Document:

Exhibit 4.3

 

SUPPLEMENTAL INDENTURE

 

This SUPPLEMENTAL INDENTURE is entered into as of May 21, 2015 (the “Supplemental Indenture”) by and among SM Energy Company, a Delaware corporation (the “Issuer”), and U.S. Bank National Association, as trustee under the Indenture referenced below (the “Trustee”).

 

Recitals

 

A.                                    The parties hereto are parties to an Indenture dated as of February 7, 2011 (the “Indenture”);

 

B.                                    The Issuer has issued its 6.625% Senior Notes due 2019 (the “Notes”) pursuant to the Indenture, of which $350 million aggregate principal amount of Notes are presently outstanding;

 

C.                                    The Issuer has conducted (i) a tender offer to purchase any and all of the Notes (the “Offer”) pursuant to the Offer to Purchase and Consent Solicitation Statement dated May 7, 2015 and the related Consent and Letter of Transmittal and, (ii) pursuant to the same documents, a consent solicitation of the holders of the Notes pursuant to which the Issuer has received the consent of the holders of an aggregate amount in outstanding principal of the Notes that is necessary under Section 9.02 of the Indenture to amend the Indenture as provided in this Supplemental Indenture;

 

D.                                    Pursuant to Section 9.06 of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Supplemental Indenture;

 

E.                                     The Issuer has been authorized by Board Resolutions to enter into this Supplemental Indenture;

 

F.                                      The Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel pursuant to Section 9.06 of the Indenture to the effect that the execution of this Supplemental Indenture by the Issuer is authorized or permitted by the Indenture; and

 

G.                                    All other acts and proceedings required by law, by the Indenture and by the charter documents of the Issuer have been done and performed to make this Supplemental Indenture a valid and binding agreement for the purposes expressed herein, in accordance with its terms.

 

Agreement

 

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Issuer and the Trustee hereby agree as follows:

 

 

ARTICLE ONE

 

Section 1.01                            Definitions.

 

Capitalized terms used in this Supplemental Indenture and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture.

 

ARTICLE TWO

 

Section 2.01                            Amendment of Certain Provisions in Article Four.

 

(a)                                 Deletion of Sections. Each of the following Sections of the Indenture is amended by deleting the text thereof in its entirety and replacing it with the text “[Reserved]”:

 

Section 4.03

Section 4.05

Section 4.07

Section 4.08

Section 4.09

Section 4.10

Section 4.11

Section 4.12

Section 4.14

Section 4.15

Section 4.16

 

Section 2.02                            Amendment of Certain Provisions in Article Five.

 

(a)                                 Mergers, Consolidations, Etc.  Clause (3) of Section 5.01(a) of the Indenture is amended by deleting the text thereof in its entirety and replacing it with the text “[Reserved].”

 

(b)                                 Mergers, Consolidations, Etc.  Section 5.01(c) of the Indenture is amended by deleting from the beginning of that section the words “Notwithstanding the preceding clause (3) of Section 5.01(a).”

 

Section 2.03                            Amendment of Certain Provisions in Article Six/Events of Default.  Each of the following Sections of the Indenture is amended by deleting the text thereof in its entirety and replacing it with the text “[Reserved]”:

 

Section 6.01(3)

Section 6.01(4)

Section 6.01(6)

Section 6.01(9)

 

Section 2.04                            Conforming Amendments.

 

(a)                                 Amendment of Table of Contents.  The Table of Contents of the Indenture is amended to reflect the amendments to the Indenture made by this Supplemental Indenture.

 

2

 

(b)                                 Defined Terms to be Deleted.  Section 1.01 of the Indenture is amended by deleting in their entirety all definitions of terms and all references to definitions of terms that are used solely in the text of the Indenture that is being deleted from the Indenture pursuant to this Supplemental Indenture.

