  DURING CONSTRUCTION AND OPERATION PERIOD

  	
  31

  
	
  Section 7.1
  Facility Construction Warranty

  	
  31

  
	
  Section 7.2
  Compliance With Standards

  	
  32

  

 

i

 

 

	
  Section 7.3
  Quality Assurance Program

  	
  32

  
	
  ARTICLE
  VIII BILLING; PAYMENT; AUDITS; METERING; ATTESTATIONS

  	
  32

  
	
  Section 8.1
  Billing and Payment

  	
  32

  
	
  Section 8.2
  Records and Audits

  	
  33

  
	
  Section 8.3
  Delivery Arrangements

  	
  34

  
	
  Section 8.4
  Electric Metering Devices

  	
  34

  
	
  ARTICLE
  IX ENVIRONMENTAL ATTRIBUTES AND OTHER COSTS

  	
  35

  
	
  Section 9.1
  Transfer of Environmental Attributes

  	
  35

  
	
  Section 9.2
  Decommissioning and Other Costs

  	
  36

  
	
  ARTICLE
  X REPRESENTATIONS AND WARRANTIES; COVENANT OF SELLER

  	
  36

  
	
  Section 10.1
  Representations and Warranties by Buyer

  	
  36

  
	
  Section 10.2
  Representations and Warranties by Seller

  	
  37

  
	
  Section 10.3
  Covenant of Seller Related to Seller’s Status as Special Purpose Entity

  	
  38

  
	
  Section 10.4
  Covenants of Seller Related to Leases and Property Agreements

  	
  38

  
	
  ARTICLE
  XI DEFAULT; TERMINATION AND REMEDIES; PERFORMANCE DAMAGE

  	
  40

  
	
  Section 11.1
  Default

  	
  40

  
	
  Section 11.2
  Default Remedy

  	
  40

  
	
  Section 11.3
  Performance Damages

  	
  41

  
	
  Section 11.4
  Effect of Termination on Interconnection Agreement

  	
  41

  
	
  Section 11.5
  Termination for Default

  	
  41

  
	
  Section 11.6
  Calculation of Termination Payment

  	
  42

  
	
  ARTICLE
  XII MAKEUP OF SHORTFALL ENERGY

  	
  44

  
	
  Section 12.1
  Makeup of Shortfall

  	
  44

  
	
  Section 12.2
  No Excess Energy During Shortfall Periods

  	
  44

  
	
  Section 12.3
  Replacement Energy

  	
  44

  
	
  ARTICLE
  XIII CAPACITY RIGHTS

  	
  44

  
	
  Section 13.1
  Purchase and Sale of Capacity Rights

  	
  44

  
	
  Section 13.2
  Representation Regarding Ownership of Capacity Rights

  	
  44

  
	
  Section 13.3
  Further Assurances

  	
  45

  
	
  ARTICLE
  XIV MISCELLANEOUS

  	
  45

  
	
  Section 14.1
  Authorized Representative

  	
  45

  
	
  Section 14.2
  Notices

  	
  45

  
	
  Section 14.3
  Dispute Resolution

  	
  45

  
	
  Section 14.4
  Regulatory Compliance

  	
  46

  
	
  Section 14.5
  No Dedication of Facilities

  	
  46

  
	
  Section 14.6
  Force Majeure

  	
  46

  
	
  Section 14.7
  Assignment of Agreement

  	
  47

  
	
  Section 14.8
  Ambiguity

  	
  48

  
	
  Section 14.9
  Attorney Fees & Costs

  	
  48

  
	
  Section 14.10
  Voluntary Execution

  	
  48

  
	
  Section 14.11
  Entire Agreement

  	
  48

  

 

ii

 

 

	
  Section 14.12
  Contract Approvals

  	
  49

  
	
  Section 14.13
  Governing Law

  	
  49

  
	
  Section 14.14
  Execution in Counterparts

  	
  49

  
	
  Section 14.15
  Effect of Section Headings

  	
  49

  
	
  Section 14.16
  Waiver

  	
  49

  
	
  Section 14.17
  Relationship of the Parties

  	
  49

  
	
  Section 14.18
  Third Party Beneficiaries

  	
  49

  
	
  Section 14.19
  Indemnification; Damage or Destruction; Insurance; Limit of Liability

  	
  49

  
	
  Section 14.20
  Severability

  	
  51

  
	
  Section 14.21
  Status of Review by Buyer

  	
  51

  
	
  Section 14.22
  Confidentiality

  	
  52

  
	
  Section 14.23 No
  Immunity Claim

  	
  53

  
	
  Section 14.24
  Fixed-Rate Contract: Mobile-Sierra Clause

  	
  54

  
	
   

  	
   

  
	
  APPENDIX A

  	
  MONTHLY PAYMENT
  SCHEDULE

  	
   

  
	
  APPENDIX B

  	
  FACILITY
  DESCRIPTION AND MILESTONE SCHEDULE

  	
   

  
	
  APPENDIX C

  	
  BUYER AND SELLER
  BILLING, NOTIFICATION AND SCHEDULING CONTACT INFORMATION

  	
   

  
	
  APPENDIX D

  	
  FORM OF
  ATTESTATION

  	
   

  
	
  APPENDIX E

  	
  FORM OF
  SECURITY INTEREST

  	
   

  
	
  APPENDIX F

  	
  INSURANCE

  	
   

  
	
  APPENDIX G

  	
  REMAINING
  PREPAYMENT AMOUNT

  	
   

  
	
  APPENDIX H

  	
  CIRCLE FOUR
  LEASE

  	
   

  
	
  APPENDIX I

  	
  GUARANTEED
  GENERATION AND PREPAYMENT AMOUNT TABLE

  	
   

  
	
  APPENDIX  J

  	
  QUALITY
  ASSURANCE PROGRAM

  	
   

  

 

iii

 

POWER PURCHASE AGREEMENT

 

PARTIES

 

THIS
POWER PURCHASE AGREEMENT (“Agreement”) is entered into as of this 16TH day of March, 2007 by and between Southern
California Public Power Authority, (“Buyer”), a public entity and joint powers
agency formed and organized pursuant to the California Joint Exercise of Powers
Act (California Government section 6500 et seq.), and Milford Wind Corridor
Phase I, LLC (“Seller”), a limited liability corporation organized and existing
under the laws of the State of Delaware. Each of Buyer and Seller is referred
to individually under this Agreement as a “Party” and together they are
referred to as the “Parties”.

 

RECITALS

 

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

 

WHEREAS,
in response to a Request for Proposals issued by Buyer on August 30, 2005,
Seller proposes to own and operate a nominal 200 MW wind electric generating
and transmission facilities (the “Facility” as further described herein),
located near Milford, Utah, which will utilize wind energy technology and sell
power to Buyer beginning from the effective date of this Agreement and
extending for a term of twenty (20) years from the Commercial Operation Date
with an early termination and purchase option exercisable by Buyer as provided
herein;

 

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

 

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

 

AGREEMENT

 

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

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

 

Section 1.1 Definitions. The following
capitalized terms shall have the following meanings:

 

“Achieved Generation” means, in respect of each Contract
Year, the total Delivered Energy, in MWh, achieved during such Contract Year.

 

“Affiliate” means, as to any Person, any other
Person that, directly or indirectly, is in control of, is controlled by or is
under common control with such Person or is a director or officer of such
Person or of an Affiliate of such Person.

 

1

 

“Agreement”
means this Power
Purchase Agreement.

 

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

 

“ASTM” means American Society for Testing and
Materials. 

 

“ASME” means American Society of Mechanical
Engineers

 

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

 

“Authorized
Representative” means,
with respect to each Party, the person designated as such Party’s authorized
representative pursuant to Section 14.1.

 

“AWS” means American Welding Society.

 

“Bankruptcy”
means any case,
action or proceeding under any bankruptcy, reorganization, debt arrangement,
insolvency or receivership law or any dissolution or liquidation proceeding
commenced by or against a Person and, if such case, action or proceeding is not
commenced by such Person, such case or proceeding shall be consented to or
acquiesced in by such Person or shall result in an order for relief or shall
remain undismissed for ninety (90) days.

 

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

 

“Buyer’s
Agent” means any
member of the Buyer authorized or designated by Buyer to make the determination
or perform, carry out or provide the service or action as provided in this
Agreement.

 

“Buyer
Approvals” means
the authorizations and approvals required in order for Buyer to execute and
deliver this Agreement.

 

“CAMD” means the Clean Air Markets Division of
the United States Environmental Protection Agency, any successor agency and any
other state or federal entity or person that is given jurisdiction over a
program involving transferability of Environmental Attributes.

 

“Capacity
Rights” means the
right to capacity, resource adequacy, and/or reserves associated with the
electric generating capability of the Facility, measured in MW.

 

“CEC” means the California Energy Commission or
any successor agency thereto.

 

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

 

“Closing”
means the
consummation of the transaction contemplated by this Agreement in Section 2.5.

 

2

 

“COD Notice” has the meaning set forth in Section 5.2
hereof.

 

“Commercial Operation” means the date on which all of the
following have occurred:

 

(a)           The Facility
interconnection to the Point of Delivery is completed and tested in accordance
with the requirements of the Interconnection Agreement.

 

(b)           Seller shall have
provided Buyer with evidence reasonably satisfactory to Buyer that the Facility
meets the requirements for Early Completion Facility Configuration and has
successfully completed all testing required prior to normal operations.

 

(c)           Seller shall have
certified to Buyer that environmental and all other required permits necessary
for the operation and maintenance of the Facility have been obtained in a final
form no longer subject to appeal.

 

(d)           Seller shall have
certified to Buyer that the Facility meets the requirements for Early
Completion Facility Configuration and has been completed in all material
respects; and

 

(e)           Seller shall have
certified that it has obtained Insurance coverage for the Facility consistent
with

Appendix F.

 

“Commercial Operation Date” means the date on which Commercial
Operation shall have occurred; provided, that Seller shall have the right to
declare Commercial Operation as to all additional wind turbines following the
Commercial Operation Date if Commercial Operation is achieved as to the
Facility in the Early Completion Facility Configuration in accordance with Section 5.3.

 

“Contract Capacity” means the maximum net continuous
output level at the Point of Delivery that the Facility is designed to produce
and that Buyer is obligated to purchase; provided, that Seller shall have the
right to declare Commercial Operation as to the Early Completion Facility
Configuration at the Commercial Operation Date, and thereafter on or before
ninety (90) days following the Commercial Operation Date may declare Commercial
Operation as to all additional wind turbines in accordance with Section 5.3
which shall also constitute Contract Capacity.

 

“Contract Year” means each 12-month period of the Delivery
Term commencing with the Commercial Operation Date.

 

“Costs” has the meaning set forth in Section 11.6(f) hereof.

 

“Default” has the meaning set forth in Section 11.1
hereof. 

 

“Defaulting Party” has the meaning set forth in Section 11.1
hereof.

 

3

 

“Delivered Energy” means the MWh of Energy as metered
at the Point of Delivery, which amount will be adjusted to include the MWh of
curtailed Energy in accordance with Section 6.5(i).

 

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

 

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

 

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

 

“Early Completion Facility Configuration” means a configuration
of the Facility with the interconnection facilities and installed wind turbines
aggregating not less than 130 MW of nameplate capacity and no more than 200 MW
of nameplate capacity.

 

“EEI” means Edison Electric Institute.

 

“Effective Date” means the date of this Agreement
as set forth in Section 2.1 hereof.

 

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

 

“Energy” means the energy and Capacity
Rights produced by wind turbines at the Facility and delivered to the Point of
Delivery.

 

“Energy Rate” has the meaning set forth in Section 2.6
hereof.

 

“Environmental Attribute Reporting Rights” means all rights to
report the ownership of the Environmental Attributes to any Person, without limitation.

 

“Environmental Attributes” means any and all credits,
benefits (other than Tax Benefits), offsets, reductions, or allowances,
howsoever entitled, resulting from the generation of renewable Energy and its
subsequent displacement of conventional Energy generation. Environmental
Attributes include without limitation: (1) any avoided emission of carbon
dioxide (CO2), methane (CH4), or any other greenhouse gas, and (2) any
avoided emission of sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide
(CO), particulate matter (PM), or any other sources or air, soil, or water
pollution. Environmental Attributes received hereunder may be applied under any
governmental, regulatory, or voluntary program, including but not limited to
the United Nations Framework Convention on Climate Change (UNFCC) and the Kyoto
Protocol to the UNFCC, in accordance with applicable law. Environmental
Attributes created by the Facility shall be assigned so that one MWh of
Facility Metered Output is equivalent to one MWh of Environmental Attributes.
Environmental Attributes associated with the Replacement Energy shall be
derived from a renewable energy resource which (i) is eligible for
compliance with the renewable portfolio standards and greenhouse gas reporting
requirements established

 

4

 

under
California law and (ii) does not emit carbon dioxide or other greenhouse
gas emissions. Environmental Attributes are also commonly known as renewable
energy credits (RECs) and green tags, and the terms shall have identical
meanings for the purposes of this Agreement.

 

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

 

“Excess  Energy” means the Energy
delivered to the Point of Delivery which is in excess of the Guaranteed Annual
Quantity.

 

“Excess
Energy Price” means the $/MWh payment made to Seller by Buyer for Excess
Energy according to the provisions in Appendix A.

 

“Excess
PTC Value” has the meaning set forth in Section 2.5(g) hereof.

 

“Expected
Production Tax Credits” means a renewable electricity production credit of
1.5 cents per kWh in accordance with Section 45 of the Internal Revenue
Code (as the same exists on the Effective Date), as heretofore adjusted and as
hereafter to be adjusted by the inflation adjustment factor specified in Section 45,
as the same exists on the Effective Date, which tax credit shall be available
for a 10-year period beginning on Commercial Operation Date, measured on
Facility Metered Output.

 

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

 

“Facility
Common Facilities Interests” means the rights and interests in
and to the properties, structures, equipment and facilities described in
Appendix B as constituting the Facility Common Facilities Interests.

 

“Facility
Generating Premises” means the land described in Appendix B as
constituting the Facility Generating Premises.

 

“Facility
Lender” means any lender providing senior or subordinated
construction, interim or long-term debt or equity financing or refinancing for
or in connection with the development, construction, purchase, installation or
operation of the Facility, including any equity and tax investor providing
financing or refinancing for the Facility or purchasing equity ownership
interests of Seller and/or its Affiliates, and any trustee or agent acting on
their behalf, and any Person or entity providing interest rate protection
agreements to hedge any of the foregoing debt obligations.

 

“Facility
Metered Output” means the energy produced by the Facility wind turbine
generators as measured at the site of the wind turbine generators.

 

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

 

5

 

“Facility Transmission Line Interests” means the rights and
interests in and to the properties, structures and facilities described in
Appendix B as constituting the Facility Transmission Line Interests.

 

“Fair Market Value” means the amount the Buyer and
Seller agree is the current value of the Facility and, failing agreement, what
an appraiser, selected jointly by Buyer and Seller, reports is the value. The
value will be based on the value that a third party would be willing to pay if
it acquired the Facility subject to this Agreement.

 

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

 

“Force Majeure” has the meaning set forth in Section 14.6
hereof.

 

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

 

“GAAP” means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect as of the relevant date of
determination.

 

“Gains” has the meaning set forth in Section 11.6.

 

“GDPIPD” means the implicit price deflator
for the gross domestic product as computed and published from time to time by
the U.S. Department of Commerce.

 

“Guaranteed Annual Quantity” means Guaranteed Generation
divided by twenty (20).

 

“Guaranteed Generation” means the MWh of Energy specified
in Section 3.1 to be guaranteed to be delivered from the Facility to the
Point of Delivery as measured at the Point of Delivery; provided, that such
Guaranteed Generation and the applicable Guaranteed Annual Quantity shall be
reduced for each MWh that the Facility is unable to generate as a result of a
Buyer Default, a curtailment pursuant to Section 6.5(i), or Force Majeure
declared by the Buyer.

 

“IEEE” means Institute of Electrical and Electronics
Engineers. 

 

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

 

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

 

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

 

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

 

6

 

“ISA” means
Instrument Society of America. 

 

“KW” means kilowatt.

 

“KWh” means
kilowatt-hour.

 

“Lien” means any lien, mortgage, encumbrance, attachment, pledge, charge,
lease, sublease, easement or security interest of any kind.

 

“Leases and Property Agreements” means (A) the following leases and
property agreements and instruments under which Seller shall acquire the
Facility Generating Premises, as well as other undeveloped property in
connection therewith: (i) the Circle Four Lease, and all other leases to
Seller, as lessee, from third parties (other than the State of Utah) as set
forth in Section 2.10, (ii) a grant or grants of right of way to
Seller by the USBLM, (iii) the lease or leases to Seller, as lessee, from
the State of Utah, and (iv) agreements or instruments providing for the
acquisition and fee ownership by Seller of parcels of land, and (B) the grants of rights of way
and the leases, agreements, deeds and other instruments providing for the
acquisition by Seller of the Transmission Line right of way and associated
property rights and interests.

 

“Losses” has the meaning set forth in Section 11.6(f) hereof.

 

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

 

“MW” means
megawatt.or megawatts, as applicable.

 

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

 

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

 

“Non-Consolidation Opinion” means a reasoned opinion of Chadbourne &
Parke LLP addressed and delivered to the Buyer on or before the date on which
the Buyer pays the Prepayment Amount to Seller as to the non-consolidation of
the Seller in a bankruptcy proceeding of any member of Seller.

 

“Non-Defaulting Party” has the meaning set forth in Section 11.5(a) hereof.

 

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

 

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

 

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

 

“Operating Insurance” means the Insurance associated with the
Facility after final completion of the Facility construction phase,
specifically excluding Marine/Inland Marine Cargo, Marine

 

7

 

Delay
in Start Up, Builder’s Risk, and Workers Compensation coverages, as set forth
in Appendix F, which are associated with construction or personnel.

 

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

 

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

 

“P99 Energy” means the amount of Energy predicted to be available for delivery to
the Point of Delivery annually with a probability of exceedance of 99%, or the
predicted one year Energy production at a 99% probability of exceedance.

 

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

 

“Performance Security” means the performance security described in Section 6.6
that is required to be provided by Seller to Buyer, prior to Buyer’s obligation
to pay the Prepayment Amount, to secure Seller’s performance under this
Agreement.

 

“Permitted Encumbrances” means (i) any Lien expressly provided
for or permitted by the terms of the Agreement, (ii) Liens for taxes not
yet due or for taxes being contested in good faith by appropriate proceedings
so long as such proceedings do not involve a material risk of the sale,
forfeiture, loss or restriction on the use of the Facility or any part thereof,
provided that such proceedings end by the expiration of the Agreement Term, (iii) suppliers’,
vendors’, mechanics’, workman’s, repairman’s, employees’ or other like Liens
arising in the ordinary course of business for work or service performed or
materials furnished in connection with the Facility for amounts the payment of
which is either not yet delinquent or is being contested in good faith by
appropriate proceedings so long as such proceedings do not involve a material
risk of the sale, forfeiture, loss or restriction on use of the Facility or any
part thereof, provided that such proceedings end by the expiration of the
Agreement Term, and (iv) easements, rights of way, use rights, exceptions,
encroachments, reservations, restrictions, conditions or limitations, provided
that in each case the same do not interfere with or impair the operation or use
of the Facility or any interest therein as contemplated by the Agreement, or
have a material adverse effect on the value, the remaining useful life or the
utility of the Facility or any interest therein.

 

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

 

“Point of Delivery” means the interconnection facilities of Seller located at the point of
interconnection between the Facility’s transmission line and the Intermountain
Power Project Switchyard bus as further described in the Interconnection
Agreement.

 

“Prepayment Amount” means the amount to be paid by Buyer for the Guaranteed Generation as
set forth in Section 3.1.

 

“Present Value Rate” means the sum of 0.50% plus the yield
reported on page “USD” of the Bloomberg Financial Markets Services Screen
(or, if not available, any other nationally

 

8

 

recognized
trading screen reporting on-line intraday trading in United States government
securities) at 11:00 a.m. (New York City, New York time) for the United
States government securities having a maturity that matches the average
remaining Agreement Term.

 

“Production Tax Credits” or “PTCs” means the Production Tax Credit under Section 45
of the Internal Revenue Code, as the same may be amended, supplemented,
extended or replaced from time to time, and including all successor enactments
or legislation relating thereto, measured on the Facility Metered Output.

 

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

 

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

 

“Remaining Prepayment Amount” means, for any Contract Year, the amount set
forth in Appendix G for 8,500,000 MWh of Guaranteed Generation; provided
however that if the Guaranteed Generation calculated pursuant to Section 3.1
is less than 8,500,000 MWh, then the Remaining Prepayment Amounts shown in
Appendix G shall also be reduced pro-rata.

 

“Replacement Energy” has the meaning set forth in Section 12.3.

 

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

 

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

 

“Scheduled Outage Projection” has the meaning set forth in Section 6.5(g).

 

“Scheduler” means an employee or agent of a Party hereto who has, among other
duties, the responsibility for preparing preliminary interchange energy
schedules. The contact information for Buyer and Seller Schedulers is provided
in Appendix C (item 4) and will be revised by the Parties as needed.

 

“Security Interest” has the meaning set forth in Section 6.6(iii) hereof. 

 

“Shortfall Energy” has the meaning set forth in Section 12.1 hereof. 

 

“Site Common Facilities” means and includes:

 

9

 

(i)        a substation, including switching facilities, and interconnections with
the Transmission Line and collection systems and related transmission
facilities and the site thereof, including fee ownership interests, leaseholds,
rights of way, easements and other related property rights and interests and
associated buildings, structures and other improvements therefor;

 

(ii)       approximately 36 miles of newly constructed access roads and turnaround
areas;

 

(iii)      supervisory control and data acquisition
(SCADA) systems;

 

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

 

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

 

“Special
Investor” means the
equity investor in Seller receiving the majority of the Production Tax Credits.

 

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

 

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

 

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

 

(c)           Except for the ownership of undeveloped or
unused leased land, has not been, is not, and will not be engaged in any
business unrelated to the acquisition, development, ownership, management or
operation of the Facility, other than the sale of Energy from the Facility to
third parties as permitted by this Agreement, the removal and divestiture of
leaseholds as provided in Section 2.10, or the sale, transfer or disposal
of rights or interests in and to Site Common Facilities as provided in Section 2.11
or in and to the Transmission Line as provided in Section 2.12; provided
however that (i) Seller shall divest of all property rights and interests
of undeveloped or unused leased land not included in the Facility, as permitted
under Sections 2.10, 2.11 and 2.12, prior to any development or usage of said
property rights and interests for purposes other than those provided for in
this Agreement; and provided further that said divestiture shall not alter or
affect Buyer’s Security Interest, except as permitted by Sections 2.10, 2.11 or
2.12. For the purpose of owning and divesting of undeveloped or unused leased
land, as provided under Section 2.10 prior to any development or usage
thereof for purposes other than this Agreement, Seller shall amend or
terminate, as applicable, the Leases and

 

10

 

Property
Agreements to remove such leased land from the Leases and Property Agreements
and cause the lessor(s) to execute replacement leases or other property
agreements with other Persons applicable to the leased land divested.

 

(d)        Except for the ownership of undeveloped or
unused leased land or those portions of the Transmission Line and Site Common
Facilities not included in the Facility as described in (c) above, has not
had, does not have and will not have, any assets other than those related to
the Facility;

 

(e)          has not failed and will not fail to correct
any known misunderstanding regarding the separate identity of such entity;

 

(f)          has maintained and will maintain its accounts,
books, resolutions, agreements and records separate from any other Person and
has filed and will file its own tax returns;

 

(g)          has held itself out and identified itself and
will hold itself out and identify itself as a separate and distinct entity under
its own name or in a name franchised or licensed to it by a Person other than
an Affiliate of Seller and not as a division or part of any other Person,
except for services rendered under a business management services agreement
with an Affiliate that complies with the terms contained in Subsection (k) below,
so long as the manager, or equivalent thereof, under such business management
services agreement holds itself out as an agent of Seller;

 

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

 

(i)           has not made and will not make loans to any
Person or hold evidence of indebtedness issued by any other Person (other than
cash and investment-grade securities issued by a Person that is not an
Affiliate of or subject to common ownership with such Person);

 

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

 

(k)         has not entered into or been a party to, and
will not enter into or be a party to, any transaction with its members or
Affiliates, except (i) in the ordinary course of its business and on terms
which are intrinsically fair, commercially reasonable and are no less favorable
to it than would be obtained in a comparable arm’s-length transaction with an
unrelated third party or (ii) in connection with this Agreement;

 

(l)           has not had and will not have any obligation
to indemnify, and has not indemnified and will not indemnify its officers or
members, as the case may be;

 

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

 

11

 

(n)         does not and will not have any of its
obligations guaranteed by any Affiliate; and

 

(o)         has complied and will comply with all of the
terms and provisions contained in its organizational documents. The statement
of facts contained in its organizational documents are true and correct and
will remain true and correct;

 

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

 

(q)         has held and will hold its assets in its own
name;

 

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

 

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

 

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

 

(u)         has not assumed or guaranteed or become
obligated for, and will not assume or guarantee or become obligated for the
debts of any other Person and has not held out and will not hold out its credit
as being available to satisfy the obligations of any other Person except as
permitted pursuant to this Agreement;

 

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

 

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

 

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

 

(y)         has not pledged and will not pledge its
assets for the benefit of any other Person;

 

(z)         has had, now has, and will have articles of
organization, a certificate of formation and/or an operating agreement, as
applicable, that provides that it will not: (A) dissolve, merge,

 

12

 

liquidate
or consolidate; (B) sell
all or substantially all of its assets; (C) engage in any other business
activity, or amend its organizational documents with respect to the matters set
forth in this definition without the consent of Buyer; or (D) without the affirmative vote
of all of its members, file a bankruptcy or insolvency petition or otherwise
institute insolvency proceedings with respect to itself or to any other Person
in which it has a direct or indirect legal or beneficial ownership interest;

 

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

 

(bb)
has and will have no indebtedness other than (i) the loan made by the
Facility Lender providing construction financing for the Facility, (ii) Taxes
and Insurance premiums, (iii) liabilities incurred in the ordinary course
of business relating to its ownership, leasing and operation of the Facility
and its routine administration, in amounts not to exceed $1.8 million which liabilities
are not more than sixty (60) days past due, are not evidenced by a note and are
paid when due, and which amounts are normal and reasonable under the
circumstances, and (iv) such other liabilities that are permitted pursuant
to this Agreement.

 

“Startup and Test
Energy”  means the energy produced by the Facility
prior to the Commercial Operation Date.

 

“System Emergency”  means an emergency condition or abnormal interconnection situation
which in Buyer’s sole reasonable judgment affects the ability of Buyer, or
Buyer’s Agent, to receive the Delivered Energy in a manner which is deemed to
minimize the risk of injury to persons and/or property.

 

“Targeted Rate of Return” means the Special Investor’s target,
after-tax, internal rate of return on its investment as established in the
Seller’s equity agreement, not to exceed 15%, and the return shall consist of
all tax benefits (including, but not limited to Production Tax Credits and the
value of tax deductions) and taxable income received by the Special Investor
from the date of its initial investment in the Facility until the tenth (10th)
anniversary of the Commercial Operation Date at the Special Investor’s
effective tax rate as established in the Seller’s equity agreement, plus cash
distributions allocated to the Special Investor.

 

“Tariff Rate” has the meaning set forth in Section 4.4 hereof.

 

“Tax Benefits”  means all tax deductions and tax credits available under applicable
laws to owners or operators of the Facility, including Production Tax Credits,
or such substantially equivalent tax credits that provide Seller with a tax
credit based on energy production from any portion of the Facility and all tax
deductions and tax credits that are now or may in the future be, applicable to
owners and/or operators of the Facility under the laws of the State of
California or Utah.

 

“Taxes” has the meaning set forth in Section 6.3.

 

13

 

“Termination Payment” means in the case of a Default, the amount to
liquidate this Agreement, as calculated pursuant to Section 11.6.

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)   reference to any gender includes the other;

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

ARTICLE II

EFFECTIVE DATE, TERM, PRODUCTION TAX CREDITS,

EARLY TERMINATION AND FACILITY PROPERTIES

 

Section 2.1 Effective Date. This Agreement shall become effective when
duly executed and delivered by both Parties.

 

Section 2.2 Agreement Term and Delivery Term. Subject to Buyer’s purchase option described
in Section 2.5, this Agreement shall have a delivery term (the “Delivery
Term”) of twenty (20) Contract Years commencing on the Commercial Operation
Date. The term of this Agreement (the “Agreement Term”) shall commence
on the Effective Date and shall end upon the expiration or termination for any
reason of the Delivery Term.

 

Section 2.3 Survivability. The provisions of this Article II, Article VIII,
Article X, and Article XI shall survive the termination of this
Agreement. The provisions of Article III and Article VIII shall
continue in effect after termination to the extent necessary to provide for
final billing and adjustments related to the period prior to termination of
this Agreement, including payment of any money due and owing to Seller or Buyer
pursuant to this Agreement.

 

Section 2.4 Early Termination by Seller. Notwithstanding any provisions of this
Agreement to the contrary, (a) if no financial closing for the
construction of the Facility occurs before December 31, 2007, or (b) if
Seller reasonably determines that the requirements of the permits issued for
the Facility would make development or operation of the Facility infeasible or
uneconomic, Seller shall, on the terms and subject to the conditions of this Section 2.4,
have the right to terminate this Agreement, without any further financial or
other obligation to Buyer as a result of such termination (except as expressly provided
herein), by providing written notice of such determination to Buyer at any time
before December 31, 2007. Seller shall provide written notice to Buyer of
financial closing for the construction financing of the Facility within five (5) Business
Days after such financial closing has occurred.

 

Section 2.5 Extension of Production Tax Credits;
Early Termination by Buyer or Exercise of Purchase Option.

 

(a) In
the event that the Commercial Operation Date shall not occur by December 31,
2008 but shall occur prior to any default under Section 11.1(e) arising
from a failure to achieve the Commercial Operation Date, and on or prior to the
Commercial Operation Date the Production Tax Credits for wind generating
facilities shall have been extended so as to apply to the Facility at a value
that is at least equal to 95% (but does not exceed 100%) of the value of the
Expected Production Tax Credits on the Commercial Operation Date, the Buyer
shall pay to the Seller (A) within 90 days following the Commercial Operation
Date the Prepayment Amount and (B) all
other payments as provided in Section 3.1 and Appendix A.

 

15

 

(b) In
the event that the Commercial Operation Date shall not occur by December 31,
2008 but shall occur prior to any default under Section 11.1(e) arising
from a failure to achieve the Commercial Operation Date, and on or prior to the
Commercial Operation Date the Production Tax Credits for wind generating
facilities shall have been extended so as to apply to the Facility at a value
that is at least equal to 75% (but less than 95%) of the value of the Expected
Production Tax Credits, the Buyer shall pay to the Seller:

 

(1)           within 90 days following the Commercial Operation Date the Prepayment
Amount, and

 

(2)           all other payments as provided in Section 3.1 and Appendix A, and

 

(3)           an additional monthly payment equal to the difference between the value
of the reduced (or eliminated) Production Tax Credits for such applicable month
and 95% of the value of the Expected Production Tax Credits for such applicable
month, multiplied by the Delivered Energy for such applicable month, and all
divided by 0.65 as a gross-up of the amount of such difference to account for
Seller income taxes which would not have been applicable to the reduced (or
eliminated) Production Tax Credits.

 

(c) In
the event that the Commercial Operation Date shall not occur by December 31,
2008 but shall occur prior to any default under Section 11.1(e) arising
from a failure to achieve the Commercial Operation Date, and on or prior to the
Commercial Operation Date the Production Tax Credits for wind generating
facilities shall have been extended so as to apply to the Facility at a value
that is less than 75% of the value of the Expected Production Tax Credits, the
Buyer shall exercise one of the following options:

 

(1)           Buyer shall purchase the Facility from Seller within 90 days following
the Commercial Operation Date at a purchase price of $2,050 per installed KW of
Contract Capacity, or

 

(2)           Buyer shall pay to Seller (A) within 90 days following the
Commercial Operation Date the Prepayment Amount, (B) all other payments
set forth in Section 3.1 and Appendix A, and (C) an additional
monthly payment equal to the difference between the value of the reduced (or
eliminated) Production Tax Credits for such applicable month and 95% of the
value of the Expected Production Tax Credits for such applicable month,
multiplied by the Delivered Energy for such applicable month, and all divided
by 0.65 as a gross-up of the amount of such difference to account for Seller
income taxes which would not have been applicable to the reduced (or
eliminated) Production Tax Credits.

