Document:

Exhibit 4.148

Exhibit 4.148

 

SETTLEMENT AGREEMENT,
  WAIVER AND MUTUAL RELEASE

 

This Settlement Agreement ,
Waiver and Mutual Release (“Agreement”) is entered into on August 20,
2010, (“Effective Date”) by and between (i) NGP Blue Mountain I LLC (“NGP1”
or “Owner”) for itself and on behalf of its past, present and future parent
entities, affiliates, subsidiaries, shareholders, officers, directors,
partners, partnerships, fiduciaries, trustees and each of such entities’ and
persons’ respective employees, agents, members, predecessors, successors,
assigns and attorneys (collectively, including Parent - “Owner Entities”), (ii) 
NGP Blue Mountain Holdco LLC (“Parent”), and
(iii) Ormat Nevada Inc. (“Ormat” or “Contractor”), for itself and on
behalf of its past, present and future parent entities, affiliates,
subsidiaries, shareholders, officers, directors, partners, partnerships,
fiduciaries, trustees and each of such entities’ and persons’ respective employees,
agents, members, predecessors, successors, assigns and attorneys (collectively
– “Ormat Entities”).  For ease of reference, the parties hereto are sometimes
referred to herein individually as “Party” and collectively as the “Parties.” 
This Agreement is entered into based on the following recitals and mutual
promises.  Capitalized terms used herein without definition shall have the
meanings ascribed to those terms in the EPC Contract referred to below.

RECITALS

WHEREAS: 

A.               
On
March 28, 2008, NGP1 entered into an Engineering, Procurement and Construction
contract (“EPC Contract”) with Ormat for the turnkey construction of an
approximately $76 million, three-unit binary 49.5 MW (maximum gross) – 42.3
MW (net) Blue Mountain “Faulkner I” Geothermal Power Plant (“Facility”),
located approximately 20 miles 

 

 

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west of Winnemucca, Nevada in Humboldt County, with a Substantial Completion Guaranteed Date of December 31, 2009. 

B.                 Construction of the Facility by Ormat and its subcontractors took place between approximately October 2008 and October 9, 2009, at which time Ormat declared Substantial Completion of the Facility under the EPC Contract.  

C.                 Ormat was paid by NGP1 in full pursuant to the terms of the EPC Contract, including the payment of certain early completion and performance bonuses (“Bonuses”) based upon the Contractor’s declared Substantial Completion of the Facility. 

D.                The Facility experienced events of overheating in the “main ductbank” in the area adjacent to the main power building commencing at the end of October 2009 through mid-January 2010.

E.                 Between January 16, 2010 and March 5, 2010, the Facility experienced an outage (which was reduced to a partial outage from February 23, 2010) arising from overheating in the underground electrical cables located within the “main ductbank” that adjoins the Facility’s electrical control building (“Facility Shutdown”).  

F.                  NGP1 declared a force majeure event because of the loss of the Facility’s operational capacity and ability to deliver electric power to NV Energy pursuant to the obligations of NGP1’s Power Purchase Agreement.

G.                Commencing immediately upon notice of the Facility Shutdown, Ormat and its subcontractors re-designed, replaced, and/or repaired certain damaged Facility cables and other equipment between January and March 2010, and in coordination with NGP1’s timing requirements, committed to complete work on certain sections of the 13KV switchgear in need 

 

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of replacement during the Facility’s next regularly scheduled maintenance shutdown, estimated to be in October 2010.  

H.                Pursuant to Articles 25 and 32 of the EPC Contract, the Parties entered into a Tolling Agreement (and four extensions thereof) commencing on or about January 27, 2010 in order to extend the time necessary for written notice of any claim for indemnification under the EPC Contract.

I.                   Via various email messages, teleconferences and letters, including, without limitation, its letters dated February 8, 2010, March 26, 2010, April 22, 2010 and April 30, 2010, NGP1 tendered various demands and claims to Ormat arising under the EPC Contract (and other grounds) relating to the Facility Shutdown (collectively “Notice of Claim”).

J.                   Via various email messages, teleconferences and letters, including, without limitation, its letters dated February 17, 2010, March 30, 2010, and two letters of May 5, 2010, Ormat responded to NGP1’s various demands and claims under the EPC Contract (and other grounds).

K.                Certain disputes have arisen between the Parties under the EPC Contract and other alleged grounds relating to the construction and performance of the electrical and electrical-related equipment at the Facility, documentation requests, warranties and requested warranty extensions, performance of the Work, including proper conduct of repair works; refund of Bonuses and losses; indemnification for lost revenue, property damage, breach of warranty and diminution in value of the Facility as a result of the Facility Shutdown, liquidated damages, allegations concerning the Substantial Completion Date of the Facility, the Facility Shutdown, and the repairs necessary to restore the Facility to its full operational capacity following the 

 

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Facility Shutdown and other claims, losses, damages and costs incurred or demanded by NGP1 in connection with the Facility Shutdown (collectively “Disputed Matters”).

L.                 The Parties recognize that it is in their mutual interest to resolve all claims and disputes between them that pertain to the Disputed Matters.  It is therefore the desire and intention of the Owner and Contractor to enter into this Agreement in order to effect a settlement and mutual release of all previous, existing, or future claims between the Parties with respect to the Disputed Matters. 

NOW, THEREFORE, in consideration of the promises stated below and for other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned Parties hereto mutually agree as follows:

TERMS OF SETTLEMENT

1.                  SETTLEMENT CONSIDERATION:   In consideration for the final settlement of all claims whatsoever regarding the Disputed Matters, while expressly denying any wrongful conduct, Ormat shall pay and/or provide to NGP1 the following aggregate consideration (the “Settlement Consideration”):

1.1           Ormat shall pay to NGP1 the collective, total sum of One Million Dollars (US$1,000,000) (“Cash Payment”) within 5 business days of the execution and delivery of this Agreement.  The Cash Payment shall be made by wire transfer of immediately available funds to the following account:

            Bank:                Bank of the West

                                      4950 Kietzke Lane

                                      Reno, NV 

            Acct #:             247-101850

            Routing:           1211100782

            Beneficiary :    NGP Blue Mountain I LLC 

 

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Upon receipt, NGP1
shall issue and deliver a written confirmation of receipt of the Cash Payment
to Ormat, in the form attached hereto as Exhibit A.

1.2          
Ormat shall, without charge to NGP1 or its affiliates,
supply to Parent one complete “Level 1
Turbine” and one complete “Level 2 Turbine,” each as more fully described on
Exhibit B (collectively, the “Settlement Turbines”).  Ormat shall, at
its own cost and expense (including import duties and taxes, if applicable),
make all arrangements, including the processing of all documentation, necessary
to import the Settlement Turbines into the United States and deliver the
Settlement Turbines for storage to Ormat’s maintenance facility located at  the
Steamboat complex, Reno, Nevada no later than March 31, 2011, and shall
coordinate with the applicable Governmental Authorities in achieving clearance
of United States customs for the Settlement Turbines.  Ormat shall cause the
Settlement Turbines to be designed, fabricated, assembled and handled in
accordance with the standards set forth in the EPC Contract for the design,
fabrication, assembly and handling of the corresponding turbines supplied thereunder
with such modifications as necessary to correct for and avoid any vibration
issues similar to the vibration issues discovered with respect to the Unit 2
level 1 turbine delivered under the EPC Contract.  Without limiting the
generality of the foregoing, the Settlement Turbines shall be designed and constructed
to meet the same design criteria and capacity described in Exhibit A, the Scope
of Work in the EPC Contract for the existing turbines of the Power Plant, with
the modifications described above, and shall include a license to use
intellectual property rights solely in association with Ormat supplied
equipment at Owner sites.   

(i)                
Ormat shall store the Settlement Turbines at its maintenance
facility described above free of charge to NGP1, Parent or their affiliates for
a period not to exceed five (5) years from the date of this Agreement (the
“Storage Period”).   At the request of 

 

 

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Parent at any time during the Storage Period, Ormat shall further arrange to deliver to NGP1, Parent or their affiliates, each of the Settlement Turbines (together with any original turbine wheels removed from the Settlement Turbines in accordance with clause (ii) below) either (x) to any of the following specific locations: the Facility site, Pumpernickel or Crump, all located in the Nevada/Oregon area, at its own cost and expense, or (y) to any other location specified by Parent at NGP1’s expense, reimbursable within fifteen (15) days of invoice, in any case under either clause (x) or (y), as notified in writing by Parent no less than seven (7) days prior to the requested delivery time) on or before the time specified in such written notice (with respect to each Settlement Turbine, “Final Delivery”).  If no notice is received within the maximum Storage Period for one or more Settlement Turbines, Ormat shall, at its own expense, deliver the remaining Settlement Turbines to the Facility site.