 

(c)                                  Definition of Additional Notes.  The definition of “Additional Notes” in the Indenture is amended by deleting the text “Sections 2.01(g), 2.02, 2.16 and 4.07” in that definition in its entirety and replacing it with “Sections 2.01(g), 2.02 and 2.16.”

 

(d)                                 Definition of Unrestricted Subsidiary.  The definition of “Unrestricted Subsidiary” in the Indenture is amended by deleting from the final line of that definition the text “and the Company could Incur at least $1.00 of additional Indebtedness under Section 4.07(a) on a pro forma basis taking into account such designation.”

 

(e)                                  Definition of Supplemental Indenture.  Section 1.01 of the Indenture is amended by adding to that Section the following term and definition of “Supplemental Indenture”:

 

“Supplemental Indenture” means the Supplemental Indenture dated as of May 21, 2015, among the Issuer and the Trustee.

 

(f)                                   Amendment of Section 1.03.  Section 1.03 of the Indenture is amended by deleting from that Section the following lines of text:

 

	
Affiliate Transaction
    	
 
    	
Section 4.12
    
	
Asset Disposition Offer
    	
 
    	
Section 4.11
    
	
Asset Disposition Offer Amount
    	
 
    	
Section 4.11
    
	
Asset Disposition Offer Period
    	
 
    	
Section 4.11
    
	
Asset Disposition Purchase Date
    	
 
    	
Section 4.11
    
	
Change of Control Offer
    	
 
    	
Section 4.15
    
	
Change of Control Payment Date
    	
 
    	
Section 4.15
    
	
Change of Control Payment Notice
    	
 
    	
Section 4.15
    
	
Change of Control Payment
    	
 
    	
Section 4.15
    
	
Excess Proceeds
    	
 
    	
Section 4.11
    
	
Pari Passu Notes
    	
 
    	
Section 4.11
    
	
Restricted Payments
    	
 
    	
Section 4.08
    
	
Restricted Payment Basket
    	
 
    	
Section 4.08
    

 

(g)                                  Amendment of Section 2.02(b). Section 2.02(b) of the Indenture is amended by deleting from that Section the text “, subject to compliance with Section 4.07.”

 

(h)                                 Amendment of Section 2.07(i)(2).  Section 2.07(i)(2) of the Indenture is amended by deleting the text “Sections 2.11, 3.06, 4.11, 4.15 and 9.05” and replacing it with the text “Sections 2.11, 3.06 and 9.05.”

 

(i)                                     Amendment of Section 2.16(a).  Section 2.16(a) of the Indenture is amended by deleting from that Section the text “, subject to its compliance with Section 4.07.”

 

3

 

(j)                                    Amendment of Section 3.07(d).  Clause (d) of Section 3.07 is amended by deleting the text thereof in its entirety and replacing it with the text “[Reserved].”

 

(k)                                 Amendment of Section 6.01(4).  Section 6.01(4) of the Indenture is amended by deleting the text “Sections 4.07 through Section 4.15” and replacing it with the text “Section 4.13.”

 

(l)                                     Amendment of Section 8.03.  Section 8.03 of the Indenture is amended as follows:

 

i.                                          by deleting the text “Sections 4.07 through 4.15” and replacing it with the text “Section 4.13”;

 

ii.                                       by deleting the text “Sections 6.01(6), (7), (8)” and replacing it with the text “Sections 6.01(7), (8)”; and

 

iii.                                    by deleting the text “Sections 6.01(4), (5), (6), (7), (8)” and replacing it with the text “Sections 6.01(5), (7), (8).”

 

(m)                             Amendment of Section 9.02(a)(4).  Section 9.02(a)(4) of the Indenture is amended by deleting from that Section the text ; “; it being expressly understood that this does not apply to modifications of Sections 4.11 and 4.15 or provisions relating thereto.”

 

ARTICLE THREE

 

Section 3.01                            Amendment of Notes.

 

(a)                                 Amendment of Section 7 of the Notes.  Pursuant to Section 11 of each Note, Section 7 of each Note is amended by deleting the text thereof and replacing it in its entirety with the text “[Reserved].”