 

(d) In
the event that the Commercial Operation Date shall not occur by December 31,
2008 but shall occur prior to any default under Section 11.1(e) arising
from a failure to achieve the Commercial Operation Date, and on or prior to the
Commercial Operation Date the Production Tax Credits for wind generating
facilities shall not have been extended and at least one of the Parties shall
have determined on or prior to the Commercial Operation Date that it is

 

16

 

likely
that the Production Tax Credits will be extended prior to the first anniversary
of the Commercial Operation Date so as to apply to the Facility, Buyer shall
not pay to Seller the Prepayment Amount on or prior to the Commercial Operation
Date, but instead Buyer shall pay Seller $52.50 per MWh for all Delivered
Guaranteed Generation and shall make all other payments as provided in Section 3.1
and Appendix A; provided however that such payment for the Delivered Guaranteed
Generation shall terminate upon payment by the Buyer of the Prepayment Amount
or upon the purchase by the Buyer of the Facility as set forth herein below in
this Section 2.5(d). If prior to the first anniversary of the Commercial
Operation Date the Production Tax Credits for wind generation facilities shall
have been extended so as to apply to the Facility and:

 

(1)           such extended Production Tax Credits shall have a value that is at
least equal to 95% (but does not exceed 100%) of the value of the Expected
Production Tax Credits, then the Buyer shall pay to the Seller (A) within 90
days following such first anniversary of the Commercial Operation Date the
Prepayment Amount and (B) all other payments as provided in Section 3.1
and Appendix A, or

 

(2)           such Extended Production Tax Credits shall have a value that is at
least equal to 75% (but less than 95%) of the value of the Expected Production
Tax Credits, then the Buyer shall (AA) pay to Seller within 90 days following
such first anniversary of the Commercial Operation Date the Prepayment Amount,
(BB) continue the other payments set forth in Section 3.1 and Appendix A,
and (CC) pay to Seller an additional monthly payment equal to the difference
between the value of the reduced (or eliminated) Production Tax Credits for
such applicable month and 95% of the value of the Expected Production Tax
Credits for such applicable month, multiplied by the Delivered Energy for such
applicable month, and all divided by 0.65 as a gross-up of the amount of such
difference to account for Seller income taxes which would not have been
applicable to the reduced (or eliminated) Production Tax Credits, or

 

(3)           such extended Production Tax Credits have a value that is less than 75%
of the value of the Expected Production Tax Credits, then the Buyer shall
exercise one of the following options:

 

(A)          Buyer shall purchase the Facility from Seller within (90) days
following such first anniversary of the Commercial Operation Date at a purchase
price of $2,050 of installed KW of Contract Capacity, or

 

(B)          Buyer shall (a) pay to Seller within 90 days following such first
anniversary of the Commercial Operation Date the Prepayment Amount, (b) continue
all other payments to Seller as provided in Section 3.1 and Appendix A,
and (c) pay to Seller an additional monthly payment equal to the
difference between the value of the

 

17

 

reduced
(or eliminated) Production Tax Credits for such applicable month and 95% of the
value of the Expected Production Credits for such applicable month, multiplied
by the Delivered Energy for such applicable month, and all divided by 0.65 as a
gross-up of the amount of such difference to account for Seller income taxes
which would have been applicable to the reduced (or eliminated) Production Tax
Credits.

 

In
the event, however, that in such case that the Production Tax Credits for wind
generating facilities shall not have been extended prior to such first
anniversary of the Commercial Operation Date, then Buyer shall purchase the
Facility from the Seller within 90 days following such first anniversary of the
Commercial Operation Date at a purchase price of $2,050 per installed KW of
Contract Capacity.

 

(e)   In the event that the Commercial Operation
date shall not occur by December 31, 2008, but shall occur prior to any
default under Section 11.1(e) arising from a failure to achieve the
Commercial Operation Date, and prior to the Commercial Operation Date the
Production Tax Credits for wind generating facilities shall not have been
extended and neither of the Parties is able to determine prior to the
Commercial Operation Date that it is likely that the Production Tax Credits
will be extended by the first anniversary of the Commercial Operation Date so
as to apply to the Facility, the Buyer shall purchase the Facility from Seller
within 90 days following the Commercial Operation Date at a purchase price of
$2,050 per installed KW of Contract Capacity.

 

(f)    The failure by Buyer to exercise its option
to purchase the Facility or to pay the Prepayment Amount as set forth in
paragraphs (c) or (d) above or to purchase the Facility as set forth
in paragraph (e) above shall be considered to be a payment default under Section 11.1(a).

 

(g)   If under Section 2.5(a) or Section 2.5(d)(1) Production
Tax Credits for wind generating facilities are extended at a value that exceeds
one hundred percent (100%) of their current value for the first ten Contract
Years (“Excess PTC Value”), the Prepayment Amount to be paid in each such case
shall be reduced by the same percentage that the Excess PTC Value exceeds 100%
of the current value.

 

(h)   Buyer shall have the right at any time on or
prior to the date that is six months prior to the later of (i) the tenth
anniversary of the Commercial Operation Date or (ii) the tenth anniversary
of the date of enactment of Production Tax Credits in the event such credits
are not in place at the Commercial Operation Date but become effective within
twelve (12) months thereafter (“Option Exercise Date”), to exercise its option
to purchase the Facility and the related assets from Seller and terminate this
Agreement at the Option Exercise Date by providing written notice of its intent
to exercise its purchase option effective as of the Option Exercise Date for
the Fair Market Value of the Facility, but in no event less than the value that
the Special Investor requires to reach a Targeted Rate of Return and in no
event more than one hundred fifty million dollars ($150,000,000). Buyer may
request in writing Seller’s reasonable estimate of the purchase price for the
Facility at any time following the eighth (8th) anniversary of the Commercial
Operation Date, and Seller shall provide such estimate with supporting

 

18

 

documentation
within 60 days of such written request. The reasonable estimate will be based
on the actual Delivered Energy from the Commercial Operation Date through the
most recent anniversary of the Commercial Operation Date, and the expected
Delivered Energy from that date until the Option Exercise Date. The calculation
of the expected Delivered Energy will be based on the average annual Delivered
Energy since the Commercial Operation Date.

 

(i)   In the event the Buyer does not exercise its
option to purchase the Facility at the Option Exercise Date, Buyer shall have
the option to purchase the Facility from the Seller at the expiration of the
Agreement Term at the Fair Market Value calculated as of the expiration of the
Term by providing notice to the Seller at least 180 days prior to the expiration
of the Agreement Term. This Agreement will be terminated upon the effective
date of the consummation of such purchase by Buyer and (i) the payment in
full to Seller of the purchase price, (ii) the payment of all other
obligations due hereunder, and (iii) the release and return to Seller of
any Performance Security provided under this Agreement. If Buyer does not
provide written notice of its intent to exercise its purchase option on or
before the date that is six months prior to the twentieth (20th) anniversary of the Commercial Operation Date, Buyer shall be deemed
to have forfeited all rights to purchase the Facility at the expiration of the
Agreement Term.

 

(j)  Closing Conditions. The Closing for the purchase and sale of the Facility shall take place
at the offices of Southern California Public Power Authority, 225 South Lake
Ave, Pasadena, CA 91101 on the third Business Day after the conditions to
Closing have been satisfied or waived, or at such place as Buyer and Seller
mutually agree in writing. The Closing shall be deemed effective as of 12:01 a.m.
(Pacific Prevailing Time) on the Closing Date:

 

(1)           Except as provided in Article VII, Seller shall transfer the
Facility to Buyer on an “as is” basis, and Seller shall not make any
representations and warranties to Buyer relating to the condition of the
Facility in connection with such transfer, either express or implied by statute
or otherwise, including warranties as to merchantability and/or fitness for any
particular purpose, the absence of patent or inherent defects, description or
otherwise of whatsoever nature, other than a warranty of title. Seller shall
have no liability of any kind whatsoever to Buyer under this Agreement or in
respect of the operation or otherwise of the Facility by Buyer or Buyer’s
designee from and after the transfer of the Facility to Buyer; provided,
however, that no such transfer shall relieve Seller of any liability
whatsoever arising from the violation, breach or default by Seller, prior to
the transfer date, of any transferred contract, transferred permit, transferred
intellectual property or other transferred asset, or resulting from any act or
omission by Seller or its Affiliates that occurred prior to the transfer date.

 

(2)           Seller shall transfer the Facility to Buyer, free and clear of all
liens and encumbrances, other than Permitted Encumbrances. Seller shall assign
and transfer to Buyer all of its right, title and interest in: (i) all raw
materials, consumables and spare parts; (ii) all tangible personal property;
(iii) all intangible personal property, including permits, patents, patent
licenses,

 

19

 

patent
applications, trade names, trademarks, trademark registrations and applications
therefore, trade secrets, copyrights, know-how, secret formulae and any other
intellectual property rights; (iv) all buildings and fixtures; (v) computerized
and non-computerized records, reports, data, files, and information; (vi) all
design, construction and equipment warranties and guarantees related to the
Facility in which Seller has any remaining rights against engineers,
contractors, suppliers, equipment manufacturers or other Persons; and (vii) the
Leases and Property Agreements, Interconnection Agreement, and all common or joint
ownership, construction and operating agreements entered into by Seller as
provided in Sections 2.11 and 2.12 and all other agreements with a total market
value in excess of $50,000 for third-party joint operation or use of the
Facility or any portion thereof or of any capacity or capability of the Site
Common Facilities or the Transmission Line, all of which shall be assignable
and transferable to Buyer in accordance with the terms thereof; provided,
however, that assignments of interest of the USBLM and the State of Utah may be
subject to the prior approval of the USBLM and the State of Utah, respectively.

 

(3)           All items relating to the ownership and operation of the Facility,
which are customarily prorated, including without limitation Taxes, Operating
Insurance premiums, and rentals or other payments under Leases and Property
Agreements, shall be prorated as of the Closing Date. Seller shall be liable
with respect to items or obligations that relate to any time period prior to
the Closing Date and Buyer shall be liable with respect to items or obligations
relating to time periods after the Closing Date, and to the extent practicable,
there shall be a cash settlement on the Closing Date, provided that any monthly
payments made by Buyer for Taxes and Operating Insurance premiums shall be
credited to Buyer’s settlement account.

 

Section 2.6 Early Termination for Change in
Requirement of Law. If
at any time after the Effective Date there is a change in Requirement of Law
that either has (a) a material adverse effect on the performance by Seller
of its obligations under this Agreement or on the Seller’s ownership,
construction and/or operation and maintenance of the Facility or (b) a
disproportionate adverse impact to Seller or the Facility, such that in either
such case development or operation of the Facility would be infeasible or
uneconomic, Seller shall have the right unless waived by Seller in writing, to
terminate this Agreement, without any further financial or other obligation to
Buyer as a result of such termination, by providing written notice of such
determination to Buyer at any time within thirty (30) days after Seller becomes
aware of such change in Requirement of Law and such termination of this
Agreement shall become effective ninety (90) days after such notice, but only
if Buyer shall have been paid the Remaining Prepayment Amount and all other
amounts owed to Buyer under this Agreement, less all amounts owed to Seller
under this Agreement. Seller shall include as part of any such notice documentation
reasonably substantiating that the

 

20

 

change
in Requirement of Law would have a material adverse effect on the performance
by Seller of its obligations under this Agreement or on Seller’s ownership,
construction, and/or operation and maintenance of the Facility, or make
development or operation of the Facility infeasible or uneconomic. If Seller
determines that this Agreement is sustainable with an additional payment to
cover the additional costs directly associated with this change in Requirement
of Law, then Seller may propose to continue the Agreement with an additional
payment per MWh of Delivered Energy (“Energy Rate”), with reference to the cost
projections used by the Seller to determine the Energy Rate. If Buyer, in its
sole and absolute discretion, determines that it is willing to increase the
Energy Rate to the amount Seller has determined to be necessary to offset such
cost increases, Buyer shall, within ninety (90) days of receipt of Seller’s
termination notice, notify Seller thereof, and the Parties shall amend this
Agreement to reflect such Energy Rate and this Agreement, as so amended, shall
continue in full force and effect. If Buyer fails to provide such notice, this
Agreement shall terminate effective immediately upon the expiration of such
ninety (90) day period, but only if Buyer shall have been paid the Remaining
Prepayment Amount for all other amounts owed to Buyer under this Agreement,
less all amounts owed to Seller under this Agreement; provided,  however,
that in the event that, prior to the expiration of such ninety (90)-day period,
Buyer notifies Seller that Buyer wishes to negotiate the amount of the increase
in the Energy Rate requested by Seller, this Agreement shall terminate on the
thirtieth (30th) day following Seller’s receipt of such
written notice, subject however to the receipt by Buyer of the payments by
Seller referred to above in this Section 2.6, unless prior to the
expiration of such thirty (30)-day period the Parties reach agreement regarding
the amount of the increase in the Energy Rate (in which event the Parties shall
mutually amend this Agreement to reflect such agreed increase in the Energy
Rate and this Agreement, as so amended, shall continue in full force and
effect). In the event of early termination under this Section, Buyer agrees at
the cost and expense of Seller to cooperate with Seller in arrangements to be
made by Seller for the transmission of Energy from the Facility by one or more
members of the Buyer under an OATT. It is acknowledged by Seller that Buyer has
no rights, interests or entitlements in any system or facilities for the
transmission of such Energy or under any OATT. The Parties acknowledge and
agree that the Facility covered by this Agreement will be subject to
environmental review pursuant to the National Environmental Policy Act of 1969
(NEPA) and pursuant to Utah laws requiring preparation of a document containing
essentially the same points of analysis as in an environmental assessment or
environmental impact statement prepared under NEPA, and is therefore
statutorily exempt from the California Environmental Quality Act (“CEQA”)
pursuant to Title 14 California Code of Regulations, Section 15277.
Neither Party shall be bound by this Agreement unless and until a Notice of
Exemption pursuant to said Title 14, California Code Regulations, Section 15277
is prepared and duly filed in the appropriate state and county and the statute
of limitations pertaining to that filing has expired without a legal challenge
..

 

Section 2.7 Early Termination
by Mutual Agreement. This
Agreement may be terminated upon mutual written agreement of the Parties

 

21

 

Section 2.8 Early Termination for Certain Force
Majeure. Buyer may terminate this Agreement effective upon written notice to
Seller if, as a result of Force Majeure involving action or inaction by, or
failure to obtain necessary authorizations or approvals from, any governmental
agency or authority, including as a result of any appeals of such
authorizations or approvals, the Commercial Operation Date is not achieved
within four (4) years after the Effective Date.

 

Section 2.9 Milestone Schedule. Seller has provided
a milestone schedule with estimated deadlines for the development of the
Facility through the Commercial Operation Date in Appendix B. Seller shall
inform Buyer on a quarterly basis of the status of each milestone, including
any slippage in an estimated deadline.

 

Section 2.10 The Facility Generating Premises.

 

(a)     Seller shall enter into such Leases and
Property Agreements which, together with the Circle Four Lease, provide Seller
with leaseholds or other property rights and interests which shall include the
entire Facility Generating Premises, as well as leaseholds and property
interests in other undeveloped lands. The terms and provisions of the leases
hereafter entered into by Seller (other than those with the State of Utah)
shall be substantially the same as the terms and provisions of the Circle Four
Lease, except as otherwise approved by Buyer, which approval shall not be
unreasonably withheld. The terms and provisions of a grant or grants of right
of way from the USBLM and a lease or leases from the State of Utah to be
entered into by Seller shall be subject to review, comment and approval by
Buyer, which approval shall be granted upon confirmation by Buyer that its
rights and interests under this Agreement and the Security Interest afforded by
its Performance Security are not adversely affected. In the event that Buyer
fails to approve the terms and conditions negotiated between the Seller and (i) USBLM
or (ii) the State of Utah within 30 days of receipt by Buyer of such terms
and conditions, such delay shall be deemed to be an event of Force Majeure
until such approval is received by the Seller. All Leases and Property
Agreements, to the extent recordable under federal or state law, shall be duly
recorded in the land records of the applicable county or counties of the State
of Utah or as otherwise provided by applicable law.

 

(b)     All such Leases and Property Agreements
referred to in (a) above shall be entered into by Seller so as to enable
Seller to construct and install the wind turbine generators and related
transmission facilities and other improvements constituting the portion of the
Facility located on the Facility Generating Premises.

 

(c)     Seller agrees not to develop or improve the
areas of such Leases and Property Agreements, other than the Facility
Generating Premises which shall be developed and improved so as to provide for
the facilities and improvements of the Facility to be located on the Facility
Generating Premises in accordance with this Agreement. Seller shall be
entitled, however, by amendment or termination of any of the Leases and
Property Agreements to remove any portions of or rights or interests in the
premises, other than the Facility Generating Premises, acquired thereunder;
provided that, upon the granting of the Performance Security to Buyer all the
property rights and interests under the Leases and Property Agreements then in
effect shall become subject to the lien and security interest of the
Performance Security. Thereafter, Seller

 

22

 

may
remove any portions of or interests in the premises under such Leases and
Property Agreements, other than the Facility Generating Premises, with consent
of the Buyer to an amendment of the Performance Security releasing such portion
of or interests in such premises from the lien and security interest of the
Performance Security, which consent shall be granted upon confirmation by Buyer
that such removal does not interfere with the operation or use of the Facility
under this Agreement.

 

Section 2.11 Site Common Facilities and Facility
Common Facilities’ Interests. The construction and installation of structures, facilities and other
improvements of the Facility on the Facility Generating Premises as provided in
this Agreement shall include the Site Common Facilities. The Seller may sell,
transfer or otherwise dispose of undivided interests or rights in such Site
Common Facilities including the use of the capacity or capabilities thereof to
other entities in accordance with agreements as to the common ownership, use,
construction and operation of such Site Common Facilities including provisions
for sharing of the costs thereof and rights and entitlements to the capacity
and services thereof; provided that Seller shall not sell, transfer or dispose
of the Facility Common Facilities’ Interests or any portion thereof but shall
retain the same as part of the Facility under this Agreement. However, upon the
granting of the Performance Security to Buyer all the ownership, rights and
interests of the Seller in the Site Common Facilities, other than those
theretofore sold, transferred or disposed of, shall become subject to the lien
and security interest of the Performance Security. Thereafter, any such sale,
transfer or disposal by Seller of rights or interests in such Site Common
Facilities shall require the consent of Buyer to an amendment of the
Performance Security releasing such rights and interests from the lien and
security interest of the Performance Security, which consent shall be granted
upon confirmation by Buyer that such sale, transfer or disposal does not
interfere with the operation or use of the Facility Common Facilities
Interests. Except for third party contracts having a total market value of less
than $50,000, Buyer shall have the right to review any agreement that provides
for any third party ownership and related joint operation of the Site Common
Facilities or any capacity or capability thereof, and such agreement shall be
subject to approval by Buyer prior to execution thereof by Seller which
approval shall be granted upon confirmation by Buyer that its rights and
interests under this Agreement and the Security Interest afforded by its
Performance Security are not adversely affected thereby. Seller shall not enter
into any use agreement for the Site Common Facilities that would have a
material adverse effect on the Buyer, provided that Buyer shall have the right
to review and comment on said use agreements prior to execution.

 

Section 2.12 Transmission Line and Facility
Transmission Line Interests.

 

(a)     Seller shall acquire such rights of way,
easements and other property rights and interests necessary for the
Transmission Line right of way and shall locate and construct thereon the
facilities and improvements of the Transmission Line.

 

(b)     Seller may sell, transfer or otherwise dispose
of undivided interests or rights in the Transmission Line including the rights
to use the capacity or transfer capability thereof;

 

23

 

provided
that Seller shall not sell, transfer or otherwise dispose of and shall retain
the Facility Transmission Line Interests. However, upon the granting of the
Performance Security to Buyer, the ownership, rights and interests of the
Seller in the Transmission Line shall become subject to the lien and security
interest of the Performance Security. Thereafter any sale, transfer or disposal
by Seller of rights or interests in the Transmission Line shall require the
consent of Buyer to an amendment of the Performance Security releasing such
rights or interests from the lien and security interest of the Performance
Security, which consent shall be granted upon confirmation by Buyer that such
sale, transfer or disposal does not interfere with the operation or the use of
the Facility Transmission Line Interests. Except for third party contracts
having a total market value of less than $50,000, Buyer shall have the right to
review any agreement that provides for any third party ownership or related
joint operation of the Transmission Line or any capacity or capability thereof,
and such agreement shall be subject to approval by Buyer prior to execution
thereof by Seller which approval shall be granted upon confirmation by Buyer
that its rights and interests under this Agreement and the Security Interest
afforded by its Performance Security are not adversely affected thereby. Seller
shall not enter into any use agreement for the Transmission Line except as
provided in Section 4.4, and Buyer shall have the right to review any such
use agreement prior to its submission to FERC.

 

ARTICLE III

PURCHASE AND SALE OF POWER

 

Section 3.1 Purchases by Buyer.

 

(a)   The Facility shall have a Contract Capacity
of up to 200 MW and a Guaranteed Generation of 8,500,000 MWh based on a
Contract Capacity of 200 MW. On or before the Commercial Operation Date (or
such date as specified in Section 2.5 if the Prepayment Amount is deferred
as provided therein), Buyer shall pay to Seller the Prepayment Amount set forth
in Appendix I for the Guaranteed Generation calculated as provided in Section 3.1(c),
except as otherwise provided in Section 2.5(g).

 

(b)   Subject to the terms and conditions of this
Agreement, all of the Energy from the Facility shall be dedicated to the Buyer.

 

(c)   At least 90 days prior to the anticipated
Commercial Operation Date, as set forth in the COD Notice pursuant to Section 5.2,
Seller shall deliver to Buyer a written declaration of the planned Contract
Capacity and the planned Guaranteed Generation. The calculation of such planned
Guaranteed Generation shall be based on a written certification, to be
furnished to Buyer with such declaration, of the P99 Energy for the planned
Contract Capacity, multiplied by twenty (20) years; provided, however, that
such calculation of the planned Guaranteed Generation shall in no event be
based on an amount of planned Contract Capacity greater than 110% of the Early
Completion Facility Configuration consisting of the actual Contract Capacity
installed on the Commercial Operation Date. Such certification of P99 Energy
shall be prepared by a recognized wind expert, to be selected by Seller subject
to Buyer’s approval, which approval shall not be unreasonably withheld by
Buyer.

 

24

 

(d)     Following the Commercial Operation Date and
continuing for the Delivery Term, Seller shall make available, schedule and
deliver, and Buyer shall accept and purchase, the Delivered Energy from the
Facility for the Delivery Term.

 

(e)     Prior to the Commercial Operation Date,
Seller shall sell and deliver, and Buyer shall accept and purchase the
Delivered Energy at the Startup and Test Energy rate in accordance with
paragraph 2 of the payment schedule set forth in 

Appendix A.

 

(f)     For all Excess Energy delivered following the
Commercial Operation Date, Buyer shall pay Seller the Excess Energy Price in
accordance with paragraph 1 of the payment schedule set forth in Appendix A.

 

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

 

(h)     Commencing on the Commercial Operation Date,
Buyer shall pursuant to Appendix A reimburse Seller for all Taxes and Operating
Insurance premiums following the Commercial Operation Date, except as otherwise
provided in Appendix A. Such reimbursement amounts will be estimated by Seller
prior to the year of payment, divided by 12, and paid monthly by Buyer. Any
overpayment or underpayment by Buyer of reimbursement amounts for such actual
Taxes and Operating Insurance premiums paid by Seller will be reconciled
through an adjustment to the invoice sent to Buyer in the month following the
applicable year of payment.

 

Section 3.2 Dispatch
Procedures. For
purposes of helping Buyer or Buyer’s Agent schedule its resources, Seller shall
follow the applicable scheduling procedures set forth in Section 6.5.

 

Section 3.3 Energy to Come
Exclusively from Facility. Except as provided in Article XII, in no event shall Seller have
the right to procure energy from sources other than the Facility for sale and
delivery pursuant to this Agreement.

 

ARTICLE IV

POINT OF DELIVERY AND INTERCONNECTION AGREEMENT

 

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

 

Section 4.2 Interconnection
Agreement. Prior to
the Commercial Operation Date, Intermountain Power Agency and Seller will enter
into an interconnection agreement, to define the equipment to be installed at
the Point of Delivery to interconnect the Facility at the Point of Delivery and
all other interconnection issues, including the Parties’ rights and obligations
in respect of the design, construction and operation of the Intermountain Power
Switchyard (the

 

25

 

“Interconnection
Agreement”). In the event that the total capital costs of incremental
interconnection facilities associated with the Facility exceed two-million
dollars ($2 million), Seller will have the right to terminate this Agreement
without liability to Buyer following thirty (30) days’ written notice to Buyer;
provided however that if Buyer agrees, in its sole discretion, to reimburse
Seller for incremental interconnection facilities costs in excess of
two-million dollars ($2 million), then Seller shall not have the right to
terminate this Agreement pursuant to this Section 4.2. In connection with
any sales, transfers, use, or disposal of any rights or interests in the
Transmission Line by Seller as permitted by Section 2.12, Buyer shall be
entitled to recover a pro-rata share of Buyer’s reimbursement for such
incremental interconnection facilities costs in excess of two-million dollars
($2 million). Such pro-rata reimbursement due to Buyer shall offset amounts
otherwise due to Seller pursuant to the Monthly Payment hereunder.

 

Section 4.3 Transmission
Service Agreement. Buyer
agrees to cooperate with Seller at the cost and expense of Seller in Seller’s
arranging of transmission service, pursuant to the applicable OATTs, which
could enable Seller to sell Energy to other parties during any period during
which Buyer is unable to accept Energy from the Facility and/or a Buyer Default
has occurred and is continuing. It is acknowledged by Seller that Buyer has no
rights, interests or entitlements in any systems or facilities for the
transmission of such Energy or under any OATT.

 

Section 4.4 Use of
Transmission Line. Seller
agrees to charge cost based tariff rates (“Tariff Rates”) subject to FERC
jurisdiction under the Federal Power Act for third party use of any
Transmission Line capacity or entitlement rights that are in excess of the
capacity or entitlement rights thereon provided for the Facility under this
Agreement. Such Tariff Rates as filed with FERC by Seller shall provide for the
full recovery of all capital, fixed, and variable costs incurred for, or properly
allocated to, the portion of the Transmission Line associated with such third
party capacity rights thereon, in accordance with standard FERC cost of service
ratemaking policies and practices. In no event, however, shall (i) the
rates charged to any such third party be less than the Tariff Rates or (ii) the
use afforded such third party with respect to the Transmission Line interfere
with Buyer’s rights or interests under this Agreement, and provided, further,
that the terms and conditions of such tariff service shall be consistent with
the rules and regulations of FERC or, in the absence of such rules and
regulations, standard industry practice.

 

ARTICLE V

OWNERSHIP OF THE FACILITY

 

Section 5.1 Ownership of the
Facility. Seller
shall use commercially reasonable and diligent efforts to site, permit,
develop, finance and construct the Facility. The Facility shall be owned by
Seller during the Agreement Term. Seller shall operate and maintain, at its
sole risk and expense, the Facility in compliance with all Requirements of Law,
Prudent Utility Practices, and applicable manufacturer’s and operator’s
specifications and recommended procedures. Meeting

 

26

 

this
requirement shall not relieve Seller of its other obligations pursuant to the
terms and conditions of this Agreement. Seller shall be responsible, at its
sole expense, for:

 

(a)     the development and commercial operation of
the Facility in accordance with Prudent Utility Practices; and

 

(b)     seeking, obtaining, maintaining, complying
with and, as necessary, renewing and modifying from time to time, all permits,
certificates or other authorizations which are required by any Requirement of
Law, governmental authority or regulatory agency as prerequisites to engaging
in the activities envisioned by this Agreement and to meeting Seller’s
obligation to operate the Facility consistently with the terms of this
Agreement. Buyer and Buyer’s Agent shall be responsible, at Buyer’s sole
expense, to the extent required, for seeking, obtaining, maintaining, complying
with and, as necessary, reviewing and modifying from time to time, all permits,
certificates or other authorizations which are required to meet Buyer’s
obligations under this Agreement. Each party will cooperate with the other
Party with respect to the other Party’s obtaining and maintaining and complying
with required permits, certificates, or other authorizations.

 

Section 5.2 Certification of
Commercial Operation Date. Seller shall provide Buyer with a written notice when Seller believes
that all conditions precedent to achieving Commercial Operation of the Facility
have been satisfied (such notice, the “COD Notice”).

 

Section 5.3 Additional Capacity after Early
Completion in the Early Completion Facility Configuration. In the event that Seller shall achieve
Commercial Operation as to the Facility in the Early Completion Facility
Configuration, then Seller shall nevertheless have the right to install
additional wind turbines (for a maximum aggregate Contract Capacity of 200 MW)
up to ninety (90) days following the Commercial Operation Date. Seller shall
have the right to modify the Facility configuration shown in Appendix B to
incorporate additional wind turbines installed and completed after achievement
of Commercial Operation of the Facility in the Early Completion Facility
Configuration by providing written notice to Buyer. Any such installation of
additional wind turbines shall have no effect on the Prepayment Amount.

 

Section 5.4 Other Information.
Seller shall provide
to Buyer such other information regarding the permitting, engineering,
construction or operations, of Seller, its subcontractors or the Facility,
financial or otherwise, and other data concerning the Seller, its
subcontractors or the Facility as Buyer may, from time to time, reasonably
request. Until the Commercial Operation Date, Seller shall provide to Buyer
quarterly written reports describing permitting and development activities in
the previous quarter and anticipated progress and activities for the upcoming
quarter. Buyer shall be permitted to inspect the Facility from time to time
upon reasonable notice to Seller and during reasonable business hours, provided
that Buyer is accompanied by Seller’s employees made available for such
purpose.

 

27

 

ARTICLE VI

OPERATION AND MAINTENANCE OF THE FACILITY

 

Section 6.1 Compliance with
Electrical Service Requirements. Seller shall, at its sole expense, operate and
maintain the Facility in accordance with Prudent Utility Practices. Seller
shall comply with standard operating procedures such that the Facility has
on-site or on-call operations management twenty-four (24) hours per day.

 

Section 6.2 General
Operational Requirements. 

 

Seller shall, at all times:

 

(a)          Employ qualified and trained personnel for managing,
operating and maintaining the Facility and for coordinating with Buyer and
Buyer’s Agent. Seller shall ensure that necessary personnel are available
on-site or on-call twenty-four (24) hours per day during the Delivery Term.

 

(b)         Operate and maintain the Facility with due regard
for the safety, security and reliability of the interconnected system.

 

(c)          Comply with operating and maintenance standards
recommended by, and required by, the Facility’s equipment suppliers.

 

Section 6.3 Taxes. Buyer will be responsible
for, and will reimburse Seller if paid by Seller, lawful state and local taxes
assessed within the State of Utah, which are directly associated with the
Facility or the delivery or sale of Energy or Environmental Attributes, if any,
including all property taxes or payments in lieu of property taxes directly
associated with the Facility and excluding income, payroll, and sales taxes
other than sales taxes directly imposed on the delivery or sale of Energy or
Environmental Attributes, if any, (“Taxes”). To the extent reasonably able to
do so, either Party, upon written request of the other, shall provide a
certificate of exemption or other reasonably satisfactory evidence of exemption
if either Party is exempt from any Taxes, and shall use all reasonable efforts
to obtain or maintain, or to enable the other Party to obtain or maintain, any
exemption from or reduction of any Taxes, whether currently available or
becoming available in the future. Seller will pay all lawful Taxes and will use
reasonable efforts to minimize Taxes, and will consult with the Buyer on any
negotiations Seller may undertake with governmental authorities responsible for
imposing Taxes. Promptly following its payment of any Taxes Seller shall
provide Buyer with copies of receipts or other evidence of the payment of such
Taxes. Seller shall also promptly provide to Buyer copies of all notices,
correspondence or other items (including, without limitation, written reports
on any verbal exchanges with the relevant taxing authorities) to the extent
relating to Taxes, and shall afford Buyer a reasonable opportunity to
participate in any discussions or other communications with any taxing
authority relating to Taxes. To the extent it is legally able to do so, Seller
will follow the written instructions of Buyer with respect to the negotiation,
reporting, payment and contest (and shall

 

28

 

permit Buyer to conduct such contest, to the extent it is
legally able to do so) of any Taxes for which Seller is liable hereunder.
Seller shall promptly pay to Buyer the amount of any refunds or other credits
against any Taxes or other economic benefits which Seller receives or to which
it is entitled with respect to any Taxes for which Buyer is responsible
hereunder. Without limiting the generality of the foregoing, the Parties agree
that, if beneficial to the efforts of either Party to obtain or maintain any
exemption from or reduction of any Taxes, whether currently available or
becoming available in the future, the Parties will cooperate to restructure the
transactions contemplated by this Agreement so as to enable either Party to
obtain or maintain such exemption or reduction, as the case may be, provided,
however, that any such restructuring shall not affect adversely the economic
consequences to either Party. Buyer shall have no obligations with to respect
to any Taxes to the extent such Taxes (1) are attributable to any period
prior to the Commercial Operation Date for the Facility, or following the
expiration or termination of this Agreement in accordance with the terms
hereof, (2) are imposed as a result of the gross negligence or willful
misconduct by the Seller, the breach by the Seller of any of its obligations
under this Agreement or any related transaction document, (3) are imposed
as a result of any transfers by Seller of any interest in the Facility, this
Agreement or any transaction contemplated hereby or related hereto (except to
the extent resulting from a breach by Buyer if its obligations under this
Agreement).

