Document:

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                                                                   Exhibit 10.39
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                     TAX EXEMPTION CERTIFICATE AND AGREEMENT

                                      AMONG

                      THE INDUSTRIAL DEVELOPMENT AUTHORITY
                        OF THE CITY OF SHOW LOW, ARIZONA

                                       AND

                       SNOWFLAKE WHITE MOUNTAIN POWER, LLC

                                       AND

                 J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

                                   $39,250,000

                      THE INDUSTRIAL DEVELOPMENT AUTHORITY
                        OF THE CITY OF SHOW LOW, ARIZONA
                       SOLID WASTE DISPOSAL REVENUE BONDS
                  (SNOWFLAKE WHITE MOUNTAIN POWER, LLC PROJECT)
                                   SERIES 2006

                                SEPTEMBER 8,2006

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION                                    HEADING                          PAGE
-------                                    -------                          ----
<S>                <C>                                                      <C>
ARTICLE I          DEFINITIONS...........................................     2

ARTICLE II         DESCRIPTION OF PROJECT................................     6

   Section 2.1.    Purpose of the Bonds..................................     6
   Section 2.2.    The Project -- Binding Commitment and Timing..........     6
   Section 2.3.    Reimbursement.........................................     6
   Section 2.4.    Investment of Bond Proceeds...........................     8
   Section 2.5.    No Grants.............................................     8
   Section 2.6.    Hedges...............................,................     8
   Section 2.7.    Payments to Related Persons...........................     9
   Section 2.8.    Internal Revenue Service Audits.......................     9

ARTICLE III        USE OF PROCEEDS; DESCRIPTION OF FUNDS.................     9

   Section 3.1.    Use of Proceeds.......................................     9
   Section 3.2.    Purpose of Bond Fund..................................    10
   Section 3.3.    Purpose of Debt Service Reserve Account...............    10
   Section 3.4.    Credit Agreement Accounts.............................    10
   Section 3.5.    No Other Gross Proceeds...............................    11

ARTICLE IV         ARBITRAGE REBATE; RECORD KEEPING; INVESTMENT
                   DIRECTION.............................................    12

   Section 4.1.    Compliance with Rebate Provisions.....................    12
   Section 4.2.    Rebate Fund...........................................    12
   Section 4.3.    Records...............................................    12
   Section 4.4.    Prohibited Payments; Certificates of Deposit and
                   Investment Agreements.................................    13
   Section 4.5.    Arbitrage Elections...................................    16
   Section 4.6.    Arbitrage Rebate Consultant...........................    16

ARTICLE V          YIELD AND INVESTMENT LIMITATIONS......................    17

   Section 5.1.    Issue Price...........................................    17
   Section 5.2.    Yield Limits..........................................    17
   Section 5.3.    Continuing Nature of Yield Limits.....................    18
   Section 5.4.    Yield on the Loan Agreement...........................    18
   Section 5.5.    Other Payments Relating to the Bonds..................    18
   Section 5.6.    Federal Guarantees....................................    18
   Section 5.7.    Investments After the Expiration of Temporary Periods,
                   Etc...................................................    19
   Section 5.8.    Treatment of Certain Credit Facility Fees.............    19
</TABLE>

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<TABLE>
<S>                                                                         <C>
ARTICLE VI         MISCELLANEOUS.........................................    19

   Section 6.1.    Project Certificate; Certain Tax Consequences.........    19
   Section 6.2.    Termination; Interest of Issuer in Rebate Fund........    20
   Section 6.3.    U.S. Form 8038........................................    20
   Section 6.4.    Common Plan of Financing..............................    20
   Section 6.5.    No Sale of the Project................................    20
   Section 6.6.    Future Events.........................................    20
   Section 6.7.    Permitted Changes; Opinion of Bond Counsel............    20
   Section 6.8.    Public Approval.......................................    21
   Section 6.9.    Volume Cap............................................    21
   Section 6.10.   Registered Form.............,.........................    21
   Section 6.11.   Records...............................................    21
   Section 6.12.   Severability..........................................    22
   Section 6.13.   Counterparts..........................................    22
   Section 6.14.   Notices...............................................    22
   Section 6.15.   Successors and Assigns................................    22
   Section 6.16.   Headings..............................................    22
   Section 6.17.   Governing Law.........................................    22
   Section 6.18.   Expectations..........................................    22

Signatures...............................................................    24
</TABLE>

EXHIBIT A -- Estimated Sources and Uses of Funds
EXHIBIT B -- Drawdown Schedule of Bond Proceeds
EXHIBIT C -- Certificate of Purchaser
EXHIBIT D -- Memorandum of Chapman and Cutler LLP
EXHIBIT E -- Declaration of Intent to Reimburse
EXHIBIT F -- Gross Proceeds
EXHIBIT G -- Form 8038
EXHIBIT H -- Letters of Credit Facility Provider
EXHIBIT I -- Swap Confirmation

                                      -ii-

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                     TAX EXEMPTION CERTIFICATE AND AGREEMENT

     The undersigned are duly qualified officers of The Industrial Development
Authority of the City of Show Low, Arizona (the "Issuer"), Snowflake White
Mountain Power, LLC (the "Company") and J.P. Morgan Trust Company, National
Association (the "Trustee"), respectively. The undersigned officer of the Issuer
is charged, with others, with the responsibility for executing and delivering
the obligations described on the cover page of this Tax Agreement (the "Bonds")
on the date hereof. The Bonds were authorized pursuant to a duly authorized
resolution (the "Resolution") of the Issuer and are being issued pursuant to
that certain Indenture of Trust dated as of September 1, 2006 (the "Indenture")
between the Issuer and the Trustee. Sale Proceeds of the Bonds will be provided
to the Company pursuant to that certain Loan Agreement dated as of September 1,
2006 (the "Loan Agreement") between the Issuer and the Company. The payment of
principal and purchase prices of and interest on the Bonds for an initial period
will be supported by the Credit Facility to be issued by the Credit Facility
Provider. Certain terms are defined in Article I hereof. Terms used herein and
not defined in Article I shall have the meanings given to them in the Indenture.

     One purpose of executing this Tax Agreement is to set forth various facts
regarding the Bonds and to establish the expectations of the Issuer, the Company
and the Trustee as to future events regarding the Bonds and the use of Bond
proceeds. To the extent such facts do not relate directly to the Issuer or the
Trustee, the Issuer and the Trustee are relying upon the certifications of the
Company, which is reasonable and prudent. The certifications, covenants and
representations contained herein are made on behalf of the Issuer, the Company
and the Trustee for the benefit of the owners from time to time of the Bonds.

     The Issuer and the Company hereby covenant that they will not take any
action, omit to take any action or permit the taking or omission of any action
within their control (including, without limitation, making or permitting any
use of the proceeds of the Bonds) if taking, permitting or omitting to take such
action would cause any of the Bonds to be an arbitrage bond within the meaning
of the Code or would otherwise cause the interest on the Bonds to be included in
the gross income of the recipients thereof for federal income tax purposes. The
Issuer acknowledges that, in the event of an examination by the Internal Revenue
Service of the exemption from federal income taxation of interest on the Bonds,
under present rules, the Issuer may be treated as a "taxpayer" in such
examination. The Company agrees that it will direct the Issuer to respond in a
commercially reasonable manner to any inquiries from the Internal Revenue
Service in connection with such an examination and the Issuer agrees that it
will reasonably cooperate with the Company (at the expense of the Company) in
this regard. The Company has agreed at Section 5.2 of the Loan Agreement to
indemnify and hold harmless the Issuer against any liability resulting from or
related to the issuance of the Bonds.

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

     In addition to such other words and terms used and defined in this Tax
Agreement, the following words and terms used in this Tax Agreement shall have
the following meanings unless, in either case, the context or use clearly
indicates another or different meaning is intended:

     "Affiliated Person" means any Person that (a) at any time during the six
months prior to the execution and delivery of the Bonds, (i) has more than five
percent of the voting power of the governing body of the Issuer or the Company
in the aggregate vested in its directors, officers, owners, and employees or,
(ii) has more than five percent of the voting power of its governing body in the
aggregate vested in directors, officers, board members, owners, members or
employees of the Issuer or the Company or (b) during the one-year period
beginning six months prior to the execution and delivery of the Bonds, (i) the
composition of the governing body of which is modified or established to reflect
(directly or indirectly) representation of the interests of the Issuer or the
Company (or for which an agreement, understanding, or arrangement relating to
such a modification or establishment during that one-year period) or (ii) the
composition of the governing body of the Issuer or the Company is modified or
established to reflect (directly or indirectly) representation of the interests
of such Person (or for which an agreement, understanding, or arrangement
relating to such a modification or establishment during that one-year period).

     "Arbitrage Rebate Consultant" means a firm of recognized expertise in the
area of arbitrage rebate calculations and its requirements engaged by the
Company, after prior notice to the Issuer and the Trustee, which is acceptable
to the Trustee.

     "Bond Counsel" means Chapman and Cutler LLP or any other nationally
recognized firm of attorneys experienced in the field of municipal bonds whose
opinions are generally accepted by purchasers of municipal bonds.

     "Bond Fund" means the Bond Fund established pursuant to the Indenture.

     "Bond Purchase Fund" means the Bond Purchase Fund established pursuant to
the Indenture.

     "Bonds" means the obligations of the Issuer defined in the preamble to this
Tax Agreement.

     "Capital Expenditures" means costs of a type that are properly chargeable
to a capital account under the Code (or would be so chargeable with a proper
election) under federal income tax principles taking into account the definition
of Placed-in-Service set forth herein.

     "Closing" means the date of this Tax Agreement, which is the first date on
which the Issuer is receiving the purchase price for the Bonds.

                                       -2-

<PAGE>

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Commingled Fund" means any fund or account containing both Gross Proceeds
and an amount in excess of $25,000 that are not Gross Proceeds if the amounts in
the fund or account are invested and accounted for, collectively, without regard
to the source of funds deposited in the fund or account. An open-ended regulated
investment company under Section 851 of the Code is not a Commingled Fund.

     "Company" is defined in the preamble to this Tax Agreement.

     "Confirmation" means the Confirmation of Irrevocable Letter of Credit
issued by JPMorgan Chase Bank, N.A.

     "Construction Fund" means the Construction Fund established pursuant to the
Indenture.

     "Control" means the possession, directly or indirectly through others, of
either of the following discretionary and non-ministerial rights or powers over
another entity:

          (a) to approve and to remove without cause a controlling portion of
     the governing body of a Controlled Entity; or

          (b) to require the use of funds or assets of a Controlled Entity for
     any purpose.

     "Controlled Entity" means any entity or one of a group of entities that is
subject to Control by a Controlling Entity or group of Controlling Entities.

     "Controlled Group" means a group of entities directly or indirectly subject
to Control by the same entity or group of entities, including the entity that
has the Control of the other entities.

     "Controlling Entity" means any entity or one of a group of entities
directly or indirectly having Control of any entities or group of entities.

     "Costs of Issuance" means the costs of issuing the Bonds, including
underwriter's discount or fees, legal fees, but not including the fees for the
Credit Facility described in Section 5.8 hereof.

     "Credit Agreement" means the Credit Agreement dated as of September 1, 2006
among the Company, Renegy, LLC and Renegy Trucking LLC, as Borrowers, CoBank,
ACB, as issuer of the Letter of Credit, CoBank, ACB, as Lead Arranger,
Administrative Agent and Collateral Agent, and the financial institutions
parties thereto, as Lenders.

     "Credit Facility" means, collectively the Letter of Credit and the
Confirmation.

     "Credit Facility Provider" means, collectively, CoBank, ACB and JPMorgan
Chase Bank, N.A.

                                       -3-

<PAGE>

     "De minimis Amount of Original Issue Discount or Premium" means (a) any
original issue discount or premium that does not exceed two percent of the
stated redemption price at maturity of the Bonds plus (b) any original issue
premium that is attributable exclusively to reasonable underwriter's
compensation.

     "External Commingled Fund" means a Commingled Fund in which the Issuer, the
Company and all Related Persons to the Issuer and the Company, own, in the
aggregate, not more than ten percent of the beneficial interests.

     "GIC" means (a) any investment that has specifically negotiated withdrawal
or reinvestment provisions and a specifically negotiated interest rate and (b)
any agreement to supply investments on two or more future dates (e.g., a forward
supply contract).

     "Gross Proceeds" means amounts in the funds listed on Exhibit F hereto.

     "Indenture" means that certain indenture of trust pursuant to which the
Bonds are being issued and identified in the preamble to this Tax Agreement.

     "Issuer" is defined in the preamble to this Tax Agreement.