(ii)               Prior to the earlier of (x) the fifth (5th) anniversary of this Agreement’s execution and delivery by both Parties and (y) ten (10) months prior to receipt of Parent’s notice of requested delivery time of the applicable Settlement Turbine, as described in subsection 1.2 (i) above, Parent shall have the option, exercisable in Parent’s sole discretion by delivery of written notice thereof to Ormat, to purchase from Ormat either or both of the “Level 1 Turbine Wheel” and/or the “Level 2 Turbine Wheel” for re-installation in one or both of the Settlement Turbines.  Such “Level 1 Turbine Wheel” and “Level 2 Turbine Wheel” are described in greater detail in Exhibit B. Upon exercise of the purchase option described herein by Parent, Ormat shall deliver each applicable turbine wheel and change it out for the original turbine wheel in the corresponding Settlement Turbines prior to Final Delivery thereof, for the total, all-inclusive prices (FOB US workshop) set forth below:   

 

	
    TURBINE WHEELS

 

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  	Level 1 Turbine Wheel:
	$ 300,000

	Level 2 Turbine Wheel:
	$ 200,000

  

  

The foregoing prices shall include all costs associated with delivery of the Level 1 Turbine Wheel and the Level 2 Turbine Wheel to Ormat’s maintenance facility identified above.  Such prices, together with sales taxes, shall be paid by Parent within fifteen (15) days after installation in the applicable Settlement Turbine, and shall include payment for (a) all costs of the equipment and materials comprising the turbine wheels, labor, transportation, engineering, design and other services, including physical re-installation into each applicable Settlement Turbine, relating to Ormat’s installation of the turbine wheels (including a license to use intellectual property rights solely in association with Ormat supplied equipment at one or more specified installation sites) provided by Ormat or its subcontractors or vendors; (b) all United States federal, state, regional, and local taxes, goods and services taxes, other than sales taxes which are specifically excluded from the price and shall be billed to and timely paid by Parent; (c) other than with respect to sales taxes, all other taxes, duties, levies, imposts, fees, or charges of any kind (whether in the United States or elsewhere and including, without limitation, any of the foregoing related to the importation of any items into the United States), including any increases thereof that may occur during the term of this Agreement; and (d) any duties, levies, imposts, fees, charges, and royalties (and including, without limitation, any of the foregoing related to the importation of any items into the United States) imposed on Ormat or its subcontractors or vendors with respect to any equipment and materials, labor, or services provided hereunder with respect to the turbine wheels.  Ormat shall, at its own cost and expense (including import duties and taxes, if applicable), make all arrangements, including the processing of all documentation and customs clearance, necessary to import the turbine wheels into the United States and shall re-install them 

 

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  in the
Settlement Turbines within ten (10) months after Parent’s exercise of its
option to acquire any of such turbine wheels.  From and after the installation
of any such turbine wheel into the applicable Settlement Turbine, such
Settlement Turbine shall, for purposes of this Agreement, be deemed to include
the corresponding turbine wheel installed pursuant to this paragraph and, among
other things, the warranties provided under this Agreement for the Settlement
Turbines shall apply to such Settlement Turbines as modified by the
installation of any new turbine wheels.  For the
avoidance of doubt, Parent may exercise its purchase option with respect to
each turbine wheel specified above only once, but may do so at a different time
for each Settlement Turbine within the period permitted under this paragraph.

(iii)            
  Ormat
    warrants good title, free and clear of all liens, claims, charges, security
    interests, and encumbrances whatsoever, to the Settlement Turbines (and any
    turbine wheels delivered in connection therewith).  Title to the Settlement
    Turbines (and any turbine wheels delivered in connection therewith) shall pass
    to Parent, free and clear of all liens, claims, charges, security interests,
    and encumbrances whatsoever, upon delivery to Ormat’s maintenance facility
    described above; provided, however, that Ormat shall have care, custody, and
    control of, and shall assume full risk of loss for, each Settlement Turbine (and
    any turbine wheels delivered in connection therewith) and shall exercise due
    care with respect thereto until Final Delivery, at which point risk of loss
    shall pass to Parent. 

(iv)            
For
a period of one year following Final Delivery, Ormat warrants that the Settlement
Turbines (a) shall be new and of good and suitable quality at Final Delivery;
(b) shall conform to the requirements of this Agreement, including the portions
of the EPC Contract incorporated herein by reference and all Applicable Laws
and Permit Requirements; (c) shall be free from any charge, lien, security
interest or other encumbrance; and (d) shall be free 

 

 

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of any Defects including Defects in design, materials or fabrication; provided that the warranty period for any Settlement Turbine or portion thereof required to be repaired, corrected or replaced following discovery of a Defect during the original one year warranty period shall be extended from the time of such repair, correction or replacement for a period ending on the earlier of (x) one year following completion of such repair, correction or replacement and (y) the second anniversary of the applicable date of Final Delivery.

1.3           Ormat shall perform at its sole cost and expense equipment replacement work of certain switchgear, and CBX1 breakers (“Additional Repair Work”) under the Work Warranty and Materials Warranty, as set forth in greater detail on Exhibit (B).  Ormat acknowledges and agrees that such Additional Repair Work shall be undertaken and, assuming an outage period of two weeks, completed during the Project’s first scheduled outage following the date hereof, presently scheduled for mid to end October, 2010  and NGP1 shall coordinate with Ormat in advance as to the final schedule for such outage.  Ormat further agrees that both Parties shall inspect such equipment.  Ormat shall promptly (and in any case prior to the end of such scheduled outage) replace all of the equipment identified on Exhibit B for Additional Repair Work irrespective of the findings during such inspection.  In addition, Ormat shall promptly (and use reasonable efforts to execute prior to the end of such scheduled outage) repair or replace, as necessary, any of such surrounding equipment found by the Parties to be Defective or otherwise damaged as a result of the events causing the Facility Shutdown.   Ormat represents and warrants that it has ordered replacement equipment and parts for all of the equipment identified on Exhibit B for Additional Repair Work to enable that such equipment will be delivered and available for installation on or before the start of the Project’s next scheduled outage as described above. NGP1 acknowledges and agrees that all parts and 

 

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materials (whether Defective, damaged or not) replaced by the said Repair Work or the additional warranty work, shall become the sole property of Ormat and Ormat shall have the right to remove such original parts and materials replaced by the Repair Work or additional warranty work from the site and use it as it wishes and at its sole discretion.

1.4             Notwithstanding anything to the contrary in the EPC Contract, the Warranty Period (inclusive of all rewarranty) applicable to the turbines previously delivered under the EPC Contract shall mean the period commencing on the Substantial Completion Date and ending on the fifth (5th) anniversary of this Agreement’s execution and delivery by both Parties.  .

1.5           Notwithstanding anything to the contrary in the EPC Contract, the Warranty Period for work and equipment related to the Facility repairs during January 2010-March 2010 shall be extended as follows: 

a.   For repaired and replaced cables:  Two (2) additional rewarranty years, commencing on March 10, 2010, and ending March 9, 2012.

 

b.   For Switchgear:  Two (2) additional rewarranty years, commencing upon completion of each switchgear repair and replacement work in accordance with Exhibit C, and ending on the date which is 2 years later for each such repair work.

 

c.   For the damaged portions of the Electrical Building:  Three (3) additional rewarranty years, commencing on March 10, 2010, and ending March 9, 2013.

                        

Except as modified under Section 1.4 or this Section 1.5, all other warranties in the EPC Contract shall remain in effect as stated in the EPC Contract.