 

Section 6.4 Environmental
Credits. Seller shall, if applicable, obtain in its own name and at its own
expense any and all pollution or environmental credits or offsets necessary to
operate the Facility in compliance with the Requirements of Law.

 

Section 6.5 Scheduling of Energy and Scheduled
Outages.

 

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

 

(b)         [Intentionally omitted]

 

(c)          [Intentionally omitted]

 

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

 

29

 

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

 

(f)    By
5:30 AM Pacific Prevailing Time on the Business Day immediately preceding the
date of delivery, Seller or Seller’s designee shall cause the Facility’s
scheduling coordinator to provide Buyer, or Buyer’s Agent as designated by
Buyer, with a copy of a non-binding hourly forecast of deliveries of Energy for
each hour of the immediately succeeding day. A forecast provided a day prior to
any non-Business Day(s) shall include forecasts for the immediate day,
each succeeding non-Business Day and the next Business Day. Seller shall
provide Buyer, or Buyer’s Agent as designated by Buyer, with a copy of any and
all updates to such forecast indicating a change in forecasted Energy from the
then current forecast.

 

(g)         No later than sixty (60) days prior to the
Commercial Operation Date, and on each January 1 thereafter, Seller shall
provide Buyer, or Buyer’s Agent as designated by Buyer, with a non-binding
written projection of all Scheduled Outages for the succeeding three (3) years
(the “Scheduled Outage Projection”). The Scheduled Outage Projection shall
include information concerning all projected Scheduled Outages during such
period, including (i) the anticipated start and end dates of each
Scheduled Outage; (ii) a description of the maintenance and/or repair work
to be performed during the Scheduled Outage; and (iii) the anticipated
operational MW capacity, if any, during the Scheduled Outage. Seller shall
notify Buyer, or Buyer’s Agent as designated by Buyer, of any change in the
Scheduled Outage Projection as soon as practicable, but in no event later than
thirty (30) days prior to the originally scheduled date of the Scheduled
Outage. Seller will use commercially reasonable efforts to accommodate
reasonable requests of Buyer with respect to the timing of Scheduled Outages
and Seller will, to the extent feasible and consistent with Prudent Utility
Practices, arrange for Scheduled Outages to occur between October 1 and May 1
of each year and coincident with planned transmission outages. In the event of
a System Emergency, Seller shall make all reasonable efforts to reschedule any
Scheduled Outage previously scheduled to occur during the System Emergency.

 

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

 

(i)             Seller shall reduce
deliveries of Energy for curtailments required by Buyer in the event of a
System Emergency or due to scheduled and unscheduled maintenance on Buyer’s
side of the Point of Delivery that prevent it from accepting Energy at the
Point of Delivery. Such curtailments shall not reduce the Achieved Generation,
and the Guaranteed Annual Quantity or the Guaranteed Generation calculations
shall include MWh that would have been realized had the curtailment not
occurred. Seller shall be credited for all such curtailed Energy that would

 

30

 

have been realized had the curtailment not occurred; and
such curtailed Energy shall be reasonably estimated by the Parties and deemed
Delivered Energy and Facility Metered Output for settlement purposes. In
addition to payments due pursuant this Agreement for non-curtailed Delivered
Energy and Facility Metered Output, Buyer shall pay to Seller all amounts,
including any Production Tax Credits, to which Seller would have been entitled
but did not receive for Energy curtailed by Buyer pursuant to this Section 6.5.
Seller shall install sufficient measuring equipment at the Facility to collect
data necessary to reasonably determine the amount of Energy subject to the
aforementioned curtailments. Seller shall install sufficient meteorological
towers around the Facility Generating Premises or in conjunction with the wind
turbines comprising the Facility to provide the capability of measuring and
recording representative wind data twenty-four (24) hours per day, which wind
data, in conjunction with actual wind turbine availability and capability,
shall be used to calculate any amounts due Seller under this Section 6.5.

 

Section 6.6 Performance Security. Notwithstanding anything
to the contrary in this Agreement, Buyer’s obligation to pay the Prepayment
Amount shall be conditioned upon (i) the release by the Facility Lender
providing construction or other financing for the Facility of its lien or liens
on the Facility, (ii) receipt by Buyer of Seller’s title insurance policy
as to the Facility Premises that is reasonably satisfactory to Buyer, provided,
however, that said title insurance policy shall not be required for lands owned
by USBLM or the State of Utah, (iii) the Buyer obtaining a lien on and
security interests in the Facility including all leasehold interests and real
and personal property rights and interests of the Seller under the Leases and
Property Agreements then in effect to secure the performance of this Agreement
by Seller by means of a perfected first lien and priority security interest in
the Facility (the “Security Interest”), subject only to Permitted Encumbrances,
and (iv) the receipt by Buyer of the Non-Consolidation Opinion. The
Security Interest will be in the form of a deed of trust against the Facility
as set forth in Appendix E. The amount of the Security Interest will equal the
Termination Payment plus any other amounts or damages owed by Seller to Buyer
under Article XI. In the event of Buyer foreclosure on the Security
Interest, Seller will be responsible for the reasonable legal expenses of the
Buyer to accomplish the foreclosure.

 

ARTICLE VII

COMPLIANCE DURING CONSTRUCTION AND OPERATION PERIOD

 

Section 7.1 Facility Construction Warranty. The Seller warrants and
guarantees that it will perform, or cause to be performed, all construction in
a good and workmanlike manner and in accordance applicable standards, Prudent
Utility Practice, Seller’s Quality Assurance Program, and other provisions of
this Agreement. When complete, and at the time that Buyer exercises any
purchase option, the Seller warrants and guarantees that the Facility, its design,
its components and related work, shall be free from defects caused by errors or
omissions in design, engineering and construction, that the Facility will
comply in all respects with the requirements of the Agreement, and that the
Facility will comply with, and be capable of operation, in accordance with
applicable laws and regulations and the guarantees in this Agreement. Seller
also warrants and guarantees that it will monitor the operation

 

31

 

and maintenance of the Facility and that said operation
and maintenance is, and will be, in full compliance of all requirements,
including, but not limited to, vendor’s operation and maintenance requirements,
and safety and environmental requirements. Any recommended or required updates
or modifications to equipment and materials, including procedures, programming
and software will be instituted in a timely manner.

 

Section 7.2 Compliance With
Standards. The equipment and structures furnished under this Agreement shall be
designed, constructed, tested, operated and maintained to meet all of the
applicable requirements of the latest revision of the ASTM, ASME, AWS, EPA,
EEI, IEEE, ISA (or any successors thereto), National Electrical Code, National
Electric Safety Code, OSHA, Cal-OSHA as applicable, Uniform Building Code,
Uniform Plumbing Code, and the local County Fire Department Standards of the
applicable county, and other codes and standards and operations and maintenance
requirements applicable to the services, equipment, and work as generally shown
in this Agreement.

 

Section 7.3 Quality Assurance
Program. Seller agrees to maintain and comply with a written quality assurance
policy (“Quality Assurance Program”) attached hereto as Appendix J, and Seller
shall cause all work performed pursuant to this Agreement to comply with said
Quality Assurance Program.

 

ARTICLE VIII

BILLING; PAYMENT; AUDITS; METERING; ATTESTATIONS

 

Section 8.1 Billing and
Payment. Billing and payment for the Energy purchases by Buyer under this
Agreement and for any other amounts due and payable by Buyer hereunder shall be
as follows:

 

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

 

(1)                                 Delivered Energy
allocated to:

 

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

 

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

 

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

 

(3)                                 Environmental Attributes
billed pursuant to Appendix A based on Facility Metered Output.

 

32

 

(4)                                 Any reimbursement to
Seller for Taxes and Operating Insurance premiums, and adjustments for actual
Taxes and Operating Insurance premiums, pursuant to Section 3.1(h).

 

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

 

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

 

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

 

(d)         Buyer shall pay such invoices rendered by Seller by
wire transfer to the accounts designated on the invoices rendered by Seller on
or before the twenty-fifth (25th) day of the month or 15-days following their
receipt. Bills or portions of bills which are not paid by the due date shall
thereafter accrue an interest charge at the rate of one percent (1.0%) per
month or the maximum rate permitted by law, whichever is less, from and
including the date payment was due to but excluding the date such payment is
made. Seller shall pay to Buyer any reimbursement owed to Buyer as set forth in
Section 8.1(a)(5).

 

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

 

(f)            In the event any portion
of any bill is in dispute, the disputed amount shall nonetheless be paid under
protest when due. The Party hereto disputing a payment shall promptly notify
the other Party in writing of the basis for the dispute. Disputes shall be
discussed and resolved by the Authorized Representatives, who shall use their
best efforts to amicably and promptly resolve the disputes, and any failure to
agree shall be subject to resolution in accordance with Section 14.3. Upon
resolution of any dispute, the required amount of payment or refund shall be
paid within ten (10) days after such determination, with interest accrued
at the rate of one percent (1.0%) per month or the maximum rate permitted by
law, whichever is less, computed from and including the due date to but excluding
the date such payment or refund is paid.

 

Section 8.2 Records and
Audits. Seller shall be subject, at any time with 7 calendar days’ prior written
notice, to audits by Authorized Auditors relating to the accuracy of all
billings and of all costs for which Buyer is required to reimburse the Seller
pursuant to Article III. The Authorized Auditors shall have access to all
records and data relating to such billings, costs, metering, and Environmental
Attribute attestations. Seller shall maintain and the Authorized Auditors will
have the right to examine and audit all books, records, documents, accounting
procedures and practices, and other evidence, regardless of form (e.g., machine
readable media such as disk, tape, etc.) or type (e.g., databases, applications
software, database management software, utilities, etc.), sufficient to
properly reflect all such billings and costs. Any information provided on
machine-readable media shall be provided in a format accessible and readable by
the Authorized Auditors. Seller shall not, however, be required to furnish the
Authorized Auditors with commonly available

 

33

 

software. The Authorized Auditors will also have the right
to reproduce, photocopy, download, or transcribe, such billing and cost
records. Seller shall make such records, or to the extent accepted by the
Authorized Auditors, photographs, micro-photographs etc. or other authentic
reproductions thereof available to the Authorized Auditors at Seller’s offices
at all reasonable times and without charge. Seller shall keep and preserve all
such records for a period of not less than 3 years from and after final payment
or, if the Agreement is terminated in whole or in part, until 3 years after the
Delivery Term.

 

Notwithstanding the foregoing, if the audit reveals that
the overpayment is more than 5% of the billing, Seller shall pay all expenses
and costs incurred by the Authorized Auditors arising out of or related to the
audit.

 

Section 8.3 Delivery Arrangements. Seller shall be
responsible for all interconnection, electric losses, transmission and
ancillary service arrangements and costs required to deliver, the Energy from
the Facility to Buyer or Buyer’s Agent at the Point of Delivery. Buyer shall be
responsible for all electric losses, transmission and ancillary service
arrangements and costs required to receive the Energy beyond the Point of
Delivery. Seller shall have title to the Energy on its side of the Point of
Delivery. Buyer, or Buyer’s Agent, shall have title to the Energy on its side
of the Point of Delivery.

 

Section 8.4 Electric Metering Devices.

 

(a)               The Delivered Energy and
Facility Metered Output made available to Buyer, or Buyer’s Agent, by Seller
under this Agreement shall be measured using the Electric Metering Devices
installed, owned and maintained by the Seller or its designee in accordance
with the Interconnection Agreement, if applicable, and Prudent Utility
Practices. If Electric Metering Devices are not installed at the Point of
Delivery, meters or meter readings will be adjusted to reflect losses from the
Electric Metering Devices to the Point of Delivery. All Electric Metering
Devices used to provide data for the computation of payments shall be sealed
and the Seller or its designee shall only break the seal when such Electric
Metering Devices are to be inspected and tested or adjusted in accordance with
this Section 8.4. Seller or its designee shall specify the number, type,
and location of such Electric Metering Devices.

 

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

 

34

 

Device is found to register inaccurately by more than the
allowable limits established in this Section 8.4, in which event the
expense of the requested additional inspection or testing shall be borne by Seller.
Seller shall provide copies of any inspection or testing reports to Buyer.

 

(c)               Adjustment for Inaccurate Meters. If an Electric Metering
Device fails to register, or if the measurement made by an Electric Metering
Device is found upon testing to be inaccurate by more than one percent (1.0%),
an adjustment shall be made correcting all measurements by the inaccurate or
defective Electric Metering Device for both the amount of the inaccuracy and
the period of the inaccuracy. To the extent that the adjustment period covers a
period of deliveries for which payment has already been made by Buyer, Seller
shall use the corrected measurements as determined in accordance with this Section 8.4
to recompute the amount due for the period of the inaccuracy and shall subtract
the previous payments by Buyer for this period from such recomputed amount. If
the difference is a positive number, the difference shall be paid by Seller to
Buyer or at the discretion of Seller, may take the form of an offset to
payments due Seller by Buyer; if the difference is a negative number, the
difference shall be paid by Buyer to Seller. Payment of such difference by the
owing Party shall be made not later than thirty (30) days after the owing Party
receives notice of the amount due, unless Seller elects payment via an offset.

 

ARTICLE IX

ENVIRONMENTAL ATTRIBUTES AND OTHER COSTS

 

Section 9.1 Transfer of
Environmental Attributes. For and in consideration of Buyer entering into
this Agreement, and in addition to the agreement by Buyer and Seller to
purchase and sell, respectively, the Energy on the terms and conditions set
forth herein, Seller shall transfer to Buyer, and Buyer shall receive from
Seller, all right, title, and interest in and to all Environmental Attributes,
whether now existing or acquired by Seller or that hereafter come into
existence or are acquired by Seller during the Agreement Term, for the Facility
Metered Output and Replacement Energy pursuant to this Agreement. Buyer agrees
to make the monthly payments for such Environmental Attributes as set forth in
paragraph 3 of Appendix A. Seller agrees to transfer and make such
Environmental Attributes available to Buyer immediately to the fullest extent
allowed by applicable law upon Seller’s production of the Environmental Attributes.
Seller shall not assign, transfer, convey, encumber, sell or otherwise dispose
of all or any portion of such Environmental Attributes to any Person other than
Buyer.

 

(a)                    Reporting of Ownership of Environmental
Attributes. During the Agreement Term, Seller shall not report to any person or
entity that the Environmental Attributes granted hereunder to Buyer belong to
anyone other than Buyer, and Buyer may report under any program that such
Environmental Attributes purchased hereunder belong to it.

 

(b)                   Further Assurances. Seller will document the
production of Environmental Attributes under this Agreement by delivering with
each invoice to Buyer an attestation for Environmental Attributes (i) produced
by the Facility and (ii) included with Replacement Energy for the
preceding calendar month. The form of attestation is set forth as Appendix D.
At

 

35

 

Buyer’s
request and expense, the Parties shall execute all such documents and
instruments in order to effect the transfer of the Environmental Attributes
specified in this Agreement to Buyer’s Agents as Buyer may reasonably request.
In the event of the promulgation of a scheme involving Environmental Attributes
administered by CAMD, upon notification by CAMD that any transfers contemplated
by this Agreement will not be recorded, the Parties shall promptly cooperate in
taking all reasonable actions necessary so that such transfer can be recorded.
Each Party shall promptly give the other Party copies of all documents it
submits to the CAMD to effectuate any transfers.

 

Section 9.2 Decommissioning and Other Costs. Unless Buyer exercises its purchase option
described in Section 2.5, Buyer shall not be responsible for any cost of
decommissioning or demolition of the Facility or any environmental liability
associated with the construction, operation, or decommissioning thereof without
regard to the timing or the cause of such decommissioning or demolition.

 

ARTICLE X

REPRESENTATIONS AND WARRANTIES; COVENANT OF SELLER

 

Section 10.1 Representations and Warranties by Buyer. Buyer makes the following representations
and warranties to Seller:

 

(a)                    Buyer is duly organized, validly existing and
in good standing under the laws of the State of California and has the legal
power and authority to own its properties, to carry on its business as now
being conducted and to enter into this Agreement and carry out the transactions
contemplated hereby and perform and carry out all covenants and obligations on
its part to be performed under and pursuant to this Agreement.

 

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

 

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

 

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

 

36

 

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

 

Section 10.2 Representations
and Warranties by Seller. Seller makes the following representations and
warranties to Buyer:

 

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

 

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

 

(c)                    The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the fulfillment of and compliance with the provisions of this
Agreement, do not and will not conflict with or constitute a breach of or a
default under, any of the terms, conditions or provisions of any Requirement of
Law, or any organizational documents, agreement, deed of trust, mortgage, loan
agreement, other evidence of indebtedness or any other agreement or instrument
to which Seller is a party or by which it or any of its property is bound, or
result in a breach of or a default under any of the foregoing, and Seller has
obtained or shall obtain all permits, licenses, approvals and consents of
governmental authorities required for the lawful performance of its obligations
hereunder. Further, Seller warrants that it shall maintain in good standing all
permits, licenses, approvals, and consents of governmental authorities required
for the lawful operation of the Facility in accordance with this Agreement,
Prudent Utility Practices, and all Requirements of Law.

 

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

 

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

 

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

 

(g)                   Seller has been, is and
will be a Special Purpose Entity.

 

37

 

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

 

(i)                  All of the assumptions made
in the Non-Consolidation Opinion, including, but not limited to, any exhibits
attached thereto, are true and correct in all material respects. Seller has
complied with all of the assumptions made with respect to Seller in the
Non-Consolidation Opinion.

 

(j)                  There are no mineral
rights or interests underlying the Facility Premises or otherwise underlying
any premises leased or acquired under the Leases and Property Agreements the
development or exploration of which would interfere with the construction or
operation of the Facility.

 

Section 10.3 Covenant of Seller Related to Seller’s
Status as Special Purpose Entity. Seller shall at all times comply with the
requirements of, and qualify as, a Special Purpose Entity.

 

Section 10.4 Covenants of Seller Related to
Leases and Property Agreements.

 

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

 

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

 

(c)               Seller agrees to enforce
the provisions of the Leases and Property Agreements and duly perform its covenants
and agreements thereunder. Seller further agrees not to consent,

 

38

 

agree
to or permit, or to take or cause to be taken any action or non-action, to
bring about any rescission or termination of or amendment to any of the Leases
and Property Agreements or to take any action in connection with any of the
Leases and Property Agreements which will materially impair or have a material
adverse effect on the rights, interest or security of the Buyer, or elect to
arbitrate any controversy, claim or dispute under an arbitration provision in
the Leases and Property Agreements, or to assign, sublease, encumber, mortgage,
or grant any security interest in or otherwise dispose of any of the Leases and
Property Agreements or any portion thereof or interest therein without the
consent of the Buyer, except as expressly permitted in this Agreement.

 

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

 

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

 

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

 

(g)              Seller shall use its commercially reasonable
efforts to obtain and deliver to Buyer executed waivers from each party owning
or leasing a mineral interest underlying any portion of the premises under the
Leases and Property Agreements of its right to explore and/or develop minerals,
on, in or under such premises which exploration and/or development might
interfere with Seller’s rights under the Leases and Property Agreements.

 

(h)              From and after the Commercial Operation Date,
Seller shall provide Buyer, as Beneficiary under the Performance Security, with
evidence that the rent, fees or other payments payable by Seller under the
Leases and Property Agreements have been paid at least ten days prior to the
date on which such rent, fees or other payments world be delinquent. If Seller
does not provide Buyer with such evidence within five days after receipt of
written request for the same and if such rent, fees or other payments have not
been paid, Buyer, as Beneficiary under

 

39

 

the
Performance Security, may, but shall not be obligated to, cure such default by
Seller as provided under Section 10.4(d).

 

ARTICLE XI

DEFAULT; TERMINATION AND REMEDIES; PERFORMANCE DAMAGE

 

Section 11.1 Default. Each of the following events or circumstances
shall constitute a “Default” by the responsible Party (the “Defaulting Party”):

 

(a)                 Payment
Default. Failure by either
Party to pay any amount when due under this Agreement which is not cured within
ten (10) Business Days after receiving written notice thereof from the
other Party hereto.

 

(b)                 Performance
Default. Failure by any
Party to perform any of its material duties or obligations under this Agreement
when and as due (other than the failure to make any payment) which is not cured
within thirty (30) calendar days after receipt of written notice thereof from
the other Party hereto.

 

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

 

(d)                 Bankruptcy.
Bankruptcy of either Party
hereto.

 

(e)                  Seller
Commercial Operation Date Default. Failure by Seller to achieve the Commercial Operation Date within 270
days following December 31, 2008, and such failure is not cured within
thirty (30) calendar days or more after receipt of written notice thereof from
Buyer to Seller.

 

(f)                     Buyer
Commercial Operation Date Default. Failure by Buyer to accept Delivered Energy on or after the Commercial
Operation Date.

 

Section 11.2 Default Remedy.

 

(a)                    If Buyer is in Default for nonpayment,
subject to any duty or obligation under this Agreement, Seller may, at its sole
option, suspend service and sell Energy to third parties or continue to provide
services pursuant to its obligations under this Agreement; provided that
nothing in this Section 11.2(a) shall affect Seller’s rights and
remedies set forth in this Section 11.2; and provided, further, that
Energy sold to third parties shall not count as Achieved Generation. Seller’s
continued service to Buyer shall not act to relieve Buyer of any of its duties
or obligations under this Agreement.

 

(b)                   Notwithstanding any other provision herein,
if any Default has occurred and is continuing, the affected Party may, whether
or not the dispute resolution procedure set forth in Section 14.3 has been
invoked or completed, bring an action in any court of competent jurisdiction as
required by Section 14.13 seeking injunctive relief in accordance with
applicable California or Federal rules of civil procedure.

 

40

 

(c)          Except as expressly limited by this Agreement, if a Default has
occurred and is continuing and Buyer is the Defaulting Party, Seller may
without further notice exercise any rights and remedies provided herein or
otherwise available at law or in equity, including the right to terminate this
Agreement pursuant to Section 11.5 upon giving notice of intent to
terminate to Buyer. No failure of Seller to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise by Seller of any right, remedy or
power hereunder preclude any other or future exercise of any right, remedy or
power.

 

(d)         Except as expressly limited by this Agreement, if a Default has
occurred and is continuing and Seller is the Defaulting Party, Buyer may
without further notice exercise any rights and remedies provided for herein, or
otherwise available at law or equity, including termination of this Agreement
pursuant to Section 11.5 and foreclosure of Buyer’s Performance Security,
upon notice of intent to terminate to Seller. No failure of Buyer to exercise,
and no delay in exercising, any right, remedy or power hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise by Buyer of any
right, remedy or power hereunder preclude any other or future exercise of any
right, remedy or power.

 

Section 11.3 Performance
Damages.

 

(a)          If Seller fails to achieve the Commercial Operation Date by March 31,
2009, except to the extent due to a Force Majeure event, Seller shall pay
liquidated damages to Buyer in an amount equal to $40,000/day for each day of
delay thereafter, provided, however, that the maximum liability of Seller under
this Section 11.3(a) during the Agreement Term shall not exceed $7.2
million.

 

(b)         [Deleted]

 

Section 11.4 Effect of
Termination on Interconnection Agreement. The expiration or termination for any reason
of this Agreement shall not affect the Leases and Property Agreements or the
Interconnection Agreement or the continuing effectiveness thereof

 

Section 11.5 Termination for
Default.

 

(a)          If Default occurs, the Party that is not the Defaulting Party (the “Non
Defaulting Party”) shall, without limiting any other rights or remedies
available to the Non-Defaulting Party under this Agreement, possess the right
to terminate this Agreement upon notice (by facsimile or other reasonable
means) to the Defaulting Party, such notice of termination shall specify the
date on which the termination is to become effective. If the Non-Defaulting
Party fails to furnish such notice of termination within one-hundred eighty
(180) days following the time when the Default becomes known (or such later
date if the Non Defaulting and Defaulting Parties agree to an extension), then
such right of termination shall no longer be available to the Non Defaulting
Party as a remedy for the event(s) of Default.

 

(b)         Upon termination, the Non Defaulting Party shall liquidate this
Agreement as soon as practicable. The Termination Payment shall be calculated
in accordance with

 

41

 

Section 11.6.
The Termination Payment shall be the sole and exclusive remedy for the Non
Defaulting Party for termination of this Agreement for the time period
beginning at the time notice of termination under this Section 11.5 is
received, provided that Buyer shall in any event be entitled to exercise
foreclosure and other rights under the Performance Security to enforce payment
of the Termination Payment and any other amounts due and owing to Buyer.

 

Upon
termination, the Non-Defaulting Party may withhold any payments it owes the
Defaulting Party for any obligations incurred prior to termination under this
Agreement until the Defaulting Party pays the Termination Payment to the Non
Defaulting Party. The Non Defaulting Party shall possess the right to set off
the amount due it under this Section 11.5 by any such payments due the
Defaulting Party.

 

Section 11.6 Calculation of
Termination Payment. The
Non Defaulting Party shall calculate the Termination Payment as follows:

 

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

 

(b)         The Gains and Losses for Excess Energy and Environmental Attributes
calculated under Section 11.6(a) shall be discounted to present value
using the Present Value Rate as of the time of termination (to take account of
the period between the time notice of termination was effective and when such
amount would have otherwise been due if this Agreement had been performed in
full).

 

(c)          The Non Defaulting Party shall set off or aggregate, as appropriate,
the Gains and Losses (as calculated in Section 11.6(a)) and Costs and
notify the Defaulting Party. If the Non Defaulting Party’s aggregate Losses and
Costs exceed its aggregate Gains with respect to Excess Energy and
Environmental Attributes, the Defaulting Party shall, within three (3) Business
Days of receipt of such notice, pay the resulting Termination Payment, after
any aggregation or set off as provided in Section 11.6(d), to the Non
Defaulting Party, which amount shall bear interest at the Present Value Rate
from the time notice of termination was received until paid. If the Non

 

42

 

Defaulting
Party’s aggregate Gains exceed its aggregate Losses and Costs, the Termination
Payment shall be zero.

 

(d)         The Non Defaulting Party shall aggregate or set off, as applicable, at
its election, any or all other amounts owing between the Parties under this
Agreement with or against the Termination Payment so that all such amounts are
aggregated and/or netted to a single liquidated amount, which shall be the
amount of the Termination Payment. Such Termination Payment shall be paid
within three (3) Business Days following the date notice of termination is
received. Notwithstanding any other provision of this Section 11.6, if
Buyer shall be the Non-Defaulting Party, in no event shall the amount of the
Termination Payment due Buyer be less than the Remaining Prepayment Amount,
subject, however, to aggregation or setoff, as applicable, of any amounts owing
between the Parties under this Agreement other than Gains, Losses and Costs.

 

(e)          If the Defaulting Party disagrees with the calculation of the
Termination Payment and the Parties cannot otherwise resolve their differences,
the calculation issue shall be submitted to informal dispute resolution as
provided in Section 14.3(a). Pending resolution of the dispute, the
Defaulting Party shall pay the full amount of the Termination Payment
calculated by the Non Defaulting Party within three (3) Business Days of
receipt of notice of termination as set forth in Section 11.5(a) subject
to the Non Defaulting Party refunding, with interest, at the Present Value
Rate, any amounts determined to have been overpaid.

 

(f)            For purposes of this Section 11.6:

 

(1)                                  “Gains” means the economic benefit (exclusive
of Costs), if any, resulting from the termination of this Agreement, determined
in a commercially reasonable manner as calculated in accordance with this Section 11.6;

 

(2)                                  “Losses” means the economic loss (exclusive
of Costs), if any, resulting from the termination of this Agreement, including,
in the case of the Buyer, the Unamortized Prepayment Amount, determined in a
commercially reasonable manner as calculated in accordance with this Section 11.6;

 

(3)                                  “Costs” means brokerage fees, commissions and
other similar transaction costs and expenses reasonably incurred in terminating
any specifically related arrangements or entering into arrangements which
replace this Agreement, as well as Facility operation and maintenance costs and
expenses, including transmission and ancillary service costs associated
therewith, and excluding attorneys’ fees, if any, incurred in connection with
the Non Defaulting Party enforcing its rights with regard to this Agreement.
The Non Defaulting Party shall use reasonable efforts to mitigate or eliminate
these Costs.

 

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

 

43

 

ARTICLE XII

MAKEUP OF SHORTFALL ENERGY

 

Section 12.1 Makeup of
Shortfall. If Seller
fails to deliver the full Guaranteed Annual Quantity during any Contract Year,
then Seller shall make up this shortfall of Delivered Guaranteed Generation (“Shortfall
Energy”) by delivery of Energy to Buyer as provided in Section 12.2 no
later than three (3) Contract Years following the shortfall, or four (4) Contract
Years if said shortfall is caused by a Force Majeure.

 

Section 12.2 No Excess Energy
During Shortfall Periods. During periods in which there is Shortfall Energy due to Buyer, Seller
shall deliver to Buyer all Energy that would otherwise be designated as Excess
Energy until all Shortfall Energy is provided to Buyer. Notwithstanding any
other provision in this Agreement, there will be no payment of the Excess
Energy Price for this Energy until the Shortfall Energy has been fully made up.

 

Section 12.3 Replacement
Energy. If Seller
fails to provide the full amount of Shortfall Energy by the end of the third
Contract Year following the Contract Year of the shortfall, or the fourth
Contract Year if the shortfall is caused by a Force Majeure event, Seller shall
provide to Buyer replacement energy at the Point of Delivery including
associated Environmental Attributes comparable to those associated with the
Energy produced by the Facility (“Replacement Energy”) within 180-days after
the third anniversary, or fourth anniversary if shortfall is caused by a Force
Majeure, on a delivery schedule consistent with the Facility’s historic
percentage of On Peak and Off Peak Delivered Energy, or other delivery
schedules as mutually agreed to by the Parties, provided that such schedule
shall not cause the Delivered Energy to be delivered at a rate greater than 200
MW. If Seller fails to deliver Replacement Energy as described above then Buyer
shall purchase Replacement Energy and Seller shall reimburse Buyer for said
Replacement Energy and promptly notify Seller of the cost of such Replacement
Energy.

 

ARTICLE XIII

CAPACITY RIGHTS

 

Section 13.1 Purchase and Sale
of Capacity Rights. For
and in consideration of Buyer’s agreement to purchase from Seller the Energy
and Environmental Attributes on the terms and conditions set forth in this
Agreement, Seller transfers to Buyer, and Buyer accepts from Seller, any and
all right, title, and interest that Seller has in and to Capacity Rights, if
any, associated with the Facility. Seller makes no written or oral
representation or warranty, either express or implied, regarding the production
or existence of Capacity Rights.

 

Section 13.2 Representation
Regarding Ownership of Capacity Rights. Seller represents that it has not sold and
will not in the future sell or attempt to sell to any Person other than Buyer
the Capacity Rights, if any, associated with the Facility. During the Agreement
Term of this Agreement, Seller shall not report to any Person

 

44

 

that
the Capacity Rights, if any, associated with the Facility belong to any Person
other than Buyer. Buyer may, at its own risk and expense, report to any Person
that the Capacity Rights, if any, associated with the Facility belong to Buyer.
Seller makes no written or oral representation or warranty, either express or
implied, regarding the production or existence of Capacity Rights.

 

Section 13.3 Further
Assurances. At Buyer’s
request, the Seller shall execute such documents and instruments as may be
reasonably required to effect recognition and transfer of the Capacity Rights,
if any, to Buyer. Buyer shall bear the costs associated with preparing and
executing any such documents and instruments.

 

ARTICLE XIV

MISCELLANEOUS

 

Section 14.1 Authorized Representative.
Each Party hereto
shall designate an authorized representative who shall be authorized to act on
its behalf with respect to those matters contained herein (each an “Authorized
Representative”), which shall be the functions and responsibilities of such
Authorized Representatives. Each Party may also designate an alternate who may
act for the Authorized Representative. Within thirty (30) calendar days after
execution of this Agreement, each Party shall notify the other Party in writing
of the identity of its Authorized Representative, and alternate if designated,
and shall promptly notify the other Party of any subsequent changes in such
designation. The Authorized Representatives shall have no authority to alter,
modify, or delete any of the provisions of this Agreement. Prior to the
Commercial Operation Date, the Authorized Representative of each Party will
meet periodically to discuss issues related to the sharing of information on
the operation and maintenance of the Facility and interconnection facilities,
provided, however, that Buyer shall have no right to approve Seller’s schedules
or budgets. Each Party by notice to the other Party may also designate a Person
as its designee as provided in this Agreement.

 

Section 14.2 Notices. With the exception of billing invoices
pursuant to Section 8.1 hereof, all written notices under this Agreement
shall be deemed properly sent if delivered in person or sent by facsimile
transmission, reliable overnight courier, or sent by registered or certified
mail, postage prepaid to the persons specified in Appendix C.