     "Letter of Credit" means the irrevocable direct pay Letter of Credit issued
by CoBank, ACB.

     "Loan Agreement" means the loan agreement identified in the preamble to
this Tax Agreement.

     "Person" means any entity with standing to be sued or to sue, including any
natural person, corporation, body politic, governmental unit, agency, authority,
partnership, trust, estate, association, company, or group of any of the above.

     "Placed-in-Service" means the date on which, based on all facts and
circumstances (a) a facility has reached a degree of completion that would
permit its operation at substantially its design level and (b) the facility is,
in fact, in operation at such level.

     "Preliminary Expenditures" means architectural, engineering, surveying,
soil testing, Costs of Issuance and similar costs that were incurred prior to
commencement of construction, rehabilitation or acquisition of the Project, but
do not include any costs related to land acquisition, site preparation and
similar costs incident to commencement of construction.

     "Project" means the acquisition, construction and installation of certain
solid waste disposal facilities to be owned and operated by the Company as part
of its electric generation facility in Navajo County, Arizona, as more fully
described in the Project Certificate.

     "Project Certificate" means the Company's Project Certificate dated the
date hereof and executed in connection with the issuance of the Bonds.

                                       -4-

<PAGE>

     "Purchaser" means the purchaser of the Bonds from the Issuer.

     "Qualified Tax Exempt Obligations" means (a) any obligation described in
Section 103(a) of the Code, the interest on which is excludable from gross
income of the owner thereof for federal income tax purposes; (b) an interest in
a regulated investment company to the extent that at least ninety-five percent
of the income to the holder of the interest is interest which is excludable from
gross income under Section 103 of the Code of any owner thereof for federal
income tax purposes; and (c) certificates of indebtedness issued by the United
States Treasury pursuant to the Demand Deposit State and Local Government Series
program described in 31 C.F.R. part 344.

     "Rebate Fund" means the fund, if any, identified and defined in Section 4.2
herein.

     "Rebate Provisions" means the rebate requirements contained in Section
148(f) of the Code and in the Regulations.

     "Regulations" means United States Treasury Regulations dealing with the
tax-exempt bond provisions of the Code.

     "Reimbursed Expenditures" means amounts, if any, used from Sale Proceeds
and investment earnings thereon to reimburse the Company for an expenditure paid
prior to Closing.

     "Reimbursement Allocation" means the act of allocating the amount of Sale
Proceeds indicated on Exhibit A to reimburse Reimbursed Expenditures.

     "Related Person" means (i) in the case of the Issuer, any member of the
same Controlled Group as the Issuer or (ii) in the case of the Company or the
Credit Facility Provider, any person related to the Company or the Credit
Facility Provider within the meaning of Section 144(a)(3) of the Code.

     "Sale Proceeds" means amounts actually or constructively received from the
sale of the Bonds, including (a) amounts used to pay underwriters' discount or
compensation and accrued interest, other than accrued interest for a period not
greater than one year before Closing but only if it is to be paid within one
year after Closing and (b) amounts derived from the sale of any right that is
part of the terms of a Bond or is otherwise associated with a Bond (e.g., a
redemption right).

     "Tax Agreement" means this Tax Exemption Certificate and Agreement.

     "Trustee" is defined in the preamble to this Tax Agreement.

     "Yield" means that discount rate which when used in computing the present
value of all payments of principal and interest paid and to be paid on an
obligation produces an amount equal to the obligation's purchase price (or in
the case of the Bonds, the issue price as established in Section 5.1), including
accrued interest. For purposes of computing the Yield on the Bonds and

                                       -5-

<PAGE>

on investments, the same compounding interval (which must be an interval of not
more than one year) and standard financial conventions (such as a 360-day year)
must be used.

     "Yield Reduction Payment" means a rebate payment or any other amount paid
to the United States in the same manner as rebate amounts are required to be
paid or at such other time or in such manner as the Internal Revenue Service may
prescribe that will be treated as a reduction in Yield of an investment under
the Regulations.

                                    ARTICLE II

                             DESCRIPTION OF PROJECT

     Section 2.1. Purpose of the Bonds. The Bonds are being issued to finance
the Project in a prudent manner consistent with the needs of the Company. Sale
Proceeds of the Bonds will be provided to the Company pursuant to the Loan
Agreement. A breakdown of the sources and uses of funds is attached as Exhibit
A.

     Section 2.2. The Project -- Binding Commitment and Timing. The Company has
incurred or will, within six months of the Closing, incur a substantial binding
obligation (not subject to contingencies within the control of the Issuer, the
Company or any Related Person to either of them) to a third party to expend at
least five percent of the Sale Proceeds on the Project. It is expected that the
work of acquiring and constructing the Project and the expenditure of amounts
deposited into the Construction Fund will continue to proceed with due diligence
through December 1, 2007, at which time it is anticipated that all Sale Proceeds
and investment earnings thereon will have been spent.

     It is expected that the Sale Proceeds deposited into the Construction Fund,
including investment earnings on the Construction Fund, will be spent to pay
costs of the Project and interest on the Bonds in accordance with the estimated
drawdown schedule contained in Exhibit B.

     Estimated total investment income as set forth in Exhibit A has been
calculated on the basis of an expected overall investment rate as set forth
therein on amounts in the Construction Fund, assuming that (a) the costs of the
Project are drawn down in accordance with the schedule contained in Exhibit B
and (b) Costs of Issuance will be drawn down during the three-month period after
Closing. The foregoing assumptions represent the Issuer's and the Company's best
estimate, as of this date, of the draw down schedules of and investment earnings
on the Sale Proceeds.

     Section 2.3. Reimbursement. Except for Reimbursed Expenditures, as
identified on Exhibit A, none of the Sale Proceeds or investment earnings
thereon will be used to reimburse an expenditure paid prior to the date of
Closing.

     The Issuer and the Company are making the Reimbursement Allocation to
allocate a portion of the Sale Proceeds and investment earnings thereon to the
Reimbursed Expenditures incurred in connection with the acquisition,
construction and installation the Project and will,

                                       -6-

<PAGE>

after such Reimbursement Allocation, treat such proceeds as being spent. In
support of the Reimbursement Allocation, the Company represents, and the Issuer
represents solely with respect to those items relating to the Issuer in (a) and
(d) below, as follows:

          (a) Except as described in (f) below, the Issuer declared an official
     intent to reimburse such expenditures not later than 60 days after the date
     such expenditures were paid. At the time the official intent described
     above was declared, the Company and the Issuer (based upon information
     supplied by the Company, upon which it was reasonable and prudent for the
     Issuer to rely) reasonably expected to reimburse the non-Preliminary
     Expenditures related thereto with the proceeds of a future borrowing. A
     copy of the declaration of such intent is attached hereto as Exhibit E.
     With respect to expenditures paid within the 60 day period ending on this
     date and with respect to which no declaration of intent was previously
     made, the Issuer hereby declares its intent to reimburse such expenditures
     as identified in Exhibit A and in the description of the Project contained
     herein. The Issuer and the Company hereby allocate Sale Proceeds in the
     amount indicated on Exhibit A to reimburse the Reimbursed Expenditures.

          (b) Except as described in (f) below, the Closing is within 18 months
     after the later of (i) the first date on which a Reimbursed Expenditure was
     paid or (ii) the first date on which the property relating to a Reimbursed
     Expenditure was Placed-in-Service or abandoned, but in no event more than
     three years after the first date on which a Reimbursed Expenditure was
     paid.

          (c) All Reimbursed Expenditures represent Capital Expenditures or
     Costs of Issuance.

          (d) The Issuer and the Company acknowledge that if within one year
     after Closing the Issuer or the Company deposits any money or other
     property into any fund or account (other than amounts deposited into a bona
     fide debt service fund) to pay principal of or interest on the Bonds or any
     other tax-exempt obligations in an amount corresponding to Gross Proceeds
     used to reimburse a Reimbursed Expenditure (unless such money or other
     property constitutes proceeds of a borrowing by the Issuer or the Company),
     it may adversely affect the tax-exempt status of the Bonds. The Issuer and
     the Company further acknowledge that in the Indenture and Loan Agreement,
     respectively, they have covenanted not to take any action that would cause
     interest on the Bonds to become includable in the gross income of the
     holders thereof for federal income tax purposes.

          (e) No Reimbursement Allocation will employ any action (i) that
     results in the Issuer issuing more Bonds, issuing Bonds earlier, or
     allowing Bonds to remain outstanding longer than is reasonably necessary to
     accomplish the governmental purposes of the Bonds, based upon all of the
     facts and circumstances or (ii) that avoids the restrictions of Sections
     142 through 147 of the Code.

          (f) The restrictions in (a) and (b) above do not apply to (i) an
     amount of Preliminary Expenditures that does not exceed 20% of the Sale
     Proceeds being used to

                                       -7-

<PAGE>

     finance the portion of the Project with respect to which the Preliminary
     Expenditures were incurred, (ii) Costs of Issuance or (iii) an amount not
     in excess of the lesser of $100,000 or five percent of the Sale Proceeds.

     Section 2.4. Investment of Bond Proceeds. Not more than 50% of the Sale
Proceeds and investment earnings thereon are or will be invested in investments
(other than Qualified Tax Exempt Obligations) having a Yield that is
substantially guaranteed for four years or more. No portion of the Bonds is
being issued solely for the purpose of investing a portion of Sale Proceeds or
investment earnings thereon at a Yield higher than the Yield on the Bonds.

     Section 2.5. No Grants. None of the Sale Proceeds or investment earnings
thereon will be used to make grants to any person.

     Section 2.6. Hedges. (a) The Company has entered into an Interest Rate
Exchange Agreement with CoBank, ACB (the "Swap") with respect to the Bonds.
Attached as Exhibit I is the confirmation for the Swap, which describes the
terms of the Swap. The Issuer hereby identifies the Swap on its books and
records for the Bonds, and the date hereof is no more than three days after the
date the terms of the Swap were agreed to. The Issuer has directed that the Swap
be included in the closing transcript for the Bonds and will retain this
identification and copies of the Swap with its books and records maintained with
respect to the Bonds, and the existence of the Swap will be noted on the first
form relating to the Bonds that is filed with the Internal Revenue Service. The
interest rate to be paid by the Corporation under the Swap is a fixed rate. The
notional principal amount for each period of time under the Swap will be no more
than the principal amount of the Bonds scheduled to be outstanding under the
Indenture at such times. No portion of one party's payments under the Swap
relates to a conditional or unconditional obligation by the other party to make
a payment on a different date, and they do not require any up-front payment or
other non-periodic payments. The counterparty on the Swap is not paying any
broker's or bidding agent fees. The Swap has been entered into between the
Corporation, which is the conduit borrower of the proceeds of the Bonds, and a
party that is not related to the Issuer or the Corporation. The Swap covers all
or part of the Bonds. Without regard to the Swap, the Bonds would be variable
rate bonds. The payments received by the Corporation under the Swap correspond
closely in time to the dates interest payments must be made on the Bonds.
Payments to be made to the counterparty by the Corporation under the Swap are
reasonably expected to be paid from the same source of funds that, absent the
Swap, would be reasonably expected to be used to pay principal and interest on
the Bonds. Based on the foregoing, the Swap will constitute a qualified hedge
under Section 1.148-4(h) of the Regulations. Therefore, in determining Bond
Yield, the Corporation's payments and receipts under the Swap are taken into
account, together with the actual payments on the Bonds.

     (b) Neither the Company, the Issuer nor any Related Person to either of
them has entered into or expects to enter into any hedge (e.g., an interest rate
swap, interest rate cap, futures contract, forward contract or an option)
directly related to the Bonds, except for the Swap. The Company and the Issuer
acknowledge that any such other hedge could affect, among other things, the
calculation of Bond Yield under the Regulations. The Internal Revenue Service
could recalculate Bond Yield if the failure to account for any such hedge fails
to clearly reflect the economic substance of the transaction.

                                       -8-

<PAGE>

     The Company and the Issuer also acknowledge that if they acquire a hedging
contract with an investment element (including e.g. an off-market swap
agreement, or any cap agreement for which all or a portion of the premium is
paid at, or before the effective date of the cap agreement), then a portion of
such hedging contract may be treated as an investment of Gross Proceeds of the
Bonds, and be subject to the fair market purchase price rules, rebate and yield
restriction. The Company and the Issuer agree not to use proceeds of the Bonds
to pay for any such hedging contract in whole or in part. The Company and the
Issuer also agree that they will not give any assurances to any Bond holder, the
Credit Facility Provider, or any other credit or liquidity enhancer with respect
to the Bonds that any such hedging contract will be entered into or maintained.
The Company and the Issuer recognize that if a portion of a hedging contract is
determined to be an investment of gross proceeds, such portion may not be fairly
priced even if the hedging contract as a whole is fairly priced.