 

2.                    SETTLEMENT OF DISPUTED MATTERS, WAIVER AND RELEASE

2.1              By this Agreement, on behalf of itself and each Owner Entity, NGP1 hereby completely releases and forever discharges each and every Ormat Entity from any and all 

 

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previous, existing or future claims, contentions, debts, liabilities, demands, promises, agreements, costs, expenses (including, but not limited to, attorneys’ fees), damages, actions or causes of action, or whatever kind or nature, whether now known or unknown, and whether based on contract, tort, statutory or other legal or equitable theory of recovery, which any Owner Entity has, or could have had, has claimed or could have claimed, which relate to, arise from or are connected to any activity described or based on, arising out of, or in connection with the Facility Shutdown, Notice of Claim, and/or Disputed Matters, other than the obligations created under Article 1 of this Agreement for payment or performance by Ormat of the Settlement Consideration (“Owner Released Matters”).  

2.2               By this Agreement, on behalf of itself and each Ormat Entity, Ormat hereby completely releases and forever discharges each and every Owner Entity from any and all previous, existing or future claims, contentions, debts, liabilities, demands, promises, agreements, costs, expenses (including, but not limited to, attorneys’ fees), damages, actions or causes of action, or whatever kind or nature, whether now known or unknown, and whether based on contract, tort, statutory or other legal or equitable theory of recovery, which any Ormat Entity has, or could have had, has claimed or could have claimed, which relate to, arise from or are connected to any activity described or based on, arising out of, or in connection with the Facility Shutdown, Notice of Claim, and/or Disputed Matters, other than the obligations created under Article 1 of this Agreement for payment or performance by one or more Owner Entities as stated therein (“Contractor Released Matters”).  

2.3               Intent.  In connection with the above waivers and relinquishments, each of the Parties hereby acknowledges that it is aware that, after executing this Agreement, it or its attorneys or agents may discover claims or facts in addition to or different from those which it 

 

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now knows or believes to exist with respect to the subject matter of this Agreement, the Parties hereto, or, with respect to the Owner Entities, the Owner Released Matters, and with respect to the Contractor Entities, the Contractor Released Matters, but that it is the intention of the Owner Parties to fully, finally and forever settle and release all of the Owner Released Matters and claims, disputes and differences known or unknown, suspected or unsuspected, which now exist, may exist, or heretofore may have existed against the Ormat Entities relating to the Owner Released Matters, and it is the intention of the Ormat Entities to fully, finally and forever settle and release all of the Contractor Released Matters and claims, disputes, and differences known or unknown, suspected or unsuspected, which now exist, may exist, or heretofore may have existed against the Owner Entities relating to the Contractor Released Matters.  

2.4               No Pending or Future Lawsuits.  NGP1 hereby further represents to Ormat that it and each Owner Entity has no lawsuits, claims, complaints or actions pending in its name, or on behalf of any other person or entity, against any Ormat Entities in any court, whether federal or in any territory, state or country, before any arbitrator or before any government agency or entity, worldwide.  NGP1 also represents to Ormat hereto that it does not and the other Owner Entities do not intend to bring any claims or complaints on its own behalf or on behalf of any other person or entity with respect to the Owner Released Matters against any of the Ormat Entities in any court, whether federal or in any territory, state or country, before any arbitrator, or before any government agency or entity, worldwide.  For the avoidance of doubt, this Agreement does not waive NGP1’s rights in respect of known issues that do not pertain to the Disputed Matters or future warranty claims in the EPC Contract which are unrelated to the Disputed Matters.  NGP1 represents and warrants to Ormat that it and the other Owner Entities are not aware of any additional warranty items or other issues other than those which have been previously disclosed 

 

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to Ormat. Notwithstanding any provision to the contrary contained herein, neither Party releases, waives or otherwise gives up its right to enforce the terms of this Agreement.

2.5              No Assignment of Claims.  The Parties hereby represent and warrant that with respect to the claims released by each of them, each is the sole owner of such claims, demands, and causes of action released by such Party, and that no assignment (whether separately or by operation of contract or law) of any claims, demands, or causes of action have been made to any other persons or entities by the Party.  Each of the Parties hereto agrees to indemnify and hold harmless the other Parties and their successors and assigns, from and against any loss, claims, liabilities or assignment of any of the claims, demands, or causes of action released herein by the Party.  

2.6              The Parties agree that nothing in this Agreement shall in any way compromise, modify, discharge, waive, or otherwise affect any Party’s rights or obligations under the EPC Contract or other applicable law, except as expressly provided in this Agreement.

3.                   DENIAL OF LIABILITY

3.1              The Parties acknowledge and agree that this Agreement is for the compromise of disputed claims and is made to avoid litigation and expense.  Accordingly, it is understood and agreed by each of the Parties hereto:

            A.        that this Agreement is not, and shall not be deemed to be an admission of liability or responsibility by any Party, any such liability or responsibility being expressly denied; and

            B.        that this Agreement is not, and shall not be deemed to be an admission of the truth of any allegation or statement made by NGP1 or Ormat. 

 

 

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3.2              The Parties agree not to introduce this Agreement or the fact of the settlement effected herein into evidence in any action or proceeding except as may be necessary to enforce this Agreement.  

4.                   ADDITIONAL REPRESENTATIONS AND WARRANTIES

4.1              Ormat represents to NGP1 that, as of the Effective Date of this Agreement:

4.1.1                 Ormat is a corporation duly formed, validly existing, and in good standing under the laws of the State of Delaware, and it has the lawful authority to engage in the business it presently conducts and contemplates conducting.

4.1.2                 Ormat has the authority to execute and carry out this Agreement and to perform its obligations hereunder, and all such actions have been duly authorized by all necessary corporate action on its part.

4.1.3                 This Agreement has been duly and validly executed and delivered by Ormat.  This Agreement constitutes a legal, valid, and binding obligation of Ormat, enforceable in accordance with its terms, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity.  No authorization, approval, exemption or consent by any governmental authority is required in connection with the authorization, execution, delivery and carrying out of the terms of this Agreement.

4.1.4                 Ormat has received all consents and authorizations required to enter into and effectuate this Agreement as a legal, valid, and binding obligation of Ormat.  

4.2              NGP1 represents to Ormat that, as of the Effective Date of this Agreement:

4.2.1                 NGP1 is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Delaware, and it has the lawful 

 

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authority to engage in the business it presently conducts and contemplates conducting.

4.2.2                 NGP1 has the authority to execute and carry out this Agreement and to perform its obligations hereunder and all such actions have been duly authorized by all necessary corporate action on its part.

4.2.3                 This Agreement has been duly and validly executed and delivered by NGP1.  This Agreement constitutes a legal, valid, and binding obligation of NGP1, enforceable in accordance with its terms, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity.  No authorization, approval, exemption or consent by any governmental authority is required in connection with the authorization, execution, delivery and carrying out of the terms of this Agreement.

4.2.4                 NGP1 has received all consents and authorizations required to enter into and effectuate this Agreement as a legal, valid and binding obligation of NGP1.  

5.                   GENERAL PROVISIONS

5.1              This Agreement contains the entire agreement between the Parties and may not be altered or amended except by a writing signed by all of the Parties hereto.  This Agreement may be modified or amended only by an instrument in writing duly executed by all Parties.  This Agreement supersedes all prior agreements, understandings, and discussions related to the claims arising from the Disputed Matters.  

5.2              This Agreement shall be binding upon, and shall inure to the benefit of, the Parties, and, solely to the extent stated expressly herein, this Agreement shall be binding upon and shall inure to the benefit of the Ormat Entities and the Owner Entities.  

 

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5.3              No Party may assign or transfer this Agreement in whole or in part, except upon the prior written consent of the other Party.

5.4              This Agreement shall be governed by the laws of the State of Nevada, without regard to conflicts of laws principles.  Each of the Parties hereby irrevocably and unconditionally submits itself and its property in any legal action relating to this Agreement to the exclusive general jurisdiction of the courts of the State of Nevada.  

5.5              Any Notice pursuant to the terms and conditions of this Contract shall be in writing and deemed effective as follows:  (a) if delivered personally, upon delivery; (b) if sent by certified mail, return receipt requested, upon certified receipt; (c) if sent by a recognized mail or courier service, with delivery receipt requested, upon receipt; or (d) if sent by facsimile transmission, when dispatched and acknowledge by recipient as having been received in full and in legible form.  Notices shall be addressed to the following persons and address (or to such other persons or addresses as the respective Parties may add or substitute by written Notice):

If to Owner:                                       NGP Blue Mountain I LLC

                                                            595 Double Eagle Court, Suite 2001

                                                            Reno, Nevada 89521

                                                            Attention: Max Walenciak 

                                                            Fax: (775) 853-2375

 

            with a copy to:                      Nevada Geothermal Power Inc.