 

Section 14.3 Dispute
Resolution. Subject
to Section 11.2(b), regarding suits for injunctive relief, disputes under
this Agreement between Seller and Buyer may be resolved in accordance with the
provisions of this Section 14.3.

 

(a)   In the event of any claim, controversy or
dispute between the Parties arising out of or relating to or in connection with
this Agreement (including any dispute concerning the validity of this Agreement
or the scope and interpretation of this Section 14.3) (a “Dispute”),
either Party (the “Notifying Party”) may deliver to the other Party (the
“Recipient Party”) notice of the Dispute with a detailed description of
the underlying circumstances of such Dispute (a “Dispute Notice”). The
Dispute Notice shall include a schedule of the availability of the

 

45

 

Notifying
Party’s senior officers (having a title of senior vice president (or its
equivalent) or higher) duly authorized to settle the Dispute during the thirty
(30) day period following the delivery of the Dispute Notice.

 

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

 

(c)          In the event a Dispute is not resolved pursuant to the procedures set
forth in Subsections 14.3 (a) and 14.3 (b) by the expiration of the
thirty (30) day period set forth in Subsection 14.3(a) then either Party
may pursue any legal remedy available to it in accordance with the provisions
of Section 14.13 of this Agreement.

 

Section 14.4 Regulatory
Compliance. Each
Party hereto shall at all times comply with all applicable Requirements of Law.
As applicable, each Party hereto shall give all required notices, shall procure
and maintain all necessary governmental permits, licenses, and inspections
necessary for performance of this Agreement, and shall pay its respective
charges and fees in connection therewith.

 

Section 14.5 No Dedication of
Facilities. Any
undertaking by one Party hereto to the other Party under any provisions of this
Agreement shall not constitute the dedication of the system or any portion
thereof of either Party to the public or to the other Party or any other
Person, and it is understood and agreed that any such undertaking by either
Party shall cease upon the termination of such Party’s obligations under this
Agreement.

 

Section 14.6 Force Majeure.

 

(a)   Neither Party hereto shall be considered to
be in default in the performance of any of its obligations under this Agreement
(other than the obligations of a Party to make payment of amounts due under
this Agreement, which are not subject to Force Majeure) when the failure of
performance shall be due to a Force Majeure despite all reasonable efforts of
such Party to prevent or mitigate its effects. A Party which is not able to
perform its obligations under this Agreement as a result of a Force Majeure
shall give prompt, written notice including a detailed description of the Force
Majeure to the other Party, which notice shall include information with respect
to the nature, cause and date of commencement of such event, and the
anticipated scope and duration of the delay. The Party providing such notice
shall be excused from fulfilling its obligations under this Agreement to the
extent and until such time that the Force Majeure has ceased to prevent
performance or other remedial action is taken, at which time the Party shall
promptly notify the other Party of the resumption of its obligations under this
Agreement. If Seller is unable to provide Excess Energy due to a Force Majeure,
Buyer shall have no obligation to pay for Excess Energy under this Agreement
from the start of the Force Majeure until Seller resumes delivery thereof under
this Agreement. This Section 14.6 does not excuse Buyer from

 

46

 

Monthly
Payments up to the time that Seller ceased deliveries of Energy due to a Force
Majeure. Any Party whose performance under this Agreement is hindered by a
Force Majeure shall make all reasonable efforts to remove and cure the Force
Majeure and perform its obligations under this Agreement and to mitigate the
effects of the Force Majeure. It is understood by the Parties that the
foregoing provisions do not excuse any obligations of the Seller with respect
to Shortfall Energy and Replacement Energy, as provided under Article XII,
caused by a Force Majeure.

 

(b)   The term “Force Majeure” means any cause
beyond the reasonable control of, and not the result of negligence of, the
Party affected or due to removable or remediable causes which the affected
Party fails to remove or remedy within a reasonable period of time, which the
affected Party, notwithstanding its exercise of due diligence, is unable to
avoid and, when occurred, overcome, including, but not restricted to, flood,
drought, earthquake, storm, fire, lightning, epidemic, war, riot, civil
disturbance or disobedience, excessive wind speeds which prevent the
construction or safe operation of the Facility, equipment failures which
require lengthy repair or replacement of equipment, labor dispute, labor or
material shortage, sabotage, and action or inaction by, or failure to obtain
the necessary authorizations or approvals from, any governmental agency or
authority. Nothing contained in this Section 14.6 shall be construed so as
to require either Party to settle a strike or labor dispute in which it may be
involved. A Force Majeure does not include (i) an act of negligence or
wrongdoing; (ii) events arising from the failure by Seller to operate and
maintain the Facility in accordance with Prudent Utility Practices and the
standards set forth in this Agreement; (iii) an increase in the variable
and fixed costs of operation and maintenance of the Facility; (iv) failure
of third parties to provide goods or services essential to a Party’s
performance, unless such failure is caused by a Force Majeure; (v) delays
in or an inability of a Party hereto to obtain financing or (vi) economic
hardship.

 

Section 14.7 Assignment of Agreement.

 

(a)          Except as set forth in this Section 14.7, neither Party hereto
shall assign or transfer this Agreement, in whole or in part, or any of its
interests hereunder to any other Person without the prior written consent of
the other Party hereto. Such consent shall not be unreasonably withheld by
either Party. Any attempt to transfer or assign this Agreement, or any
privilege hereunder, without such prior written consent, except as provided
herein, shall be void and confer no right on any Person that is not a party to
this Agreement.

 

(b)         Buyer’s consent shall not be required for Seller to assign this
Agreement to an Affiliate of Seller, subject however to compliance with Section 10.3;
provided that Seller provides reasonable assurances and executes documents
reasonably required by Buyer regarding Seller’s continued liability for all of
Seller’s obligations under this Agreement in the event of any nonperformance on
the part of such assignee.

 

(c)          Buyer’s consent shall not be required for Affiliates of Seller to assign
or sell any membership interest in Seller, subject to compliance with Section 10.3.

 

(d)         Buyer’s consent shall not be required for Seller to assign this
Agreement for collateral purposes to any Facility Lender; provided however that
the terms of such financing and the documentation relating thereto shall comply
with the applicable terms and conditions of this

 

47

 

Agreement. Seller shall provide Buyer with written notice of any such
assignment to any Facility Lender no later than thirty (30) days after the
assignment.

 

(e)          To facilitate Seller’s obtaining of financing to construct and operate
the Facility, Buyer shall provide such consents to assignment or other
documents as may be reasonably requested by Seller or any Facility Lender in
connection with the financing of the Facility, including the acquisition of
equity for the development, construction and operation of the Facility;
provided however that the terms of such financing and the documentation relating
thereto shall comply with the applicable terms and conditions of this
Agreement. Seller shall reimburse, or shall cause the Facility Lender to
reimburse, Buyer for the incremental direct expenses (including the reasonable
fees and expenses of outside counsel) incurred by Buyer in the preparation,
negotiation, execution and/or delivery of any documents requested by Seller or
the Facility Lender, and provided by Buyer, pursuant to this Section 14.7(e).

 

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

 

(g)         Seller’s consent shall not be required for Buyer to assign this
Agreement to the City of Los Angeles, acting by and through the Department of
Water and Power, a municipal corporation created under the laws of the State of
California (“LADWP”) or LADWP in conjunction with the cities of Burbank and
Pasadena, provided that at the time of assignment each of the assignees shall
have at least an investment grade credit rating from a national credit rating
agency.

 

Section 14.8 Ambiguity. The Parties acknowledge that this Agreement
was jointly prepared by them, by and through their respective legal counsel,
and any uncertainty or ambiguity existing herein shall not be interpreted
against either Party on the basis that the Party drafted the language, but
otherwise shall be interpreted according to the application of the rules on
interpretation of contracts.

 

Section 14.9 Attorney Fees &
Costs. Both Parties
hereto agree that in any action to enforce the terms of this Agreement that
each Party shall be responsible for its own attorney fees and costs.

 

Section 14.10 Voluntary
Execution. Both
Parties hereto acknowledge that they have read and fully understand the content
and effect of this Agreement that the provisions of this Agreement have been
reviewed and approved by their respective counsel. The Parties to this
Agreement further acknowledge that they have executed this Agreement
voluntarily, subject only to the advice of their own counsel, and do not rely
on any promise, inducement, representation or warranty that is not expressly
stated herein.

 

Section 14.11 Entire
Agreement. This
Agreement (including all Appendices and Exhibits) contains the entire
understanding concerning the subject matter herein and supersedes and replaces
any prior negotiations, discussions or agreements between the Parties, or any
of them, concerning that subject matter,

 

48

 

whether
written or oral, except as expressly provided for herein. This is a fully
integrated document. Each Party acknowledges that no other party,
representative or agent, has made any promise, representation or warranty,
express or implied, that is not expressly contained in this Agreement that
induced the other Party to sign this document.

 

Section 14.12 Contract
Approvals. This
Agreement is contingent upon Buyer obtaining the Buyer Approvals.

 

Section 14.13 Governing Law. This Agreement shall be interpreted, governed
by, and construed under the laws of the State of California without
consideration of conflicts of law principles.

 

Section 14.14 Execution in
Counterparts. This
Agreement may be executed in counterparts and upon execution by each signatory,
each executed counterpart shall have the same force and effect as an original
instrument and as if all signatories had signed the same instrument. Any
signature page of this Agreement may be detached from any counterpart of
this Agreement without impairing the legal effect of any signature thereon, and
may be attached to another counterpart of this Agreement identical in form
hereto by having attached to it one or more signature pages.

 

Section 14.15 Effect of Section Headings.
Section headings
appearing in this Agreement are inserted for convenience only and shall not be
construed as interpretations of text.

 

Section 14.16 Waiver. The failure of either Party to this Agreement
to enforce or insist upon compliance with or strict performance of any of the
terms or conditions hereof, or to take advantage of any of its rights
hereunder, shall not constitute a waiver or relinquishment of any such terms,
conditions or rights, but the same shall be and remain at all times in full
force and effect.

 

Section 14.17 Relationship of
the Parties. This
Agreement shall not be interpreted to create an association, joint venture or
partnership between the Parties hereto or to impose any partnership obligation
or liability upon either such Party. Neither Party shall have any right, power
or authority to enter into any agreement or undertaking for, or act on behalf
of, or to act as an agent or representative of, the other Party.

 

Section 14.18 Third Party
Beneficiaries. This
Agreement shall not be construed to create rights in, or to grant remedies to,
any third party as a beneficiary of this Agreement or any duty, obligation or
undertaking established herein.

 

49

 

Section 14.19 Indemnification;
Damage or Destruction; Insurance; Limit of Liability.

 

(a)   Indemnification.

 

(1)                                  Seller shall
indemnify and defend the Buyer, its officers, directors and employees against,
and hold the Buyer, its officers, directors and employees harmless from, at all
times after the date hereof, any and all claims incurred, suffered, sustained
or required to be paid, directly or indirectly, by, or sought to be imposed
upon, the Buyer, its officers, directors and employees for personal injury or
death to persons or damages to property arising out of any negligent act or
omission or any intentional misconduct by Seller in connection with this
Agreement. “Claims” in this Section means all third party claims or
actions, threatened or filed and, whether groundless, false, fraudulent or
otherwise, that relate to the subject matter of an indemnity, and the resulting
losses, damages, expenses, attorneys’ fees and court costs, whether incurred by
settlement or otherwise, and whether such claims or actions are threatened or
filed prior to or after the termination of this Agreement.

 

(2)                                  The Buyer shall
indemnify and defend Seller, its officers, directors and employees against, and
hold Seller, its officers, directors and employees harmless from, at all times
after the date hereof, any and all Claims, incurred, suffered, sustained or
required to be paid, directly or indirectly, by, or sought to be imposed upon,
Seller, its officers, directors and employees for personal injury or death to
persons or damage to property arising out of any negligent act or omission or
any intentional misconduct by the Buyer in connection with this Agreement.

 

(3)                                  In the event injury
or damage results from the joint or concurrent negligent or intentional acts or
omissions of both the Buyer and Seller, the Parties shall be deemed to be
equally liable for such injury or damages unless it is established that the
Parties’ relative degree of fault is other than 50/50, in which event each
Party shall be liable in proportion to its relative degree of fault.

 

(b)         Damage
or Destruction.                  In
the event of any damage or destruction of the Facility or any part thereof, the
Facility or such part thereof shall be diligently repaired, replaced or
reconstructed by the Seller so that the Facility or such part thereof shall be
restored to substantially the same general condition and use as existed prior
to such damage or destruction, unless a different condition or use is approved
by the Buyer. Proceeds of Insurance with respect to such damage or destruction
maintained as provided in this Agreement shall be applied to the payment for
such repair, replacement or reconstruction of the damage or destruction as
provided in Section 14.19(c).

 

(c)          Insurance.

 

(1)                                  Seller shall obtain and maintain the
Insurance coverages listed in Appendix F on the terms set forth in Appendix F.
Insurance coverages for jointly owned facilities shall be apportioned to the
Seller in an equitable manner. In the event that the cost of obtaining and
maintaining coverage

 

50

 

required by this Agreement materially increases from the cost that
applies to such Insurance coverage as of the Effective Date, or if any risk
required to be insured in connection with this Agreement becomes uninsurable
after the Effective Date, then at Seller’s request the Parties shall, using
reasonably prudent risk management practices and insurance industry standards,
revise such insurance coverages then in effect as the parties mutually
determine to be necessary so as to enable the Seller to provide Insurance to
the extent available on commercially reasonable terms.

 

(2)                                  If at any time there
shall have occurred a casualty event with respect to all or a substantial portion of the Facility, all
Insurance proceeds relating to such event shall be paid by the insurer to an
escrow agent named in the insurance policy as the loss payee and deposited in
an escrow account held by such escrow agent. Such escrow agent shall be
mutually agreed upon by Buyer and Seller. Seller may request a withdrawal or
transfer from the escrow account by delivering to the escrow agent, with a copy
to Buyer, a requisition of funds no fewer than five (5) days in advance of
any proposed transfers or withdrawals from the escrow account. Each requisition
of funds shall be accompanied by a certification by a financial officer of
Seller to the effect that (i) the directed withdrawals, transfers or
payments will be used exclusively for repair, replacement or restoration of the
Facility and (ii) such repair, replacement, or restoration are being
conducted either (x) pursuant to plans and specifications that have been
previously approved in writing by Buyer, or (y) pursuant to such other
arrangements approved in writing by Buyer. Upon receipt of a requisition of
funds, the escrow agent shall make the withdrawals, transfers or payments
directed therein.

 

(d)   Limitation of Liability. Neither Party
will be liable to the other Party for indirect, consequential or special
damages, other than indemnification obligations related to third party claims.

 

Section 14.20 Severability. In the event any of the terms, covenants or
conditions of this Agreement, or the application of any such terms, covenants
or conditions, shall be held invalid, illegal or unenforceable by any court
having jurisdiction, all other terms, covenants and conditions of this
Agreement and their application not adversely affected thereby shall remain in
force and effect, provided that the remaining valid and enforceable provisions
materially retain the essence of the Parties’ original bargain.

 

Section 14.21 Status of Review
by Buyer. Any review
by Buyer of the design, construction, operation or maintenance of the Facility
is solely for the information of Buyer. By making such review, Buyer makes no
representation as to the economic and technical feasibility, operational
capability or reliability of the Facility. Seller shall in no way represent to
any third party that any such review by Buyer of the Facility, including, but
not limited to, any review of the design,

 

51

 

construction,
operation or maintenance of the Facility by Buyer, is a representation by Buyer
as to the economic and technical feasibility, operational capability or
reliability of the Facility. Seller is solely responsible for the economic and
technical feasibility, operational capability and reliability thereof.

 

Section 14.22 Confidentiality.

 

(a)   Each Party agrees, and shall cause its
parent, subsidiary and affiliated corporations, and its and their respective
directors, officers, employees and representatives, as a condition to receiving
confidential information hereunder, to keep confidential all documents, data,
drawings, studies, projections, plans and other information, whether oral or
written, that relate to economic benefits to or amounts payable by either Party
under this Agreement, and, with respect to documents, that are clearly marked “Confidential”
at the time a Party shares such information with the other Party (“Confidential
Information”). The provisions of this Section 14.22 shall survive and
shall continue to be binding upon the Parties for period of one (1) year
following the date of termination of this Agreement. Notwithstanding the
foregoing, information shall not be considered confidential which (i) was
in the public domain prior to disclosure, (ii) was lawfully in a Party’s
possession or acquired by a Party outside of this Agreement, which acquisition
was not known by the receiving Party to be in breach of any confidentiality
obligation, or (iii) developed independently by a Party based solely on
information that is not considered confidential under this Agreement.

 

(b)   Either Party may, without violating this
Subsection 14.22, disclose matters that are made confidential by this Agreement:

 

(1)                                  To actual or prospective, co-owners, lenders,
underwriters, contractors, suppliers, and others involved in construction,
operation, and financing transactions and arrangements for a Party or its
subsidiaries, affiliates, or parent, if the Party making the disclosure
obtains, as a condition precedent to the disclosure, a confidentiality
agreement with the person, corporation, or other entity to whom the disclosure
is being made with terms substantially the same as this Section 14.22; and

 

(2)                                  To governmental officials and parties
involved in any proceeding in which either Party is seeking a permit,
certificate, or other regulatory approval or order necessary or appropriate to
carry out this Agreement, but the Party making the disclosure shall make reasonable
efforts to restrict public access to the information disclosed, by protective
order or otherwise; to governmental officials or the public as required by any
law, regulation, or order, including without limitation laws or regulations
requiring disclosure of financial information, information material to
financial matters, and filing of financial reports, but the Party making the
disclosure shall make reasonable efforts to restrict public access to the
information disclosed, by protective order or otherwise.

 

(c)   Notwithstanding the foregoing or any other
provision of this Agreement, Seller acknowledges that Buyer, as a California
municipal corporation, is subject to disclosure as

 

52

 

required by the California Public Records Act, Cal. Govt. Code §§ 6250
et. seq. (“CPRA”) and the Ralph M. Brown Act, Cal. Govt. Code §§ 54950 et. seq.
(“Brown Act”). Confidential Information of Seller provided to the Buyer
pursuant to this Agreement will become the property of the Buyer and Seller
acknowledges that Buyer shall not be in breach of this Agreement or have any
liability whatsoever under this Agreement or otherwise for any claims or causes
of action whatsoever resulting from or arising out of Buyer’s copying or releasing
to a third party any of the Confidential Information of Seller pursuant to the
CPRA or Brown Act.

 

If
Buyer receives a CPRA request for Confidential Information of Seller, and Buyer
determines that such Confidential Information, is subject to disclosure under
the CPRA, then Buyer will notify the Seller of the request and its intent to
disclose the documents. The Buyer, as required by the CPRA, will release such
documents unless the Seller timely obtains a court order prohibiting such
release. If Seller, at its sole expense, chooses to seek a court order
prohibiting the release of Confidential Information pursuant to a CPRA request,
then Seller undertakes and agrees to defend, indemnify and hold harmless Buyer
from and against all suits, claims, and causes of action brought against Buyer
for Buyer’s refusal to disclose Confidential Information of Seller to any
person making a request pursuant to CPRA. Seller’s expenses and obligations
herein include, but are not limited to, all attorney’s fees (both in house and
outside counsel), costs of litigation incurred by Buyer or its attorneys
(including all actual, costs incurred by Buyer, not merely those costs
recoverable by a prevailing party, and specifically including costs of experts
and consultants) as well as all damages or liability of any nature whatsoever
arising out of any such suits, claims, and causes of action brought against
Buyer, through and including any appellate proceedings. Seller’s obligations to
Buyer under this indemnification provision shall be due and payable on a
monthly, on-going basis within thirty (30) days after each submission to Seller
of Buyer’s invoices for all fees and costs incurred by Buyer, as well as all
damages or liability of any nature.

 

(d)         Notwithstanding the foregoing or any other provisions of this
Agreement, Seller acknowledges that Buyer shall not be in breach of this
Agreement or have any liability whatsoever under this Agreement or otherwise
for any claims or causes or action whatsoever resulting from or arising out of
the disclosure by Buyer of any Confidential Information of Seller that Buyer,
as advised by counsel, deems to be material disclosure and discloses in
connection with the public offering by Buyer of its bonds or other obligations
to finance payment of the Prepayment Amount.

 

(e)          The provisions of this Section 14.22 shall survive the expiration
or termination of this Agreement.

 

Section 14.23 No Immunity
Claim. Buyer warrants
and covenants that with respect to its contractual obligations hereunder and performance
thereof, if and to the extent permitted by law to waive such immunity, it will
not claim immunity on the grounds of sovereignty or similar grounds with
respect to itself or its revenues or assets from (a) suit, (b) jurisdiction
of court (including a court located outside its jurisdiction), (c) relief
by way of injunction, order for specific performance or recovery of property, (d) attachment
of assets, or (e) execution or enforcement of any judgment.

 

53

 

Section 14.24
Fixed-Rate Contract: Mobile-Sierra Clause. The Parties
hereby stipulate and agree that this Agreement was entered into as a result of
arms’-length negotiations between the Parties. Further, the Parties believe
that the rates, terms and conditions of this Agreement are just and reasonable
within the meaning of Sections 205 and 206 of the Federal Power Act, 16 U.S.C.
Sections 824d or 824e, and that the rates, terms and conditions of this
Agreement will remain so over the life of the
Agreement. The Parties waive all rights to challenge the validity of this
Agreement or whether it is just and reasonable for and with respect to the
entire term thereof, under Sections 205 and 206 of the Federal Power Act and to
request the FERC to revise the terms and conditions and the rates or services
specified in this Agreement, and hereby agree to make no filings at the FERC or
with any other state or federal agency, board, court or tribunal challenging
the rates, terms and conditions of this Agreement as to whether they are just
and reasonable or in the public interest under the Federal Power Act. The
Parties hereby further stipulate and agree that neither Party may bring any
action, proceeding or complaint under Section 205 or 206 of the Federal
Power Act, 16 U.S.C. 824d or 824e, seeking to modify, cancel, suspend, or
abrogate the rates, terms and conditions of this Agreement, or to prevent this
Agreement from taking effect. It is further agreed that, in the event any of
the Parties challenges this Agreement for any other reason, they will not
dispute the applicability of the public interest standard as that term has been
defined and interpreted under the Federal Power Act and the cases of United
Gas Pipe Line Co. v.  Mobile Gas Corp., 350 U.S. 332 (1956) and FPC v.
Sierra Pacific Power Co., 350 U.S.
348 (1956), and subsequent cases.

 

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

 

 

	
   

  	
   

  	
   

  	
   

  	
  Southern
  California Public Power Authority

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  4/4/07

  	
   

  	
  By:

  	
     /s/
  David H. Wright

  
	
   

  	
   

  	
   

  	
   

  	
  David H. Wright, President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attest:

  	
     /s/ Bill D. Carnahan

  
	
   

  	
   

  	
   

  	
   

  	
  Bill D. Carnahan, Assistant Secretary

  
							

 

54

 

	
   

  	
   

  	
   

  	
  Milford
  Wind Corridor Phase I, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  16-MAR-07

  	
   

  	
  By:

  	
  /s/ Paul J Gaynor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  PAUL J GAYNOR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   PRESIDENT

  
								

 

55

 

APPENDIX A

 

Monthly Payment Schedule

 

1.              Monthly Energy Payment (MEP) for Excess Energy. The monthly payment for Excess Energy shall
be made in accordance to the following formula:

 

MEP
= EEP x DEE 

 

Where:

 

EEP
is the Excess Energy Price, which is $56.94 per MWh and escalated at an annual
rate of 1.75% commencing on January 1, 2009, and continuing on each
anniversary of that date.

 

DEE
is the MWh of Delivered Excess Energy delivered or deemed to be delivered to
the Point of Delivery during the month, as metered according to Section 8.4,
and, in the event of System Emergency or other curtailment, as may be adjusted
pursuant to Section 6.5(i).

 

2.              Monthly Payment for Startup and Test Energy. Buyer shall purchase Delivered Energy from
the Facility during startup and testing periods prior to the Commercial
Operation Date at a price equal to $55 per MWh times the Delivered Energy. All
startup and test energy shall be scheduled in accordance with Buyer procedures
in Section 6.5. Buyer shall receive any and all Environmental Attributes
associated with the Startup and Test Energy, the value of which is included in
this Startup and Test Energy price.

 

3.              Monthly Environmental Attributes Payment. After the Commercial Operation Date, Buyer
shall make a monthly payment to the Seller for the transfer of all
Environmental Attributes pursuant to Section 9.1 in an amount equal to
$10.60 per MWh times the Facility Metered Output and escalated at an annual
rate of 1.75% commencing on January 1, 2009 and continuing on each anniversary
of that date; provided that, beginning the sixth Contract Year, the payment
shall be increased by an additional $1.96 per MWh.

 

4.              Taxes and Operating Insurance Payment. Buyer shall reimburse Seller for all Taxes
and Operating Insurance premiums as set forth in Section 3.1 of the
Agreement; provided that such Taxes and Operating Insurance premiums associated
with Site Common Facilities or the Transmission Line will be apportioned to the
Seller pro-rata based on the Facility Common Facilities Interests or the
Facility Transmission Line Interests, as the case may be, in the Site Common
Facilities or the Transmission Line, respectively, and in accordance with the
common or joint ownership, operation or use agreements therefor entered into in
accordance with Section 2.11 or Section 2.12, as applicable. Such
Taxes and Operating Insurance payments in the aggregate shall not exceed $4
million for any Contract Year, escalated at an annual rate of 1.75% commencing
on January 1, 2009 and continuing on each anniversary of that date. In the
event Seller fails to pay when due any Taxes or any Operating Insurance
premiums, and fails to make such payment within five days following notice from
Buyer of such failure, Buyer shall have the

 

A-1

 

right to pay such Taxes or Operating Insurance premiums, as the case
may be, and Seller shall refund to Buyer the monthly payments made by Buyer
with respect to such overdue Taxes or Operating Insurance premiums pursuant to Section
3.1(h) with interest on such amounts of monthly payments at the Present Value
Rate. Thereafter, Buyer shall have the right exercised on notice to Seller to
pay such Taxes or Operating Insurance premiums, as applicable, in lieu of
making monthly payments therefor as provided in Section 3.1(h).

 

A-2

 

APPENDIX B

 

Facility Description and Milestone Schedule

 

I. Facility Description

 

·                       The Facility Generating Premises, consisting of at least approximately
4000 acres, as described in Exhibit A to this Appendix B, which consist of leaseholds and
other property rights and interests under the Leases and Property Agreements as
set forth in Section 2.10.

 

·                       Exhibit A also provides a Facility layout showing the planned
Facility configuration (which is subject to revision so as to show the actual
Facility configuration), provided that such configuration shall comply with the
following minimum specifications:

 

·                            Individual wind turbines will be sited no
closer than two (2) rotor diameters apart

·                            Any two rows of wind turbines will be no
closer than (6) rotor diameters apart

·                            Upwind wind turbines will be set back at least six (6) rotor
diameters from the Facility Generating Premises boundary

 

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

 

·                       Fee ownership of all wind turbine generators associated with the
Contract Capacity, which is currently expected to include up to eighty 2.5-MW
wind turbine generators and pad-mounted transformers, and all other fixtures
and personal property located on or associated with the Facility Generating
Premises.

 

·                       Up to four permanent meteorological towers appropriately located on the
Facility Generating Premises, which are necessary to operate the Facility in
accordance with this Agreement.

 

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

 

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

 

·                       The Facility Transmission Line Interests which shall consist of an
ownership interest (which may be an undivided interest) in the property of the
Transmission Line, including the rights of way, easements and other property
rights and interests constituting the Transmission Line right of way, all
associated real or personal property, and all rights and interests of the
Seller in and to any rights of way, easement or license agreements, crossing
permits, or line crossing agreements, and any and all agreements for joint
ownership or for any third party joint operation or use of the Transmission
Line or any capacity or transfer capability thereof

 

B-1

 

referred to in Section 2.12 which shall provide Seller with rights
to not less than the greater of 220 MW of the capacity of the Transmission Line
or 25% of such capacity.

 

·                       The Facility Common Facilities Interests which shall consist of an
ownership interest (which may be an undivided interest) in the Site Common
Facilities, including all associated real or personal property, and the rights
and interests of the Seller in and to any and all agreements for joint
ownership or for any third party joint operation or use of the Site Common
Facilities or the capacity or capability thereof referred to in Section 2.11
and which shall provide Seller with the rights to such capability, capacity or
use of the Site Common Facilities that shall in no event be less than that
necessary to support the full Contract Capacity on a prudent and reliable
basis.

 

II. Estimated Project Development Milestone Schedule

 

	
  4Q06

  	
  ·

  	
  Ongoing
  collection of wind data at site

  
	
   

  	
  ·

  	
  Plan
  of Development for Transmission Line submitted to USBLM

  
	
   

  	
  ·

  	
  Conditional-Use-Permit
  Application submitted to Beaver County, Utah

  
	
   

  	
  ·

  	
  Conditional
  Use Permit granted by Beaver County, Utah on Dec. 4, 2006

  
	
   

  	
  ·

  	
  Wind
  Turbine Generators (WTGs) Purchased – 80 Clipper C99 WTGs

  
	
   

  	
  ·

  	
  Discussion
  with Utah State Tax Assessors Office regarding Property Tax Assessment

  
	
   

  	
   

  	
   

  
	
  1Q07

  	
  ·

  	
  Final
  System Impact Study Reviewed with the Los Angeles Department of Water and
  Power (“LADWP”)

  
	
   

  	
  ·

  	
  Completion
  of LADWP interconnection studies

  
	
   

  	
  ·

  	
  Sign
  Interconnection Studies Agreement with LADWP/IPA.

  
	
   

  	
  ·

  	
  NEPA
  Kickoff of Facility and Transmission Line commences

  
	
   

  	
  ·

  	
  Seller
  hires NEPA contractor

  
	
   

  	
  ·

  	
  Seller
  hires transmission engineering firm to design the project transmission line

  
	
   

  	
  ·

  	
  Identify
  NEPA study requirements with the BLM

  
	
   

  	
  ·

  	
  (Title
  14 CEQA Compliance)

  
	
   

  	
  ·

  	
  Property
  Tax Assessment Ongoing

  

 

B-2

 

	
  2Q07

  	
  ·

  	
  Apply
  for Millard County, Utah Conditional Use Permit

  
	
   

  	
  ·

  	
  BLM’s
  NEPA review ongoing (Biological, Plant, Archeological)

  
	
   

  	
  ·

  	
  Seller
  orders transmission line poles, conductors and other long-lead time equipment

  
	
   

  	
  ·

  	
  Property
  tax assessment ongoing

  
	
   

  	
   

  	
   

  
	
  3Q07

  	
  ·

  	
  USBLM’s
  NEPA review ongoing

  
	
   

  	
   

  	
   

  
	
  4Q07

  	
  ·

  	
  USBLM’s
  NEPA review ongoing

  
	
   

  	
  ·

  	
  Tax
  equity financing commitment obtained by Seller

  
	
   

  	
   

  	
   

  
	
  1Q08

  	
  ·

  	
  BLM
  issues NEPA findings & Record of Decision for Facility

  
	
   

  	
   

  	
   

  
	
  2Q08

  	
  ·

  	
  Construction &
  Installation of Facility commences

  
	
   

  	
  ·

  	
  Construction
  of Transmission Line commences

  
	
   

  	
   

  	
   

  
	
  3Q08

  	
  ·

  	
  Construction &
  installation of Facility

  
	
   

  	
  ·

  	
  Wind
  Turbines arrive on site

  
	
   

  	
   

  	
   

  
	
  4Q08

  	
  ·

  	
  Construction
  of Transmission Line completed

  
	
   

  	
  ·

  	
  Testing &
  commissioning of Facility

  
	
   

  	
  ·

  	
  Energization
  of substation & interconnection to Intermountain Power Project
  Switchyard

  
	
   

  	
  ·

  	
  Commercial
  Operation Date Achieved

  
	
   

  	
   

  	
   

  
	
  1Q09

  	
  ·

  	
  Final
  punchlist items

  

 

B-3

 

Exhibit A to Appendix B

 

Description of Planned Facility Generating
Premises and Facility Layout

 

 

Power Purchase Agreement

 

B-4

 

APPENDIX C

 

Buyer and Seller Billing, Notification and Scheduling
Contact Information

 

	
  1.