     Section 2.7. Payments to Related Persons. None of the Sale Proceeds or
investment earnings thereon will be paid to the Issuer, the Company or any
Related Person to the Issuer or the Company, except for reimbursements to the
Company for amounts paid to persons other than the Issuer, the Company or any
Related Person to the Issuer or the Company, and the Issuer's fee described in
Section 5.5 of this Tax Agreement.

     Section 2.8. Internal Revenue Service Audits. The Issuer represents that
the Internal Revenue Service has not contacted the Issuer regarding any
obligation issued by the Issuer for the benefit of the Company. The Company
represents that it has not been contacted by the Internal Revenue Service or any
issuer of bonds regarding any examination of any tax exempt bonds issued for the
benefit of the Company. To the best of the knowledge of the Company, no bonds
issued as tax exempt bonds for the benefit of the Company are or have been under
examination by the Internal Revenue Service.

                                   ARTICLE III

                      USE OF PROCEEDS; DESCRIPTION OR FUNDS

     Section 3.1. Use of Proceeds. (a) Exhibit A describes the use of the Sale
Proceeds and investment earnings thereon and Exhibit F describes the funds held
under the Indenture or the Credit Agreement at the time of Closing. No Sale
Proceeds will be used to prepay for goods or services to be received over a
period of years prior to the date such goods or services are to be received,
except for any payment to the Credit Facility Provider. No Sale Proceeds or any
investment earnings thereon will be used to pay for or otherwise acquire goods
or services from an Affiliated Person.

     (b) As shown on Exhibit A, only the following fund or account will be
funded at Closing: the Construction Fund. Other than the foregoing fund, the
only other funds or accounts created under the Indenture are the Bond Fund and
the Bond Purchase Fund. No amounts, regardless of the source, are being
deposited into the Bond Fund or the Bond Purchase Fund at Closing. The following
funds and accounts are created under the Credit Agreement: the

                                       -9-

<PAGE>

Construction Account, the Revenue Account, the Debt Service Reserve Account and
the Major Maintenance Account.

     (c) Principal of, premium, if any, and interest on the Bonds will be paid
from the Bond Fund.

     (d) Costs of Issuance in an amount not exceeding two percent of the face
amount of the Bonds, because the Bonds have a De Minimis Amount of Original
Issue Discount or Premium, incurred in connection with the Bonds will be paid
from the Construction Fund. Any other Costs of Issuance will be paid by the
Company from a source other than tax-exempt financing.

     (e) The costs of the Project will be paid from the Construction Fund and no
other moneys (except for investment earnings on amounts in the Construction
Fund) are expected to be deposited therein.

     (f) Money received from the sale of tendered Bonds, from drawings under the
Credit Facility to pay the purchase price of tendered Bonds or from moneys
received from the Company to pay the purchase price of tendered Bonds shall be
deposited in the Bond Purchase Fund and then paid to the former owners of
tendered Bonds. No such amounts will be used to pay principal, whether at
maturity, redemption, acceleration or otherwise, or interest on the Bonds.

     (g) Payments made by the Company under the Loan Agreement will be deposited
in the Bond Fund, when received by the Trustee, to be used to pay principal of,
premium, if any, and interest on the Bonds, as provided in the Indenture.

     (h) Earnings on investment of moneys in the Bond Fund and the Construction
Fund are credited to such funds as provided in the Indenture. Earnings on
investments of moneys in the Bond Purchase Fund shall be credited to the Bond
Purchase Fund.

     Section 3.2. Purpose of Bond Fund. The Bond Fund and the portion of the
Revenue Account expected to be used for debt service on the Bonds will be used
primarily to achieve a proper matching of revenues and earnings with principal,
premium, if any, and interest payments on the Bonds in each bond year. It is
expected that the Bond Fund and such portion of the Revenue Account will be
depleted at least once a year, except for a reasonable carry over amount not to
exceed the greater of (a) the earnings on the investment of moneys in the Bond
Fund and such portion of the Revenue Account for the immediately preceding bond
year or (b) l/12th of the principal and interest payments on the Bonds for the
immediately preceding bond year.

     Section 3.3. Purpose of Debt Service Reserve Account. The Company and the
Issuer represent that the Debt Service Reserve Account created under the Credit
Agreement is required in connection with the issuance of the Bonds, based on the
certificate of the Purchaser set forth as Exhibit C attached hereto and the
certificate of the Credit Facility Provider set forth as Exhibit H attached
hereto. The Company and the Issuer have no reason to believe that the
representations made in each such certificate are untrue or incorrect.

     Section 3.4. Credit Agreement Accounts. None of the Credit Agreement
Accounts will contain any Sale Proceeds or any investment earnings thereon.
Except for amounts in the portion

                                      -10-

<PAGE>

of the Revenue Account expected to be used for debt service on the Bonds no
amounts in any of such accounts are expected to be used to pay debt service on
the Bonds or to reimburse the Credit Facility Provider for such payments. Except
for (i) the portion of the Revenue Account expected to be used for debt service
on the Bonds and (ii) the Debt Service Reserve Account amounts in such accounts
are available for uses other than the payment of debt service on the Bonds or to
reimburse the Credit Facility Provider for such payments, and there are no
assurances that such amounts would be available to pay principal or interest on
the Bonds or the obligations under the Credit Facility or any other credit
enhancement or liquidity device with respect to the Bonds, even if the Issuer,
the Company or any Related Person to either of them encounters financial
difficulties.

     Section 3.5. No Other Gross Proceeds. (a) Except as identified on Exhibit F
hereto, and except for the Credit Facility, after the issuance of the Bonds,
neither the Issuer, the Company nor any Related Person to either of them has or
will have any property, including cash, securities, or any other property held
as a passive vehicle for the production of income or for investment purposes,
that constitutes:

          (i) Sale Proceeds;

          (ii) amounts in any fund and account with respect to the Bonds (other
     than the Rebate Fund and amounts in the accounts described in Section 3.4
     of this Tax Agreement);

          (iii) amounts that have a sufficiently direct nexus to the Bonds or to
     the governmental purpose of the Bonds to conclude that the amounts would
     have been used for that governmental purpose if the Bonds were not used or
     to be used for that governmental purpose (the mere availability or
     preliminary earmarking of such amounts for a governmental purpose, however,
     does not itself establish such a sufficient nexus);

          (iv) amounts in a debt service fund, redemption fund, reserve fund,
     replacement fund or any similar fund to the extent reasonably expected to
     be used directly or indirectly to pay principal of, premium, if any, or
     interest on the Bonds or any amounts for which there is provided, directly
     or indirectly, a reasonable assurance that the amount will be available to
     pay principal of, premium, if any, or interest on the Bonds, or obligations
     under the Credit Facility or any other credit enhancement or liquidity
     device with respect to the Bonds, even if the Issuer, the Company or any
     Related Person to either of them encounters financial difficulties;

          (v) any amounts held pursuant to any agreement (such as an agreement
     to maintain certain levels of types of assets) made for the benefit of the
     owners of the Bonds, the Credit Facility Provider or any other credit
     enhancement provider, including any liquidity device or negative pledge
     (any amount pledged to pay principal of or interest on an issue held under
     an agreement to maintain the amount at a particular level for the direct or
     indirect benefit of Owners or a guarantor of the Bonds); or

                                      -11-

<PAGE>

          (vi) amounts actually or constructively received from the investment
     and reinvestment of the amounts described in (i) or (ii) above.

     (b) No compensating balance, liquidity account, negative pledge of property
held for investment purposes or similar arrangement exists with respect to, in
any way, the Bonds, the Loan Agreement, the Credit Facility or any other credit
enhancement or liquidity device related to the Bonds.

     (c) The term of the Bonds is not longer than is reasonably necessary for
the governmental purposes of the Bonds because the weighted average maturity of
the Bonds does not exceed 120 percent of the average reasonably expected
economic life of the Project as evidenced in the Project Certificate.

                                   ARTICLE IV

             ARBITRAGE REBATE; RECORD KEEPING; INVESTMENT DIRECTION

     Section 4.1. Compliance with Rebate Provisions. The Issuer and the Company
covenant to take such actions and make, or cause to be made, all calculations,
transfers and payments that may be necessary to comply with the Rebate
Provisions applicable to the Bonds. The Issuer and the Company will make, or
cause to be made, rebate payments with respect to the Bonds in accordance with
law. The Issuer shall be obligated to make such payments only out of amounts
available under the Indenture or otherwise provided by the Company. Bond Counsel
has provided a memorandum attached hereto as Exhibit D concerning the principles
set forth in the Regulations regarding rebate.

     Section 4.2. Rebate Fund. The Issuer hereby creates with the Trustee a
special fund to be known as "The Industrial Development Authority of the City of
Show Low, Arizona Solid Waste Disposal Revenue Bonds (Snowflake White Mountain
Power, LLC Project) Series 2006 - Rebate Fund" (the "Rebate Fund"), which shall
be continuously held, invested, expended and accounted for in accordance with
the Indenture and this Tax Agreement. Moneys in the Rebate Fund shall not be
considered moneys held for the benefit of the Owners. Except as provided in the
Regulations, moneys in the Rebate Fund (including earnings and deposits therein)
shall be held in trust for payment to the United States as required by the
Rebate Provisions and by the Regulations and as contemplated under the
provisions of this Tax Agreement.

     In addition to the amounts provided in this Tax Agreement, the Company
hereby agrees to pay to the Trustee for deposit in the Rebate Fund for payment
to the United States any amount which under the Regulations must be deposited in
the Rebate Fund for payment to the United States with respect to the Bonds, but
which is not available under the Indenture for transfer to the Rebate Fund for
payment to the United States.

     Section 4.3. Records. The Trustee (with respect to amounts held under the
Indenture) and the Company agree to keep and retain or cause to be kept and
retained until six years after the Bonds are paid in full adequate records with
respect to the investment of all Gross Proceeds and amounts in the Rebate Fund.
Such records shall include:

                                      -12-

<PAGE>

          (a) purchase price;

          (b) purchase date;

          (c) type of investment;

          (d) accrued interest paid;

          (e) interest rate;

          (f) principal amount;

          (g) maturity date;

          (h) interest payment date;

          (i) date of liquidation; and

          (j) receipt upon liquidation.

If any investment becomes Gross Proceeds on a date other than the date such
investment is purchased, the records required to be kept shall include the fair
market value of such investment on the date it becomes Gross Proceeds. If any
investment is retained after the date the last Bond is retired, the records
required to be kept shall include the fair market value of such investment on
the date the last Bond is retired. Amounts or investments will be segregated
whenever necessary to maintain these records.

     Section 4.4. Prohibited Payments; Certificates of Deposit and Investment
Agreements. The Company will direct the Trustee in writing to continuously
invest all amounts on deposit in the Rebate Fund, together with the amounts, if
any, to be transferred to the Rebate Fund, in any investment permitted under
this Tax Agreement and the Indenture. In directing the Trustee with respect to
such investments, the Company shall take into account prudent investment
standards and the date on which such moneys may be needed. Except as provided in
the next sentence, all amounts that constitute Gross Proceeds and all amounts in
the Rebate Fund shall be invested at all times to the greatest extent
practicable, and no amounts may be held as cash or be invested in zero yield
investments other than obligations of the United States purchased directly from
the United States. In the event moneys cannot be invested, other than as
provided in this sentence due to the denomination, price or availability of
investments, the amounts shall be invested in an interest bearing deposit of a
bank with a yield not less than that paid to the general public or held
uninvested to the minimum extent necessary.

     Gross Proceeds and any amounts in the Rebate Fund that are invested in
certificates of deposit or in GICs shall be invested only in accordance with the
following provisions:

          (a) Investments in certificates of deposit of banks or savings and
     loan associations that have a fixed interest rate, fixed payment schedules
     and substantial penalties for early withdrawal shall be made only if either
     (i) the Yield on the certificate

                                      -13-

<PAGE>

of deposit (A) is not less than the Yield on reasonably comparable direct
obligations of the United States and (B) is not less than the highest Yield that
is published or posted by the provider to be currently available from the
provider on reasonably comparable certificates of deposit offered to the public
or (ii) the investment is an investment in a GIC and qualifies under paragraph
(b) below.