                                                            Suite 900-409 Granville Street

                                            Vancouver, BC V6C 1T2

                                                            Canada 

                                                            Attention: Brian Fairbank & Andrew Studley 

                                                            Fax: (604) 688-5926

 

            with a copy to:                      Latham & Watkins LLP

                                                            600 West Broadway, Suite 1800

                                            San Diego, C A 92101 

                                            Attention: Kelley M. Gale, Esq. 

                                            Fax: (619) 696-7419

 

 

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If to Contractor:                                Ormat Nevada, Inc.

                                                            6225 Neil Road

                                                            Reno, Nevada 89511

                                                            Attention: Yoram Bronicki

                                                            Telephone: (775) 356-9029 

                                                            Facsimile:  (775) 356-9039

 

            with a copy to:                      Ormat Nevada, Inc.

                                                            6225 Neil Road

                                                            Reno, Nevada 89511

                                                            Attention:  Zvi Reiss

                                                            Telephone: (775) 356-9029 

                                                            Facsimile:  (775) 356-9039

 

with a copy to:                  Lynn Alster, Esq.

                                            New Industrial Zone

                                            P.O. Box 68

                                            Szydlowski Road

                                            Yavne, Israel 81100

                                            Facsimile: (972) 89439901

 

 

5.6              If any provision of this Agreement is determined to be illegal or unenforceable, that provision shall be deemed stricken and all remaining provisions shall remain in full force and effect.

5.7              This Agreement has been prepared jointly by counsel for all Parties, with a full opportunity for all Parties to negotiate its terms.  Accordingly, each Party acknowledges that any ambiguity in the Agreement shall not be interpreted against the Party that drafted the Agreement and any right to so interpret such ambiguity is hereby waived.

5.8              Confidentiality:  Each of the Parties agrees that none of them has nor will any of them reveal in the future any of the terms or conditions of this Agreement with any person, organization or entity, except as set out specifically otherwise hereto.  Each Party agrees that it will, and will require its respective agents, representatives, attorneys and others acting on its 

 

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behalf, to keep the facts, terms and amounts stated in this Agreement completely confidential, and not to disclose the terms, amount or fact of the settlement embodied in this Agreement to anyone, provided that a Party may make disclosures as are required by law, court order, by the rules of any stock exchange to which it or its affiliates are or shall be subject, or, after prior coordination with the other Party as may be reasonably practicable or, if such prior coordination is not reasonably practicable in the determination of the disclosing Party, then with notice provided to the other Party promptly following such disclosure, those portions of this Agreement that are, determined by the disclosing Party to be reasonably necessary for insurance underwriting, financing or refinancing, operational contracts, or the sale or transfer of any ownership interest in the Facility, and provided further that Ormat shall be entitled to make disclosures as it may deem necessary for the conduct of its defense or of any dispute or for recovery of amounts in connection with the Disputed Matters from its Subcontractors, Vendors, insurers or advisors.  Subject to the aforesaid, if inquiries arise concerning the subject of this Agreement, a Party will simply state “the matter has been resolved” and will make no other comment.  Each Party further recognizes and acknowledges that this confidentiality provision is a material term of this Agreement, and that its violation will constitute a material breach which shall not affect the continuing validity or enforceability of this Agreement.  The prevailing party in any claim for damages upon breach of this confidentiality provision shall recover its attorneys’ fees incurred.

5.9              This Agreement may be executed and signed in counterpart and faxed signatures shall be effective as originals.  All signatories hereto state and affirm they have the authority to execute this Agreement and thus they thereby bind the Party which each purports to represent.

 

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5.9       This Agreement may be executed and signed in counterpart and faxed signatures shall be effective as originals.  All signatories hereto state and affirm they have the authority to execute this Agreement and thus they thereby bind the Party which each purports to represent.

APPROVED AND AGREED:

                                                                        OWNER:

 

DATED: August 20, 2010                           NGP BLUE MOUNTAIN I LLC, a Delaware limited liability company

 

 

                                                                        By:_________/s/ Brian Fairbank_______________

                                                                        Name: Brian D. Fairbank

                                                                        Title:    President and Chief Executive Officer

 

 

                                                                        CONTRACTOR:

 

DATED: August 20, 2010                           ORMAT NEVADA, INC., a Delaware corporation

 

 

                                                                        By:___________________________________

                                                                        Name: 

                                                                        Title:    

 

 

                                                                        PARENT:

 

DATED: August 20, 2010                           NGP BLUE MOUNTAIN HOLDCO LLC, a Delaware limited liability company

 

 

                                                                        By:_______/s/ Brian Fairbank________________

                                                                        Name: Brian D. Fairbank

                                                                        Title:    President and Chief Executive Officer]

                                                                        

| ||

	
19

 

                                                                        

 

                                                                        CONTRACTOR:

 

DATED: August 20, 2010                           ORMAT NEVADA, INC., a Delaware corporation

 

 

                                                                        By:_______/s/ Connie Stechman_______________

                                                                        Name: Connie Stechman

                                                                        Title:    Assistant Secretary

  

| ||

	
20

 

 

APPROVED AND AGREED:

                                                                        OWNER:

 

DATED: August 20, 2010                           NGP BLUE MOUNTAIN I LLC, a Delaware limited liability company

 

 

                                                                        By:_________/s/ Brian Fairbank_______________

                                                                        Name: Brian D. Fairbank

                                                                        Title:    President and Chief Executive Officer

 

| ||

	
21

 

 

 

APPROVED AND AGREED:

                                                                        OWNER:

 

DATED: August 20, 2010                           NGP BLUE MOUNTAIN I LLC, a Delaware limited liability company

 

 

                                                                        By:_________/s/ Brian Fairbank_______________

                                                                        Name: Brian D. Fairbank

                                                                        Title:    President and Chief Executive Officer

 

| ||

	
22

 

 

 

APPENDIX A

 

Confirmation of Receipt of Payment

 

To:         Ormat Nevada Inc.

               6225 Neil Road

               Reno, Nevada

 

               Via Email and Facsimile Transmission:

 

Date:    ___________________________

 

 

Dear Sir/Madame:

 

We hereby acknowledge receipt in full of the Cash Payment under the Settlement Agreement, Waiver and Mutual Release entered into as of [    ] 2010 by and between, inter alia, NGP Blue Mountain I LLC and Ormat Nevada Inc.

 

Executed this ___ day of ____, 20[ ].

 

 

| ||

	
23

 

 

 APPENDIX B

 

          Description of Settlement Turbines,  Turbine Wheels and Additional Repair Work

 

	Settlement Turbines 

 

Provide two (2) complete assembled turbines, one level 1 turbine and one level 2 turbine.

Each Turbine will consist of the following main components and shall be assembled as one unit, checked and balanced, that can be installed on the turbo-generator skid instead of one of the existing turbines :

            * HP casing

            * Exhaust casing

            * Shaft assembly

            * Expansion set including wheels and nozzles

Each settlement turbine will be compatible with the existing turbines, so it can operate at the same capacity with identical design parameters as specified in Exhibit A of the EPC Contract.

Excluded from the settlement turbines, are any ancillary systems such as oil system, injection valves, turbo-generator  skid, generator, inlet & outlet piping, couplings etc. 

 

	Turbine Wheels 

 

            * One (1)  turbine expansion set  for level 1 turbine,  consisting  of  Three (3) turbine wheels and nozzles rings,  designed to meet the same design conditions as specified in  Exhibit A of the EPC Contract . 

            * One (1)  turbine expansion set  for level 2 turbine,  consisting  of  Two (2) turbine wheels and nozzles rings,  designed to meet the same design conditions as specified in  Exhibit A of the EPC Contract. 

 

	Additional Repair Work 

 

Provide, disassemble and replace  few sections of the existing Powercon, 13.8KV switchgear  with new identical parts  as follows:

 

a. Main Switchgear circuit breaker assigned as CBX , specified as follows:

One (1 ) 15 kV, 3000 Amp. 1000 MVA vacuum power circuit breaker, three-pole, with electrically operated, stored-energy mechanism for local/remote operation and local manually open/close device, with two (2) SPDT voltage free auxiliary contacts for remote open/close indication.