  	
  Authorized Representative. Correspondence pursuant to
  Section 14.1 shall be transmitted to the following addresses:

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  If
  to Buyer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Executive
  Director

  
	
   

  	
   

  	
  Southern
  California Public Power Authority 

  
	
   

  	
   

  	
  225
  S. Lake Avenue, Suite 1250

  
	
   

  	
   

  	
  Pasadena,
  CA 91101

  
	
   

  	
   

  	
  Telephone:
  626-793-9364

  
	
   

  	
   

  	
  Facsimile:
  626-793-9461

  
	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
  If
  to Seller:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Milford
  Wind Corridor Phase I, LLC

  
	
   

  	
   

  	
  c/o
  UPC Wind Management,
  Suite 201

  
	
   

  	
   

  	
  Newton,
  MA 02459

  
	
   

  	
   

  	
  Attn:
  General Counsel 

  
	
   

  	
   

  	
  Telephone:
  617-964-3340 

  
	
   

  	
   

  	
  Facsimile:
  617-964-3342

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Billings
  and payments pursuant to Section 3.1 and Appendix A shall be transmitted
  to the following addresses:

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  If
  Billing to Buyer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Finance
  and Accounting Manager

  
	
   

  	
   

  	
  Southern
  California Public Power Authority 

  
	
   

  	
   

  	
  225
  S. Lake Avenue, Suite 1250

  
	
   

  	
   

  	
  Pasadena,
  CA 91101

  
	
   

  	
   

  	
  Telephone:
  626-793-9364

  
	
   

  	
   

  	
  Facsimile:
  626-793-9461

  
	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  If
  Payment to Buyer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Finance
  and Accounting Manager

  
	
   

  	
   

  	
  Southern
  California Public Power Authority 

  
	
   

  	
   

  	
  225
  S. Lake Avenue, Suite 1250

  
	
   

  	
   

  	
  Pasadena,
  CA 91101

  
	
   

  	
   

  	
  Telephone:
  626-793-9364

  
	
   

  	
   

  	
  Facsimile:
  626-793-9461

  

 

C-1

 

	
  3.

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  to Buyer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Executive
  Director

  
	
   

  	
   

  	
  Southern
  California Public Power Authority 

  
	
   

  	
   

  	
  225
  S. Lake Avenue, Suite 1250

  
	
   

  	
   

  	
  Pasadena,
  CA 91101

  
	
   

  	
   

  	
  Telephone:
  626-793-9364

  
	
   

  	
   

  	
  Facsimile:
  626-793-9461

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  to Seller:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Milford
  Wind Corridor Phase I, LLC

  
	
   

  	
   

  	
  c/o
  UPC Wind Management,
  Suite 201

  
	
   

  	
   

  	
  Newton,
  MA 02459

  
	
   

  	
   

  	
  Attn:
  General Counsel 

  
	
   

  	
   

  	
  Telephone:
  617-964-3340 

  
	
   

  	
   

  	
  Facsimile:
  617-964-3342

  
	
   

  	
   

  	
   

  
	
  4.

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

  
	
   

  	
   

  
	
   

  	
   

  	
  If
  to Buyer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Energy
  Systems Manager

  
	
   

  	
   

  	
  Southern
  California Public Power Authority

  
	
   

  	
   

  	
  225
  S. Lake Avenue, Suite 1250 

  
	
   

  	
   

  	
  Pasadena,
  CA 91101

  
	
   

  	
   

  	
  Telephone:
  626-793-9364 

  
	
   

  	
   

  	
  Facsimile:
  626-793-9461

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  to Seller:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Milford
  Wind Corridor Phase I, LLC

  
	
   

  	
   

  	
  c/o
  UPC Wind Management,
  Suite 201

  
	
   

  	
   

  	
  Newton,
  MA 02459

  
	
   

  	
   

  	
  Attn:
  General Counsel 

  
	
   

  	
   

  	
  Telephone:
  617-964-3340 

  
	
   

  	
   

  	
  Facsimile:
  617-964-3342

  

 

C-2

 

APPENDIX D

 

Form of Attestation

 

Milford Wind Corridor Phase I, LLC

 

Environmental Attribute Attestation and Bill of Sale

 

Milford
Wind Corridor Phase I, LLC (“Milford/Seller”) hereby sells, transfers and
delivers to                                              
                                                               
(“Buyer”) the Environmental Attributes and other associated environmental
attribute reporting rights associated with the generation of the indicated
energy for delivery to the grid (as such term(s) are defined in the                                           (identify
contract) (the “Agreement’) dated      ,
200   between Milford and Buyer) arising from the generation
for delivery to the grid of the energy by the Facility described below:

 

Facility name and location:                                         

 

Fuel Type:                                         

 

Capacity (MW):                                                         Operational Date:                                         

 

(for facility that has added renewable capacity, show operational date
and amount of new capacity)

As applicable: CEC Reg. no.       Energy
Admin ID  no.                Q.F.
ID no.               

 

	
  Dates

  	
   

  	
  MWhs generated

  
	
   

  	
   

  	
   

  
	
                200  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
                200  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
                200  

  	
   

  	
   

  	
   

  	
   

  

 

in
the amount of one Environmental Attribute or its equivalent for each megawatt
hour generated; and Milford further attests, warrants and represents as
follows:

 

D-1

 

	
  i)

  	
   

  	
  to the best of its knowledge, the information provided herein is true
  and correct;

  
	
   

  	
   

  	
   

  
	
  ii)

  	
   

  	
  its
  sale to Buyer is its one and only sale of the Environmental Attributes and
  other associated environmental attribute reporting rights referenced herein;

  
	
   

  	
   

  	
   

  
	
  iii)

  	
   

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

  

 

[check
one:]

 

	
  iv)

  	
   

  	
  Milford
  owns the Facility.

  
	
   

  	
   

  	
   

  
	
  iv)

  	
   

  	
  to
  the best of Milford’s knowledge, each of the Environmental Attributes and
  Environmental Attribute Reporting Rights associated with the generation of
  the indicated energy for delivery to the grid have been generated and sold by
  the Facility.

  

 

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

 

Contact Person:                                        tel:

 

D-2

 

APPENDIX E 

 

Form of Security Interest

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
FILING

 

THIS DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING (“Deed of Trust”) is by and among Milford Wind Corridor Phase I,
LLC, a Delaware limited liability company, having an office and mailing address
c/o UPC
Wind Management, LLC, 100 Wells Avenue, Suite 201, Newton, Massachusetts
02459 (hereinafter “Trustor”),                                                   (hereinafter “Trustee”),  and Southern California Public Power
Authority, a joint power agency created pursuant to the laws of the State of
California and having an office and mailing address at 225 South Lake Ave,
Pasadena, CA 91101 (hereinafter “Beneficiary”).

 

WITNESSETH:

 

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

 

a.                                       the fee simple interests in each of the
parcels of real property described on Exhibit A
attached hereto and made a
part hereof that are identified as a “Fee Parcel” thereon (each a “Fee Parcel” and, collectively, the “Fee Parcels”);

 

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

 

c.                                       the rights-of-way and other interests granted
in and with respect to each of the parcels of real property described on Exhibit A that are identified as a “BLM Parcel” thereon (each a “BLM Parcel” and collectively the “BLM Parcels”), pursuant to each of the Right-of-Way
Grant/Temporary Use Permits issued by the United States Department of Interior
Bureau of Land Management (the “BLM”)described on Exhibit B attached hereto and made a part hereof (as the same may be amended,
restated, supplemented or otherwise modified from time to time (each a “BLM Grant” and collectively, the “BLM Grants”); and the easement estates in the BLM Parcels
created by the BLM Grants, and all other rights of Trustor under the BLM
Grants, including all of Trustor’s unexpired estate, title and interest by
virtue of the BLM Grants and any and all credits, deposits, options to renew or
extend, and any other rights and privileges of

 

E-1

 

Trustor
thereunder. The Fee Parcels, Leasehold Parcels, and BLM Parcels are referred to
collectively as the “Land”);

 

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

 

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

 

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

 

g.             All option rights, purchase or sale
contracts, agreements, including without limitation the Transmission and Common
Facility Agreements as defined in Section 3q, condemnation claims,
demands, awards and settlement payments, insurance contracts, insurance
payments and proceeds, unearned insurance premiums, warranties, guarantees,
utility deposits, books and records and general intangibles of Trustor relating
to the Real Estate or the Equipment and any other intangible property of
Trustor related to the Real Estate, the Equipment, the Facility Transmission
Line Interests or the Facility Common Facilities’ Interests (hereafter defined)
(all of the foregoing is herein referred to collectively as the “Intangibles”);

 

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

 

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

 

j.              All rights of Trustor under any contracts
executed by Trustor with any provider of goods or services for or in connection
with any construction, operation, maintenance or services performed or to be
performed in connection with the Real Estate or the Equipment,

 

E-2

 

including, without limitation, any construction contracts and
management contracts (all of the foregoing are herein referred to collectively
as the “Contracts for Construction or Services”);

 

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

 

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

 

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

 

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

 

2.             Secured Obligations. Trustor makes the grant, conveyance,
transfer and assignment set forth above for the purpose of securing the payment
and performance of (i) all obligations of Trustor, as Seller, under the
Power Purchase Agreement dated                                                , 2007, between Trustor, as Seller, and
Beneficiary, as Buyer (as defined therein and as amended, supplemented or
modified from time to time, the “Power Purchase Agreement”), which
provides for remedies to be exercised following a default under Section 11.1
of the Power Purchase Agreement (a “Default”) and (ii) Trustor’s
performance pursuant to its covenants and warranties of this Deed of Trust
(collectively, the “Secured Obligations”). The amount of the Secured
Obligations secured by this Deed of Trust is indefinite, but in no event shall
the amount secured hereunder exceed THREE HUNDRED TWENTY FIVE MILLION and
No/100 Dollars ($325,000,000 or the “Maximum Amount”); provided that
such Maximum Amount shall be reduced by $10,000,000 on January 1st of each
year following Contract Years in which there is no Shortfall Energy due to
Beneficiary, as Buyer (all as defined in the Power Purchase Agreement).

 

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

 

E-3

 

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

 

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

 

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

 

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

 

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

 

d.             Insurance. Trustor will at all
times maintain or cause to be maintained on the Subject Property, all insurance
required under the Power Purchase Agreement, the Ground Leases and the BLM
Grants. Any proceeds of such insurance shall be paid and accounted for as
provided for in the Power Purchase Agreement. Nothing contained in this Deed of
Trust shall create any responsibility or obligation on Beneficiary to collect
any amounts owing on any insurance policy or resulting from any condemnation,
to rebuild or replace any damaged or destroyed Improvements or other portions
of the Subject Property or to perform any other act hereunder. Beneficiary
shall not by the fact of approving, disapproving, accepting, preventing,
obtaining or failing to obtain any insurance, incur any liability for or with
respect to the amount

 

E-4

 

of insurance carried, the form or legal sufficiency of insurance
contracts, solvency of insurance companies, or payment or defense of lawsuits,
and Trustor hereby expressly assumes full responsibility therefor and all
liability, if any, with respect thereto.

 

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

 

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

 

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

 

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

 

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

 

E-5

 

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

 

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

 

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

 

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

 

E-6

 

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

 

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

 

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

 

p.             Covenants Regarding Ground Leases and BLM
Grants.

 

i.              Each of the Ground Leases and BLM Grants is
valid and in full force and effect in accordance with the terms thereof and has
not been modified except as herein set forth. All of the rents and other
charges payable under the Ground Leases and BLM Grants prior to the execution
hereof have been paid, all of the terms, conditions and agreements contained in
the Ground Leases and BLM Grants have been performed and no default exists

 

E-7

 

under any of the Ground Leases or BLM Grants. This Deed of Trust is lawfully executed and delivered and
is, and will be kept, a valid
lien on the interests of Trustor therein.

 

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

 

iii.            Except as permitted under the
Power Purchase Agreement, Trustor shall not extend, supplement, cancel or
surrender or in any material way modify the terms of any Ground Leases, the BLM Grants, or other easements,
licenses, crossing permits or other permits or agreements included within the
Subject Property without Beneficiary’s prior written consent, which consent
shall not be withheld unless such action is likely to adversely affect the security provided to Beneficiary under
this Deed of Trust. Trustor expressly releases and surrenders unto Beneficiary
all its right, power and authority to cancel, surrender, amend, modify, supplement or alter in any way the terms
and provisions of the Ground Leases or BLM Grants, except as specifically provided in the Power Purchase
Agreement or except with Beneficiary’s prior consent, which consent not be
withheld unless such action is likely to adversely affect the security provided to Beneficiary under
this Deed of Trust. Trustor will use commercially reasonable efforts to enforce the
provisions of the Ground Leases and BLM Grants short of termination thereof to the end that
Trustor may enjoy all of the rights granted to it as lessee or grantee under the Ground Leases and BLM
Grants. Trustor will promptly notify Beneficiary of any breach by the lessor or
grantor under any of the Ground Leases or BLM Grants and of any inability of such lessor or
grantor to perform its obligations under any of the Ground Leases or BLM Grants. Trustor
assigns to Beneficiary the proceeds of any claim Trustor may have against such lessor or
grantor for such breach or inability. In the event of a Default or a material
breach by
Trustor
of its
obligations
under this Deed of Trust, Beneficiary shall have the sole right to choose either (i) to proceed against
such lessor or grantor in Trustor’s name or in Beneficiary’s name as agent for Trustor,
and Trustor agrees to cooperate with Beneficiary in such action and to execute all
documents required by Beneficiary in furtherance of such action, or (ii) to have Trustor proceed on
its and Beneficiary’s behalf, in which event Beneficiary may participate in such proceedings,
and Trustor will deliver to Beneficiary all documents required by Beneficiary for
such participation. Trustor shall, at its expense, diligently prosecute such proceedings,
shall deliver to Beneficiary copies of all papers served in connection therewith and
shall consult and cooperate with Beneficiary and its attorneys and agents,
provided that no settlement of such proceedings may be made by Trustor without Beneficiary’s prior written consent.

 

E-8

 

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

 

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

 

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

 

ii.             Trustor will promptly pay, or cause to be
paid, all rents, charges and other sums or amounts required to be paid by
Trustor under the terms of the Transmission and Common Facility Agreements,
will further timely and fully keep and perform all of the covenants, terms,
conditions and provisions of the Transmission and Common Facility Agreements
required to be performed and complied with by Trustor thereunder, and will not
do or suffer to be done anything the doing of which, or refrain from doing
anything the omission of which, will impair the security of this Deed of Trust.
Trustor shall provide evidence of such payments immediately upon the request of
Beneficiary. Until the obligations secured hereby have been indefeasibly paid
in full, Trustor shall keep the Transmission and Common Facility Agreements in
full force and effect. Trustor shall do, or cause to be done, all things
necessary to preserve and keep unimpaired the rights of Trustor under the
Transmission and Common Facility Agreements and to prevent any default under
the Transmission and Common Facility Agreements, or any termination, surrender,
cancellation, forfeiture or impairment thereof.

 

iii.            Trustor covenants that it will not modify,
extend, supplement or cancel any of the transmission and common facility
agreements as to which Beneficiary has

 

E-9

 

rights of review or approval under Sections 2.11 or 2.12 of the Power
Purchase Agreement, or waive or release the other parties thereto of or from
any obligations, conditions or agreements by said parties, and shall not have
the power to do so, without Beneficiary’s prior written consent, which consent
shall be granted upon confirmation by Beneficiary that such action is not
likely to have an adverse effect on, or increase the risk of Beneficiary with
regard to, the security provided to Beneficiary under this Deed of Trust.
Trustor agrees to promptly notify Beneficiary of any breach by any party to the
Transmission and Common Facility Agreements and to enforce the obligations of
the other parties to the Transmission and Common Facility Agreements, to the
end that Trustor may enjoy all of its rights under the Transmission and Common
Facility Agreements. In the event of a Default or a material breach by Trustor
of its obligations under this Deed of Trust, Beneficiary shall have the sole
right to choose either (i) to proceed against such other parties in
Trustor’s name or in Beneficiary’s name as agent for Trustor, and Trustor
agrees to cooperate with Beneficiary in such action and to execute all
documents required by Beneficiary in furtherance of such action, or (ii) to
have Trustor proceed on its and Beneficiary’s behalf, in which event
Beneficiary may participate in such proceedings, and Trustor will deliver to
Beneficiary all documents required by Beneficiary for such participation.
Trustor shall, at its expense, diligently prosecute such proceedings, shall
deliver to Beneficiary copies of all papers served in connection therewith and
shall consult and cooperate with Beneficiary and its attorneys and agents,
provided that no settlement of such proceedings may be made by Trustor without
Beneficiary’s prior written consent.

 

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

 

r.              Bankruptcy Rights and Remedies.
The lien of this Deed of Trust attaches to all of Trustor’s rights and remedies
at any time arising under or pursuant to Section 365 of the Bankruptcy
Code (the “Bankruptcy Code”), including, without limitation, all of
Trustor’s rights to remain in possession of the Subject Property. Trustor shall
not commence any action, suit, proceeding or case, or file any application or
make any motion, in respect of the Ground Leases or BLM Grants in any such case
under the Bankruptcy Code without the prior written consent of Beneficiary.
Trustor shall promptly, after obtaining knowledge thereof, notify Beneficiary
orally of any filing by or against the lessor or Trustor of a petition under
the Bankruptcy Code. Trustor shall thereafter forthwith give written notice of
such filing to Beneficiary, setting forth any information available to Trustor
as to the date of such filing, the court in which such petition was filed and
the relief sought therein. Trustor shall promptly deliver to Beneficiary,
following receipt, any and all notices, summons, pleadings, applications and
other documents received by Trustor in connection with any such petition and
any proceedings relating thereto.

 

E-10

 

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

 

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

 

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

 

E-11

 

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

 

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

 

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

 

e.             Foreclosure.

 

i.              Trustee’s Sale. Beneficiary may foreclose this Deed of
Trust by way of a trustee’s sale pursuant to the provisions of Title 57,
Chapter 1, Utah Code Annotated, as
currently in effect, as amended, or in any other manner then permitted by law (“Trustee
Sale”). After the lapse of such time as may then be required by law
following the recordation of said notice of default, and notice of default and
notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell the Subject Property on the date and at the time
and place designated in said notice of sale, either as a whole or in separate
parts or parcels, and in the absence of direction by Trustor, in such order as
it may determine, at public auction to the highest bidder, the purchase price
payable in lawful money of the United States at the time of the sale. To the
extent allowed by law, the person conducting the sale may, for any cause he or
she deems expedient, postpone the sale from time to time until it shall be completed
and, in every such case, postponement shall be given by public declaration
thereof at the time and place last appointed for sale. Trustee shall execute
and deliver to the purchaser its trustee’s deed conveying said property so
sold, but without any covenant or warranty, express or implied. The recitals in
the trustee’s deed of any matters or facts shall be conclusive proof as to bona
fide third parties of the truthfulness thereof. Any person, including
Beneficiary, may bid at the sale. Trustee shall apply the proceeds of the sale
to payment of (1) the costs and expenses of exercising the power of sale
and of the sale, including the payment of Trustee’s and attorney’s fees; (2) the
Secured Obligations; and (3) the remainder, if any, to the person or persons
entitled thereto.

 

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

 

iii.            Expenses of Trustee’s Sale or Foreclosure. All reasonable fees, costs and expenses of
any kind incurred by Beneficiary in connection with foreclosure of this 

 

E-12

 

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

 

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

 

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

 

f.              Appointment of Receiver.
Beneficiary shall be entitled to the appointment of a receiver. Such receiver
and his agents shall be empowered (a) to take possession of the Subject
Property and any businesses conducted by Trustor or any other person (other
than the lessor or other persons authorized by the lessor with respect to any
rights to use portions of the Subject Property retained by the lessor as
provided in the Ground Leases or by the BLM under the BLM Grants) thereon and
any business assets used in connection therewith and, if the receiver deems it
appropriate, to operate the same, (b) to exclude Trustor and Trustor’s
agents and employees from the Subject Property, (c) to collect the rents,
issues, profits, and income therefrom, (d) to complete any construction
which may be in progress, (e) to do such maintenance and make such repairs
and alterations as the receiver deems necessary, (f) to pay all
taxes and assessments against the Subject Property and all premiums for
insurance thereon, (g) to pay all utility and other operating expenses,
and all sums due under any prior or subsequent encumbrance, and (h) generally
to do anything which Trustor could legally do if Trustor were in possession of
the Subject Property. All reasonable expenses incurred by the receiver or his
agents shall constitute a part of the obligations secured hereby. Any revenues
collected by the receiver shall be applied first to the expenses of the
receivership, including attorneys’ fees incurred by the receiver and by
Beneficiary, together with interest thereon at the Default Rate from the date
incurred until repaid, and the balance shall be applied toward the obligations

 

E-13

 

secured hereby and then to Trustor or in such other manner as the court
may direct. Unless sooner terminated with the express consent of Beneficiary,
any such receivership will continue until the obligations secured hereby have
been discharged in full, or until title to the Subject Property has passed
after foreclosure sale and all applicable periods of redemption have expired.

 

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

 

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

 

5.             Uniform Commercial Code. This Deed of Trust, to the extent that it
conveys or otherwise deals with (i) personal property, or (ii) items
of personal property which are or may become fixtures, shall also be construed
as a security agreement under the Uniform Commercial Code as in effect in the
state of Utah (“UCC”), and this Deed of Trust constitutes a financing
statement filed as a fixture filing in the Official Records of the county
recorder of the county or counties in which the Subject Property, or any
portion thereof is located with respect to any and all fixtures included within
the term “Subject Property” as used herein and with respect to any personal
property that may now be or hereafter become such fixtures. For purposes of the
foregoing, Trustor is the debtor and owner of the Subject Property (with its
address as set forth above), Beneficiary is the secured party (with its address
as set forth below). Trustor grants to Beneficiary a valid and effective first
priority security interest in all of Trustor’s right, title and interest in and
to all portions of the Subject Property which constitute personal property,
together with all replacements, additions, and proceeds. Except for Permitted
Encumbrances, Trustor

 

E-14

 

agrees that, without the written consent of Beneficiary and except as
otherwise permitted under the Power Purchase Agreement, no other security
interest will be created under the provisions of the UCC and no lease having a
market value of over $500,000 will be entered into with respect to any goods,
fixtures, equipment, appliances, or articles of personal property now attached
to or used or to be attached to or used in connection with the Subject
Property; provided that any lease entered into by Trustor having a market value
of over $50,000 shall constitute Subject Property subject to the security
interest under this Deed of Trust. Subject to the cure provisions of section 4
herein, upon Trustor’s failure to perform any of its material obligations under
this Deed of Trust or upon the occurrence of a Default under the Power Purchase
Agreement, as provided and defined therein, Beneficiary shall have the remedies
of a secured party under the UCC and, at Beneficiary’s option, may also invoke
the power of sale and all other remedies provided in this Deed of Trust as to
the personal property and any other items of the Subject Property subject to
this security interest. In exercising any remedies, Beneficiary may proceed
against the items of Real Estate and any other items specified in Article 1
as part of the Subject Property separately or together and in any order
whatsoever, without in any way affecting the availability of Beneficiary’s
remedies under the UCC or of the remedies provided in this Deed of Trust.

 

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

 

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

 

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

 

9.             Severability. The invalidity of any one or more
covenants, phrases, clauses, sentences or paragraphs of this Deed of Trust
shall not affect the remaining portions of this Deed of Trust or any part
thereof, and this Deed of Trust shall be construed as if such invalid
covenants, phrases, clauses, sentences or paragraphs, if any, had not been
inserted herein.

 

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

 

11.           Notices. Trustor requests all notices to be given to it shall be made to the
address stated on the first page of this Deed of Trust. All notices
required or permitted to be given hereunder shall be in writing and may be
given in person or by United States mail, by

 

E-15

 

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

 

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

 

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

 

14.           Conflicts. In the event of a conflict or inconsistency with the terms of this
Deed of Trust and the terms of the Power Purchase Agreement, the terms of the
Power Purchase Agreement shall control. Notwithstanding the foregoing, the
rights and remedies afforded to beneficiaries under deeds of trust and provided
to Beneficiary in this Deed of Trust shall be in addition to, and not in lieu
of, rights and remedies provided to Beneficiary under the Power Purchase
Agreement.

 

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

 

16            Release Provisions. Beneficiary agrees to execute and deliver
(or cause the Trustee to execute and deliver) a partial release of lien and
amendment to this Deed of Trust in recordable form releasing any portion of the
Subject Property for which the conditions of release pursuant to Sections 2.10,
2.11 and 2.12 of the Power Purchase Agreement have been met, as soon as
practicable following Trustor’s written request therefore.

 

E-16

 

Executed
as of this                     day
of                                                    ,
200  .

 

E-17

 

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

 

	
   

  	
  TRUSTOR:

  
	
   

  	
   

  
	
   

  	
  Milford Wind Corridor Phase I, LLC, a Delaware

  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  : ss.

  	
   

  
	
   

  	
   

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  

 

 

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

 

 

	
  My Commission Expires:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTARY PUBLIC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Residing at:

  	
   

  

 

E-18

 

Exhibit A

 

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

 

Power
Purchase Agreement

 

E-19

 

Exhibit B

 

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

 

E-20

 

Exhibit C

 

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

 

E-21

 

Exhibit D

 

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

 

E-22

 

APPENDIX F

 

Insurance

 

1.1          Insurance Required

 

Seller shall carry and maintain or cause to be carried and maintained,
at all times during the Agreement Term, insurance coverage with the following
limits: (a) Marine/Inland Marine Cargo and Builder’s Risk: $350 million, (b) Delay
in Startup: up to $45 million, (c) Operational Property Damage/Machinery
Breakdown: $350 million; and (d) Operational Business Interruption: up to
$45 million. In the event a loss is sustained under the policy, such loss will
be paid to (i) Seller for insurance claims to be settled prior to Buyer
paying the Prepayment Amount to Seller, as required hereunder or (ii) an
escrow agent for the benefit of Buyer and Seller, as provided in Section 14.19(c)(2) of
this Agreement, for insurance claims to be settled after Buyer has paid the
Prepayment Amount to Seller. The loss payee named in the insurance policies
obtained pursuant to this Section 1.1 (a), (b), (c), and (d) shall be
the escrow agent for the benefit of Buyer and Seller, as provided in Section 14.19(c)(2) of
this Agreement, effective on the date that the Prepayment Amount is paid to
Seller.

 

(a)           Marine/Inland Marine
Cargo Insurance

 

All property and interests of every kind and description (including
materials, equipment, machinery and spares) intended for the Facility or
subsequent operations while in transit by land, air and/or sea.

 

All risks of physical loss or damage from a cause not excluded but
including war, strikes, riots and civil commotions on a continuous open cover
basis for the full amount as declared. Coverage shall be in effect from the
commencement of loading of the property at the manufacturer’s or supplier’s
premises anywhere in the world until the completion of its offloading at the
final destination including loading and unloading and any storage or
transhipment during the course of transit and including return shipments, if
any, and shall cover all forms of conveyance.

 

Period: From the commencement of the financial closing for the
construction financing of the Facility until the completion of offloading at
the final destination of the last shipment of equipment for the Facility.

 

Sum Insured: The total shall be on the basis of 110% of the cost
insurance freight (the CIF) value to arrival at the site of the property
insured, subject to the limits for any one loss (as reasonably applicable) any
one conveyance and in the course of transit a sum sufficient to cover the
value, on the above basis, of the largest shipment; and any one location other
than in the course of transit a sum sufficient to cover the maximum value, on a
full replacement basis.

 

(b)           Marine Delay in Start
Up Insurance

 

Indemnity: If any of the property insured under Section 1.1(a) above
is lost, destroyed or damaged by any of the risks insured above including loss,
destruction or damage which would but for the application of any deductible
have been insured and causes delay to the Commercial Operation Date resulting
in reduction in the anticipated revenue this insurance shall indemnify

 

F-1

 

the Seller in respect of such loss of revenue less all non-continuing
expenses during the Indemnity Period in respect of such costs as may cease or
be reduced in consequence of the delay.

 

Period: From the date of purchase of this coverage until the final
completion of the Facility construction phase, which may occur after the
Commercial Operation Date.

 

Sum Insured: A sum sufficient to cover the sums that are the subject of
the indemnity, for the indemnity period.

 

Indemnity Period: Not less than twelve (12) months from the date of
loss.

 

Maximum Time Deductible: The first 30 days of any loss and in all.

 

(c)           Builder’s Risk

 

All property and interests of every kind and description (including
materials, equipment, machinery and spares) intended for the Facility or
subsequent operations at all times from the commencement of construction of the
Facility through the final completion of the Facility construction phase, which
may occur after the Commercial Operation Date, with a sum insured equal to the
full replacement cost of the Facility, with no deduction for depreciation. This
insurance shall be written on an “all-risk” basis and shall include coverage
for flood, windstorm, earthquake, testing, expediting expenses, off-site
storage and transportation. There shall be no exclusion for resultant damage
caused by faulty workmanship, design or materials. Deductibles under the policy
shall not exceed $250,000 per occurrence except for deductibles for natural
catastrophe peril, which shall not exceed five percent (5%) of the insured
loss. Seller shall immediately notify the Buyer in writing of any claims
reported under the builder’s risk policy in excess of the deductible.

 

Increased cost of working: The additional expenditure necessarily and
reasonably incurred for the purpose of avoiding or reducing delay which,
without such expenditure would have taken place but not exceeding the amount of
the anticipated revenue thereby avoided. Expediting Sublimit is $500,000.

 

(d)           Property/Operation All Risk

 

All property and interests of every kind and description (including
materials, equipment, electric transmission and distribution, machinery and
spares) intended for the Facility or subsequent operations at all times after
the final completion of the Facility construction phase, which may occur after
the Commercial Operation Date, in an amount equal to the full replacement value
of the Facility for “all risks” of physical loss or damage including, but not
limited to, coverage for earth movement, flood, windstorm, earthquake,
sabotage, riots, civil commotion, testing, boiler and machinery, transit and
off-site storage, but shall exclude coverage for any equipment owned or leased
by the Buyer and its subcontractors and their personal property. The policy may
contain separate sub limits and deductibles subject to insurance company
underwriting guidelines. Deductibles under the policy shall not exceed $250,000
per occurrence, except for deductibles for natural catastrophe peril, which
shall not exceed five percent (5%) of the insured loss. Business Interruption
coverage shall be maintained by Seller in an amount covering a period of
indemnity equal to twelve (12) months following a thirty (30) day deductible
period from the date of loss. Such Business Interruption insurance shall only
apply in the event of

 

F-2

 

physical loss or damage to the Facility caused by an insured peril
under the policy. In the event a loss is sustained under the policy, such loss
will be paid to the escrow agent, as the loss payee, as provided in Section 14.19(c)(2) of
this Agreement, for the benefit of Seller and Buyer.

 

(e)           Workers Compensation

 

Coverage shall comply with any statutory obligation imposed by Workers
Compensation, Occupational Disease Laws, or similar laws, including where
applicable, the United States Longshoremen’s and Harbor Workers’ Act, the
Federal Employers’ Liability Act and the Jones Act. Employers’ Liability
insurance shall have limits of not less than $1,000,000 per accident,
$1,000,000 disease-policy limit and $1,000,000 disease-each employee.

 

(f)            Commercial General
Liability

 

Insurance providing coverage for bodily injury, property damage and
personal/advertising injury with a combined single limit of not less than
$1,000,000 per occurrence and $2,000,000 aggregate. The policy shall include
contractual liability and completed operations coverage. If any of the work
performed under this Agreement includes blasting, excavating, pile driving,
caisson work or any sub-surface or underground work, the policy shall include
coverage for explosion, collapse and underground exposures.

 

(g)           Automobile Liability

 

Insurance for owned, non-owned and hired automobiles with a limit of
not less than $1,000,000 per occurrence.

 

(h)           Excess
liability/Umbrella

 

Insurance with a minimum limit of $8,000,000 per occurrence and annual
aggregate. The excess liability limits shall apply in excess of the insurance
required herein and shall contain a drop down provision in the event of
exhaustion of the underlying limits.

 

Such minimum insurance limits required herein may be satisfied either
by primary insurance or by any combination of primary and excess/umbrella
insurance. The required insurance coverages shall be in effect on or before the
commencement of on site construction of the Facility and shall be maintained in
effect throughout the Term of this Agreement.

 

1.2          Evidence and Scope of Insurance

 

(a)           Seller
shall provide the Buyer with one certified-true copy of each insurance policy
evidencing coverage and additional insured status of Buyer, or endorsements
acceptable to Buyer evidencing the same. Seller shall provide replacement
certified-true copies of policies or endorsements within five (5) Days of
any renewal of the required insurance. A complete copy of each policy shall be
available at Seller’s offices during normal business hours for review by the
Buyer upon written request.

 

(b)           All
such insurance policies shall:

 

(i)            name
the Buyer as an additional insured (except in the case of worker’s compensation
insurance);

 

F-3

 

(ii)           provide
that the Buyer shall receive 30 Days’ prior written notice of non-renewal,
cancellation of, or significant modification to, any of such policies (except
that such notice period will be 10 Days in case of non-payment of premiums);
and

 

(iii)          provide
a waiver of any rights of subrogation against the Buyer, its Affiliates or
utility members and their officers, directors, agents, subcontractors, and
employees.

 

The certified-true copies of insurance policies, or endorsements,
provided to the Buyer shall indicate that the insurance policies have been
endorsed as noted above.

 

(c)           All
policies shall be written by one or more insurance companies authorized to do business
in United States of America and be rated A VII or higher by A.M. Best.