          (b) Investments in GICs shall be made only if:

               (i) the bid specifications are in writing, include all material
          terms of the bid and are timely forwarded to potential providers (a
          term is material if it may directly or indirectly affect the yield on
          the GIC);

               (ii) the terms of the bid specifications are commercially
          reasonable (a term is commercially reasonable if there is a legitimate
          business purpose for the term other than to reduce the yield on the
          GIC);

               (iii) all bidders for the GIC have equal opportunity to bid so
          that, for example, no bidder is given the opportunity to review other
          bids (a last look) before bidding;

               (iv) any agent used to conduct the bidding for the GIC does not
          bid to provide the GIC;

               (v) at least three of the providers solicited for bids for the
          GIC are reasonably competitive providers of investments of the type
          purchased (i.e., providers that have established industry reputations
          as competitive providers of the type of investments being purchased);

               (vi) at least three of the entities that submit a bid do not have
          a financial interest in the Bonds;

               (vii) at least one of the entities that provided a bid is a
          reasonably competitive provider that does not have a financial
          interest in the Bonds;

               (viii) the bid specifications include a statement notifying
          potential providers that submission of a bid is a representation that
          the potential provider did not consult with any other provider about
          its bid, that the bid was determined without regard to any other
          formal or informal agreement that the potential provider has with the
          Company or any other person (whether or not in connection with the
          Bonds) and that the bid is not being submitted solely as a courtesy to
          the Company or any other person for purposes of satisfying the federal
          income tax requirements relating to the bidding for the GIC;

               (ix) the determination of the terms of the GIC takes into account
          the reasonably expected deposit and drawdown schedule for the amounts
          to be invested;

                                      -14-

<PAGE>

               (x) the highest-yielding GIC for which a qualifying bid is made
          (determined net of broker's fees) is in fact purchased; and

               (xi) the obligor on the GIC certifies the administrative costs
          that it is paying or expects to pay to third parties in connection
          with the GIC.

          (c) If a GIC is purchased, the Company will retain the following
     records with its bond documents until three years after the Bonds are
     redeemed in their entirety:

               (i) a copy of the GIC;

               (ii) the receipt or other record of the amount actually paid for
          the GIC, including a record of any administrative costs paid, and the
          certification under paragraph (b)(xi) of this section;

               (iii) for each bid that is submitted, the name of the person and
          entity submitting the bid, the time and date of the bid, and the bid
          results; and

               (iv) the bid solicitation form and, if the terms of the GIC
          deviated from the bid solicitation form or a submitted bid is
          modified, a brief statement explaining the deviation and stating the
          purpose for the deviation.

     Moneys to be rebated to the United States shall be invested to mature on or
prior to the anticipated rebate payment date. All investments made with Gross
Proceeds or amounts in the Rebate Fund shall be bought and sold at fair market
value. The fair market value of an investment is the price at which a willing
buyer would purchase the investment from a willing seller in a bona fide, arm's
length transaction. Except for investments specifically described in this
section and United States Treasury obligations that are purchased directly from
the United States Treasury, only investments that are traded on an established
securities market, within the meaning of regulations promulgated under Section
1273 of the Code, will be purchased with Gross Proceeds. In general, an
"established securities market" includes: (i) property that is listed on a
national securities exchange, an interdealer quotation system or certain foreign
exchanges; (ii) property that is traded on a Commodities Futures Trading
Commission designated board of trade or an interbank market; (iii) property that
appears on a quotation medium; and (iv) property for which price quotations are
readily available from dealers and brokers. A debt instrument is not treated as
traded on an established market solely because it is convertible into property
which is so traded.

     The Company agrees that an investment of Gross Proceeds in an External
Commingled Fund shall be made only to the extent that such investment is made
without an intent to reduce the amount to be rebated to the United States
Government or to create a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the rebate or Yield
restriction requirements not been relevant. An investment of Gross Proceeds
shall be made in a Commingled Fund other than an External Commingled Fund only
if the investments made by such Commingled Fund satisfy the provisions of this
Section 4.4.

                                      -15-

<PAGE>

     A single investment, or multiple investment awarded to a provider based on
a single bid may not be used for funds subject to different rules relating to
rebate or yield restrictions.

     The foregoing provisions of this Section 4.4 satisfy various safe harbors
set forth in the Regulations relating to the valuation of certain types of
investments. The safe harbor provisions of this Section 4.4 are contained herein
for the protection of the Company, who has covenanted not to take any action to
adversely affect the tax-exempt status of the interest on the Bonds. The Company
will contact Bond Counsel if it does not wish to comply with the provisions of
this Section 4.4 and forego the protection provided by the safe harbors provided
herein. Modifications to this Tax Agreement can be made in accordance with
Section 6.7 hereof.

     Section 4.5. Arbitrage Elections. No elections with respect to arbitrage
are being made on the date hereof.

     Section 4.6. Arbitrage Rebate Consultant. The Company shall, within 14 days
prior to the end of each fifth Bond Year and within 14 days prior to the payment
in full of all Bonds, retain a Arbitrage Rebate Consultant to calculate and
furnish to the Trustee in writing the amount of accrued arbitrage rebate
liability as of the end of that fifth Bond Year or the date of such payment in
full. The costs and all expenses of the Arbitrage Rebate Consultant are the sole
responsibility of the Company. Notwithstanding the foregoing, such calculations
shall not be required to be made if the Arbitrage Rebate Consultant or the Bond
Counsel delivers an opinion to the Issuer, the Company and the Trustee to the
effect that the calculations described in this Section 4.6 are no longer
required.

     The Company agrees to maintain and furnish the Arbitrage Rebate Consultant
with all such information and data as the Arbitrage Rebate Consultant shall
reasonably require to make the calculations described in this Section within 45
days after the Arbitrage Rebate Consultant is retained by the Company. The
Trustee shall notify the Company and the Issuer in writing of the amount then on
deposit in the Rebate Fund. If the amount then on deposit in the Rebate Fund is
calculated to be in excess of the accrued arbitrage rebate liability, then the
Trustee shall forthwith pay that excess amount to the Company upon written
request. If the amount then on deposit in the Rebate Fund is calculated to be
less than the accrued arbitrage rebate liability, then the Company shall, within
ten days after receipt of the aforesaid notice from the Trustee, pay to the
Trustee for deposit in the Rebate Fund an amount sufficient to cause the Rebate
Fund to contain an amount equal to the accrued arbitrage rebate liability. With
60 days after the end of the fifth Bond Year and every fifth Bond Year
thereafter, the Trustee, acting at the written direction of and on behalf of the
Issuer and the Company, shall pay to the United States of America in accordance
with the written instructions of the Company from moneys then on deposit in the
Rebate Fund the amount set forth in such written instructions. Within 60 days
after the payment in full of all Outstanding Bonds, the Trustee shall pay to the
United States of America in accordance with the written instructions of the
Company from the moneys then on deposit in the Rebate Fund the amount set forth
in such written instructions and any moneys remaining in the Rebate Fund
following such payment shall be paid to the Company upon written request.

     The Trustee and the Issuer shall be entitled conclusively to rely on the
calculations and directions of the Arbitrage Rebate Consultant made pursuant to
this Section and shall not be

                                      -16-

<PAGE>

responsible for any loss or damage resulting from any action taken or omitted to
be taken in reliance upon those calculations and directions.

     The Trustee shall maintain a record of any investments of gross proceeds of
the Bonds held by the Trustee, including without limitation investments of
amounts held in the Bond Fund and the Project Fund, as described in Section 4.3.

     The Trustee shall keep such records of the computations made pursuant to
this Section that are provided to it. Notwithstanding the foregoing, the Trustee
shall keep such records at least until six years following the final payment or
maturity of all Bonds.

                                    ARTICLE V

                        YIELD AND INVESTMENT LIMITATIONS

     Section 5.1. Issue Price. The Purchaser has certified, inter alia, in the
Certificate of the Purchaser set forth as Exhibit C, which is attached hereto,
that the first offering price at which it sold at least 10% of the Bonds is 100%
of the principal amount thereof, there being no accrued interest.

     Section 5.2. Yield Limits. Except as provided in paragraphs (a), (b) and
(c), all Gross Proceeds shall be invested at market prices and at a Yield (after
taking into account any Yield Reduction Payments) not in excess of the Yield on
the Bonds, plus, if only amounts in the Construction Fund are subject to this
Yield limitation, 1/8th of one percent.

     The following may be invested without Yield restriction:

     (a)

          (i) amounts on deposit in the Bond Fund and the portion of the Revenue
     Account expected to be used for debt service on the Bonds that have not
     been on deposit under the Indenture for more than 13 months, so long as
     they continue to qualify as a bona fide debt service fund as described in
     Section 3.2 hereof; and

          (ii) amounts on deposit in the Construction Fund prior to the earlier
     of three years after Closing or the completion (or abandonment) of the
     Project;

     (b)

          (i) amounts invested in Qualified Tax Exempt Obligations (to the
     extent permitted by the Indenture);

          (ii) amounts in the Rebate Fund;

          (iii) all amounts other than Sale Proceeds for the first 30 days after
     they become Gross Proceeds;

                                      -17-

<PAGE>

          (iv) all amounts derived from the investment of Sale Proceeds and
     investment earnings thereon for a period of one year after the date
     received; and

          (v) an amount not to exceed the lesser of $100,000 or five percent of
     the Sales Proceeds.

     (c) The amount on deposit in the Debt Service Reserve Account created under
the Credit Agreement, to the extent allocable to the Bonds under the
Regulations, may be invested without regard to Yield restriction to the extent
it does not exceed the least of the amounts computed pursuant to (i), (ii),
(iii) or (iv) below:

          (i) 100% of the maximum annual debt service on the Bonds;

          (ii) 125% of the average annual debt service on the Bonds;

          (iii) ten percent of the stated principal amount of the Bonds (because
     overall the Bonds have a De minimis Amount of Original Issue Discount or
     Premium);

          (iv) the amount required to be held in the Debt Service Reserve
     Account by the Credit Agreement, which is the amount required by the Credit
     Facility Provider to issue the Credit Facility as certified in Exhibit H.

     Section 5.3. Continuing Nature of Yield Limits. Except as provided in
Section 6.7, once moneys are subject to the Yield limits of Section 5.2 hereof,
such moneys remain Yield restricted until they cease to be Gross Proceeds.

     Section 5.4. Yield on the Loan Agreement. Payments of repayment
installments under the Loan Agreement will be due on not later than the day and
in the same amount as payments are due on the Bonds. The earnings and profits of
any temporary investments of amounts held under the Indenture, if any, will
accrue to the Company, not to the Issuer.

     Section 5.5. Other Payments Relating to the Bonds. Except for (a) the
payments under the Loan Agreement as described above, (b) costs of issuance
relating to the Bonds, including the Purchaser's compensation, (c) fees and
expenses of the Trustee, and (d) fees of the Credit Facility Provider, no
consideration, in cash or in kind, is being or will be paid by any person to any
person in connection with or relating to issuing, carrying or redeeming the
Bonds or issuing, carrying or repaying the Company's obligations under the Loan
Agreement. The Issuer is receiving no fee with respect to the Bonds.

     Section 5.6. Federal Guarantees. Except for investments meeting the
requirements of Sections 5.2(a) and (c) hereof, investments of Gross Proceeds
shall not be made in (a) investments constituting obligations of or guaranteed,
directly or indirectly, by the United States (except obligations of the United
States Treasury or investments in obligations issued pursuant to Section
21B(d)(3) of the Federal Home Loan Bank Act, as amended (e.g., Refcorp Strips));
or (b) federally insured deposits or accounts (as defined in Section
149(b)(4)(B) of the Code). Except as otherwise permitted by this Section, no
portion of the payment of principal or interest

                                      -18-

<PAGE>

on the Bonds, the Credit Facility or any other credit enhancement or liquidity
device relating to the foregoing is or will be guaranteed, directly or
indirectly (in whole or in part), by the United States (or any agency or
instrumentality thereof), including a lease, incentive payment, research or
output contract or any similar arrangement, agreement or understanding with the
United States or any agency or instrumentality thereof. No portion of the Gross
Proceeds has been or will be used to make loans the payment of principal or
interest with respect to which is or will be guaranteed (in whole or in part) by
the United States (or any agency or instrumentality thereof). Neither this
Section 5.6 nor Section 5.7 applies to any guarantee by the Federal Housing
Administration, the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, the Government National Mortgage Association, the Student
Loan Marketing Association or the Bonneville Power Administration pursuant to
the Northwest Power Act (16 U.S.C. 839d) as in effect on the date of enactment
of the Tax Reform Act of 1984.