 

b. Three (3 ) Identical Bays, one for for each Generator feeder. Each bay includes  the necessary equipment for generator breaker tripping/closing and sensing PTs/CTs for generator protection, control and mutterings and the following items:  

 

| ||

	
24

 

 

1 -         15 kV, 1200 Amp. 1000 MVA vacuum power circuit breaker, three-pole, with electrically operated, stored-energy mechanism for local/remote operation and local manually open/close device with two (2) SPDT voltage free auxiliary contacts for remote open/close indication.

 

1 -          Breaker stationary structure.

 

3 -         Current transformer, 2000/5 Multi- Ratio (set 1500/5), window type, accuracy class C200, ABB type SCV, or approved equal, 1 per pole on bus side of breaker, for connection to differential relay device 87G.

 

3 -         Current transformer, 1200/5 Multi- Ratio (set 1200/5), window type, accuracy class C200, ABB type SCV, or approved equal, on generator entry side of breaker for speed controller.

 

1 -         Current transformer, 1200/5 Multi- Ratio (set 1200/5), window type, accuracy class C200, ABB type SCV, or approved equal, on generator entry side of breaker for 50/51 voltage regulator.

 

3 -         Current transformer, 1200/5 single-Ratio, window type, ANSI metering accuracy class 0.15B1.8, 1 per pole on line side (cable entry side) of the breaker.

 

2 -         Draw out potential transformer, ABB type VIZ-11, or approved equal, with two (2) primary current limiting fuses, 14,400 Volt, 1000 VA, ratio120:1, connected on generator entry side (cable entry side) of breaker. Secondary connection: open delta, for 3-phase line to line sensing, with secondary fuse holders with tin plated copper links.

 

2  -         Draw-out potential transformer, ANSI metering accuracy class 0.15%, with primary current limiting fused, 14,400 volt, 1000 VA, ratio 120:1, connected to generator side of the breaker, with secondary fuses.

Low voltage side connection: open DELTA, for revenue meter.

 

2 -          Indicating lamp, breaker open-closed, green and red.

 

1 -          Breaker closing fuse block, pull-out type, two-pole.

 

1 -          Breaker tripping fuse block, pull-out type, two-pole.

 

1 -         Circuit breaker control switch.  Control switch to trip breaker at any position and close breaker in “Test” position only.  The control switches to be lockable in either close or trip position.

 

1 -         Capacitor trip device 120 VAC input, as back-up, to trip breaker when 125 VDC source fails. CTD-5 shall have 2 alarm contacts (1 N.O, 1 N.C) with a LED indicator.

 

| ||

	
25

 

 

 

1 -          120 VAC space heater, wired to common circuit breaker and thermostat.

 

-                   Provisions for power cable conductors terminations, 3 cables, 3 conductors, 500 MCM + #1 GND, 15 kV, MC-Type, bottom entry.

 

-                    Low voltage and Control cables entry from bottom and top.

 

-                     Necessary bus, supports and ground bus,

 

-                   Ground studs.

 

| ||

	
26ex10-1.htm

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

Applied DNA Sciences, Inc.

25 Health Sciences Drive, Suite 113

Stony Brook,  New York 11790

Gentlemen and Ladies:

The undersigned (the “Subscriber”) hereby subscribes for a $_______________ principal amount senior secured convertible promissory note (“Note”) of Applied DNA Sciences, Inc., a Delaware corporation (the “Company”).  The Note is in the form attached hereto as Annex 1.

 

1.  Subscription. Subject to the terms and conditions hereof, the Subscriber agrees to pay $_______________ by check or wire transfer of immediately available funds as consideration for the Subscriber’s Note.  The Subscriber tenders herewith a check made payable at the direction of the Company or wire transfer, in the amount of $_______________.  The Subscriber acknowledges and agrees that this subscription is irrevocable by the Subscriber but is subject to acceptance by the Company.  The Subscriber understands and agrees that a placement fee of up to 15% of the proceeds of this subscription may be paid, and warrants to purchase 5% of the New Notes may be issued, to one or more placement agents in connection with this subscription.

2.  Subscription Compliance.  The Subscriber agrees that this subscription is subject to the following terms and conditions:

The Company shall have the right, in its sole discretion, to: (i) accept or reject this subscription; (ii) determine whether this Subscription Agreement has been properly completed by the Subscriber and (iii) determine whether the Subscriber has met all of the Company’s requirements for investment in the Note.  If the Company deems this subscription to be defective, deficient or otherwise non-compliant with the terms of this offering, the Subscriber’s funds will be returned promptly to the Subscriber without interest or deduction.

3.  Receipt of Information.

	
a.  

	
The Subscriber and Subscriber’s purchaser representative, if any, have received a copy of the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K, if any.  The Subscriber, either alone or together with Subscriber’s purchaser representative, if any, have such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the Company.

	
b.  

	
The Subscriber and Subscriber’s representative, if any, have had the opportunity to ask questions of and receive answers from the Company concerning the terms and conditions of the offering of the Note by the Company and to obtain any additional information Subscriber has requested which is necessary to verify the accuracy of the information furnished to the Subscriber concerning the Company and such offering.

4.  Representations of Subscriber. In connection with the purchase of the Note, the Subscriber hereby represents and warrants to the Company as follows:

	
a.  

	
The Subscriber is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Act.

 

  

  

  

 

 

	
b.  

	
The Note is being purchased for the Subscriber’s own account without the participation of any other person, with the intent of holding the Note for investment and without the intent of participating, directly or indirectly, in a distribution of the Note and not with a view to, or for a resale in connection with, any distribution of the Note or any portion thereof, nor is the undersigned aware of the existence of any distribution of the Company’s securities.  Furthermore, the undersigned has no present intention of dividing such Note with others or reselling or otherwise disposing of any portion of such Note, either currently or after the passage of a fixed or determinable period of time, or upon the occurrence or nonoccurrence of any predetermined event or circumstance.

	
c.  

	
The Subscriber has no need for liquidity with respect to his purchase of a Note and is able to bear the economic risk of an investment in the Note for an indefinite period of time and is further able to afford a complete loss of such investment.

	
d.  

	
The Subscriber represents that his financial commitment to all investments (including his investment in the Company) is reasonable relative to his net worth and liquid net worth.

	
e.  

	
The Subscriber recognizes that the Note will be sold to the Subscriber without registration under any United States federal or other law relating to the registration of securities for sale.

	
f.  

	
The Subscriber is aware that any resale of the Note cannot be made except in accordance with the registration requirements of the United States Securities Act of 1933, as amended (the “Securities Act”) or an exemption therefrom.

	
g.  

	
The Subscriber represents and warrants that all offers and sales of the Note shall be made pursuant to an exemption from registration under the Act or pursuant to registration under the Act, and the Subscriber will not engage in any hedging or short selling transactions with regard to the Note or the underlying common stock.

	
h.  

	
The Subscriber is not acquiring the Note based upon any representation, oral or written, by any person with respect to the future value of, or income from, the Note but rather upon an independent examination and judgment as to the prospects of the Company.

	
i.  

	
The Subscriber understands that the Company is an early stage company, has limited operating funds and has a limited operating history.  The Subscriber appreciates and understands the risks involved with investing in a Company with a limited operating history and has read and understands the risk factors and other information set forth in the Company’s Annual Report on Form 10-K, filed on December 23, 2009, and the Company’s Quarterly Reports on Form 10-Q, filed on February 11, 2010 and August 13, 2010.  These reports and any future filings made with the SEC under Section 15(d) of the Securities Exchange Act of 1934, as amended, can be obtained by visiting the Securities and Exchange Commission’s website at http://www.sec.gov.  The Subscriber is not relying on any other written information which may have been provided by the Company or the Company’s placement agent.

	
j.  

	
The Subscriber represents, warrants and agrees that it will not sell or otherwise transfer the Note without registration under the Securities Act or an exemption therefrom, and fully understands and agrees that the Subscriber must bear the economic risk of its purchase because, among other reasons, the Note has not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under the applicable securities laws of such states, or an exemption from such registration is available.  In particular, the Subscriber is aware that the Note is a “restricted security,” as such term is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and it may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are met.

 

  

2

  

 

	
k.  