 

(d)           All
policies shall be written on an occurrence basis. The policies shall contain an
endorsement that Seller’s policies shall be primary as respects the construction,
operation, and maintenance of the Facility regardless of any insurance carried
by others.

 

(e)           Any
contractor or subcontractor providing services under this Agreement, including
any third party operator of the Facility, shall maintain the same types of
insurance on the same terms and limits as required of Seller.

 

(f)            If
Seller fails to comply with its insurance obligations as specified in this
Appendix F, the Buyer shall have the right, but not the duty, to procure the
required insurance coverage. In such case, amounts paid directly by Buyer shall
not be reimbursable to Seller pursuant to Appendix A.

 

(h)           The
required insurance coverage shall in no way affect or otherwise limit the
Seller’s liability with respect to its performance under this Agreement.

 

F-4

 

APPENDIX G

 

Remaining Prepayment Amount

 

	
  Contract Year *

  	
   

  	
  Remaining Prepayment

  Amount for 8,500,000 MWh

  of Guaranteed Generation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  0.5

  	
   

  	
  273,610,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.0

  	
   

  	
  268,715,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
   

  	
  263,820,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.0

  	
   

  	
  259,190,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  254,560,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.0

  	
   

  	
  249,735,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
   

  	
  244,900,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.0

  	
   

  	
  239,865,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.5

  	
   

  	
  234,825,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.0

  	
   

  	
  229,575,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.5

  	
   

  	
  224,320,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.0

  	
   

  	
  218,840,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.5

  	
   

  	
  213,360,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.0

  	
   

  	
  207,650,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  201,930,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.0

  	
   

  	
  195,970,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.5

  	
   

  	
  190,010,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.0

  	
   

  	
  183,790,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.5

  	
   

  	
  177,575,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.0

  	
   

  	
  171,095,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.5

  	
   

  	
  164,610,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.0

  	
   

  	
  157,845,000

  	
   

  

 

G-1

 

	
  11.5

  	
   

  	
  151,085,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.0

  	
   

  	
  144,030,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.5

  	
   

  	
  136,980,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.0

  	
   

  	
  129,625,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.5

  	
   

  	
  122,270,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.0

  	
   

  	
  114,600,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.5

  	
   

  	
  106,930,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.0

  	
   

  	
  98,930,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.5

  	
   

  	
  90,930,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.0

  	
   

  	
  82,585,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.5

  	
   

  	
  74,240,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.0

  	
   

  	
  65,540,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.5

  	
   

  	
  56,835,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.0

  	
   

  	
  47,755,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.5

  	
   

  	
  38,680,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.0

  	
   

  	
  29,210,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.5

  	
   

  	
  19,745,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.0

  	
   

  	
  9,875,000

  	
   

  

 

	
  * 0.5 Contract Years is equal to 6 months

  

 

G-2

 

APPENDIX H

 

Circle Four Lease

 

LAND LEASE AGREEMENT

 

This Land Lease Agreement (this “Lease”) is made this 22nd day of
February, 2007 (the “Effective Date”), between Circle Four LLC, a Delaware
limited liability company with an address at 341 South Main Street, P.O. Box
100, Milford, UT 84751(together with its successors and assigns, the “Lessor”),
and Milford Wind Corridor Phase I, LLC, a Delaware limited liability company
with an address c/o UPC Wind Management, LLC, 100 Wells Avenue, Suite 201,
Newton, MA 02459 (together with its successors and assigns, the “Lessee”).
Lessor and Lessee are at times collectively referred to herein as the “Parties”
or individually as a “Party.”

 

RECITALS:

 

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

 

B.            Lessee
desires to lease from Lessor, and Lessor desires to lease to Lessee, the
Premises, the Wind Rights and the Other Appurtenances (collectively, the “Leased Property”) for purposes of wind
energy generation and related uses on the terms and conditions set forth
herein.

 

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

 

1.     DEFINITIONS.

 

1.1 “Commencement Date” means the first (1st) day of
the month following the date that the first WTG (as the term “WTG” is defined
in Subsection 1.10) commences commercial electrical power production for
purposes other than start up and testing.

 

1.2 “Improvements” is as defined in Section 6.

 

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

 

H-1

 

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

 

1.5 “Liens” is as
defined in paragraph 13.4.1.

 

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

 

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

 

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

 

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

 

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

 

2.     LEASE. Lessor hereby leases to
Lessee and Lessee leases from Lessor the Leased Property upon and subject to
the terms and conditions hereof.

 

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

 

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

 

H-2

 

3.2 The right to capture and to convert any
or all of the wind resources of the Premises;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

H-3

 

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

 

4.     USES RESERVED BY LESSOR.

 

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

 

4.2
In furtherance of Subsection 4.1, in consideration of Lessee’s investment in
the Improvements and the other covenants contained in this Agreement, Lessor
shall limit its future activities on the Premises, and any grant of rights
Lessor makes to any third party, whether the right of use is located on the
Premises or elsewhere, as follows:

 

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

 

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

 

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

 

MD
= 100 ft. + (H*20)

 

H-4

 

Where: MD = the Minimum Distance

 

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

 

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

 

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

 

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

 

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

 

6.     OWNERSHIP OF WIND ENERGY IMPROVEMENTS. Lessor shall have no ownership or other
interest in any Improvements (as defined below). Lessee shall have title to all
Improvements at all times, whether or not the same shall be affixed to the
Premises, and Lessee may remove any or all such Improvements at any time. As
used in this Lease, the term “Improvements” means
all facilities or equipment installed on the Leased Property for the purpose of
producing electricity by wind power, including but not limited to WTGs,
Transmission Facilities, structures, equipment, machinery, wire, conduit,
fiber, cable, poles,

 

H-5

 

materials
and property of every kind and character constructed, installed and/or placed
on, above or below the Leased Property by or on behalf of Lessee. This Lease
contemplates that Improvements may be installed at separate times, in multiple
stages to create one or more sets of integrated Improvements under separate
capital structures and power sales arrangements, each defined as a “Wind Energy
Improvement.” The Wind Energy Improvements may share some common facilities
such as substations, transmission lines, and roads.

 

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

 

8.     SURVEY AND SITE PLAN. Lessee may survey the Premises and all
elements of any Wind Energy Improvements at its own expense. Any site and/or
construction plan(s) intended to be used by Lessee with respect to the
Improvements, Transportation Facilities, or Transmission Facilities, including
any plans required to be filed from time to time in connection with permitting
each Wind Energy Improvement, shall be subject to the review and consent of Lessor;
provided that such review shall be as timely as practical so as to avoid
permitting or construction delays, and such consent will be provided so long as
such plans maintain a distance between lines of WTGs, such that Lessor may
install buildings up to 30 ft. in height above ground between such lines or
arrays while conforming to the Minimum Distance. Once accepted by Lessor,
Lessee may make immaterial alterations to such plans without prior Lessor
consent and shall locate, construct, operate, and replace all Improvements in
accordance with such plans. While the wind resource will dictate the location
of the WTGs, Lessee shall use commercially.

 

reasonable
efforts to accommodate requests of Lessor regarding the location of
Transportation Facilities, Transmission facilities, and substations. No review
and consent by Lessor shall constitute any warranty of Lessor or create any
liability of Lessor. Lessee shall be solely responsible for designing,
permitting, financing, constructing, operating, repairing, replacing, and
maintaining each Wind Energy Improvement. Lessor is solely responsible for the
placement and operation of its facilities on the Premises.

 

H-6

 

9.     TERM

 

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

 

9.2
If the Commencement Date does not take place on or before the third anniversary
of the Effective Date, then after the third anniversary date, the Lessor has
the option to terminate this Lease by providing notice to Lessee thirty (30)
days in advance of any such termination date (the “Termination Date”), with termination effective as of 11:59 p.m.
on the 30th day
following delivery of such notice; provided that before or after any such
notice, if Lessee provides reasonable evidence that continuous construction of
a Wind Energy Improvement is underway and will be completed by the fourth
anniversary of the Effective Date, then Lessor may not invoke the Termination
Date unless the Commencement Date has not occurred by the fourth anniversary of
the Effective Date. If under these circumstances the Commencement Date has not
occurred by the fourth anniversary
of the Effective Date, or within such additional time as Lessor may
specifically approve in writing, this Lease shall terminate at 11:59 p.m.
on the on the 30th day
following delivery of notice of termination. Absent a termination by Lessor
hereunder, this Lease shall remain in full force and effect in accordance with
all of its provisions during the Initial Term and any extension of the Initial
Term, except that this Lease shall be subject to early termination as otherwise
provided in this Lease.

 

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

 

H-7

 

10.   RENT; TAXES AND UTILITIES.

 

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

 

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

 

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

 

10.4
Initial Payments. In consideration of Lessor entering into this exclusive
wind resources Lease with Lessee, assistance with initial wind assessments, and
status as the primary private land owner necessary for the Improvements, Lessee
shall pay two payments to Lessor: a one-time payment of $50,000 due at the time
this Lease Agreement is signed by Lessor and a second payment of $135,000 due
and payable on the Commencement Date. The first rental payment of $50,000 shall
be deemed fully earned and due and payable when Lessor signs this Lease
Agreement. The $135,000 rental amount shall be deemed fully earned and due and
payable immediately upon the Commencement Date. Lessee shall be deemed in
default under this Lease if each such payment is not received by Lessor within
sixty (60) days of the due date.

 

10.5
Proration of Rent. All annual Base Rent payments shall be prorated from
the date rent begins or the date on which an adjustment to rental rates occurs
during any partial calendar year during which this Lease is in effect. For
example, if the Commencement Date occurs on October 1, the obligation to
pay Base Rent thereby commences on that date and the rent obligation payable March 31st of the following calendar year
would be the amount that accrued beginning October lst and ending December 31st. Also as an example, if the Commencement Date is October 1st, the annual CPI-U rental adjustment or any other rental adjustment
would take effect on October 1st and the rental payment due March 31st of the next calendar year would
be the total of the rent accrued from January 1st to September 30th at the rate as adjusted by the CPU-1 on October 1st of the year previous to the one
in which the rent accrued, and the rent that accrued from October 1st to December 31st at the rate as adjusted on October 1st.

 

10.6
Base Rent. Beginning as of the first day of the calendar month following
the Effective Date through the Commencement Date, the Base Rent shall be
$10,000 per year, with such amount pro rated for any partial year through the
Commencement Date. Beginning as of the Commencement Date, the Base Rent due
hereunder shall be:

 

10.6.1
During the first ten (10) years after the Commencement Date Lessee shall
pay rent of $2,000 per year for each megawatt of wind generating capacity
installed on the Leased

 

H-8

 

Property.
Rental payable based on the generating capacity for each WTG shall prorated to
the date the WTG is placed in service. Once a WTG is placed in service, the
rental based on that WTG shall accrue whether or not the WTG is operated but
shall cease to accrue upon permanent removal of such WTG from service. For the
purposes of this paragraph 10.6.1, the date a WTG is placed in service shall
mean the date a WTG first delivers electrical energy to Transmission Facilities
for sale to or use by an electrical energy provider.

 

10.6.2
Beginning on the tenth anniversary of the Commencement Date and on each annual
anniversary date thereafter the rental amount for each megawatt of installed
generating capacity shall be adjusted based on the Inflation Index using the
last calendar year prior to the tenth anniversary as the base year. For
example, if the tenth anniversary of the Commencement Date is March 1,
2019, the base year for the inflation index would be the calendar year
beginning January 31, 2018 and ending December 31, 2018. The rental
amount shall be adjusted each year thereafter by the Inflation Index to the
base year determined as stated above.

 

10.6.3
On the tenth anniversary of the Commencement Date, after giving effect to the
adjustment in (b) above, the rental amount shall be increased by $1,000
for each megawatt of installed generation capacity. The $1,000 increase shall
be in addition to the rental rate then in effect, as adjusted for changes in
the Inflation Index. For example, if the annual rental rate of $2,000/mw/year
had been adjusted to $2,060 by the 11th year pursuant to (b) above, the rental
rate for the 11th year
would become $3,060 for each megawatt of installed WTG capacity.

 

10.6.4
On the fifteenth anniversary of the Commencement Date, after giving effect to
the adjustment in 10.6.2 above, the rental amount shall be increased by another
$1,000 for each megawatt of installed WTG capacity. The $1,000 increase shall
be in addition to the rental rate then in effect, as adjusted for changes in
the Inflation Index. For example, if the annual rental rate of $3,060/mw/year
had been adjusted to $3,533 by the 16th year pursuant to 10.6.2 above, the
rental rate for the 16th year
would become $4,533 for each megawatt of installed generation capacity.

 

10.6.5
The rental rate shall be adjusted after the rental increase on the fifteenth
anniversary of the Commencement Date only by the Inflation Index adjustment
stated above. If this Lease is extended under the options to extend provided in
paragraph 9.1, the rental amount shall continue to be adjusted annually by the
Inflation Index.

 

10.6.6
Lessee shall give Lessor notice of each change in generation capacity installed
on the Premises and the total installed generation capacity at the time each
WTG is placed in service and at each time a WTG is permanently removed from
service. For the purposes of this paragraph 10.6.6, a WTG shall be deemed
permanently removed when the WTG and all related facilities have been removed
and the site restored.

 

10.6.7
In addition to the forgoing, Lessee will pay an annual rental amount equal to
twenty cents ($0.20) per square foot for every square foot in excess of 2500
sq. feet of aggregate land surface associated with the total of control
buildings, maintenance yards, and associated parking located on the Leased
Property (“Footprint Rent”). Beginning on

 

H-9

 

the tenth anniversary of the Commencement Date and
on each annual anniversary date thereafter such rental amount shall be adjusted
based on the Inflation Index in the same manner as provided in 10.6.7 above. No
such Footprint Rent applies to the Improvements enumerated in Section 3.1
hereof other than control buildings, maintenance yards, and associated parking.

 

10.7 Lessor’s Taxes. Lessor will pay prior to
delinquency all real and personal property and other taxes, general and special
assessments, and other charges of every description (collectively, “Taxes”) levied or assessed against the
Leased Property and all improvements thereon other than (a) the
Improvements and (b) any improvements placed on the Leased Property in
connection with any Transmission Facilities Easement. Lessor shall provide
Lessee with evidence that the entire Taxes bill covering the Leased Property
(other than the Lessee Taxes, as defined in Subsection 10.8) has been paid at
least twenty (20) days prior to the date(s) on which such Taxes payment
would be delinquent. If Lessor does not provide Lessee with such evidence
within five (5) days after receipt of written request for the same and if
the Tax bill has not been paid, Lessee may, but shall not be obligated to, pay
the taxing authorities the entire amount (including, but not limited to, any
interest and penalties set forth thereon) due on the Taxes bill. Lessor shall
reimburse Lessee such amount plus interest (computed from the date of Lessee’s
payment) at a rate equal to the lesser of (i) the prime rate of interest
as quoted by Wells Fargo Bank, N.A. or its successor, or (ii) the maximum
rate allowed by applicable law, or Lessee may offset such amount, together with
such interest, against any payments due Lessor under this Lease.

 

10.8 Lessee’s Taxes. Within twenty (20) days
after Lessor receives the Taxes bill for any given year during the Initial Term
or any extension thereof with respect to the leasehold estate created hereby or
any real property owned by Lessee or any interconnecting utility, Lessor shall
forward the same to Lessee. Lessee shall, prior to delinquency, pay directly to
the taxing authority all property Taxes, if any, attributable to the leasehold
estate created hereby and the Improvements on the Leased Property (“Lessee  Taxes”).
Lessee shall not be responsible for Taxes attributable to improvements
installed by Lessor on the Leased Property or to the underlying value of the
Leased Property itself nor shall Lessee be responsible for any Taxes that may
be due and payable on the Leased Property on account of a change in ownership
or use of the Leased Property, unless such change of use is attributable to
Lessee as provided below. To the extent that any Lessee Taxes are jointly
assessed with Taxes payable by Lessor, the Parties shall cooperate in a good
faith effort to cause such Lessee Taxes to be separately assessed. Lessee shall
also pay on behalf of or reimburse Lessor on or before the due date for any
Greenbelt rollback tax assessments under the Utah Code Annotated Section 59-2-506
(if any) and any increase in ad valorem Taxes on the Premises resulting solely
from Lessee’s use of the Premises. With respect to any Lessee Taxes, Lessee
shall have the right to contest the validity and/or amount of such Lessee
Taxes; provided that if such Lessee Taxes create a lien on Lessor’s interest in
the Leased Property, then Lessee may only contest such Lessee Taxes if the
proceeding in which it contests such Lessee Taxes operates to prevent or stay
their collection or Lessee removes any such lien by bonding or otherwise.
Lessor agrees to render to Lessee all reasonable assistance in contesting the
validity or amount of any such contested Lessee Taxes, including joining in the
signing of any protests or pleading which Lessee may deem advisable to file;

 

H-10

 

provided,
however, that Lessee shall reimburse Lessor for its reasonable out-of-pocket
expenses, including attorneys’ fees, incurred in connection with providing such
services.

 

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

 

11.   USE GOVERNMENTAL
APPROVALS. Lessee’s uses of the Leased Property are subject to receipt of
all of the certificates, permits, zoning changes or variances, easements,
rights of way, and other federal, state or local authorizations and/or
approvals (collectively, the “Governmental
Approvals”) that may be required by any federal, state or local
government, agency or other authority (“Governmental
Authorities”) under any applicable federal, state, or local law,
rule, regulation, ordinance, statute, order or decree (“Legal Requirements”) as well as
satisfactory soil boring tests which will permit the Lessee use of the Leased
Property as set forth above. Lessee shall have the right in its sole
discretion, to contest by appropriate legal proceedings, brought in the name of
Lessee or in the names of both Lessee and Lessor where appropriate or required,
the validity or applicability to the Leased Property, Transmission Facilities,
Improvements, or Wind Energy Improvements of any Legal Requirement, Taxes or
the like, now or hereafter made or issued by any Governmental Authority. Lessor
shall cooperate in every reasonable way in such contest, at no material
out-of-pocket expense to Lessor. If any of such Governmental Approvals should
be finally rejected or denied or any Governmental Approval issued to the Lessee
is canceled, expires, lapses or is otherwise withdrawn or terminated, or soil
boring tests are found to be unsatisfactory so that the Lessee in its sole
discretion will be unable to use the Leased Property for its intended purposes
or the Lessee determines that the Leased Property is no longer technically
compatible for its intended use, the Lessee shall have the right to terminate
this Lease. Notice of the Lessee’s exercise of its right to terminate shall be
given to the Lessor in writing by certified mail, return receipt requested, and
shall be effective upon the mailing of such notice by the Lessee. Except with
respect to any surviving provisions hereof, including provisions with respect
to indemnity, taxes, removal of Improvements and any outstanding rent due, this
Lease shall become null and void and the Parties shall have no further
obligations.

 

H-11

 

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

 

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

 

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

 

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

 

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

 

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

 

H-12

 

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

 

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

 

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

 

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

 

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

 

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

 

13.4 Liens.

 

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

 

H-13

 

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

 

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

 

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

 

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

 

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

 

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

 

H-14

 

13.7                           No Litigation. Lessor is not a party to any, and to Lessor’s
knowledge, there are no pending or threatened, legal, administrative, arbitral
or other proceedings, claims, actions or governmental or regulatory
investigations of any kind or nature whatsoever against Lessor (a) challenging
the validity or propriety of this Lease, the documents executed in connection

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

 

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

 

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

 

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

 

13.11                     Confidentiality. Lessor shall maintain in confidence, except
to the extent required by law, for the sole benefit of Lessee, all information
pertaining to the financial terms of or payments under this Lease, Lessee’s
site or product design, methods of operation, methods of construction, power
production or availability of the Wind Energy Improvements whether disclosed by
Lessee or discovered by Lessor, unless such information either (a) is in
the public

 

H-15

 

domain
by reason of prior publication through no act or omission of Lessor or the
other Lessor Parties, or (b) was already known to Lessor at the time of
disclosure and which Lessor is free to use or disclose without breach of any
obligation to any person or entity. Lessor shall not publish or otherwise
disclose such information to others, except as necessary to financial advisors,
consultants, retained experts, constituent entities of any Lessor, and lawyers
or other professionals, who receive such information under an obligation of
confidentiality.

 

13.12                     Surface Waivers. At its discretion, Lessee may seek executed
waivers from each party owning or leasing a mineral interest underlying any
portion of the Premises the development of which might interfere with Lessee’s
rights under this Lease by each such mineral owner or lessee, on terms
reasonably satisfactory to Lessee. Lessor will use reasonable efforts to
cooperate with Lessee in such efforts.

 

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

 

14.1 General Liability. Lessee shall
obtain and maintain, from an insurance company or companies and in a form
acceptable to Lessor, a policy or policies of commercial general liability
insurance, or its equivalent, covering all of Lessee’s activities and
operations on the Premises or that in any way may be the source of any
liability claim against Lessor. Such policy or policies shall provide
protection against liability for bodily injury and death and for damage to
property. Liability coverage shall provide at least ONE MILLION DOLLARS
($1,000,000.00) in any one occurrence, with an annual aggregate limit of at
least $2,000,000. Lessee shall have Lessor named as an additional insured on
each such policy, or as an insured indemnitee, or provide contractual liability
endorsement in favor of and satisfactory to Lessor.

 

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

 

14.3 Worker’s Compensation. Lessee shall
maintain any required workers’ compensation insurance protecting against
liability to each of its employees regarding activities and operations related
to the transportation and delivery services required by this Lease. Employer
liability coverage under workers’ compensation shall be at least FIVE HUNDRED
THOUSAND DOLLARS ($500,000) in all areas in which workers’ compensation
insurance provides coverage.

 

14.4 Auto and Truck Insurance. Lessee
shall obtain vehicle insurance on all vehicles used on the Premises. This
insurance coverage shall include liability coverage of at least ONE MILLION
DOLLARS ($1,000,000).

 

14.5 Evidence of Insurance. Lessee shall
provide to Lessor, upon request, evidence of all insurance policies (or
self-insurance plans) required under this

 

H-16

 

agreement.
Such insurance policies shall provide for thirty (30) days written notice to
Lessor prior to cancellation of any coverage required herein, unless a shorter
notice period is approved in writing by Lessor. Lessor will consider in good
faith, and will not unreasonably withhold its consent to, any request by Lessee
to self-insure any of the required coverages upon a showing by Lessee of the
legality of self-insurance and sufficient financial resources to support a self-insurance
program.

 

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

 

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

 

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

 

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

 

15.         LESSOR INSURANCE. If Lessor commences new and material
commercial activities on the Premises, then at the request of Lessee, Lessor
shall procure and maintain during the Initial Term and any extension thereof,
at its sole cost and expense, a policy or policies of insurance in amounts not
less than a combined single limit of $1,000,000 per occurrence and $2,000,000
in the aggregate, insuring against any and all liability to the extent
obtainable for injury or death of a person or persons or damage to property
occasioned by or arising out of or in connection with Lessor’s occupation and
material use of the Leased Property. Lessee shall be named as an additional
insured on such policy or policies. Lessor shall provide copies of certificates
evidencing such coverage from time to time upon Lessee’s request. The limits of
any insurance coverage required under this Section 15 shall be subject to
adjustment as required under Subsection 14.7.

 

H-17

 

16.   INDEMNITY AND RELEASE.

 

16.1
Indemnity. To the fullest extent permitted by law, each Party (an “Indemnifying
Party”) shall indemnify, defend and hold harmless the other Party and its
consultants, owners, agents, employees, and any company of which such Party is
a subsidiary or any company owned by an entity of which such Party is a
subsidiary (the “Indemnified Parties”) from and against claims, damages, losses
and expenses, including, but not limited to attorneys fees (collectively, “Losses”),
arising out of or resulting from (a) the Indemnifying Party’s activities
or operations (i) on the Premises or (ii) which may create any
liability claim against the Indemnified Parties, including, without limitation,
in the case of Lessee, liens for material or labor furnished to the Premises at
the instance of Lessee, except to the extent that such Losses are caused by one
or more Indemnified Parties, or (b) inaccuracies in or breaches of the
Indemnifying Party’s representations, warranties, covenants or agreements
contained herein. Should either Party suffer a Loss because of an act or
omission of the other Party, the other Party’s employees or agents, or another
for whose acts the other Party is legally liable, claim shall be made in
writing to the other Party within a reasonable time after such Loss occurred.
Any obligation of indemnity hereunder will be limited to claims in excess of
$10,000. This duty to indemnify the Indemnified Parties shall extend beyond
termination of the Lease provided for in this Lease and shall continue for so
long as the Indemnified Parties can be held liable for any claim or injury
arising from any activities of Lessee, whether such activity occurs on the
Premises or elsewhere.

 

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

 

17.   ASSIGNMENT AND
SUBDIVISION.

 

17.1
Assignment by the Parties. This Lease and the rights of any Party to
this Lease and the Leased Property, Wind Energy Improvements, Transmission
Facilities and Improvements may be assigned, encumbered, or mortgaged, in whole
or in part, (and may be sublet by Lessee) without the prior written consent of
the non-assigning Party, but no such assignment, encumbrance, mortgage, deed of
trust, or sublease shall operate to enlarge the obligations or diminish the
rights of the non-assigning Party hereto, nor relieve the assigning Party of
its indemnification obligations hereunder (except as expressly provided below,
with respect to the release of the assigning Party). Notwithstanding the
foregoing, no assignment, encumbrance, mortgage, or sublease of this Lease or
the rights of any Party hereunder or to the Leased Property, Wind Energy
Improvements, Transmission Facilities or Improvements, however accomplished,
shall be binding on the non-assigning Party until after the non-assigning Party
has been furnished with written notice thereof and an executed original
counterpart of the instrument establishing such

 

H-18

 

persons’
rights under this Lease and/or to the Leased Property, Wind Energy
Improvements, Transmission Facilities and Improvements. Except as otherwise
provided herein, in the event of an assignment or sublease of this Lease by any
Party hereto that is not for collateral or other security purposes, such Party
shall be relieved of all obligations under this Lease as to the interest so
assigned to the extent that such obligations relate to periods of time following
such assignment and are assumed by the party to whom assigned, and liability
for obligations relating to the interest so assigned and assumed and relating
to the periods of time from and after such assignment shall rest exclusively
upon such assignee; provided, that
no such assignment shall release the assigning Party from its removal
obligations under Section 21 hereof absent a demonstration to Lessor’s
reasonable satisfaction that the assignee is financially capable of assuming
such obligations. Without limiting the generality of the foregoing, any such
assignment shall not relieve the assigning Party from any obligation that arose
or accrued prior to such assignment.

 

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

 

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

 

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

 

17.2.3
A Security Assignee shall have the right, but not the obligation, at any time
prior to the termination or exercise of any other remedy, to pay any or all
amounts due from Lessee hereunder and to do any other act or thing required of
Lessee as necessary to cure any Lessee default and to prevent the termination
of the Lease or the exercise of any other remedy. Security Assignee shall be
entitled to a minimum of thirty (30) days to cure a monetary default if Lessee
fails to cure within Lessee’s cure period, and sixty (60) days to cure a
non-monetary default, if Lessee fails to cure within Lessee’s cure period;
provided, further, that such period shall be extended for non-monetary defaults
as

 

H-19

 

reasonably
necessary to effect a cure if and to the extent the same is not susceptible of
cure within such sixty (60) day period but Security Assignee commences such
cure within such period (or as soon as Security Assignee obtains possession of
the Leased Property) and diligently prosecutes the same to completion. In
furtherance of the foregoing, as a precondition to exercising any rights or
remedies as a result of any alleged default by Lessee, Lessor shall give
written notice of the alleged default to each Security Assignee of which Lessor
has received notice concurrently with delivery of such notice to Lessee,
specifying in detail the alleged default and not less than thirty (30) days prior
written notice of the date Lessor (subject to the notice provision set forth in
Section 18.2) will commence the exercise of termination or any other
remedy under this Lease. Upon any payment or cure by Security Assignee provided
for in this Section 17.2.3, Security Assignee shall be subrogated to the
rights of the Lessor in respect of the defaulted payment and interest payable
thereon and shall be entitled to receive such defaulted payment and interest as
shall be provided in the agreement or other instrument granting the Security
Assignee a Lien or security interest in all or any part of or interest in this
Lease, the Leased Property, the Wind Energy Improvement, Transmission
Facilities or Improvements or as shall be provided in any other agreement between
the Lessee and the Security Assignee, and Lessor shall not be entitled to
terminate this Lease and any notice of termination or breach previously given
shall be void.

 

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

 

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

 

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

 

H-20

 

security
interest on the date of rejection or termination, (d) shall enjoy the same
priority as this Lease over any Lien or other interest created by Lessor, (e) may
be made subject to the same security interest held by Security Assignee prior
to any such rejection by a trustee or debtor-in-possession in any bankruptcy or
insolvency proceeding; and, until such time as such new lease is executed and
delivered, the Security Assignee may enter, use and enjoy the Leased Property
and conduct operations thereon as if this Lease were still in effect.

 

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

 

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

 

18.   DEFAULT AND TERMINATION.

 

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

 

18.2
Lessor’s Right to Terminate. 
Subject to Section 17.2.3, Lessor shall have the right to terminate
the Lease if (a) a material default in the performance of Lessee’s
obligations under this Lease shall have occurred and remains uncured, (b) Lessor
notifies Lessee and Security Assignee in writing of the default, which notice
sets forth in reasonable detail the facts pertaining to the default, and (c)(i) if
the default is a failure to pay undisputed charges or sums due and payable,
then if the default, shall not have been remedied within sixty (60) days after
Lessee and Security Assignee receive notice thereof, or (ii) if the
default is other than a payment default described in clause (c)(i), then if the
default shall not have been remedied within one hundred twenty (120)

 

H-21

 

days after Lessee and Security Assignee
receive notice thereof, or if the default will take longer than one hundred
twenty (120) days for Lessee to remedy, Lessee is not working diligently to
remedy such default.

 

18.3 Effect of
Termination. Upon termination of the Lease, whether as to the entire Leased
Property or a portion thereof, Lessee shall, upon written request by Lessor,
prepare and place of record in the county or counties in which the Leased
Property is located, a release of all of Lessee’s right, title and interest in
and to the Leased Property, or to that part thereof as to which the Lease has
been terminated. Subject to Section 21, following termination of the Lease
as to all or any part of the Leased Property, Lessee shall peaceably and
quietly leave, surrender and return the Leased Property (or applicable portion
thereof) to Lessor. All further rights and obligations of Lessor and Lessee
under this Lease will cease and terminate as of the date of any termination
with respect or in regard to the Leased Property, or to that part as to which
the Lease has been terminated; except for the provisions of Section 21 and
those obligations that expressly survive the termination of this Lease.

 

18.4 Remedies.  If either Lessor or Lessee breaches this
Lease, the non-breaching Party shall have all rights and remedies available to
such non-breaching Party at law and in equity. In consideration of the
investment being made by Lessee in reliance on the provisions herein, including
Sections 3 and 4 hereto regarding coordination of Lessor and Lessee activities
on the Premises, Lessee shall have the special remedy of specific enforcement
with respect to Lessor breaches of this Agreement that adversely affect the
operation of any Wind Energy Improvement. In order to protect its investment in
future agricultural installations, Lessor shall have the special remedy of
specific performance with respect to the bio-security provisions set forth in Section 12.7.

 

18.5 Safety
Risks/Emergency. Notwithstanding any other term hereof, Each Party may
undertake such actions as may be reasonable under the circumstances to avoid
imminent death, injury or damage to the persons or property of themselves or
others, without incurring liability hereunder or to avoid violation of any
federal, state, or local government, agency, or other authority under any
applicable federal, state, or local law, rule, regulation, ordinance, statute,
order, or decree. Lessor may undertake any action it deems necessary under the
circumstances to cure a breach by Lessee of Lessor’s Bio-Security Management
System or Animal Welfare System requirements, and Lessee shall reimburse Lessor
the reasonable cost of any such cure.

 

19. CONDEMNATION.

 

19.1 Complete Taking.  If during the Initial Term or any extension
thereof there shall be taken for any public or quasi-public use under any
statute or by right of eminent domain or by private purchase in lieu thereof,
the entire Leased Property or any substantial portion of the Leased Property
which is sufficient to render the remaining portion thereof unsuitable, in the
sole judgment of Lessee, for restoration for continued use by Lessee for the
purposes of this Lease, Lessee shall have the right to terminate this Lease as
of the date of such taking. Such termination shall be without prejudice to the
rights of either Lessor or Lessee to recover compensation from the condemning
authority for any Loss caused by such condemnation.

 

H-22

 

19.2 Partial Taking.  If during the Term there shall be taken for
any public or quasi-public use under any statute or by right of eminent domain
or by private purchase in lieu thereof, a portion of the Leased Property which
is not sufficient to require termination of this Lease as provided in Section 19.1
above, then this Lease shall continue in full effect as to the untaken portion
notwithstanding such taking, and the rent payable hereunder shall be equitably
adjusted based on the circumstances. In the event of any lesser taking as
described in this Section19.2, Lessee shall be entitled to the portion of the
net award for such taking (whether paid by way of damages, rent or otherwise)
allocable to the Improvements placed on the Leased Property by Lessee, or to
the relocation of the same.