     Section 5.7. Investments After the Expiration of Temporary Periods, Etc.
After the expiration of the temporary period set forth in Section 5.2(a),
amounts in the Project Fund may not be invested in (i) federally insured
deposits or accounts (as defined in Section 149(b)(4)(B) of the Code) or (ii)
investments constituting obligations of or guaranteed, directly or indirectly,
by the United States (except obligations of the United States Treasury or
investments in obligations issued pursuant to Section 21B(d)(3) of the Federal
Home Loan Bank Act, as amended (e.g., Refcorp Strips). Any other amounts that
are subject to the yield limitation in Section 5.2 because Section 5.2(a) is not
applicable and amounts not subject to yield restriction only because they are
described in Section 5.2(b), are also subject to the limitation set forth in the
preceding sentence.

     Section 5.8. Treatment of Certain Credit Facility Fees. The Bonds are
secured by the Letter of Credit and by the Confirmation. Neither the Issuer nor
the Company nor any Related Person to either of them is a Related Person as
defined in Section 144(a)(3) of the Code to either Credit Facility Provider.
Other than the fees paid to the Credit Facility Provider, neither of the Credit
Facility Providers nor any person who is a Related Person to a Credit Facility
Provider within the meaning of Section 144(a)(3) of the Code will use any Sale
Proceeds or investment earnings thereon. The Company certifies that the fees
paid and to be paid for the Credit Facility do not exceed a reasonable arm's
length charge for the transfer of credit risk. The Company does not expect that
either Credit Facility Provider will make any payments under the Credit Facility
other than payments for which the Credit Facility Provider will be immediately
reimbursed. Based upon representations made in the Certificates of the Credit
Facility Providers set forth as or referenced in Exhibit H attached hereto,
which the Company and the Issuer have no reason to believe are untrue, the fees
for the Credit Facility do not include any payment for any direct or indirect
services other than the transfer of credit risk.

                                   ARTICLE VI

                                  MISCELLANEOUS

     Section 6.1. Project Certificate; Certain Tax Consequences, (a) The Company
covenants that it will take all actions within its control that may be necessary
to cause all representations and covenants in the Project Certificate with
respect to future events to be true.

                                      -19-

<PAGE>

     (b) The Company acknowledges that, because interest on the Bonds is
excludible from gross income for federal income tax purposes, certain
consequences and special rules may result to the Company with respect to federal
income taxation of the Company. These consequences may include the required use
of the alternative depreciation system for tax-exempt bond financed property
under Section 168(g)(5) of the Code and the loss of the deductibility of
interest paid with respect to the Bonds upon a "change in use" under Section
150(b) of the Code. The Company acknowledges that Chapman and Cutler LLP was not
retained to advise and has no responsibility to advise the Company with respect
to any of such consequences. The Company will consult with its own tax advisors
with respect to such matters.

     Section 6.2. Termination; Interest of Issuer in Rebate Fund. This Tax
Agreement shall terminate at the later of (a) 75 days after the Bonds have been
fully paid and retired or (b) the date on which all amounts remaining on deposit
in the Rebate Fund, if any, shall have been paid to or upon the order of the
United States and any other payments required to satisfy the Rebate Provisions
of the Code have been made to the United States. Notwithstanding the foregoing,
the provisions of Section 4.3 hereof shall not terminate until the sixth
anniversary of the date the Bonds are fully paid and retired, and Sections
4.4(c) and 6.12 hereof shall not terminate until the third anniversary of the
date the Bonds are fully paid and retired.

     Section 6.3. U.S. Form 8038. The information contained in the Information
Return for Tax-Exempt Private Activity Bond Issues, Form 8038 attached hereto as
Exhibit G, is true and complete. The Issuer will file Form 8038 (and all other
required information reporting forms) in a timely manner after their preparation
by Bond Counsel.

     Section 6.4. Common Plan of Financing. During the period commencing on
August 15, 2006 and ending on October 1, 2006, no obligations issued by or on
behalf of a state or political subdivision that are reasonably expected to be
paid out of substantially the same source of funds as the Bonds have been or
will be sold, except for the Bonds.

     Section 6.5. No Sale of the Project. Neither the Project nor any portion
thereof has been, is expected to be or will be sold or otherwise disposed of in
whole or in part prior to the last maturity date of the Bonds, other than
personal property that may be disposed of upon becoming obsolete, either for no
compensation or exclusively for cash. If any such personal property is disposed
of exclusively for cash, such cash will be spent within six months of the
disposition to acquire replacement property that will be used for sewage and
solid waste disposal purposes meeting all requirements of the Project
Certificate.

     Section 6.6. Future Events. The Issuer, the Trustee and the Company
acknowledge that any changes in facts or expectations from those set forth
herein may result in different Yield restrictions or rebate requirements from
those set forth herein and in the memorandum of Bond Counsel attached hereto as
Exhibit D and agree to promptly contact Bond Counsel if such changes do occur.

     Section 6.7. Permitted Changes; Opinion of Bond Counsel. The Yield
restrictions contained in Section 5.2 or any other restriction or covenant
contained herein need not be observed or may be changed if such nonobservance or
change will not result in the loss of any exemption for the purpose of federal
income taxation to which interest on the Bonds is otherwise

                                      -20-

<PAGE>

entitled and the Issuer, the Company and the Trustee receive an opinion of Bond
Counsel to such effect. Unless the Company otherwise directs, such opinion shall
be in such form and contain such disclosures and disclaimers as may be required
so that such opinion will not be treated as a covered opinion or a state or
local bond opinion for purposes of Treasury Department regulations governing
practice before the Internal Revenue Service (Circular 230) 31 CFR Part 10.

     Section 6.8. Public Approval. The Issuer represents that a notice of public
hearing (the "Notice") was published in one or more newspapers of general
circulation throughout the Issuer's jurisdiction (including in the location of
the Project). At least fourteen days after the publication of the Notice a
public hearing (the "Public Hearing") was held at the time and place specified
in the Notice. The Public Hearing provided a reasonable opportunity for
interested individuals to express their views, both orally and in writing, on
the Bonds and the location and nature of the Project. After the Public Hearing,
the issuance of the Bonds was approved by the City Council of the City of Show
Low, Arizona and by the Board of Supervisors of Navajo County, Arizona. The
Company represents that the Project is and will be located at the location set
forth in the Notice, which is within the jurisdiction of the Issuer, and is and
will be as described in the Notice. The following items relating to the approval
of the Bonds are contained elsewhere in the transcript of the issuance of the
Bonds:

<TABLE>
<CAPTION>
                       DESCRIPTION                      TRANSCRIPT
                       -----------                      ----------
<S>                                                 <C>
(i)     Minutes of the Public Hearing                    Item 2.1

(ii)    Publisher's Affidavit (including the form
        of "Notice of Public Hearing")                   Item 2.1

(iii)   Approvals                                   Items 2.4 and 2.5
</TABLE>

     Section 6.9. Volume Cap. The Issuer represents that the Issuer has obtained
an allocation of Arizona volume cap available under Section 146 of the Code,
valid under applicable Arizona law, greater than or equal to the issue price of
the Bonds, which the Issuer has irrevocably allocated to the Bonds. Evidence of
this allocation is contained in item 2.1 of the transcript for the issuance of
the Bonds.

     Section 6.10. Registered Form. The Issuer and the Company each recognize
that Section 149(a) of the Code requires the Bonds to be issued and to remain in
fully registered form in order that interest thereon be exempt from federal
income taxation under laws in force at the time the Bonds are delivered. In this
connection, the Issuer and the Company each agree that it will not take any
action to permit the Bonds to be issued in, or converted into, bearer or coupon
form.

     Section 6.11. Records. The Issuer, the Trustee and the Corporation will
each maintain sufficient records to demonstrate compliance with all covenants
set forth herein, to support the continued exclusion of interest paid on the
Bonds from federal income taxation and to show that all tax returns related to
the Bonds submitted or required to be submitted to the Internal Revenue

                                      -21-

<PAGE>

Service are correct and timely filed. Such records shall include but are not
limited to: basic records relating to the Bond transaction (including this Tax
Agreement, the Resolution, the Indenture and the Bond Counsel opinion);
documentation evidencing the expenditure of Bond proceeds; documentation
evidencing the use of Bond-financed property by public and private entities
(including, copies of leases, management contracts and research agreements);
documentation evidencing all sources of payment or security for the Bonds; and
documentation pertaining to any investment of Bond proceeds (including the
information required under Section 4.3 and Section 4.4 hereof and in particular
information related to the purchase and sale of securities, SLGS subscriptions,
yield calculations for each class of investments if any, actual investment
income received from the investment of proceeds, guaranteed investment contracts
and documentation of any bidding procedure related thereto and any fees paid for
the acquisition or management of investments and any rebate calculations). Such
records shall be kept for at least as long as the Bonds are outstanding, plus
the period ending three years after the latest of the final payment date of the
Bonds or the final payment date of any obligations or series of obligations
issued to refund directly or indirectly all or any portion of the Bonds or for
such longer period as may be required by this Tax Agreement.

     Section 6.12. Severability. If any clause, provision or section of this Tax
Agreement is ruled invalid by any court of competent jurisdiction, the
invalidity of such clause, provision or section shall not affect any of the
remaining clauses, sections or provisions hereof.

     Section 6.13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

     Section 6.14. Notices. All written notices, demands, communications and
requests which may or are required to be given hereunder or by any party hereto
shall be deemed given when the same shall have been given to the party or
parties at the addresses and by the methods set forth in the Indenture.

     Section 6.15. Successors and Assigns. The terms, provisions, covenants and
conditions of this Tax Agreement shall bind and inure to the benefit of the
respective successors and assigns of the parties to this Tax Agreement.

     Section 6.16. Headings. The headings of this Tax Agreement are inserted for
convenience only and shall not be deemed to constitute a part of this Tax
Agreement.

     Section 6.17. Governing Law. This Tax Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona.

     Section 6.18. Expectations. The Issuer and the Company have reviewed the
facts, estimates and circumstances presented by the Company and other persons in
existence on the date of issuance of the Bonds. Such facts, estimates and
circumstances, together with the expectations of the Issuer (which expectations
are based solely upon the representations of the Company) and of the Company as
to future events, are set forth in summary form in this Tax Agreement. Such
facts and estimates are true and are not incomplete in any material respect. On
the basis of the facts and estimates contained herein and in the Project
Certificate, the Issuer and

                                      -22-

<PAGE>

the Company have adopted the expectations contained herein. On the basis of such
facts, estimates, circumstances and expectations, it is not expected that Sale
Proceeds, investment earnings thereon or any other moneys or property will be
used in a manner that will cause the Bonds to be arbitrage bonds within the
meaning of the Rebate Provisions and the Regulations. Such expectations are
reasonable and there are no other facts, estimates and circumstances that would
materially change such expectations. To the extent the Issuer is relying on the
representations, expectations and covenants of the Company, it is reasonable and
prudent for the Issuer to do so.

                                      -23-

<PAGE>

Dated: September 8, 2006

                                        THE INDUSTRIAL DEVELOPMENT AUTHORITY
                                        OF THE CITY OF SHOW LOW, ARIZONA

                                        By /s/ David Tenney
                                           -------------------------------------
                                           President, Board of Directors

                                        SNOWFLAKE WHITE MOUNTAIN POWER, LLC

                                        By
                                           -------------------------------------
                                           Sole Manager

                                        J.P. MORGAN TRUST COMPANY, NATIONAL
                                        ASSOCIATION, as Trustee

                                        By
                                           -------------------------------------
                                        Its
                                            ------------------------------------

                                      -24-

<PAGE>

Dated: September 8, 2006

                                        THE INDUSTRIAL DEVELOPMENT AUTHORITY
                                        OF THE CITY OF SHOW LOW, ARIZONA

                                        By
                                           -------------------------------------
                                           President, Board of Directors

                                        SNOWFLAKE WHITE MOUNTAIN POWER, LLC

                                        By /s/ Robert M. Worsley
                                           -------------------------------------
                                           Sole Manager

                                        J.P. MORGAN TRUST COMPANY, NATIONAL
                                        ASSOCIATION, as Trustee

                                        By
                                           -------------------------------------
                                        Its
                                            ------------------------------------

                                      -24-

<PAGE>

Dated: September 8, 2006

                                        THE INDUSTRIAL DEVELOPMENT AUTHORITY
                                        OF THE CITY OF SHOW LOW, ARIZONA

                                        By
                                           -------------------------------------
                                           President, Board of Directors

                                        SNOWFLAKE WHITE MOUNTAIN POWER, LLC

                                        By
                                           -------------------------------------
                                           Sole Manager

                                        J.P. MORGAN TRUST COMPANY, NATIONAL
                                        ASSOCIATION, as Trustee

                                        By /s/ Tamra Amos
                                           -------------------------------------
                                        Its Assistant Vice President

                                      -24-<PAGE>

                                   $39,250,000
      The Industrial Development Authority of the City of Show Low, Arizona
                       Solid Waste Disposal Revenue Bonds
                  (Snowflake White Mountain Power, LLC Project)
                                   Series 2006
                                                                   Exhibit 10.40
                             BOND PURCHASE AGREEMENT

                             Dated September 7, 2006

The Industrial Development Authority
   of the City of Show Low, Arizona
550 North 9th Place
Show Low, Arizona 85901

Snowflake White Mountain Power, LLC
3418 North Val Vista Drive
Mesa, Arizona 85213

Ladies and Gentlemen:

     Thornton Farish Inc. (the "Underwriter") offers to enter into the following
agreement with Snowflake White Mountain Power, LLC, an Arizona limited liability
company (the "Company"), and a wholly-owned indirect subsidiary of NZ Legacy,
LLC, an Arizona limited liability company, and The Industrial Development
Authority of the City of Show Low, Arizona (the "Issuer"), a nonprofit
corporation designated as a political subdivision under the laws of the State of
Arizona, which, upon the acceptance by the Company and the Issuer of this offer,
will be binding upon the Company and the Issuer and, subject to the terms and
conditions set forth herein, upon the Underwriter. Terms not otherwise defined
herein shall have the same meanings assigned to such terms in the Indenture
hereinafter referred to.