	
The Company, by and through itself and/or legal counsel, has made no representations or warranties as to the suitability of the Subscriber’s investment in the Company, the length of time the undersigned will be required to own the Note, or the profit to be realized, if any, as a result of investment in the Company.  Neither the Company nor its counsel has made an independent investigation on behalf of the Subscriber, nor has the Company, by and through itself and counsel, acted in any advisory capacity to the Subscriber.

	
l.  

	
The Company, by and through itself and/or legal counsel, has made no representations or warranties that the past performance or experience on the part of the Company, or any partner or affiliate, their partners, salesmen, associates, agents, or employees or of any other person, will in any way indicate the predicted results of the ownership of the Note.

	
m.  

	
The Company has made available for inspection by the undersigned, and his purchaser representative, if any, the books and records of the Company. Upon reasonable notice, such books and records will continue to be made available for inspection by investors upon reasonable notice during normal business hours at the principal place of business of the Company.

	
n.  

	
The Note was not offered to the Subscriber by means of publicly disseminated advertisement or sales literature, nor is the Subscriber aware of any offers made to other persons by such means.

	
o.  

	
All information which the Subscriber has provided to the Company concerning the Subscriber is correct and complete as of the date set forth at the end of this Subscription Agreement, and if there should be any material adverse change in such information prior to receiving notification that this subscription has been accepted, the undersigned will immediately provide the Company with such information.

5.  Agreements of Subscriber.  The Subscriber agrees as follows:

	
a.  

	
The sale of the Note by the Company has not been recommended by any United States federal or other securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Subscription Agreement.

	
b.  

	
The Note and the underlying common stock will not be offered for sale, sold, or transferred other than pursuant to: (i) an effective registration under the Act or in a transaction otherwise in compliance with the Act; and (ii) evidence satisfactory to the Company of compliance with the applicable securities laws of other jurisdictions. The Company shall be entitled to rely upon an opinion of counsel satisfactory to it with respect to compliance with the above laws.

 

  

3

  

 

	
c.  

	
The Company is under no obligation to register the Note or to comply with any exemption available for sale of the Note without registration, and the information necessary to permit routine sales of securities of the Company under Rule 144 of the Act may not be available when you desire to resell them pursuant to Rule 144 of the Act. The Company is under no obligation to act in any manner so as to make Rule 144 available with respect to the Note.

	
d.  

	
There is no established market for the Note and it is not anticipated that any public market for the Note will develop in the future.

	
e.  

	
The Company may, if it so desires, refuse to permit the transfer of the Note unless the request for transfer is accompanied by an opinion of counsel acceptable to the Company to the effect that neither the sale nor the proposed transfer will result in any violation of the Act or the applicable securities laws of any other jurisdiction.

	
f.  

	
A legend indicating that the Note and the underlying common stock have not been registered under such securities laws and referring to the restrictions and transferability of the Note and the underlying common stock may be placed on the certificates or instruments delivered to the Subscriber or any substitutes thereof and any transfer agent of the Company may be instructed to require compliance therewith.

6.  Closing.  The Subscriber understands and agrees that the Company intends to issue the Note upon receipt by the Company of this Subscription Agreement, together with the Subscriber’s funds and certain other documents to be delivered to the Company by Subscriber.  The Subscriber further understands that there may be conditions to closing this subscription which if not met may result in the return of this subscription hereunder.

7.  Indemnification of the Company. The undersigned understands the meaning and legal consequences of the representations and warranties contained herein, and hereby agrees to indemnify and hold harmless, the Company, its respective agents, officers, managers and affiliates from and against any and all damages, losses, costs and expenses (including reasonable attorneys’ fees) which they or any of them may incur by reason of the failure of the Subscriber to fulfill any of the terms of this Subscription Agreement, or by reason of any breach of the representations and warranties made by the Subscriber herein, or in any document provided by the Subscriber to the Company.

8.  Representative Capacity. If an investment in the Company is being made by a corporation, partnership, trust or estate, the undersigned individual signing on behalf of the Subscriber, represents that he has all right and authority, in his capacity as an officer, managing member, trustee, executor or other representative of such corporation, trust or estate, as the case may be, to make such decision to invest in the Company and to execute and deliver this Subscription Agreement on behalf of such corporation, trust or estate as the case may be, enforceable in accordance with its terms. The undersigned individual also represent that any such corporation, trust or estate was not formed for the purpose of buying the Note hereby subscribed.

9.  Subscription Not Revocable. The undersigned hereby acknowledges and agrees that the undersigned is not entitled to cancel, terminate or revoke this Subscription Agreement or any agreements of the undersigned hereunder and that this Subscription Agreement shall survive the dissolution, death or disability of the undersigned.

 

  

4

  

 

10.  Restrictions on Transferability. The undersigned understands and agrees that the Note shall not be sold, pledged, hypothecated or otherwise transferred unless the Note is registered under the Act and applicable state securities laws or an exemption from such registration is available.

11.  Governing Law. This Subscription Agreement is being delivered and is intended to be performed in the State of New York, and shall be construed and enforced in accordance with, and the law of such state shall govern the rights of parties.

12.  Numbers and Gender. In this Agreement, the masculine gender includes the feminine gender and the neuter and the singular includes the plural, where appropriate to the context.

 

THIS SPACE INTENTIONALLY LEFT BLANK; QUESTIONNAIRE FOLLOWS

 

  

5

  

Exhibit 10.1

 

CONFIDENTIAL PROSPECTIVE PURCHASER QUESTIONNAIRE

This questionnaire is to be completed by each accredited investor (“Accredited Investor”) as defined in Rule 501 promulgated under the United States Securities Act of 1933, as amended (the “Securities Act”) who desires to purchase from Applied DNA Sciences, Inc., a Delaware corporation (the “Company”), a senior secured convertible promissory note (“Note”).

INSTRUCTIONS

This Questionnaire is being given to the person who has expressed an interest in purchasing Notes of the Company.  The purpose of this Questionnaire is to determine whether you meet certain standards, because the Securities to be offered by the Company have not been, and will not be, registered under the Securities Act.

If the answer to any questions is “None” or “Not Applicable,” please so state.

Your answers will be kept confidential at all times, however, you hereby agree that the Company may present this Questionnaire to such parties as it deems appropriate in order to assure itself that the offer and sale of Securities to you will not result in violations of federal or state securities laws which are being relied upon by the Company in connection with the offer and sale thereof.

INSTRUCTIONS:  Please type or clearly print your answer, and state “none” or “not applicable” when appropriate.  Please complete Section A and each other section you are requested to complete in Question A3.  If there is insufficient space for any of your answers, please attach additional pages.  If the Securities are to be owned by more than one individual or by a corporation or partnership, you may need extra copies of this Questionnaire.  You may use photocopies or request extra copies from the Company.

SECTION A:  SUBSCRIBER INFORMATION

 

	A1. 	Name(s) of Subscriber(s):  	 
	 	 	 
	 	 	 	 
	 	 	 	 
	A2. 	Principal Amount of Notes	 	 
	 	Subscribed for: $  	 	 	 
	 	 	 	 	 
	A3. 	Manner of Ownership of Securities (please check below):	 
	 	 	 
	__ 	One Individual ........	
Please complete Section A, B, C and, if applicable, D, E and F.

	 

 

  

 

  

 

	__ 	Husband and Wife.......	 	Please have one spouse complete Sections A, B, C and
	 	Tenants by the Entirety	 	if applicable, D, E and F. Please have both spouses complete Section C.
	 	 	 	 
	__ 	Tenants in Common.......	 	Please have each individual separately complete Sections A, B, and C and if applicable, D, E and F.
	 	 	 	 
	__ 	Joint Tenants with...... 	 	Please have each individual separately complete Sections A, B, and C and if applicable, D, E and F.
	 	Right of Survivorship	 	 
	 	Two or More Individuals	 	 
	 	(but not husband and wife)	 	 
	 	 	 	 
	__ 	Corporate Ownership.....	 	Please complete Sections A, B, D and, if applicable, E and F for the corporation.  Please have each person who owns an equity interest in the  corporation separately  complete Sections B and, if applicable, C, D, E and F.
	 	 	 	 
	__ 	Partnership Ownership...	 	Please complete Sections A, B and D, and have each general partner and limited partner separately complete Sections B, C, D, E and F, if applicable.
	 	 	 	 