 

19.3 Apportionment,
Distribution of Award. On any taking, all sums awarded shall be apportioned
between the Parties in proportion to their respective: (i) costs of
relocating or removing property; (ii) anticipated lost revenues or
profits; (iii) other remaining values of their respective interests.

 

20.              RIGHTS UPON SALE.  If
Lessor desires during the Initial Term or any extension thereof to sell,
transfer or otherwise dispose (a “Sale”) of all or any portion of its interest in the Leased
Property to a third party (“Purchaser”),
Lessor shall (a) obtain from the Purchaser a bona fide written offer to acquire such interest, stating
the terms and conditions upon which the Sale is to be made and the
consideration offered therefore, and (b) give written notification to
Lessee of its intention to so sell or otherwise dispose of its interest in the
Leased Property, which notification shall be accompanied by a copy of Purchaser’s
offer. Lessee shall have the option to purchase all but not less than all of
the interest in the Leased Property offered by Lessor upon the same terms and
conditions as offered by the Purchaser, which option may be exercised by giving
written notification to Lessor within twenty (20) days after notice of Lessor’s
intent to sell or otherwise dispose of the interest in the Leased Property. If
Lessee fails to timely exercise its purchase option, Lessor shall be entitled
to consummate the Sale to the Purchaser upon terms and conditions that are
materially no less favorable than are set forth in Purchaser’s offer, with such
Purchaser taking subject to this Lease. If Lessee timely elects to exercise its
purchase option, it shall designate the time, date, and place of closing,
provided that the date of closing shall be within sixty (60) days of the date
of Lessee’s exercise of its purchase option.

 

21.              REMOVAL UPON TERMINATION. Upon termination of the Lease, Lessee
shall, within ninety (90) days, remove its building(s), equipment, cables,
fixtures, and all personal property and otherwise restore the Premises,
reasonable wear and tear and casualty excepted, it being understood that WTG
foundations shall be removed to at least five feet (5’) below grade and covered
with topsoil, and at the request of Lessor, any access roads and crane pads
will be contoured to match the surrounding terrain and seeded. Lessor agrees
and acknowledges that all of the Improvements, equipment, fixtures and personal
property of Lessee shall remain the property of Lessee, and Lessee shall have
the right to remove the same, whether or not said items are considered fixtures
and attachments to real property under applicable law. If such time for removal
causes Lessee to remain on the Premises after the 90th day following
termination of this Lease, Lessee shall pay Base Rent at the then existing
monthly rate until such time as the removal of the

 

H-23

 

building(s),
equipment, cables, fixtures and all personal property are completed. Lessee
shall be responsible to remove any hazardous materials or environmental
contamination from the Premises that it caused to be located thereon.

 

22.
MISCELLANEOUS.

 

22.1 Force Majeure.  If
performance of this Lease or of any obligation hereunder (other than an
obligation to pay any amounts described in Section 10) is prevented or
substantially restricted or interfered with by reason of an event of “Force
Majeure” (defined below), the affected Party shall be excused from such
performance to the extent of and for the duration of such prevention,
restriction, or interference. The affected Party shall promptly notify the
other Party in writing of the event of Force Majeure and shall use its
reasonable efforts to avoid or remove such causes of nonperformance, and shall
continue performance hereunder whenever such causes are removed. The term “Force  Majeure” means
causes beyond the reasonable control of and without the fault or negligence of
the Party claiming Force Majeure, including, but not limited to, acts of God,
labor unrest (including, but not limited to, slowdowns, picketing, boycotts or
strikes), floods, earthquakes, storms, fires, lightning, explosions, power
failures or power surges, vandalism, theft, terrorism, the unauthorized cutting
of power, transmission or other lines, wires or cables to a Wind Energy
Improvement, epidemics, wars, revolutions, riots, civil disturbances, sabotage,
changes in law or applicable regulations subsequent to the date hereof and
actions or inactions by any federal, state or local legislative, executive,
administrative judicial agency or body which in any of the foregoing cases, by
exercise of due foresight such Party could not reasonably have expected to
avoid, and which, by the exercise of due diligence, it is unable to overcome.

 

22.2 Exclusion of Warranties. Lessor and Lessee specifically
acknowledge that Lessee is responsible to evaluate the condition and suitability
of the Leased Property for use by Lessee for the purposes set out in this
Lease. LESSOR EXPRESSLY EXCLUDES ANY WARRANTY THAT THE PREMISES OR ANY IMPROVEMENTS
OR EQUIPMENT LOCATED ON THE PREMISES ARE SUITABLE OR FIT FOR LESSEE’S USE FOR
THE PURPOSES INTENDED BY LESSEE OR FOR ANY PURPOSE.

 

22.3 Further Assurances. Each Party shall, whenever reasonably
requested by the other, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, all conveyances, assignments and all
other instruments and documents as may be reasonably necessary in order to
complete the transactions herein provided and to carry out the terms and
provisions of this Lease.

 

22.4 Severability. If, at any time, any provision of this Lease
is or becomes illegal, invalid, or unenforceable in any respect under the law
of any jurisdiction, neither the legality, validity, or enforceability of the
remaining provisions hereof nor shall the legality, validity, or enforceability
of such provision under the law of any other jurisdiction

 

H-24

 

in
any way be affected or impaired thereby and the Parties shall promptly
negotiate to restore this Lease as near as possible to its original intent and
economic effect.

 

22.5 Tax Credits.  Lessee
and Lessor acknowledge and agree that as between Lessee and Lessor, Lessee is,
to the extent allowed by law, to have the benefit of all federal, state, and
local tax credits and other benefits associated with the generation of
electricity from a “clean” or renewable power source. Except as provided above,
if under applicable law the holder of a leasehold interest becomes ineligible
for any tax credit, benefit, or incentive for alternative energy expenditure
established by any local, state, or federal government, then, at Lessee’s
option, Lessor and Lessee, to the extent practicable, shall amend this Lease or
replace it with a different instrument, so as to convert Lessee’s interest in
the Leased Property to a substantially equivalent interest that makes Lessee
eligible for such tax credit, benefit, or incentive; provided, however, that
any such change shall not materially reduce Lessor’s rights or benefits
hereunder.

 

22.6 No Partnership. Nothing contained in this Lease shall be
construed to create a partnership or joint venture between the Parties or their
successors in interest and Lessor shall not have any ownership in the Wind
Energy Improvements or any rights to the electricity generated thereby except
and to the extent set forth in a written agreement by and between Lessor and
Lessee.

 

22.7 Construction.  The
Parties acknowledge that their attorneys have reviewed and revised this Lease
and that any rule of construction to the effect that any ambiguities are
to be resolved against the drafting Party shall not be employed in the
interpretation of this Lease or any amendments or exhibits hereto. Each Party
was represented by legal counsel in the negotiations of this Lease.

 

22.8 Counterparts. This Lease may be executed by facsimile
[provided that a duplicate copy with an original signature is transmitted to
the other Party within the following ten (10) days] and in multiple
counterparts, no one of which need be executed by all parties hereto, each of
which shall constitute an original. Counterparts thus executed shall together
constitute one and the same instrument.

 

22.9 Integration. This Lease contains all agreements, promises
and understandings between the Lessor and the Lessee and that no verbal or oral
agreements, promises or understandings shall be binding upon either the Lessor
or the Lessee in any dispute, controversy or proceeding at law, and any
addition, variation or modification to this Lease shall be void and ineffective
unless made in writing and signed by the Parties. This lease supersedes in all
respects that certain Option Agreement between the parties hereto, dated October 8,
2003, as subsequently amended on April 15, 2005 and April 1, 2006,
and such Option Agreement is of no further effect.

 

22.10 Governing Law. This Lease and the performance thereof
shall be governed, interpreted, construed and regulated in accordance with the
laws of the State of Utah.

 

22.11 Notices. All notices hereunder must be in writing and
shall be deemed validly given if sent by certified mail, return receipt requested,
or by commercial courier, provided the

 

H-25

 

courier’s
regular business is delivery service and provided further that it guarantees
delivery to the addressee by the end of the next business day following the
courier’s receipt from the sender, addressed as follows (or any other address
that the Party to be notified may have designated to the sender by like
notice):

 

	
  to
  the Lessor:

  	
   

  	
  Circle
  Four LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ATTN:
  Jim Webb

  
	
   

  	
   

  	
  Circle Four Farms

  
	
   

  	
   

  	
  P.O. Box
  100

  
	
   

  	
   

  	
  Milford,
  UT 84751-0100

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Waddingham &
  Peterson, P.C.

  
	
   

  	
   

  	
  Attorneys
  at Law

  
	
   

  	
   

  	
  362
  West Main

  
	
   

  	
   

  	
  Delta,
  UT 84624

  
				

 

	
  to
  the Lessee:  

  	
   

  	
   

  
	
   

  	
   

  	
  Milford
  Wind Corridor Phase I, LLC 

  
	
   

  	
   

  	
  c/o
  UPC Wind Management, LLC 

  
	
   

  	
   

  	
  100
  Wells Avenue, Suite 201 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Newton,
  MA 02459  

  
	
  with
  a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
  UPC
  Wind Management, LLC 

  
	
   

  	
   

  	
  100
  Wells Ave., Suite 201 

  
	
   

  	
   

  	
  Newton,
  MA 02459  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:
  General Counsel

  

 

Notice shall be effective upon mailing or delivering
the same to a commercial courier, as permitted above.

 

22.12 Successors.  This
Lease shall extend to and bind the heirs, personal representatives, successors,
trustees, and assigns of the Parties hereto.

 

22.13 Recording. The Lessor agrees to the recordation of this
Lease, or at the request of Lessee, to execute a Memorandum(s) of this
Lease, which the Lessee may record at the appropriate Recorder’s Office for the
county or counties in which the Premises are located. The date set forth in any
Memorandum of Lease is for recording purposes only and bears no reference to
commencement of either term or rent payments.

 

H-26

 

22.14 Casualty.  In the event of damage by fire or other
casualty whatsoever to the Leased Property that cannot reasonably be expected
to be repaired within forty-five (45) days following same or, if the Premises
is damaged by fire or other casualty whatsoever so that such damage may
reasonably be expected to disrupt the Lessee’s operations at the Premises for
more than forty-five (45) days, or if any event makes it impossible for the
Lessee to effectively and practicably operate Lessee's business at a reasonable
profit as determined by Lessee, then the Lessee may at any time following such
fire or other casualty or event, terminate this Lease upon sixty (60) days
written notice to the Lessor. Any such notice of termination shall cause this
Lease to expire with the same force and effect as though the date set forth in
such notice were the date originally set as the expiration date of this Lease,
and the Parties shall make an appropriate adjustment, as of such termination
date, with respect to payments due to the other under this Lease.

 

22.15 Submission of Lease.
The submission of this Lease for examination does not constitute an offer to
lease the Premises, and this Lease becomes effective only upon the full
execution of this Lease by the Parties.

 

22.16 Authority to
Execute. Agreement. Each of the Parties hereto warrants to the other that
the person or persons executing this Lease on behalf of such Party has the full
right, power and authority to enter into and execute this Lease on such Party's
behalf and that no consent from any other person or entity is necessary as a
condition precedent to the legal effect of this Lease.

 

22.17 Applicable Legal
Requirements. The Lessee shall use the Leased Property as may be required
or as permitted by applicable Legal Requirements. The Lessee agrees to keep the
Leased Property in material conformance with all applicable Legal Requirements
and agrees to reasonably cooperate with the Lessor regarding any compliance
required by the Lessor in respect to its use of the Premises.

 

22.18 Arbitration.

 

22.18.1 Any claim shall, at
the request of either Party, be referred to a senior representative of each of
the Parties for resolution on an informal basis as promptly as practicable. If
the senior representatives are unable to resolve the dispute within thirty (30)
calendar days of such referral or such other period as the Parties may mutually
agree, the Parties may submit the matter to binding arbitration in accordance
with this Section 22.18.

 

22.18.2 Any controversy
arising out of or relating to this Lease, including but not limited to the
interpretation of the Lease, may be subject to arbitration upon the mutual
agreement of the Parties. Should the Parties elect to proceed with arbitration,
an award shall be final and judgment may be entered on the award. All Parties
to this Lease are bound, each to the other, by this arbitration clause,
provided that each such Party has signed this Lease or has signed another
agreement or document that incorporates this Lease by reference, or signs any
other agreement to be bound by this arbitration clause.

 

H-27

 

22.18.3 The Parties hereto
agree to be bound by the Utah Uniform Arbitration Act, Utah Code Ann. §§
78-31a-101, et seq, or any subsequent recodification or enactment of a
replacement to these provisions. The arbitrators shall apply Utah law in
evaluating the evidence presented.

 

22.18.4 Arbitration shall be
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association in effect at the time arbitration is initiated. The scope of the
arbitration shall be determined by the arbitrator or arbitrators depending upon
the size of the claim and the controlling Commercial Arbitration Rules. The
arbitration hearings shall be held at the Offices of the American Arbitration
Association located in Salt Lake City, Utah. Should any Party refuse or neglect
to appear or participate in the arbitration proceedings after due notice, the
arbitrator or arbitrators are empowered to decide the controversy in accordance
with whatever evidence is presented ex parte. Each side shall bear its own
costs and attorney fees incurred for the time, expense, and trouble of the
arbitration. The costs and fees associated with pursuing the arbitration with
the American Arbitration Association shall be borne equally by all the parties.

 

22.18.5 This Section 22.18
shall survive the termination or expiration of this Agreement.

 

22.18.6 Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction.

 

22.19
Captions.  The captions contained
in this Lease are inserted for convenience only and are not intended to be part
of this Lease. They shall not affect or be utilized in the construction or
interpretation of this Lease.

 

22.20
Publicity. Neither Party shall use the name, trademark, logo, or other
identifying information of the other Party or its affiliates in any publicity
display or advertising without the other Party's prior written approval.

 

22.21
Survival.  Any provision of this
Lease that expressly or by implication comes into or remains in force following
the termination of this Lease shall survive the termination or expiration of
this Lease for the period set forth in such provision, or if no period is set
forth in such provision, for the period that is coextensive with the applicable
statute of limitations. The provisions of the Lease relating to indemnification
from one Party to the other Party for events prior to such termination shall
survive any termination or expiration of this Lease. Additionally, any
provisions of this Lease which require performance subsequent to the
termination or expiration of this Lease shall also survive such termination or
expiration.

 

22.22
Attorneys Fees. Each Party shall bear its own attorney's fees and costs
incurred in connection with any claim, controversy or dispute arising under or
in connection with this Lease.

 

[THIS
SPACE INTENTIONALLY LEFT BLANK]

 

H-28

 

IN WITNESS WHEREOF, the
Parties hereto have set their hands and affixed their respective seals the day
and year first above written.

 

	
  WITNESS:

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Troy N

  	
   

  	
  By:

  	
  /s/ Dwight D. Potter

  
	
   

  	
  Name: Dwight D. Potter

  
	
   

  	
             Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  CIRCLE FOUR LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  

 

 

	
  WITNESS:

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
   

  	
  MILFORD WIND CORRIDOR
  PHASE I,

  
	
   

  	
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Title:

  
				

 

H-29

 

IN
WITNESS WHEREOF, the Parties hereto have set their hands and affixed their
respective seals the day and year first above written.

 

 

	
  WITNESS:

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  CIRCLE FOUR LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Title:

  
					

 

 

	
  WITNESS:

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Paul Gaynor

  
	
  /s/ Rita Dolan

  	
   

  	
  Name: Paul Gaynor

  
	
  Noor Rita Dolan

  	
  Title:   President

  
				

 

H-30

 

Acknowledgment of Lessor

 

	
  STATE OF

  	
  )

  
	
   

  	
   

  
	
   

  	
  :
  SS.

  
	
   

  	
   

  
	
  COUNTY OF

  	
  )

  

 

 

On
this             day
of                            
, 2007, personally appeared before me
                         
, who, being by me duly sworn, did say that he is the manager of CIRCLE FOUR,
LLC and that the foregoing instrument was signed by him in behalf of said
limited liability company, by authority, and said limited liability company
executed the same.

 

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

 

Acknowledgment of Lessee

 

	
  STATE OF California)

  
	
   

  	
   

  
	
   

  	
  :
  ss.

  

 

On
this 22nd day of Feb 4, 2007, personally appeared before me Paul Gaynor, who,
being by me duly sworn, did say that he is the President of MILFORD WIND
CORRIDOR PHASE I, LLC and that the foregoing instrument was signed by Paul
Gaynor in behalf of said limited liability company, by authority, and s.
limited liability company executed the same.

 

 

	
   

  	
  /s/
  [ILLEGIBLE]

  
	
   

  	
  Notary
  Public

  

 

 

Acknowledgment of Lessor

 

[ZAMA MAZUREK

Commission
#

1667285
Notary

Public
- California t

 

San Diego County -

My
Comm. Expires May

16, 2010

 

 

 

 

Acknowledgment of Lessor

 

	
  STATE OF a1-idt.>

  
	
   

  	
   

  	
   

  
	
   

  	
  ss.

  	
   

  
	
   

  
	
  On
  this 22

  	
  County
  of

  	
  6a1.1-eit)

  
	
  Dwight D Potter

  
					

 

	
   

  	
  /s/ Patty Goff

  
	
   

  	
  Notary Public

  

 

 

Acknowledgment of Lessee

 

	
  STATE
  OF

  	
   

  
	
   

  	
   

  
	
   

  	
  :
  ss.

  

 

nd.d ay of relyij, 2007, personally appeared before
me
                      ,
who, being b me duly sworn, did say that he is the manager of CIRCL FOUR, LLC
and that the foregoing instrument was signed by him in behalf of said limited
liability company, by authority, and said limited liability company executed
the same.

 

COUNTY
OF                          )

 

On
this               day
of                        
, 2007, personally appeared before me                             ,
who, being by me duly sworn, did say that he is the                  
of MILFORD WIND CORRIDOR PHASE I, LLC and that the foregoing instrument was
signed by                                     in
behalf of said limited liability company, by authority, and said limited
liability company executed the same.

 

 

Acknowledgment of Lessor

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

 

Exhibit A

 

PREMISES

 

The
Premises consist of the following Parcels
located in Beaver County and Millard County, Utah:

 

PARCEL
1:

 

LOTS
3 AND 4; THE EAST HALF OF THE SOUTHWEST QUARTER AND THE NORTHEAST QUARTER OF SECTION 7,
TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN.

 

PARCEL
2:

 

ALL
OF SECTION 18, TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND
MERIDIAN.

 

PARCEL
3:

 

LOTS
3 AND 4; THE EAST HALF OF THE SOUTHWEST QUARTER AND THE SOUTHEAST QUARTER OF SECTION 19,
TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN.

 

PARCEL
4:

 

THE
EAST HALF AND THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 30,
TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN.

 

PARCEL
5:

 

THE
NORTH HALF OF SECTION 31, TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
6:

 

THE
WEST HALF OF SECTION 13, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE
AND MERIDIAN.

 

 

PARCEL
7:

 

THE
SOUTH HALF OF SECTION 14, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
8:

 

THE
EAST HALF OF SECTION 15, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
9:

 

ALL
OF SECTION 23, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND
MERIDIAN.

 

PARCEL
10:

 

ALL
OF SECTION 24, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND
MERIDIAN.

 

PARCEL
11:

 

ALL
OF SECTION 26, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND
MERIDIAN.

 

PARCEL
12:

 

ALL
OF SECTION 27, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND
MERIDIAN.

 

PARCEL
13:

 

THE
EAST HALF OF SECTION 33, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
14:

 

ALL
OF SECTION 34, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND
MERIDIAN.

 

PARCEL
15:

 

ALL
OF SECTION 35, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND
MERIDIAN.

 

 

PARCEL
16:

 

LOTS
1, 2, 3 AND 4 AND THE SOUTH HALF OF THE NORTH HALF OF SECTION 2, TOWNSHIP
27 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND MERIDIAN.

 

PARCEL
17:

 

THE
NORTH HALF OF SECTION 19, TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
18:

 

ALL
OF SECTION 11, TOWNSHIP 27 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND
MERIDIAN.

 

PARCEL
19:

 

LOTS
3 AND 4; THE SOUTHEAST QUARTER AND THE EAST HALF OF THE SOUTHWEST QUARTER OF SECTION 10,
TOWNSHIP 27 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND MERIDIAN.

 

PARCEL
20:

 

LOTS
1, 2, 3 AND 7; THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER; THE NORTH HALF
OF THE SOUTHWEST QUARTER AND THE SOUTH HALF OF THE NORTHWEST QUARTER OF SECTION 3,
TOWNSHIP 27 SOUTH, RANGE 10 WEST, SALT LAKE BASE AND MERIDIAN.

 

PARCEL
21:

 

LOTS
4, 5, 6, 8, 9, 10 AND 11, SECTION 3, TOWNSHIP 27 SOUTH, RANGE 10 WEST,
SALT LAKE BASE AND MERIDIAN.

 

PARCEL
22:

 

THE
NORTHEAST QUARTER OF THE SOUTHEAST QUARTER AND THE SOUTHWEST QUARTER OF THE
SOUTHEAST QUARTER OF SECTION 10, TOWNSHIP 26 SOUTH, RANGE 10 WEST, SALT
LAKE BASE AND MERIDIAN.

 

 

PARCEL
23:

 

THE
WEST HALF OF SECTION 17, TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
24:

 

THE
WEST HALF OF SECTION 20, TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
25:

 

THE
WEST HALF OF THE WEST HALF; THE EAST HALF OF THE NORTHWEST QUARTER AND THE
NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 29, TOWNSHIP 26
SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN.

 

PARCEL
26:

 

LOTS
3 AND 4; THE SOUTH HALF OF THE NORTHWEST QUARTER; THE NORTH HALF OF THE
SOUTHWEST QUARTER AND THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 5,
TOWNSHIP 27 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND MERIDIAN.

 

PARCEL
27:

 

THE
SOUTH HALF OF SECTION 31, TOWNSHIP 25, SOUTH, RANGE 9 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
28:

 

ALL
OF SECTION 32, TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT LAKE BASE AND
MERIDIAN.

 

PARCEL
29:

 

THE
NORTHEAST QUARTER OF SECTION 33, TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT
LAKE BASE AND MERIDIAN.

 

 

PARCEL
30:

 

THE
NORTHWEST QUARTER OF SECTION 33, TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT
LAKE BASE AND MERIDIAN.

 

PARCEL
31:

 

THE
SOUTHEAST QUARTER OF SECTION 6, TOWNSHIP 26 SOUTH, RANGE 9 WEST, SALT LAKE
BASE AND MERIDIAN.

 

PARCEL
32:

 

THE
SOUTH HALF OF SECTION 29, TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
33:

 

THE
SOUTH HALF OF SECTION 30, TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT LAKE BASE
AND MERIDIAN.

 

PARCEL
34:

 

THE
NORTH HALF OF SECTION 29, TOWNSHIP 25 SOUTH, RANGE 9 WEST, SALT LAKE BASE
AND MERIDIAN.

 

LESS:
THE SOUTH HALF OF THE NORTHWEST QUARTER OF SAID SECTION 29.

 

 

APPENDIX I

 

Guaranteed Generation and Prepayment Amount Table

 

	
  Guaranteed Generation (MWh)

  	
   

  	
   

  	
   

  
	
  From

  	
   

  	
  Through and Including

  	
   

  	
  Prepayment Amount ($)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8,490,000

  	
   

  	
  8,500,000

  	
   

  	
  269,502,397

  	
   

  
	
  8,480,000

  	
   

  	
  8,489,980

  	
   

  	
  269,308,470

  	
   

  
	
  8,470,000

  	
   

  	
  8,479,980

  	
   

  	
  269,114,544

  	
   

  
	
  8,460,000

  	
   

  	
  8,469,980

  	
   

  	
  268,920,617

  	
   

  
	
  8,450,000

  	
   

  	
  8,459,980

  	
   

  	
  268,726,691

  	
   

  
	
  8,440,000

  	
   

  	
  8,449,980

  	
   

  	
  268,532,764

  	
   

  
	
  8,430,000

  	
   

  	
  8,439,980

  	
   

  	
  268,338,838

  	
   

  
	
  8,420,000

  	
   

  	
  8,429,980

  	
   

  	
  268,144,911

  	
   

  
	
  8,410,000

  	
   

  	
  8,419,980

  	
   

  	
  267,950,985

  	
   

  
	
  8,400,000

  	
   

  	
  8,409,980

  	
   

  	
  267,757,058

  	
   

  
	
  8,390,000

  	
   

  	
  8,399,980

  	
   

  	
  267,563,132

  	
   

  
	
  8,380,000

  	
   

  	
  8,389,980

  	
   

  	
  267,369,205

  	
   

  
	
  8,370,000

  	
   

  	
  8,379,980

  	
   

  	
  267,175,279

  	
   

  
	
  8,360,000

  	
   

  	
  8,369,980

  	
   

  	
  266,981,353

  	
   

  
	
  8,350,000

  	
   

  	
  8,359,980

  	
   

  	
  266,787,426

  	
   

  
	
  8,340,000

  	
   

  	
  8,349,980

  	
   

  	
  266,593,500

  	
   

  
	
  8,330,000

  	
   

  	
  8,339,980

  	
   

  	
  266,399,573

  	
   

  
	
  8,320,000

  	
   

  	
  8,329,980

  	
   

  	
  266,205,647

  	
   

  
	
  8,310,000

  	
   

  	
  8,319,980

  	
   

  	
  266,011,720

  	
   

  
	
  8,300,000

  	
   

  	
  8,309,980

  	
   

  	
  265,817,794

  	
   

  
	
  8,290,000

  	
   

  	
  8,299,980

  	
   

  	
  265,623,867

  	
   

  
	
  8,280,000

  	
   

  	
  8,289,980

  	
   

  	
  265,429,941

  	
   

  
	
  8,270,000

  	
   

  	
  8,279,980

  	
   

  	
  265,236,014

  	
   

  
	
  8,260,000

  	
   

  	
  8,269,980

  	
   

  	
  265,042,088

  	
   

  
	
  8,250,000

  	
   

  	
  8,259,980

  	
   

  	
  264,848,161

  	
   

  
	
  8,240,000

  	
   

  	
  8,249,980

  	
   

  	
  264,654,235

  	
   

  
	
  8,230,000

  	
   

  	
  8,239,980

  	
   

  	
  264,460,309

  	
   

  
	
  8,220,000

  	
   

  	
  8,229,980

  	
   

  	
  264,266,382

  	
   

  
	
  8,210,000

  	
   

  	
  8,219,980

  	
   

  	
  264,072,456

  	
   

  
	
  8,200,000

  	
   

  	
  8,209,980

  	
   

  	
  263,878,529

  	
   

  
	
  8,190,000

  	
   

  	
  8,199,980

  	
   

  	
  263,684,603

  	
   

  
	
  8,180,000

  	
   

  	
  8,189,980

  	
   

  	
  263,490,676

  	
   

  
	
  8,170,000

  	
   

  	
  8,179,980

  	
   

  	
  263,296,750

  	
   

  
	
  8,160,000

  	
   

  	
  8,169,980

  	
   

  	
  263,102,823

  	
   

  
	
  8,150,000

  	
   

  	
  8,159,980

  	
   

  	
  262,908,897

  	
   

  
	
  8,140,000

  	
   

  	
  8,149,980

  	
   

  	
  262,714,970

  	
   

  

 

I-1

 

	
  8,130,000

  	
   

  	
  8,139,980

  	
   

  	
  262,521,044

  	
   

  
	
  8,120,000

  	
   

  	
  8,129,980

  	
   

  	
  262,327,118

  	
   

  
	
  8,110,000

  	
   

  	
  8,119,980

  	
   

  	
  262,133,191

  	
   

  
	
  8,100,000

  	
   

  	
  8,109,980

  	
   

  	
  261,939,265

  	
   

  
	
  8,090,000

  	
   

  	
  8,099,980

  	
   

  	
  261,745,338

  	
   

  
	
  8,080,000

  	
   

  	
  8,089,980

  	
   

  	
  261,551,412

  	
   

  
	
  8,070,000

  	
   

  	
  8,079,980

  	
   

  	
  261,357,485

  	
   

  
	
  8,060,000

  	
   

  	
  8,069,980

  	
   

  	
  261,163,559

  	
   

  
	
  8,050,000

  	
   

  	
  8,059,980

  	
   

  	
  260,969,632

  	
   

  
	
  8,040,000

  	
   

  	
  8,049,980

  	
   

  	
  260,775,706

  	
   

  
	
  8,030,000

  	
   

  	
  8,039,980

  	
   

  	
  260,581,779

  	
   

  
	
  8,020,000

  	
   

  	
  8,029,980

  	
   

  	
  260,387,853

  	
   

  
	
  8,010,000

  	
   

  	
  8,019,980

  	
   

  	
  260,193,926

  	
   

  
	
  8,000,000

  	
   

  	
  8,009,980

  	
   

  	
  260,000,000

  	
   

  
	
  7,990,000

  	
   

  	
  7,999,980

  	
   

  	
  259,806,074

  	
   

  
	
  7,980,000

  	
   

  	
  7,989,980

  	
   

  	
  259,612,147

  	
   

  
	
  7,970,000

  	
   

  	
  7,979,980

  	
   

  	
  259,418,221

  	
   

  
	
  7,960,000

  	
   

  	
  7,969,980

  	
   

  	
  259,224,294

  	
   

  
	
  7,950,000

  	
   

  	
  7,959,980

  	
   

  	
  259,030,368

  	
   

  
	
  7,940,000

  	
   

  	
  7,949,980

  	
   

  	
  258,836,441

  	
   

  
	
  7,930,000

  	
   

  	
  7,939,980

  	
   

  	
  258,642,515

  	
   

  
	
  7,920,000

  	
   

  	
  7,929,980

  	
   

  	
  258,448,588

  	
   

  
	
  7,910,000

  	
   

  	
  7,919,980

  	
   

  	
  258,254,662

  	
   

  
	
  7,900,000

  	
   

  	
  7,909,980

  	
   

  	
  258,060,735

  	
   

  
	
  7,890,000

  	
   

  	
  7,899,980

  	
   

  	
  257,866,809

  	
   

  
	
  7,880,000

  	
   

  	
  7,889,980

  	
   

  	
  257,672,882

  	
   

  
	
  7,870,000

  	
   

  	
  7,879,980

  	
   

  	
  257,478,956

  	
   

  
	
  7,860,000

  	
   

  	
  7,869,980

  	
   

  	
  257,285,030

  	
   

  
	
  7,850,000

  	
   

  	
  7,859,980

  	
   

  	
  257,091,103

  	
   

  
	
  7,840,000

  	
   

  	
  7,849,980

  	
   

  	
  256,897,177

  	
   

  
	
  7,830,000

  	
   

  	
  7,839,980

  	
   

  	
  256,703,250

  	
   

  
	
  7,820,000

  	
   

  	
  7,829,980

  	
   

  	
  256,509,324

  	
   

  
	
  7,810,000

  	
   

  	
  7,819,980

  	
   

  	
  256,315,397

  	
   

  
	
  7,800,000

  	
   

  	
  7,809,980

  	
   

  	
  256,121,471

  	
   

  
	
  7,790,000

  	
   

  	
  7,799,980

  	
   

  	
  255,927,544

  	
   

  
	
  7,780,000

  	
   

  	
  7,789,980

  	
   

  	
  255,733,618

  	
   

  
	
  7,770,000

  	
   

  	
  7,779,980

  	
   

  	
  255,539,691

  	
   

  
	
  7,760,000

  	
   

  	
  7,769,980

  	
   

  	
  255,345,765

  	
   

  
	
  7,750,000

  	
   

  	
  7,759,980

  	
   

  	
  255,151,839

  	
   

  
	
  7,740,000

  	
   

  	
  7,749,980

  	
   

  	
  254,957,912

  	
   

  
	
  7,730,000

  	
   

  	
  7,739,980

  	
   

  	
  254,763,986

  	
   

  
	
  7,720,000

  	
   

  	
  7,729,980

  	
   

  	
  254,570,059

  	
   

  
	
  7,710,000

  	
   

  	
  7,719,980

  	
   

  	
  254,376,133

  	
   

  
	
  7,700,000

  	
   

  	
  7,709,980

  	
   

  	
  254,182,206

  	
   

  

 

I-2

 

	
  7,690,000

  	
   

  	
  7,699,980

  	
   

  	
  253,988,280

  	
   

  
	
  7,680,000

  	
   

  	
  7,689,980

  	
   

  	
  253,794,353

  	
   

  
	
  7,670,000

  	
   

  	
  7,679,980

  	
   

  	
  253,600,427

  	
   

  
	
  7,660,000

  	
   

  	
  7,669,980

  	
   

  	
  253,406,500

  	
   

  
	