     This offer is made subject to acceptance by the Company and the Issuer on
or before 5:00 p.m., eastern time, on the date hereof.

     SECTION 1. PURCHASE AND SALE OF THE BONDS. (a) Upon the terms and
conditions and upon the basis of the respective representations, warranties and
covenants herein, the Underwriter hereby agrees to purchase from the Issuer, and
the Issuer hereby agrees to sell to the Underwriter, $39,250,000 aggregate
principal amount of the Issuer's Solid Waste Disposal Revenue Bonds (Snowflake
White Mountain Power, LLC Project) Series 2006 (the "Bonds"), bearing interest
as described in the Official Statement (as defined below), at the purchase price
of 99.25% of the principal amount thereof plus accrued interest (if any) thereon
to the date of Closing (as defined in Section 5 hereof). The obligations of the
Issuer to sell, and of the Underwriter to purchase hereunder, are with respect
to all (but not less than all) of the Bonds.

<PAGE>

     (b) The Bonds shall be substantially as described in the Official Statement
dated September 7, 2006 relating to the Bonds (including the cover page thereof
and the Appendices thereto, as it may be amended or supplemented from time to
time, the "Official Statement"), and in the Indenture of Trust dated as of
September 1, 2006 (the "Indenture") between J.P. Morgan Trust Company, National
Association acting as Trustee (the "Trustee") and the Issuer, authorizing the
issuance of the Bonds, which shall be issued and secured under and pursuant to
the Indenture. The proceeds of the sale of the Bonds will be used to provide
funds to loan to the Company pursuant to the Loan Agreement dated as of
September 1, 2006 (the "Loan Agreement"), between the Issuer and the Company, to
finance the costs of the acquisition, construction and installation of certain
solid waste disposal facilities (the "Project") for use by the Company, as part
of the Company's electric generation facility in Navajo County, Arizona. The
Company will also cause CoBank, ACB (the "Fronting Credit Facility Provider"),
to deliver its irrevocable direct-pay letter of credit (the "Fronting Credit
Facility") to the Trustee and will cause JPMorgan Chase Bank, N.A. (the
"Confirming Credit Facility Provider") to deliver its irrevocable confirmation
(the "Confirming Credit Facility" and, together with the Fronting Credit
Facility, the "Initial Credit Facility") to the Trustee, to support payment of
the principal and purchase prices of and interest on the Bonds during the term
of the Initial Credit Facility. Pursuant to the Fronting Credit Facility
Agreement (as defined in the Indenture), the Company will agree to reimburse the
Fronting Credit Facility Provider for amounts drawn on the Fronting Credit
Facility. The Company's obligations under the Fronting Credit Facility Agreement
will be secured by certain collateral documents of the Company, including a Bond
Pledge Agreement, dated as of September 1, 2006, between the Company and the
Fronting Credit Facility Provider (the "Pledge Agreement") (collectively, the
"Collateral Documents"). Pursuant to the Confirming Credit Facility Agreement
(as defined in the Indenture), the Fronting Credit Facility Provider will agree
to reimburse the Confirming Credit Facility Provider for amounts drawn on the
Confirming Credit Facility.

     SECTION 2. APPROVAL OF OFFICIAL STATEMENT AND OTHER DOCUMENTS. On or before
the Closing, the Company shall deliver to the Underwriter such reasonable number
of copies of the Official Statement as the Underwriter shall request. The Issuer
and the Company authorize and approve the Official Statement and consent to the
use by the Underwriter of the Official Statement. The Company and the Issuer
have authorized or approved or will authorize or approve the Indenture, the
Bonds, the Loan Agreement and the Tax Exemption Certificate and Agreement dated
as of the date of Closing (the "Tax Agreement") among the Issuer, the Trustee
and the Company, each with such changes made prior to Closing as may be approved
by the Issuer, the Company and the Underwriter. The Issuer and the Company
approve and consent to the use by the Underwriter of the Official Statement
(including the cover page thereof and the Appendices thereto) in connection with
the offering of the Bonds, which the Issuer and the Company heretofore deemed
final as of its date within the meaning of Rule 15c2-12 of the Securities and
Exchange Commission ("Rule 15c2-12").

     SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company represents and warrants to and covenants with the Underwriter that:

          (i) The Company is a limited liability company duly organized and in
     good standing under the laws of the State of Arizona, and is duly qualified
     to conduct its

                                       -2-

<PAGE>

     business as presently conducted and as contemplated in the Official
     Statement, except where the failure to be so qualified would not have a
     material adverse effect, financial or otherwise.

          (ii) The information with respect to the Company, the use of Bond
     proceeds, the Project and the descriptions of the Bonds, the Indenture and
     the Loan Agreement contained or incorporated by reference in the Official
     Statement as of the date hereof and as of the date of the Closing does not
     and will not contain any untrue statement of a material fact or omit to
     state a material fact required to be stated therein, or necessary to make
     the statements made therein, in light of the circumstances under which they
     were made, not misleading.

          (iii) At or prior to the Closing, the Company will have entered into
     the Loan Agreement, the Tax Agreement, the Fronting Credit Facility
     Agreement, the Pledge Agreement, and the Remarketing Agreement dated as of
     September 1, 2006 with Thornton Farish Inc. (the "Remarketing Agreement")
     (such documents collectively referred to as the "Company Documents"). The
     Company Documents will thereupon constitute valid and binding agreements of
     the Company and, assuming the due authorization, execution and delivery by
     the other parties thereto, will be enforceable against the Company in
     accordance with their respective terms (subject in each instance to
     applicable bankruptcy, reorganization, insolvency, moratorium or other
     similar laws affecting the enforcement of creditors' rights generally and
     to the availability of equitable remedies), except as any rights to
     indemnity contained therein may be limited by applicable law, including
     state and federal securities laws.

          (iv) This Bond Purchase Agreement has been authorized, executed and
     delivered by the Company and, assuming the due authorization, execution and
     delivery by the other parties hereto, is a valid and binding agreement of
     the Company enforceable against the Company in accordance with its terms
     (subject to applicable bankruptcy, reorganization, insolvency, moratorium
     or other similar laws affecting the enforcement of creditors' rights
     generally and to the availability of equitable remedies), except as rights
     to indemnity hereunder may be limited by applicable law, including federal
     and state securities laws.

          (v) Except as may be set forth in the Official Statement, there is no
     action, suit, proceeding, inquiry or investigation at law or in equity or
     before or by any court, public board or body pending (and, to the knowledge
     of the Company, no basis therefor) or, to the knowledge of the Company,
     threatened, against or affecting the Company or the Project or involving
     the business or property of the Company wherein an unfavorable decision,
     ruling or finding would (a) adversely affect (i) the transactions
     contemplated herein or in the Company Documents or the Official Statement,
     or (ii) the validity or enforceability of the Company Documents, this Bond
     Purchase Agreement or any other material agreement or instrument to which
     the Company is a party and which is used or contemplated for use in the
     operation of the Project or in the consummation of the transactions
     contemplated herein or in the Company Documents or the Official

                                       -3-

<PAGE>

     Statement, or (b) have a materially adverse effect upon the financial
     condition or operations of the Company taken as a whole.

          (vi) The Company is not in default in the performance of any
     obligation, agreement or condition contained in any bond, debenture, note
     or any other evidence of indebtedness or in any indenture, lease, loan or
     other agreement to which the Company is a party or its property is subject
     which would have a materially adverse effect on its obligations hereunder
     or the transactions contemplated hereby or upon the financial condition or
     operations of the Company and its consolidated subsidiaries taken as a
     whole.

          (vii) The execution and delivery by the Company of this Bond Purchase
     Agreement and the Company Documents, and compliance with the provisions
     thereof and hereof, do not and will not conflict with or constitute on the
     part of the Company a breach or violation of, or (with or without the
     giving of notice or lapse of time or both) a default under, its articles of
     organization or by-laws, or any agreement, indenture, mortgage or lease by
     which the Company is or may be bound, or any existing law, administrative
     regulation, decree or order applicable to the Company or to which its
     property is subject.

          (viii) No approval of any governmental or regulatory body is required
     in connection with the execution and delivery of, and performance by the
     Company of its obligations under, this Bond Purchase Agreement and the
     Company Documents.

          (ix) The Company will furnish such information, execute such
     instruments and take such other action in cooperation with the Underwriter
     as the Underwriter may reasonably request to qualify the Bonds for offering
     and sale under the "blue sky" or other securities laws and regulations of
     such states and other jurisdictions of the United States as the Underwriter
     may request; provided, that in no event shall the Company be obligated to
     qualify to do business in any jurisdiction where it would not otherwise be
     required to qualify or to take any action which would subject it to general
     service of process in any jurisdiction where it would not otherwise be so
     subject.

          (x) The Company will notify the Underwriter of any event occurring
     before Closing or within 25 days after the end of the underwriting period
     for the Bonds (within the meaning of Rule 15c2-12) which would require a
     change in the Official Statement in order to make the statements therein,
     in light of the circumstances under which made, not misleading and will
     furnish at the Company's expense to the Underwriter such reasonable number
     of copies as the Underwriter shall request of amendments or supplements to
     the Official Statement in order that the statements in the Official
     Statement, as so amended or supplemented, will not, in the light of the
     circumstances under which made, when the Official Statement as so amended
     or supplemented is delivered to a purchaser, be misleading.

          (xi) The Company has not entered into, or been required to enter into,
     any undertaking to provide continuing disclosure pursuant to Rule 15c2-12.

                                       -4-

<PAGE>

     The Company may presume for purposes of this Section 3 that the
underwriting period for the Bonds will end on the date of issuance and delivery
thereof unless the Company is otherwise notified in writing at the Closing by
the Underwriter.

     Any certificate signed by any official of the Company and delivered to the
Underwriter shall be deemed a representation and warranty by the Company to the
Underwriter as to statements made therein.

     SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER. The
Issuer represents and warrants to and covenants with the Underwriter that:

          (i) The Issuer is a nonprofit corporation designated as a political
     subdivision under the Constitution and the laws of the State of Arizona.

          (ii) The Issuer has full power and authority to issue and sell the
     Bonds as provided in the Loan Agreement, the Indenture and the Official
     Statement and to enter into the Loan Agreement, the Indenture, the Tax
     Agreement and this Bond Purchase Agreement.

          (iii) The Issuer has adopted a Resolution on July 18, 2006 (the "Bond
     Resolution"), authorizing the execution and delivery of the Loan Agreement,
     the Indenture, the Tax Agreement and this Bond Purchase Agreement, the
     issuance and sale of the Bonds and all actions necessary or appropriate to
     carry out the same. The Loan Agreement, the Indenture and the Tax Agreement
     are collectively referred to as the "Issuer Documents."

          (iv) Each meeting of the Issuer at which action was taken or
     considered in connection with the Project, the Issuer Documents, this Bond
     Purchase Agreement and the Bonds, including the meeting at which the Bond
     Resolution was adopted, was a duly noticed and held meeting of the Issuer
     open to the public at all times.

          (v) This Bond Purchase Agreement has been authorized, executed and
     delivered by the Issuer.

          (vi) The information with respect to the Issuer contained under the
     heading "THE ISSUER" in the Official Statement does not at the date hereof,
     and will not as of the Closing, include any untrue statement of a material
     fact or omit to state any material fact necessary to make the statements
     therein not misleading in light of the circumstances under which they were
     made.