	__ 	Trust Ownership ........	 	Please complete Sections A, B and F, if applicable, and have each beneficiary and trustee of the trust separately complete Sections B, C, D, E and F, if applicable.

 

SECTION B:  ACCREDITED INVESTOR STATUS

	
B1.

	
Please check one or more of the following definitions of “accredited investor,” if any, which applies to you.  If none of the following applies to you, please leave a blank.

	
         (a)

	
A Bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934 (the “Exchange Act”); an insurance company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, or its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are Accredited Investors.

	
         (b)

	
A Private Business Development Company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

 

  

2

  

 

	
        (c)

	
An organization described in Section 501(c)(3) of the Internal Revenue Code or corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.

	
        (d)

	
A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of purchase exceeds $1,000,000, excluding the value of the person’s primary residence1.

	
        (e)

	
A natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

	
        (f)

	
Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D.

	
        (g)

	
Any entity in which all of the equity owners are Accredited Investors.

 

SECTION C:  INDIVIDUAL INFORMATION

C1.  General Information

Name:

Age:____Social Security Number (if applicable):

Marital Status:____Spouse’s Name:

If the Securities are to be owned by two or more individuals (not husband and wife), are you related to any other co-owner(s)?

Yes___   No___

If yes, please explain the relationship(s):

 

 

 

 

 

 

 

 

 

 

1           An investor need not deduct from his or her net worth the amount of mortgage debt secured by an excluded primary residence, except to the extent that the amount of the mortgage liability exceeds the fair value of the residence.

  

3

  

C2(a).  Principal Residence:

 

	 	Address: 	 
	 	 	 Number         Street
	 	 	 
	 	 	 City           State/Province              Country            Zip code
	 	 	 
	 	Mailing Address (if other than Principal Residence above):
	 	 

	 	 	 
	 	 	 Number         Street
	 	 	 
	 	 	 
	 	 	 City           State/Province              Country            Zip code
	 	 	 
	 	Telephone Number: (     )                                                                                                           

 

C2(b).     Have you ever resided in the United States (including its territories and possessions) or held a United States passport?

Yes___   No___

If yes, please explain where you lived, how long you lived there, or when you held the passport:

 

	C3. 	Current Employment or Business Activity:	 
	 	 	 
	 	Company Name: 	 	 

 

	 	 	 	 
	 	Address: 	 	 
	 	 	Number         Street	 

 

	 	 	 	 
	 	 	City                 State/Province                    Country                          Zip code

 

	 	Telephone Number:    	(    )  	 
	 	 	 
	 	Principal Business: 	 	 
	 	 	 

 

	 	Position and Title: 	 
	 	 	 

 

	 	Description of Duties and Responsibilities:  
	 	 	 
	 	 	 	 

                  

Length of Time in Present Position:                                                                                      

Is the company publicly owned?:  Yes ___ No __________________

	
C4.

	
Education:  Please describe your business and/or professional education or training, listing any schools you have attended and degrees you have received.

  

4

  

 

	Dates  	School	Major	   Degrees/ 

Year Receive

 

 

 

 

 

 

	
C5.

	
Prior Employment or Business Activity:  Please describe your prior employment or principal business activities during the last five years, providing all information requested below.

 

 

	Dates  	
Company Name

and Address

	
Principal

Business 

	 Position 

& Title   

	
Description of

Duties and

Responsibilities

 

                                                                                                  

 

 

 

 

	
C6.

	
The undersigned will provide a financial statement if requested by the Company.

	
C7.

	
Net worth, inclusive of the net worth of your spouse and inclusive of the value of your principal residence, furnishings therein and personal automobiles):

 

	 	(  ) less than $100,000 	(  ) $100,000 to $199,999
	 	(  ) $200,000 to $499,999	(  ) $500,000 to $1,000,000
	 	(  ) over $1,000,000	 

 

	
C8.

	
Net worth:  Your net worth, inclusive of the net worth of your spouse and excluding the value of your principal residence, furnishings therein and personal automobiles:

 

	 	(  ) less than $100,000	(  ) $100,000 to $199,999
	 	(  ) $200,000 to $499,999  	(  ) $500,000 to $1,000,000
	 	(  ) over $1,000,000	 

 

  

5

  

                                                                                           

 

	
C9.

	
Indicate (a) your individual income from all sources for the calendar years 2008 and 2009 and estimated income for 2010 or (b) your joint income with your spouse from all sources for the calendar years 2008 and 2009 and estimated income for 2010:

(a)           individual income:

 

	  	  	  	  	  	  
	  	  	
$ 60,000

	
$100,001

	
$200,000

	
$500,000

	  	  	
   to

	
   to

	
     to

	
  and

	  	  	
$100,000

	
$199,999

	
$499,999

	
  over       

	  	  	  	  	  	  
	
2007

	  	
  (   )

	 (   )	 (   )	  (   )
	  	  	  	  	  	  
	
2008

	  	
  (   )

	 (   )	
 (   )

	  (   )
	  	  	  	  	  	  
	
2009

	  	
  (   )

	 (   ) 	
 (   )

	  (   )

 

	  	
(b)

	
joint income:

	  	  	  	  	  	  	  

 

 

	  	  	  	  	  	  
	  	  	
$ 60,000

	
$100,001

	
$200,000

	
$500,000

	  	  	
   to

	
   to

	
     to

	
  and

	  	  	
$100,000

	
$199,999

	
$499,999

	
  over       

	  	  	  	  	  	  
	
2007

	  	
  (   )

	 (   )	 (   )	  (   )
	  	  	  	  	  	  
	
2008

	  	
  (   )

	 (   )	
 (   )

	  (   )
	  	  	  	  	  	  
	
2009

	  	
  (   )

	 (   ) 	
 (   )

	  (   )

 

	
C10.

	
(a)  Was some portion of your income during your last taxable year taxed at the highest rate for income tax purposes?

______Yes                                ______No

	
  

	
(b)  Do you anticipate that some portion of your income during your current taxable year will be taxed at the highest rate for income tax purposes?

______Yes                                ______No

	
C11.

	
Investment experience:

	
  

	
(a)

	
The frequency with which you invest in marketable securities is:

(   ) often                      (   ) occasionally                      (   ) never

	
  

	
(b)

	
The frequency with which you invest in unmarketable securities is:

(   ) often                      (   ) occasionally                      (   ) never

  

6

  

SECTION D:  CORPORATE OFFEREES OR PARTNERSHIP OFFEREES

	
D1.

	
General Information

Legal Name of Corporation or Partnership:_________________________

____________________________________________________________

                Fictitious name:_______________________________________________

____________________________________________________________

	
  

	
Country of Incorporation:_____________________________________

Date of Incorporation:______________________________________

I.D. Number (if applicable):_______________________________________

Fiscal Year Ends:__________________________________________

Number of Equity Owners:____________________________________

Name and Title of Executive Officer Executing

Questionnaire:_____________________________________________

D2.           Business Address:__________________________________________

___________________________________________________________

Mailing Address (if different):___________________________

___________________________________________________________

                Telephone Number:            (___) ____________________________

	
  

	
Was the corporation or partnership formed for the specific purpose of purchasing securities?

______Yes                      ______No

	
  

	
Check if applicable to the corporation:

Subchapter S_________                                                                Professional_________

D3.           The undersigned represents and warrants as follows:

	
  

	
(a)

	
The corporation or partnership, as the case may be, has been duly incorporated or formed (if a partnership), is validly existing as a corporation or partnership in good standing under the laws of the jurisdiction of its incorporation or formation with full power and authority to enter into the transactions contemplated by the Subscription Agreement;

  

7

  

	 	
(b)

	
          (i)  The officers or partners of the undersigned who, on behalf of the undersigned, have considered the purchase of the Note and the advisers, if any, of the corporation or the partnership, as the case may be, in connection with such consideration are named below in this Questionnaire, and such officers and advisors or partners, if any, were duly authorized to act for the corporation or the partnership in reviewing such investment;

	
  

	
            (ii)  The names and positions of the officers or partners, of the undersigned who, on its behalf, have reviewed the purchase of the Note are as follows:  

______________________________________________________

______________________________________________________

	
  

	
              (iii)  In evaluating the merits and risks of the purchase of the Note, the corporation or the partnership, as the case may be, intends to rely upon the advice of, or will consult with, the following persons:

______________________________________________________

______________________________________________________

______________________________________________________

	
  

	
(c)

	
The officers of the corporation (if not Accredited Investors) or the partners of the partnership who, on its behalf, have considered the purchase of the Note and the advisors, if any, of the corporation or the partnership who, in connection with such consideration, together have such knowledge and experience in financial and business matters that such officer(s), partner(s) and such advisor(s), if any, together are capable of evaluating the merits and risks of the purchase of Note and of making an informed investment decision;

	
  

	
(d)

	
Together with any corporation or group of corporations with which it files a consolidated federal income tax return, the undersigned has reserves and/or net worth adequate to permit it to satisfy any tax or other liabilities arising from its liability with respect to the investment and the operation thereof;

	
  

	
(e)

	
The net worth of the corporation or the partnership is in excess of $__________________.