  7,650,000

  	
   

  	
  7,659,980

  	
   

  	
  253,212,574

  	
   

  
	
  7,640,000

  	
   

  	
  7,649,980

  	
   

  	
  253,018,647

  	
   

  
	
  7,630,000

  	
   

  	
  7,639,980

  	
   

  	
  252,824,721

  	
   

  
	
  7,620,000

  	
   

  	
  7,629,980

  	
   

  	
  252,630,795

  	
   

  
	
  7,610,000

  	
   

  	
  7,619,980

  	
   

  	
  252,436,868

  	
   

  
	
  7,600,000

  	
   

  	
  7,609,980

  	
   

  	
  252,242,942

  	
   

  
	
  7,590,000

  	
   

  	
  7,599,980

  	
   

  	
  252,049,015

  	
   

  
	
  7,580,000

  	
   

  	
  7,589,980

  	
   

  	
  251,855,089

  	
   

  
	
  7,570,000

  	
   

  	
  7,579,980

  	
   

  	
  251,661,162

  	
   

  
	
  7,560,000

  	
   

  	
  7,569,980

  	
   

  	
  251,467,236

  	
   

  
	
  7,550,000

  	
   

  	
  7,559,980

  	
   

  	
  251,273,309

  	
   

  
	
  7,540,000

  	
   

  	
  7,549,980

  	
   

  	
  251,079,383

  	
   

  
	
  7,530,000

  	
   

  	
  7,539,980

  	
   

  	
  250,885,456

  	
   

  
	
  7,520,000

  	
   

  	
  7,529,980

  	
   

  	
  250,691,530

  	
   

  
	
  7,510,000

  	
   

  	
  7,519,980

  	
   

  	
  250,497,603

  	
   

  
	
  7,500,000

  	
   

  	
  7,509,980

  	
   

  	
  250,303,677

  	
   

  
	
  7,490,000

  	
   

  	
  7,499,980

  	
   

  	
  250,109,751

  	
   

  
	
  7,480,000

  	
   

  	
  7,489,980

  	
   

  	
  249,915,824

  	
   

  
	
  7,470,000

  	
   

  	
  7,479,980

  	
   

  	
  249,721,898

  	
   

  
	
  7,460,000

  	
   

  	
  7,469,980

  	
   

  	
  249,527,971

  	
   

  
	
  7,450,000

  	
   

  	
  7,459,980

  	
   

  	
  249,334,045

  	
   

  
	
  7,440,000

  	
   

  	
  7,449,980

  	
   

  	
  249,140,118

  	
   

  
	
  7,430,000

  	
   

  	
  7,439,980

  	
   

  	
  248,946,192

  	
   

  
	
  7,420,000

  	
   

  	
  7,429,980

  	
   

  	
  248,752,265

  	
   

  
	
  7,410,000

  	
   

  	
  7,419,980

  	
   

  	
  248,558,339

  	
   

  
	
  7,400,000

  	
   

  	
  7,409,980

  	
   

  	
  248,364,412

  	
   

  
	
  7,390,000

  	
   

  	
  7,399,980

  	
   

  	
  248,170,486

  	
   

  
	
  7,380,000

  	
   

  	
  7,389,980

  	
   

  	
  247,976,559

  	
   

  
	
  7,370,000

  	
   

  	
  7,379,980

  	
   

  	
  247,782,633

  	
   

  
	
  7,360,000

  	
   

  	
  7,369,980

  	
   

  	
  247,588,707

  	
   

  
	
  7,350,000

  	
   

  	
  7,359,980

  	
   

  	
  247,394,780

  	
   

  
	
  7,340,000

  	
   

  	
  7,349,980

  	
   

  	
  247,200,854

  	
   

  
	
  7,330,000

  	
   

  	
  7,339,980

  	
   

  	
  247,006,927

  	
   

  
	
  7,320,000

  	
   

  	
  7,329,980

  	
   

  	
  246,813,001

  	
   

  
	
  7,310,000

  	
   

  	
  7,319,980

  	
   

  	
  246,619,074

  	
   

  
	
  7,300,000

  	
   

  	
  7,309,980

  	
   

  	
  246,425,148

  	
   

  
	
  7,290,000

  	
   

  	
  7,299,980

  	
   

  	
  246,231,221

  	
   

  
	
  7,280,000

  	
   

  	
  7,289,980

  	
   

  	
  246,037,295

  	
   

  
	
  7,270,000

  	
   

  	
  7,279,980

  	
   

  	
  245,843,368

  	
   

  
	
  7,260,000

  	
   

  	
  7,269,980

  	
   

  	
  245,649,442

  	
   

  

 

I-3

 

	
  7,250,000

  	
   

  	
  7,259,980

  	
   

  	
  245,455,516

  	
   

  
	
  7,240,000

  	
   

  	
  7,249,980

  	
   

  	
  245,261,589

  	
   

  
	
  7,230,000

  	
   

  	
  7,239,980

  	
   

  	
  245,067,663

  	
   

  
	
  7,220,000

  	
   

  	
  7,229,980

  	
   

  	
  244,873,736

  	
   

  
	
  7,210,000

  	
   

  	
  7,219,980

  	
   

  	
  244,679,810

  	
   

  
	
  7,200,000

  	
   

  	
  7,209,980

  	
   

  	
  244,485,883

  	
   

  
	
  7,190,000

  	
   

  	
  7,199,980

  	
   

  	
  244,291,957

  	
   

  
	
  7,180,000

  	
   

  	
  7,189,980

  	
   

  	
  244,098,030

  	
   

  
	
  7,170,000

  	
   

  	
  7,179,980

  	
   

  	
  243,904,104

  	
   

  
	
  7,160,000

  	
   

  	
  7,169,980

  	
   

  	
  243,710,177

  	
   

  
	
  7,150,000

  	
   

  	
  7,159,980

  	
   

  	
  243,516,251

  	
   

  
	
  7,140,000

  	
   

  	
  7,149,980

  	
   

  	
  243,322,324

  	
   

  
	
  7,130,000

  	
   

  	
  7,139,980

  	
   

  	
  243,128,398

  	
   

  
	
  7,120,000

  	
   

  	
  7,129,980

  	
   

  	
  242,934,472

  	
   

  
	
  7,110,000

  	
   

  	
  7,119,980

  	
   

  	
  242,740,545

  	
   

  
	
  7,100,000

  	
   

  	
  7,109,980

  	
   

  	
  242,546,619

  	
   

  
	
  7,090,000

  	
   

  	
  7,099,980

  	
   

  	
  242,352,692

  	
   

  
	
  7,080,000

  	
   

  	
  7,089,980

  	
   

  	
  242,158,766

  	
   

  
	
  7,070,000

  	
   

  	
  7,079,980

  	
   

  	
  241,964,839

  	
   

  
	
  7,060,000

  	
   

  	
  7,069,980

  	
   

  	
  241,770,913

  	
   

  
	
  7,050,000

  	
   

  	
  7,059,980

  	
   

  	
  241,576,986

  	
   

  
	
  7,040,000

  	
   

  	
  7,049,980

  	
   

  	
  241,383,060

  	
   

  
	
  7,030,000

  	
   

  	
  7,039,980

  	
   

  	
  241,189,133

  	
   

  
	
  7,020,000

  	
   

  	
  7,029,980

  	
   

  	
  240,995,207

  	
   

  
	
  7,010,000

  	
   

  	
  7,019,980

  	
   

  	
  240,801,280

  	
   

  
	
  7,000,000

  	
   

  	
  7,009,980

  	
   

  	
  240,607,354

  	
   

  
	
  6,990,000

  	
   

  	
  6,999,980

  	
   

  	
  240,413,428

  	
   

  
	
  6,980,000

  	
   

  	
  6,989,980

  	
   

  	
  240,219,501

  	
   

  
	
  6,970,000

  	
   

  	
  6,979,980

  	
   

  	
  240,025,575

  	
   

  
	
  6,960,000

  	
   

  	
  6,969,980

  	
   

  	
  239,831,648

  	
   

  
	
  6,950,000

  	
   

  	
  6,959,980

  	
   

  	
  239,637,722

  	
   

  
	
  6,940,000

  	
   

  	
  6,949,980

  	
   

  	
  239,443,795

  	
   

  
	
  6,930,000

  	
   

  	
  6,939,980

  	
   

  	
  239,249,869

  	
   

  
	
  6,920,000

  	
   

  	
  6,929,980

  	
   

  	
  239,055,942

  	
   

  
	
  6,910,000

  	
   

  	
  6,919,980

  	
   

  	
  238,862,016

  	
   

  
	
  6,900,000

  	
   

  	
  6,909,980

  	
   

  	
  238,668,089

  	
   

  
	
  6,890,000

  	
   

  	
  6,899,980

  	
   

  	
  238,474,163

  	
   

  
	
  6,880,000

  	
   

  	
  6,889,980

  	
   

  	
  238,280,237

  	
   

  
	
  6,870,000

  	
   

  	
  6,879,980

  	
   

  	
  238,086,310

  	
   

  
	
  6,860,000

  	
   

  	
  6,869,980

  	
   

  	
  237,892,384

  	
   

  
	
  6,850,000

  	
   

  	
  6,859,980

  	
   

  	
  237,698,457

  	
   

  
	
  6,840,000

  	
   

  	
  6,849,980

  	
   

  	
  237,504,531

  	
   

  
	
  6,830,000

  	
   

  	
  6,839,980

  	
   

  	
  237,310,604

  	
   

  
	
  6,820,000

  	
   

  	
  6,829,980

  	
   

  	
  237,116,678

  	
   

  

 

I-4

 

	
  6,810,000

  	
   

  	
  6,819,980

  	
   

  	
  236,922,751

  	
   

  
	
  6,800,000

  	
   

  	
  6,809,980

  	
   

  	
  236,728,825

  	
   

  
	
  6,790,000

  	
   

  	
  6,799,980

  	
   

  	
  236,534,898

  	
   

  
	
  6,780,000

  	
   

  	
  6,789,980

  	
   

  	
  236,340,972

  	
   

  
	
  6,770,000

  	
   

  	
  6,779,980

  	
   

  	
  236,147,045

  	
   

  
	
  6,760,000

  	
   

  	
  6,769,980

  	
   

  	
  235,953,119

  	
   

  
	
  6,750,000

  	
   

  	
  6,759,980

  	
   

  	
  235,759,193

  	
   

  
	
  6,740,000

  	
   

  	
  6,749,980

  	
   

  	
  235,565,266

  	
   

  
	
  6,730,000

  	
   

  	
  6,739,980

  	
   

  	
  235,371,340

  	
   

  
	
  6,720,000

  	
   

  	
  6,729,980

  	
   

  	
  235,177,413

  	
   

  
	
  6,710,000

  	
   

  	
  6,719,980

  	
   

  	
  234,983,487

  	
   

  
	
  6,700,000

  	
   

  	
  6,709,980

  	
   

  	
  234,789,560

  	
   

  
	
  6,690,000

  	
   

  	
  6,699,980

  	
   

  	
  234,595,634

  	
   

  
	
  6,680,000

  	
   

  	
  6,689,980

  	
   

  	
  234,401,707

  	
   

  
	
  6,670,000

  	
   

  	
  6,679,980

  	
   

  	
  234,207,781

  	
   

  
	
  6,660,000

  	
   

  	
  6,669,980

  	
   

  	
  234,013,854

  	
   

  
	
  6,650,000

  	
   

  	
  6,659,980

  	
   

  	
  233,819,928

  	
   

  
	
  6,640,000

  	
   

  	
  6,649,980

  	
   

  	
  233,626,001

  	
   

  
	
  6,630,000

  	
   

  	
  6,639,980

  	
   

  	
  233,432,075

  	
   

  
	
  6,620,000

  	
   

  	
  6,629,980

  	
   

  	
  233,238,149

  	
   

  
	
  6,610,000

  	
   

  	
  6,619,980

  	
   

  	
  233,044,222

  	
   

  
	
  6,600,000

  	
   

  	
  6,609,980

  	
   

  	
  232,850,296

  	
   

  
	
  6,590,000

  	
   

  	
  6,599,980

  	
   

  	
  232,656,369

  	
   

  
	
  6,580,000

  	
   

  	
  6,589,980

  	
   

  	
  232,462,443

  	
   

  
	
  6,570,000

  	
   

  	
  6,579,980

  	
   

  	
  232,268,516

  	
   

  
	
  6,560,000

  	
   

  	
  6,569,980

  	
   

  	
  232,074,590

  	
   

  
	
  6,550,000

  	
   

  	
  6,559,980

  	
   

  	
  231,880,663

  	
   

  
	
  6,540,000

  	
   

  	
  6,549,980

  	
   

  	
  231,686,737

  	
   

  
	
  6,530,000

  	
   

  	
  6,539,980

  	
   

  	
  231,492,810

  	
   

  
	
  6,520,000

  	
   

  	
  6,529,980

  	
   

  	
  231,298,884

  	
   

  
	
  6,510,000

  	
   

  	
  6,519,980

  	
   

  	
  231,104,957

  	
   

  
	
  6,500,000

  	
   

  	
  6,509,980

  	
   

  	
  230,911,031

  	
   

  
	
  6,490,000

  	
   

  	
  6,499,980

  	
   

  	
  230,717,105

  	
   

  
	
  6,480,000

  	
   

  	
  6,489,980

  	
   

  	
  230,523,178

  	
   

  
	
  6,470,000

  	
   

  	
  6,479,980

  	
   

  	
  230,329,252

  	
   

  
	
  6,460,000

  	
   

  	
  6,469,980

  	
   

  	
  230,135,325

  	
   

  
	
  6,450,000

  	
   

  	
  6,459,980

  	
   

  	
  229,941,399

  	
   

  
	
  6,440,000

  	
   

  	
  6,449,980

  	
   

  	
  229,747,472

  	
   

  
	
  6,430,000

  	
   

  	
  6,439,980

  	
   

  	
  229,553,546

  	
   

  
	
  6,420,000

  	
   

  	
  6,429,980

  	
   

  	
  229,359,619

  	
   

  
	
  6,410,000

  	
   

  	
  6,419,980

  	
   

  	
  229,165,693

  	
   

  
	
  6,400,000

  	
   

  	
  6,409,980

  	
   

  	
  228,971,766

  	
   

  
	
  6,390,000

  	
   

  	
  6,399,980

  	
   

  	
  228,777,840

  	
   

  
	
  6,380,000

  	
   

  	
  6,389,980

  	
   

  	
  228,583,914

  	
   

  

 

I-5

 

	
  6,370,000

  	
   

  	
  6,379,980

  	
   

  	
  228,389,987

  	
   

  
	
  6,360,000

  	
   

  	
  6,369,980

  	
   

  	
  228,196,061

  	
   

  
	
  6,350,000

  	
   

  	
  6,359,980

  	
   

  	
  228,002,134

  	
   

  
	
  6,340,000

  	
   

  	
  6,349,980

  	
   

  	
  227,808,208

  	
   

  
	
  6,330,000

  	
   

  	
  6,339,980

  	
   

  	
  227,614,281

  	
   

  
	
  6,320,000

  	
   

  	
  6,329,980

  	
   

  	
  227,420,355

  	
   

  
	
  6,310,000

  	
   

  	
  6,319,980

  	
   

  	
  227,226,428

  	
   

  
	
  6,300,000

  	
   

  	
  6,309,980

  	
   

  	
  227,032,502

  	
   

  
	
  6,290,000

  	
   

  	
  6,299,980

  	
   

  	
  226,838,575

  	
   

  
	
  6,280,000

  	
   

  	
  6,289,980

  	
   

  	
  226,644,649

  	
   

  
	
  6,270,000

  	
   

  	
  6,279,980

  	
   

  	
  226,450,722

  	
   

  
	
  6,260,000

  	
   

  	
  6,269,980

  	
   

  	
  226,256,796

  	
   

  
	
  6,250,000

  	
   

  	
  6,259,980

  	
   

  	
  226,062,870

  	
   

  
	
  6,240,000

  	
   

  	
  6,249,980

  	
   

  	
  225,868,943

  	
   

  
	
  6,230,000

  	
   

  	
  6,239,980

  	
   

  	
  225,675,017

  	
   

  
	
  6,220,000

  	
   

  	
  6,229,980

  	
   

  	
  225,481,090

  	
   

  
	
  6,210,000

  	
   

  	
  6,219,980

  	
   

  	
  225,287,164

  	
   

  
	
  6,200,000

  	
   

  	
  6,209,980

  	
   

  	
  225,093,237

  	
   

  
	
  6,190,000

  	
   

  	
  6,199,980

  	
   

  	
  224,899,311

  	
   

  
	
  6,180,000

  	
   

  	
  6,189,980

  	
   

  	
  224,705,384

  	
   

  
	
  6,170,000

  	
   

  	
  6,179,980

  	
   

  	
  224,511,458

  	
   

  
	
  6,160,000

  	
   

  	
  6,169,980

  	
   

  	
  224,317,531

  	
   

  
	
  6,150,000

  	
   

  	
  6,159,980

  	
   

  	
  224,123,605

  	
   

  
	
  6,140,000

  	
   

  	
  6,149,980

  	
   

  	
  223,929,678

  	
   

  
	
  6,130,000

  	
   

  	
  6,139,980

  	
   

  	
  223,735,752

  	
   

  
	
  6,120,000

  	
   

  	
  6,129,980

  	
   

  	
  223,541,826

  	
   

  
	
  6,110,000

  	
   

  	
  6,119,980

  	
   

  	
  223,347,899

  	
   

  
	
  6,100,000

  	
   

  	
  6,109,980

  	
   

  	
  223,153,973

  	
   

  
	
  6,090,000

  	
   

  	
  6,099,980

  	
   

  	
  222,960,046

  	
   

  
	
  6,080,000

  	
   

  	
  6,089,980

  	
   

  	
  222,766,120

  	
   

  
	
  6,070,000

  	
   

  	
  6,079,980

  	
   

  	
  222,572,193

  	
   

  
	
  6,060,000

  	
   

  	
  6,069,980

  	
   

  	
  222,378,267

  	
   

  
	
  6,050,000

  	
   

  	
  6,059,980

  	
   

  	
  222,184,340

  	
   

  
	
  6,040,000

  	
   

  	
  6,049,980

  	
   

  	
  221,990,414

  	
   

  
	
  6,030,000

  	
   

  	
  6,039,980

  	
   

  	
  221,796,487

  	
   

  
	
  6,020,000

  	
   

  	
  6,029,980

  	
   

  	
  221,602,561

  	
   

  
	
  6,010,000

  	
   

  	
  6,019,980

  	
   

  	
  221,408,635

  	
   

  
	
  6,000,000

  	
   

  	
  6,009,980

  	
   

  	
  221,214,708

  	
   

  
	
  5,990,000

  	
   

  	
  5,999,980

  	
   

  	
  221,020,782

  	
   

  
	
  5,980,000

  	
   

  	
  5,989,980

  	
   

  	
  220,826,855

  	
   

  
	
  5,970,000

  	
   

  	
  5,979,980

  	
   

  	
  220,632,929

  	
   

  
	
  5,960,000

  	
   

  	
  5,969,980

  	
   

  	
  220,439,002

  	
   

  
	
  5,950,000

  	
   

  	
  5,959,980

  	
   

  	
  220,245,076

  	
   

  
	
  5,940,000

  	
   

  	
  5,949,980

  	
   

  	
  220,051,149

  	
   

  

 

I-6

 

	
  5,930,000

  	
   

  	
  5,939,980

  	
   

  	
  219,857,223

  	
   

  
	
  5,920,000

  	
   

  	
  5,929,980

  	
   

  	
  219,663,296

  	
   

  
	
  5,910,000

  	
   

  	
  5,919,980

  	
   

  	
  219,469,370

  	
   

  
	
  5,900,000

  	
   

  	
  5,909,980

  	
   

  	
  219,275,443

  	
   

  
	
  5,890,000

  	
   

  	
  5,899,980

  	
   

  	
  219,081,517

  	
   

  
	
  5,880,000

  	
   

  	
  5,889,980

  	
   

  	
  218,887,591

  	
   

  
	
  5,870,000

  	
   

  	
  5,879,980

  	
   

  	
  218,693,664

  	
   

  
	
  5,860,000

  	
   

  	
  5,869,980

  	
   

  	
  218,499,738

  	
   

  
	
  5,850,000

  	
   

  	
  5,859,980

  	
   

  	
  218,305,811

  	
   

  
	
  5,840,000

  	
   

  	
  5,849,980

  	
   

  	
  218,111,885

  	
   

  
	
  5,830,000

  	
   

  	
  5,839,980

  	
   

  	
  217,917,958

  	
   

  
	
  5,820,000

  	
   

  	
  5,829,980

  	
   

  	
  217,724,032

  	
   

  
	
  5,810,000

  	
   

  	
  5,819,980

  	
   

  	
  217,530,105

  	
   

  
	
  5,800,000

  	
   

  	
  5,809,980

  	
   

  	
  217,336,179

  	
   

  
	
  5,790,000

  	
   

  	
  5,799,980

  	
   

  	
  217,142,252

  	
   

  
	
  5,780,000

  	
   

  	
  5,789,980

  	
   

  	
  216,948,326

  	
   

  
	
  5,770,000

  	
   

  	
  5,779,980

  	
   

  	
  216,754,399

  	
   

  
	
  5,760,000

  	
   

  	
  5,769,980

  	
   

  	
  216,560,473

  	
   

  
	
  5,750,000

  	
   

  	
  5,759,980

  	
   

  	
  216,366,547

  	
   

  
	
  5,740,000

  	
   

  	
  5,749,980

  	
   

  	
  216,172,620

  	
   

  
	
  5,730,000

  	
   

  	
  5,739,980

  	
   

  	
  215,978,694

  	
   

  
	
  5,720,000

  	
   

  	
  5,729,980

  	
   

  	
  215,784,767

  	
   

  
	
  5,710,000

  	
   

  	
  5,719,980

  	
   

  	
  215,590,841

  	
   

  
	
  5,700,000

  	
   

  	
  5,709,980

  	
   

  	
  215,396,914

  	
   

  
	
  5,690,000

  	
   

  	
  5,699,980

  	
   

  	
  215,202,988

  	
   

  
	
  5,680,000

  	
   

  	
  5,689,980

  	
   

  	
  215,009,061

  	
   

  
	
  5,670,000

  	
   

  	
  5,679,980

  	
   

  	
  214,815,135

  	
   

  
	
  5,660,000

  	
   

  	
  5,669,980

  	
   

  	
  214,621,208

  	
   

  
	
  5,650,000

  	
   

  	
  5,659,980

  	
   

  	
  214,427,282

  	
   

  
	
  5,640,000

  	
   

  	
  5,649,980

  	
   

  	
  214,233,356

  	
   

  
	
  5,630,000

  	
   

  	
  5,639,980

  	
   

  	
  214,039,429

  	
   

  
	
  5,620,000

  	
   

  	
  5,629,980

  	
   

  	
  213,845,503

  	
   

  
	
  5,610,000

  	
   

  	
  5,619,980

  	
   

  	
  213,651,576

  	
   

  
	
  5,600,000

  	
   

  	
  5,609,980

  	
   

  	
  213,457,650

  	
   

  
	
  5,590,000

  	
   

  	
  5,599,980

  	
   

  	
  213,263,723

  	
   

  
	
  5,580,000

  	
   

  	
  5,589,980

  	
   

  	
  213,069,797

  	
   

  
	
  5,570,000

  	
   

  	
  5,579,980

  	
   

  	
  212,875,870

  	
   

  
	
  5,560,000

  	
   

  	
  5,569,980

  	
   

  	
  212,681,944

  	
   

  
	
  5,550,000

  	
   

  	
  5,559,980

  	
   

  	
  212,488,017

  	
   

  
	
  5,540,000

  	
   

  	
  5,549,980

  	
   

  	
  212,294,091

  	
   

  
	
  5,530,000

  	
   

  	
  5,539,980

  	
   

  	
  212,100,164

  	
   

  
	
  5,520,000

  	
   

  	
  5,529,980

  	
   

  	
  211,906,238

  	
   

  
	
  5,510,000

  	
   

  	
  5,519,980

  	
   

  	
  211,712,312

  	
   

  
	
  5,500,000

  	
   

  	
  5,509,980

  	
   

  	
  211,518,385

  	
   

  

 

I-7

 

APPENDIX J

 

Quality Assurance Program

 

Seller
shall implement a Quality Assurance Program to provide assurance that design,
purchasing, manufacturing, shipping, storage, construction, testing and
examination of all equipment, materials and services related to the Facility
will comply with the requirements of this Agreement and the manufacturers’
and/or suppliers’ requirements for successful operation of the Facility.

 

Quality
at Seller

 

What
is quality? Seller believes that quality is the unit of measure for assessing
fulfillment of project goals. A quality project meets or exceeds the contract
requirements and accepted standards of professional and industry practice.
Furthermore, high quality projects are those that address client and societal
needs more successfully than “low” quality projects. While this may seem like a
straightforward definition, the process to ensure quality is much more involved
and includes quality management, quality planning, quality control, quality
assurance, a quality system, and total quality management.

 

“Quality
assurance” refers to a process that reduces the potential for error throughout
the phases of a project. On projects with a Quality Assurance Program, the
chances of producing a poor quality deliverable are substantially reduced.
Quality control procedures are an integral part of quality assurance.
Historically, industry has used the term “quality control” to indicate a
checking procedure for verifying the quality of deliverables. This checking
commonly occurs at the end of the process, long after an error may have been
made and compounded by subsequent work. While quality control checks at the end
of a project are an essential exercise, scheduled periodic reviews at each
phase of project conceptual and final design are integral to Seller’s Quality
Assurance Program. In addition, quality maintenance which meet or exceed
manufacturers’ and/or suppliers’ requirements and best industry practices must
be an integral part of Seller’s Quality Assurance Program.

 

The
Quality Management Process

 

The
surest way to achieve satisfactory quality is to adhere to a proven quality
process. The term “quality” most accurately refers to a project’s ability to
satisfy needs when considered as a whole and each part of the process meets or
exceeds the standards of Prudent Utility Practices.

 

The
Seller project management team is responsible for proactively planning and
directing the quality of the work process, services, and deliverables. The
Seller project management team targets six areas to monitor quality:

 

J-1

 

1)              A written work plan with accompanying Q/A
Manual

2)              Detailed review of the project design at the
planning and conceptual design phase

3)              Detailed review of project final design prior
to construction

4)              A quality control program during construction
to verify implementation is in compliance with design documents and document
any changes.

5)              Independent engineering review of the entire
project process, from design review through commercial operation

6)              A written maintenance manual for the Facility
for the duration of Commercial Operation that complies with the maintenance
manuals of the manufacturers and suppliers from whom the Sellers have purchased
equipment and/or material and best industry practices.

 

Written Work Plan and Q/A Manual

 

The
idea of a written work plan and Q/A manual is to incorporate quality assurance
in all areas of project execution. Seller has found that quality needs to be
institutionalized into the project process, not only in the budgeting process,
but everywhere. For example, specific tasks and duties need to be allocated to
specific individuals; roles and interface points need to be clearly defined;
individual assignments need to be realistic; special attention needs to be paid
to complex areas within projects; schedules need to be realistic and
achievable; and lastly the work culture needs to be enjoyable and open so that
employees are empowered to react quickly to symptoms of quality problems before
they actually manifest.

 

Seller’s
quality program shall be documented in a written work plan and Quality
Assurance manual (the “Q/A Manual”). The form and the format of the Q/A Manual
shall be developed by the Seller, but must comply with Prudent Utility
Practices and follow manufacturers and suppliers recommendations without
deviation. The content of the Q/A Manual shall provide written descriptions of
policies, procedures and methodology to accomplish a quality project. Seller
shall submit three (3) copies of the Q/A Manual within ninety (90) days
after the Effective Date to Buyer or Buyer’s Agent. The Q/A Manual shall be
kept current by the Seller throughout the term of this Agreement through the
submittal of revisions, as appropriate, by the Seller to Buyer or Buyer’s
Agent.

 

The
Q/A Manual shall describe the authority and the responsibility of the Persons
in charge of the Quality Assurance Program and inspection activities. It shall
also provide the plan for detailed review of project conceptual design and
final design, hold points, and methodology for document control and comment.
Furthermore, it shall provide the plan and strategy for quality control and
review during the construction project and for maintenance and operations
during Commercial Operation. The Q/A Manual shall strive; at a minimum, to
define control procedures or methods to assure the following:

 

(a)          The design documents, drawings, specifications, Q/A procedures,

 

J-2

 

records,
inspection procedures and purchase documents are maintained to be current,
accurate and in compliance with all applicable laws and regulations.

(b)        The purchased materials, equipment and
services comply with the requirements of this Agreement.

(c)         The materials received at the site are
inspected for compliance with specifications

(d)        The subcontracted work is adequately
inspected by third parties

(e)         Proper methods are employed for the
qualification of personnel who are performing Work

(f)           Proper documentation, control and disposition
of nonconforming equipment and materials is maintained

(g)        Proper records are kept and available
following project completion to ensure accurate documentation of as-built
conditions.

(h)        Detailed and complete plan for maintenance
and operation during commercial operations consistent with manufacturers and
suppliers recommendations and best industry practices.

 

Conceptual Design Review

 

Seller
has a team of professionals who develop and review the Facility layout and
Facility conceptual design. The team consists of specialists in land-use and
planning, permitting, meteorology, engineering, construction, project
management, and finance. A preliminary site plan is developed and meetings are
held to assess optimization of wind resource, constructability, minimization of
cultural and biological impacts, land use restrictions, and landowner
requirements. Preliminary road design will also be started and access to the
site will be reviewed in detail. When this plan is ready for review, a formal
plan and map is created and a final internal review is conducted. Following
that is detailed studies for biological, cultural and other types of impacts by
third parties. The site plan is then reviewed, modified as necessary, and then
used to begin the permitting and public review process. The site plan is
further modified based on comments in that process. At that point, the site
plan can be issued for construction, and final engineering can commence.

 

In
parallel with this process, preliminary conceptual design is started for the
major areas of the project, including the substation, transmission line,
foundations, underground collection system, communications system, and road and
grading is done to develop construction estimates as well as materials
specifications. All of these areas of conceptual designs are used to check and
verify the assumptions used for development of the site plan.

 

Final Engineering Design

 

Following
finalization of the site plan, the detailed design is done for the collection

 

J-3

 

system,
fiber-optic network, foundations, roads & grading, transmission line,
and substation by third party engineering firms licensed to practice in the
state in which the Facility is to be constructed. Each firm has their own quality
assurance and checking procedures, however Seller reviews the final work
products in detail to check with conformance with this Agreement and provides
comments as a second round of quality assurance. When Seller’s comments have
been incorporated, the design of each area is considered final, that design is
then submitted to an independent engineer for review and comment. This ensures
that another entity, in addition to Seller has done a comprehensive review of
all project areas and details to ensure conformance with this Agreement.

 

In
parallel with final design and checking activities, final geotechnical studies
will be conducted at the site, and a final wind resource assessment will be
performed with the issued-for-construction project layout. If existing
subsurface conditions are different from what is expected, the foundation
locations could be slightly modified or the foundation design on a specific
turbine could be modified. Any changes of this nature would be documented in
as-built design drawings and approved in advance by Seller.

 

Quality Assurance at the Construction Site

 

Seller
will hire a third party general contractor to construct the Facility. This
contractor will be required to have its own quality assurance program in place
using its own staff, as well as third party inspectors. The two primary areas
of focus at the site are assuring conformance of construction to design
drawings, and conformance of materials to specifications. The general
contractor will be required to provide third party inspectors and testing for
materials including concrete slump testing; rebar and concrete placement; cable
trenching, soil compaction testing, etc. The general contractor will also be
required to maintain a set of red-line drawings during the course of construction
to document any changes to the design documents. Proposed Facility changes
would be reviewed and approved in the field by the Seller construction
management team prior to implementation.

 

Quality
assurance of turbine erection is achieved through a combination of procedures
and processes. The general contractor will provide rigorous inspection of its
installation crew. The turbine supplier will have technical advisors on site to
inspect and sign off on turbine components received, oversee and monitor
turbine erection, and approve mechanical completion. In addition, Seller will
have its own construction management team on site consisting of a construction
manager and quality inspectors who will observe performance of all areas of the
work and ensure compliance with design documents. A team consisting of the
turbine supplier, Seller, and the general contractor will walk down each
turbine at mechanical completion to develop a comprehensive punchlist of any
unfinished or incorrect work. This punchlist is maintained by the contractor,
and is signed off by Seller upon completion of the punchlist items. Lastly, the
independent engineer performs periodic audits during construction to oversee
critical items, spot checks

 

J-4

 

individual
turbines, confirms construction progress, reports on any perceived issues, and
provides independent reporting and assessments to the Buyer and Buyer’s Agents

 

Following
completion of the Facility, the general contractor will be required to provide
as-built all design drawings and records of all materials testing conducted at
the site. This documentation will be maintained at the Facility generation site
during operations of the Facility.

 

J-5

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