          (vii) To the best knowledge of the undersigned officer of the Issuer,
     there is no action, suit, proceeding or investigation at law or in equity
     before or by any court, either state or federal, or public board or body,
     pending or threatened, calling into question the existence or operations of
     the Issuer, the validity of the Issuer Documents or this Bond Purchase
     Agreement or the authority of the Issuer to enter into the Issuer Documents
     or to issue the Bonds.

                                       -5-

<PAGE>

          (viii) The authorization, execution and delivery by the Issuer of the
     Issuer Documents and this Bond Purchase Agreement and the issuance of the
     Bonds will not violate any existing decree, writ or injunction and will not
     contravene the provisions of, constitute a default under, or result in the
     creation of a lien, charge or encumbrance prohibited by, any existing
     agreement, indenture, bond resolution or other instrument to which the
     Issuer is a party or by which the Issuer or any of its assets are bound.

          (ix) The Issuer will cooperate with the Company in preparing and
     making available to the Underwriter any amendments or supplements to the
     Official Statement pursuant to Section 3(x) hereof at the Company's
     expense.

          (x) The Issuer will furnish such information, execute such instruments
     and take such other action in cooperation with the Underwriter as the
     Underwriter may reasonably request to qualify the Bonds for offering and
     sale under the "blue sky" or other securities laws and regulations of such
     states and other jurisdictions of the United States as the Underwriter may
     request; provided, that in no event shall the Issuer be obligated to
     qualify to do business in any jurisdiction or consent to service of process
     in any jurisdiction other than the State of Arizona.

     Any certificate signed by any official of the Issuer and delivered to the
Underwriter shall be deemed a representation and warranty by the Issuer to the
Underwriter as to statements made therein.

     SECTION 5. CLOSING. On or prior to 11:00 a.m., Chicago time, on September
8, 2006, at the offices of Chapman and Cutler LLP, Chicago, Illinois, or at such
other time or such other date or such other place as shall have been mutually
agreed upon by the Company, the Issuer and the Underwriter, the Issuer will
deliver, or cause to be delivered through the facilities of The Depository Trust
Company ("DTC"), to the Underwriter, the Bonds in definitive form duly executed
by the Issuer and authenticated by the Trustee, and the Underwriter will accept
such delivery and pay the purchase price of the Bonds, subject to the provisions
hereof including, without limitation, Section 7 hereof. Payment of the purchase
price for the Bonds by the Underwriter will be made by wire transfer in
immediately available funds, payable to the Trustee, as provided in the
Indenture, or by such other means as is acceptable to the Issuer, the Company,
the Underwriter and the Trustee. The above described payment and delivery is
herein called the "Closing."

     The Bonds will be delivered as one fully registered bond registered in the
name of Cede & Co. and will be available upon request for checking by the
Underwriter not less than one business day prior to the Closing.

     It is anticipated that a CUSIP identification number will be printed on the
Bonds, but neither the failure to print such number on any Bond nor any error in
the printing of such number shall constitute cause for a failure or refusal by
the Underwriter to accept delivery of and pay for any Bonds. The Issuer and the
Company will cooperate with the Underwriter to obtain the CUSIP number.

                                       -6-

<PAGE>

     SECTION 6. TERMINATION OF BOND PURCHASE AGREEMENT. The Underwriter shall
have the right to cancel its obligation to purchase the Bonds if, on or after
the date hereof and on or before the date of Closing: (i) (a) legislation shall
be enacted by the House of Representatives or the Senate of the Congress of the
United States, or recommended by the President of the United States to the
Congress of the United States for passage, or favorably reported for passage to
either the House of Representatives or the Senate by any committee of either
body to which such legislation has been referred for consideration, (b) a
decision shall be entered by a court established under Article III of the
Constitution of the United States, or the Tax Court of the United States, or (c)
a ruling, regulation or order of the Treasury Department of the United States or
the Internal Revenue Service shall be made or proposed, which has the purpose or
effect of including the interest on the Bonds in the gross income of the owners
of the Bonds for federal income tax purposes; (ii) legislation shall be enacted,
or actively considered for enactment by the United States Congress, or a
decision by a court of the United States shall be rendered, or a ruling or
regulation by the Securities and Exchange Commission or other governmental
agency having jurisdiction of the subject matter shall be made or proposed, the
effect of which is that (A) the Bonds, or any other "security" as defined in the
Securities Act of 1933, as amended and as then in effect (the "Securities Act"),
relating to the Bonds, are not exempt from the registration, qualification or
other requirements of the Securities Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or (B) the Indenture is not exempt from the
registration, qualification or other requirements of the Trust Indenture Act of
1939, as amended and as then in effect (the "Trust Indenture Act"); (iii) a stop
order, ruling or regulation by the Securities and Exchange Commission shall be
issued or made, the effect of which is that the issuance, offering or sale of
the Bonds, as contemplated herein or in the Official Statement, is or would be
in violation of any provision of the Securities Act, the Exchange Act, the Trust
Indenture Act, or other federal law; (iv) there shall occur any event which in
the reasonable judgment of the Underwriter either (A) makes untrue or incorrect
in any material respect any statement or information contained in the Official
Statement or (B) is not reflected in the Official Statement but should be
reflected therein in order to make the statements and information contained
therein not misleading in any material respect and, in either case, the Company
or the Issuer refuses to permit the Official Statement to be supplemented to
correct or supply such statement or information, or the effect of the Official
Statement as so corrected or supplemented is, in the reasonable judgment of the
Underwriter, to materially adversely affect the market for the Bonds or the sale
of the Bonds by the Underwriter at the contemplated offering price; (v) there
shall have been an outbreak or escalation of hostilities or any other
insurrection or armed conflict or any calamity or crisis which, in the
reasonable judgment of the Underwriter, materially adversely affects the market
for the Bonds or the sale of the Bonds by the Underwriter at the contemplated
offering price; (vi) there shall have been a general suspension of trading in
securities on the New York Stock Exchange, the American Stock Exchange, the
Pacific Stock Exchange, the Chicago Board of Trade, or any other major U.S.
financial or securities exchange, maximum or minimum prices not previously in
effect shall have been established on any such exchange, or the daily volume or
average prices on any such exchange shall have significantly changed from the
current average daily volume or level of prices, the effect of any of which on
the financial markets of the United States is, in the reasonable judgment of the
Underwriter, to materially adversely affect the market for the Bonds or the sale
of the Bonds by the Underwriter at the contemplated offering price; (vii) a
banking moratorium shall have been declared by federal, Arizona or New York
authorities; (viii) there shall have occurred any material adverse

                                       -7-

<PAGE>

change in the affairs of the Company or the Issuer or the transactions
contemplated by this Bond Purchase Agreement, the Official Statement, the
Company Documents or the Issuer Documents; (ix) there shall be any litigation,
pending or threatened, which, in the reasonable judgment of the Underwriter,
makes it impracticable or inadvisable to offer or deliver the Bonds on the terms
contemplated by the Official Statement; or (x) the Indenture, the Official
Statement, the Company Documents and the Issuer Documents are not executed,
approved and delivered. In the event of any termination of this Bond Purchase
Agreement permitted under this Section 6, there shall be no liability of any
party to this Bond Purchase Agreement to any other party, other than as provided
in Sections 9, 10 and 11.

     SECTION 7. CONDITIONS TO THE UNDERWRITER'S OBLIGATIONS. The obligations of
the Underwriter hereunder shall be subject to the performance by the Company and
the Issuer of their obligations to be performed hereunder at and prior to the
Closing and to the following conditions:

          (a) At the time of the Closing, the Official Statement, the Fronting
     Credit Facility, the Confirming Credit Facility, the Company Documents, the
     Issuer Documents, this Bond Purchase Agreement and the Bonds shall be in
     full force and effect in the form heretofore approved by the Company, the
     Issuer, the Trustee and the Underwriter and none of the foregoing documents
     shall have been amended, modified or supplemented from the forms thereof as
     of the date hereof, except as may have been approved by the Underwriter,
     the Closing in all events, however, to be deemed such approval.

          (b) At the Closing, the Bonds shall be authenticated by the Trustee
     and delivered to or as directed by the Underwriter.

          (c) At or prior to the Closing, the Underwriter shall receive the
     following documents in such number of counterparts as shall be mutually
     agreeable to the Underwriter, the Issuer and the Company:

               (1) The opinions of Paul D. Ellsworth, PLC, of Gallagher &
          Kennedy P.A. and of Bracewell & Giuliani LLP, counsel for the Company,
          each dated the date of Closing, covering the points listed in Exhibit
          A hereto;

               (2) The approving opinion of Chapman and Cutler LLP, Bond
          Counsel, dated the date of Closing, substantially in the form of
          Exhibit B hereto;

               (3) The supplemental opinion of Chapman and Cutler LLP, Bond
          Counsel, dated the date of Closing, substantially in the form of
          Exhibit C hereto;

               (4) The opinion of Chapman and Cutler LLP, as counsel passing
          upon certain matters for the Underwriter, dated the date of Closing,
          substantially in the form of Exhibit D hereto:

                                       -8-

<PAGE>

               (5) The opinion of Greenberg Traurig, LLP, counsel for the
          Issuer, dated the date of Closing, substantially in the form of
          Exhibit E hereto;

               (6) The opinion of Walter G. Schmidt, Senior Corporate Attorney
          for the Fronting Credit Facility Provider, substantially in the form
          of Exhibit F hereto;

               (7) The opinion of Quarles & Brady Streich Lang LLP, counsel for
          the Confirming Credit Facility Provider, substantially in the form of
          Exhibit G hereto;

               (8) A certificate dated the date of Closing and signed by the
          sole Manager of the Company to the effect that (A) each of the
          representations and warranties of the Company set forth in Section 3
          hereof and in the Company Documents shall be accurate as if made on
          and as of the date of Closing, (B) all of the conditions and
          agreements required in this Bond Purchase Agreement to be satisfied or
          performed by the Company at or prior to the date of Closing shall have
          been satisfied or performed in the manner and with the effect
          contemplated herein, (C) as of the date of Closing, no event of
          default under the Company Documents has occurred and is continuing and
          no event has occurred and is continuing which, with the lapse of time
          or the giving of notice, or both, would constitute such an event of
          default, and (D) as of the date of Closing, there has been no material
          adverse change in the condition of the Company from that set forth in
          or contemplated by the Official Statement;

               (9) A certificate dated the date of Closing and signed by an
          appropriate official or appropriate officials of the Issuer to the
          effect that (A) each of the representations and warranties of the
          Issuer set forth in Section 4 hereof and in the Issuer Documents shall
          be accurate as if made on and as of the date of Closing, (B) all of
          the conditions and agreements required in this Bond Purchase Agreement
          to be satisfied or performed by the Issuer at or prior to the date of
          Closing shall have been satisfied or performed in the manner and with
          the effect contemplated herein and (C) as of the date of Closing, no
          event of default under the Issuer Documents has occurred and is
          continuing and no event has occurred and is continuing which, with the
          lapse of time or the giving of notice, or both, would constitute such
          an event of default;

               (10) A certificate dated the date of Closing and signed by an
          appropriate officer or appropriate officers of the Fronting Credit
          Facility Provider to the effect that the Fronting Credit Facility has
          been duly authorized, executed and delivered by the Fronting Credit
          Facility Provider and that the information set forth in Appendix B to
          the Official Statement is accurate;

               (11) A certificate dated the date of Closing and signed by an
          appropriate officer or appropriate officers of the Confirming Credit
          Facility Provider to the effect that the Confirming Credit Facility
          has duly authorized, executed and

                                       -9-

<PAGE>

          delivered by the Confirming Credit Facility Provider and that the
          information set forth in Appendix C to the Official Statement is
          accurate;

               (12) A certificate of a duly authorized officer of the Trustee,
          as to the due execution of the Indenture and the Tax Agreement by the
          Trustee and the due authentication and delivery of the Bonds by the
          Trustee, in form and substance satisfactory to the Underwriter;

               (13) Evidence that Standard & Poor's ("S&P") has assigned ratings
          of at least AA-/A-1+ to the Bonds;

               (14) A certificate of the Underwriter stating that the long term
          and short term ratings by S&P of the Confirming Credit Facility
          Provider are not lower than such ratings by S&P of Wachovia Bank,
          N.A.; and

               (15) Such additional opinions, certificates, proceedings,
          instruments and other documents as the Underwriter and the Issuer may
          reasonably request in connection with the transactions contemplated by
          this Bond Purchase Agreement.