	
  

	
(f)

	
The corporation or the partnership has had, during each of the past two fiscal or tax years, gross income from all sources of at least $__________________ and $_____________________ respectively;

	
  

	
(g)

	
The undersigned expects the corporation or the partnership to have during the current fiscal or tax year, gross income from all sources of at least $_______________; and

	
  

	
(h)

	
The undersigned knows of no pending or threatened litigation the outcome of which could adversely affect the answer to any question hereunder;

  

8

  

(i)           Indicate the following if a partnership offeree:

(1)           The date the partnership was formed and state of formation:_____________

(2)           The names of each partner in the partnership:

_________________________________________________

_________________________________________________

	
  

	
Please have each individual partner execute a separate Questionnaire.

Section E:            Trust Offerees

E1.           General Information:

Legal Name:________________________________________________

Country of Formation:________________________________________

Date of Formation:_________________________________________

I.D. Number:______________ Fiscal Year Ends:_______

Number of Beneficiaries:___________________________________

Principal Purpose:_________________________________________

	
  

	
Was the trust formed for the specific purpose of purchasing Securities?

______Yes                                ______No

	
  

	
Is any  trustee a United States person, as that term is defined in Rule 902(k) promulgated under the Securities Act?

______Yes                                ______No

E2.           Business Address:__________________________________________

___________________________________________________________

Telephone Number:                  (___) _________________________________

Mailing Address:___________________________________________

___________________________________________________________

  

9

  

	
E3.

	
Authorization:

	
If the trust was established in connection with a deferred compensation plan, please attach a copy of the trust’s organizational documents and a properly certified copy of the resolutions adopted by the trust’s board of directors authorizing the trust to purchase the Note and authorizing the trustee named below to execute on behalf of the trust all relevant documents necessary to subscribe for and purchase the Note.  In all cases, please attach a properly certified copy of the resolutions adopted by the trustees of the trust authorizing the trust to purchase the Note and authorizing the trustee named below to execute on behalf of the trust all relevant documents necessary to subscribe for and purchase the Note.

Name of Authorized Trustee:___________________________

	
  

	
Section F:

	
Qualified Pension Plan (“Plan”) Offerees

F1.           Please initial the appropriate space below:

	
___________

	
a.

	
(initial)

	
                              The Plan requires the investment of each beneficiary or participant to be held in a segregated account and the Plan allows each beneficiary or participant to make his own investment decisions and, the decision to purchase the Note has been made by the beneficiary or the participant and such beneficiary or participant is an Accredited Investor (Please have each such beneficiary or participant execute a separate Questionnaire)

 OR

	
___________

	
b.

	
(initial)

	
The investment decisions made for the Plan are made by a plan fiduciary, whether a bank, an insurance company, or a registered investment advisor.

 OR

___________                      c.

	
 (initial)

	
The Plan has total assets exceeding $5,000,000.

F2.           General Information:

Legal Name:________________________________________________

Country of Formation:________________________________________

Date of Formation:_________________________________________

I.D. Number:______________ Fiscal Year Ends:_______

Number of Beneficiaries:___________________________________

Principal Purpose:_________________________________________

  

10

  

F3.           Business Address:__________________________________________

___________________________________________________________

Telephone Number:               (___) _________________________________

Mailing Address:___________________________________________

___________________________________________________________

	
F4.

	
Authorization:

	
If the investment decision is being made by a beneficiary or participant of a Plan, please attach applicable trust documents which permit each beneficiary or participant to make his own investment decisions.  In all other cases, please attach a properly certified copy of the resolutions adopted by the trustees of the Plan trust authorizing the Plan to purchase the Note and authorizing the fiduciary named below to execute on behalf of the Plan all relevant documents necessary to subscribe for and purchase the Note.

Name of Authorized Fiduciary:_________________________

	
F5.

	
Is any beneficiary or participant of a Plan a United States person, as that term is defined in Rule 902(k) promulgated under the Securities Act?

______Yes                                ______No

THIS SPACE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS

  

11

  

APPLIED DNA SCIENCES , INC.

SIGNATURE PAGE TO

QUESTIONNAIRE AND SUBSCRIPTION AGREEMENT

Your signature on this Signature Page evidences your agreement to be bound by the Questionnaire and the Subscription Agreement.

The undersigned represents that (a) he/she has read and understands this Subscription Agreement, (b) the information contained in this Questionnaire is complete and accurate and (c) he/she will contact the Company immediately if any material change in any of this information occurs before the acceptance of his/her subscription and will promptly sent the Company written confirmation of such change.

Subscriber hereby elects to subscribe under the Subscription Agreement for a $_______________ principal amount senior secured convertible promissory note and executes the Subscription Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Questionnaire and Subscription Agreement on the date set forth below.

Date of Execution: ______________, 2010

	  	
FOR INDIVIDUALS:

	  
	  	  	  
	  	  	  
	  	
_____________________________

	  
	  	
(Print Name)

	  
	  	  	  
	
Dated: ___________, 2010

	
_____________________________

	
 

	  	
(Signature)

	  
	  	  	  
	  	
FOR CORPORATIONS:

	  
	  	  	  
	  	
_____________________________

	  
	  	
Name of Company

	  
	  	  	  
	  	
_____________________________

	  
	  	
Executive Officer of Company

	  
	  	  	  
	
Dated: ___________, 2010

	

_____________________________

	
 

	  	
Signature of Officer

	  
	  	  	  
	  	  	  
	  	
FOR PARTNERSHIPS:

	  
	  	  	  
	  	  	  
	  	
_____________________________

	  
	  	
Name of Partnership

	  
	  	  	  
	  	  	  
	  	
_____________________________

	  
	  	
Name of Partner executing

	  
	  	
Questionnaire

	  

 

  

12

  

	  	  	  
	  	  	  
	
Dated: ___________, 2010

	
_____________________________

	  
	  	
Signature of Partner

	  
	  	
executing Questionnaire

	  
	  	  	  
	  	
FOR TRUSTS:

	  
	  	  	  
	  	  	  
	  	
_____________________________

	  
	  	
Name of Trust

	  
	  	  	  
	  	
_____________________________

	  
	  	
Name of Authorized Trustee

	  
	  	
Executing Questionnaire

	  
	  	  	  
	
Dated: ___________, 2010

	
_____________________________

	  
	  	
Signature of Authorized

	  
	  	
Trustee

	  
	  	  	  
	  	
FOR QUALIFIED PENSION PLANS:

	  
	  	  	  
	  	  	  
	  	
_____________________________

	  
	  	
Name of Qualified Pension Plan

	  
	  	  	  
	  	
                                   and

	  
	  	  	  
	  	
_____________________________

	  
	  	
Name of Plan Fiduciary

	  
	  	
executing Questionnaire

	  
	  	  	  
	
Dated: ___________, 2010

	
_____________________________

	  
	  	
Signature of Plan Fiduciary

	  
	  	
executing Questionnaire

	  
	  	  	  
	  	
                                   or

	  
	  	  	  
	  	
_____________________________

	  
	  	
Name of Plan Beneficiary

	  
	  	
executing Questionnaire

	  
	  	  	  
	  	
                                   or

	  
	
Dated: ___________, 2010

	

_____________________________

	
 

	  	
Signature of Plan Beneficiary

	  
	  	
executing Questionnaire

	  

 

APPROVED THIS ____ DAY OF ______________, 2010

APPLIED DNA SCIENCES, INC.

By:________________________________                                                      

Name:

Title:

 

  

13

  

Exhibit 10.1

 

ANNEX 1

Form of Note

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