     SECTION 8. NONSATISFACTION OF CONDITIONS. If any of the conditions to the
obligations of the Underwriter contained in Section 7 or elsewhere in this Bond
Purchase Agreement shall not have been satisfied when and as required herein,
all obligations of the Underwriter hereunder may be terminated by the
Underwriter at, or at any time prior to, the Closing by written notice to the
Company and the Issuer.

     SECTION 9. INDEMNIFICATION. (a) The Company will indemnify and hold
harmless the Underwriter, each of its directors, officers and employees and each
person who controls the Underwriter within the meaning of Section 15 of the
Securities Act (any such person being herein in this paragraph (a) sometimes
called an "Indemnified Party"), against all losses, claims, damages or
liabilities, joint or several, to which such Indemnified Party may become
subject under any statute or at law or in equity or otherwise, and will
reimburse any such Indemnified Party for any legal or other expenses incurred by
it in connection with investigating any claims against it and defending any
actions, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon (1) an allegation or determination that the Bonds or
any other security relating to the Bonds should have been registered under the
Securities Act or the Exchange Act or the Indenture should have been qualified
under the Trust Indenture Act, or (2) any untrue statement, or alleged untrue
statement, of a material fact contained in the Official Statement or any
amendment or supplement to the Official Statement or the omission or alleged
omission to state in them a material fact necessary to make the statements in
them not misleading, except a statement or omission under "UNDERWRITING." The
Company shall not be liable under this paragraph if the person asserting any
such loss, claim, damage or liability purchased Bonds from the Underwriter, if
delivery to such person of the Official Statement or any amendment of or
supplement to the Official Statement would have been a valid defense to the
action from which such loss, claim, damage or liability arose and if the
Official Statement, amendment or supplement was not delivered to such person by
or on behalf of the Underwriter.

                                      -10-

<PAGE>

This indemnity agreement will not limit any other liability the Company may
otherwise have to any such Indemnified Party.

     (b) The Company will indemnify and hold harmless the Issuer, each of its
officials and employees and each person who controls the Issuer within the
meaning of Section 15 of the Securities Act (any such person being herein in
this paragraph (b) sometimes called an "Indemnified Party"), against all losses,
claims, damages or liabilities, joint or several, to which such Indemnified
Party may become subject under any statute or at law or in equity or otherwise,
and will reimburse any such Indemnified Party for any legal or other expenses
incurred by it in connection with investigating any claims against it and
defending any actions, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon (1) an allegation or determination that
the Bonds or any other security relating to the Bonds should have been
registered under the Securities Act or the Exchange Act or the Indenture should
have been qualified under the Trust Indenture Act, or (2) any untrue statement,
or alleged untrue statement, of a material fact contained in the Official
Statement or any amendment or supplement to the Official Statement or the
omission or alleged omission to state in them a material fact necessary to make
the statements in them not misleading, except a statement or omission under "THE
ISSUER." This indemnity agreement will not limit any other liability the Company
may otherwise have to any such Indemnified Party.

     (c) The Underwriter will indemnify and hold harmless the Company and the
Issuer, each of their directors, officers, officials and employees and each
person who controls either of them within the meaning of Section 15 of the
Securities Act (for purposes of this paragraph (c), an "Indemnified Party")
against all losses, damages or liabilities, joint or several, to which such
Indemnified Party may become subject under any statute or at law or in equity or
otherwise, and will reimburse any such Indemnified Party for any legal or other
expenses incurred by it in connection with defending any actions, insofar as
such losses, damages, liabilities or actions arise out of or are based upon any
untrue statement of a material fact contained in the Official Statement or any
amendment or supplement to the Official Statement or the omission to state in
them a material fact necessary to make the statements in them not misleading,
but only with reference to written information relating to the Underwriter
furnished by it specifically for use in the preparation of the documents
referred to in the foregoing indemnity. The Company and the Issuer acknowledge
that the statements in the Official Statement under "UNDERWRITING" constitute
the only information furnished in writing by or on behalf of the Underwriter for
inclusion in the Official Statement.

     (d) An Indemnified Party (as defined in paragraph (a), (b) or (c) of this
Section 9) will, promptly after receiving notice of the commencement of any
action against such Indemnified Party in respect of which indemnification may be
sought against the Company or the Underwriter, as the case may be (in any case
the "Indemnifying Party"), notify the Indemnifying Party in writing of the
commencement of the action. Failure of the Indemnified Party to give such notice
will reduce the liability of the Indemnifying Party under this indemnity
agreement by the amount of the damages attributable to the failure to give the
notice; but the failure will not relieve the Indemnifying Party from any
liability it may have to such Indemnified Party otherwise than under the
indemnity agreement in this Section. If such action is brought against an
Indemnified Party and such Indemnified Party notifies the Indemnifying Party of
its

                                      -11-

<PAGE>

commencement, the Indemnifying Party may, or if so requested by the Indemnified
Party shall, participate in it or assume its defense, with counsel reasonably
satisfactory to the Indemnified Party, and after notice from the Indemnifying
Party to the Indemnified Party that it will not be liable to the Indemnified
Party under this Section for any legal or other expenses subsequently incurred
by such Indemnified Party, the Indemnifying Party may participate at its own
expense in the defense of the action. If the Indemnifying Party does not employ
counsel to have charge of the defense or if any Indemnified Party reasonably
concludes that there may be defenses available to it which are different from or
in addition to those available to the Indemnifying Party (in which case the
Indemnifying Party will not have the right to direct the defense of such action
on behalf of such Indemnified Party), legal and other expenses incurred by such
Indemnified Party will be paid by the Indemnifying Party. Any obligation under
this Section of an Indemnifying Party to reimburse an Indemnified Party for
expenses includes the obligation to make advances to the Indemnified Party to
cover such expenses in reasonable amounts and at reasonable periodic intervals
not more often than monthly as requested by the Indemnified Party. An
Indemnifying Party shall not be liable for any settlement of any proceeding
affected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, an Indemnifying Party shall
indemnify the Indemnified Party from and against any loss or liability by reason
of such settlement or judgment.

     (e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
Section is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company on grounds of policy or otherwise, the
Company and the Underwriter shall contribute to the total losses, claims,
damages and liabilities (including legal or other expenses of investigation or
defense) to which they may be subject in such proportion so that the Underwriter
is responsible for the percentage that the underwriting fee is of the sum of
such fee and the purchase price of the Bonds specified in Section 1 and the
Company is responsible for the balance; provided, that in no case will the
Underwriter be responsible for any amounts in the aggregate in excess of the
underwriting fee; and provided further, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9(e) each person who
controls the Underwriter within the meaning of Section 15 of the Securities Act
will have the same rights to contribution as the Underwriter, and each person
who controls the Company within the meaning of Section 15 of the Securities Act
and each officer and each director of the Company will have the same rights to
contribution as the Company, subject to the foregoing sentence. Any party
entitled to contribution will, promptly after receiving notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made under this paragraph, notify each party from whom
contribution may be sought, but the omission to notify such party shall not
relieve any party from whom contribution may be sought from any other obligation
it may have otherwise than under this paragraph.

     (f) No right or remedy granted in this Section 9 is intended to limit a
party's access to the courts to pursue other rights or remedies provided by law
or in equity.

                                      -12-

<PAGE>

     SECTION 10. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the Issuer, as set forth in this Bond Purchase
Agreement or made by either of them pursuant to this Bond Purchase Agreement,
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Underwriter, the Company, the Issuer or any of their
officers or directors or any controlling person, and shall survive delivery of
and payment for the Bonds. The obligations of the Company under Section 9 hereof
shall survive any termination of this Bond Purchase Agreement by the Underwriter
pursuant to its terms.

     SECTION 11. EXPENSES. The Company shall pay any expenses incident to the
performance of the obligations hereunder including but not limited to: (i) the
cost of the preparation and printing of the Indenture, the Loan Agreement, this
Bond Purchase Agreement, the Remarketing Agreement and the Tax Agreement,
together with a reasonable number of copies thereof; (ii) the cost of the
preparation, printing and delivery of the Official Statement, together with a
reasonable number of copies thereof; (iii) the cost of the preparation of the
Bonds; (iv) the fees and disbursements of Counsel to the Company and of any
other experts or consultants retained by the Company or the Underwriter; (v) the
fees and disbursements of Counsel to the Underwriter and Bond Counsel; (vi) the
fees and disbursements of Counsel to the Issuer; (vii) the fees, if any, for
Bond ratings; and (viii) all registration or filing fees and related costs and
expenses incurred in connection with the qualification of the Bonds under state
security (or "blue sky") laws and the preparation and printing of a blue sky
survey and legal investment memorandum relating to the Bonds. The Company may
pay such expenses from the proceeds of the Bonds to the extent legally
permissible and which will not adversely affect the exclusion from federal gross
income of interest on the Bonds.

     SECTION 12. REPRESENTATION BY COUNSEL. It is understood, agreed and
consented to by the parties hereto that, in connection with the transactions
described herein, the Issuer will be represented by Greenberg Traurig, LLP; the
Company will be represented by Bracewell & Giuliani LLP, by Paul D. Ellsworth,
PLC and by Gallagher & Kennedy P.A.; the Fronting Credit Facility Provider will
be represented by Latham & Watkins LLP and by Walter G. Schmidt, its Senior
Corporate Attorney; the Confirming Credit Facility Provider will be represented
by Quarles & Brady Streich Lang LLP; and Chapman and Cutler LLP will serve as
Bond Counsel and also pass upon certain matters for the Underwriter.

     SECTION 13. MISCELLANEOUS. (a) Any notice or other communication to be
given to the Company or the Issuer under this Bond Purchase Agreement shall be
deemed given when delivered in person to their respective addresses set forth on
the first page hereof, or when mailed by first class mail, postage prepaid, and
addressed to such addresses, or when confirmation is received by the sender that
any telex, telegram or telecopy to the Company or the Issuer at such address has
been received. Any notice or other communication to be given to the Underwriter
under this Bond Purchase Agreement shall be deemed given when delivered in
person to the addresses set forth below, or when mailed by first class mail,
postage prepaid and addressed to such addresses, or when confirmation is
received by the sender that any telex, telegram or telecopy to the Underwriter
at such addresses has been received by them, as follows:

                                      -13-

<PAGE>

               Thornton Farish Inc.
               3500 Eastern Boulevard
               Suite 210
               Montgomery, Alabama 36116

               Attention:   Public Finance Department
               Telephone:   (334) 270-8555
               Telecopy:    (334) 272-0897

     (b) This Bond Purchase Agreement is made solely for the benefit of the
Company, the Issuer and the Underwriter (including the successors or assigns of
the Underwriter) and no other person, including any purchaser of the Bonds,
shall acquire or have any right hereunder or by virtue hereof.

     (c) This Bond Purchase Agreement shall be governed and construed in
accordance with the laws of the State of Arizona.

     (d) The captions in this Bond Purchase Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.

     (e) This Bond Purchase Agreement shall become effective upon the execution
of the acceptance hereof by the Company and the Issuer.

                            (execution page follows)

                                      -14-

<PAGE>

                                        THORNTON FARISH INC.

                                        By /s/ Scott W. Bamman
                                           -------------------------------------
                                           Scott W. Bamman
                                           President

Accepted and agreed to as of the date
first above written:

SNOWFLAKE WHITE MOUNTAIN POWER, LLC

By
   ----------------------------------
   Robert M. Worsley
   Sole Manager

THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE CITY OF SHOW LOW, ARIZONA

By
   ----------------------------------

   ----------------------------------
   President, Board of Directors

                                      -15-

<PAGE>

                                        THORNTON FARISH INC.

                                        By
                                           -------------------------------------
                                           Scott W. Bamman
                                           President

Accepted and agreed to as of the date
first above written:

SNOWFLAKE WHITE MOUNTAIN POWER, LLC

By /s/ Robert M. Worsley
   ----------------------------------
   Robert M. Worsley
   Sole Manager

THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE CITY OF SHOW LOW, ARIZONA

By
   ----------------------------------

   ----------------------------------
   President, Board of Directors

                                      -15-

<PAGE>

                                        THORNTON FARISH INC.

                                        By
                                           -------------------------------------
                                           Scott W. Bamman
                                           President

Accepted and agreed to as of the date
first above written:

SNOWFLAKE WHITE MOUNTAIN POWER, LLC

By /s/ Robert M. Worsley
   ----------------------------------
   Robert M. Worsley
   Sole Manager

THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE CITY OF SHOW LOW, ARIZONA

By /s/ Randy Tenney
   ----------------------------------
   Randy Tenney
   President, Board of Directors

                                      -15-

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