 

ARTICLE FOUR

 

Section 4.01                            Effectiveness of Amendments

 

This Supplemental Indenture will become effective immediately upon its execution and delivery by each party hereto.

 

Section 4.02                            Continuing Effect of Indenture.

 

Except as expressly provided herein, all of the terms, provisions and conditions of the Indenture and the Notes shall remain in full force and effect.  Each reference in the Indenture to “this Indenture”, “hereof”, “herein”, “hereto” or words of like import referring to the Indenture shall mean and be deemed a reference to the Indenture as modified hereby. To the extent of any inconsistency between the terms of the Indenture and this Supplemental Indenture, the terms of this Supplemental Indenture will control and govern.

 

4

 

Section 4.03                            Construction of Supplemental Indenture; GOVERNING LAW.

 

This Supplemental Indenture is executed as and shall constitute an indenture supplemental to the Indenture and shall be construed in connection with and as part of the Indenture.  The Section headings herein are for convenience only and shall not affect the construction hereof.  THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

Section 4.04                            Trust Indenture Act Controls.

 

If any provision of this Supplemental Indenture limits, qualifies or conflicts with another provision of this Supplemental Indenture or the Indenture that is required to be included by the Trust Indenture Act of 1939 as in force at the date as of which this Supplemental Indenture is executed, the provision required by said Act shall control.

 

Section 4.05                            Trustee and Note Collateral Agent Disclaimer.

 

The recitals contained in this Supplemental Indenture shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture.  All rights, protections, privileges, indemnities and benefits granted or afforded to the Trustee under the Indenture shall be deemed incorporated herein by this reference and shall be deemed applicable to all actions taken, suffered or omitted by the Trustee under this Supplemental Indenture.

 

Section 4.06                            No Recourse Against Others.

 

No director, officer, employee, manager, incorporator, member, partner or stockholder or other owner of Capital Stock of the Company, Guarantors or any Restricted Subsidiary, as such, will have any liability for any obligations of the Company, Guarantors or the Restricted Subsidiaries under the Notes, the Indenture or the Guarantees to which they are a party, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

Section 4.07                            Counterparts and Severability.

 

This Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Any executed counterpart delivered by facsimile, .pdf or other electronic transmission shall be effective as an original of such executed counterpart. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provision shall not in any way be affected or impaired thereby.

 

[signature pages follow]

 

5

 

The parties hereto have caused this Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

	
 
    	
SM ENERGY COMPANY, as Issuer
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David W. Copeland
    
	
 
    	
Name:
    	
David W. Copeland
    
	
 
    	
Title:
    	
Executive Vice President, General Counsel
    
	
 
    	
 
    	
and Corporate Secretary
    

 

[additional signature page follows]

 

 

[Signature Page to Supplemental Indenture]

 

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Hansen
    
	
 
    	
Name:
    	
Leland Hansen
    
	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Supplemental Indenture]Exhibit 10.1

 

JOINT
DEVELOPMENT AGREEMENT

 

DATED:
May 13 , 2015

 

		BETWEEN:	Cat
                                         Cay Yacht Club

North Cat
Cay Island, Bahamas

1050 Lee
Wagener Boulevard, Suite 106

Fort Lauderdale, FL 33315

 

		AND:	Cirque
                                         Energy Inc.

414 W. Wackerly
Street

Midland, MI 48640

 

This binding
Joint Development Agreement (“JDA”) will confirm the mutual interests and intentions regarding a proposed transaction
between Cat Cay Yacht Club (“Cat Cay”) and Cirque Energy Inc. (“Cirque”) (individually a “Party”
and collectively referred to as the “Parties”) as set forth below. The Parties hereby agree that they will negotiate
in good faith to attempt to effectuate these transactions and enter into a definitive agreement or agreements regarding the respective
transactions.

 

		1.	Project
                                         Definition:

 

The Parties
desire to enter into this JDA to set forth their mutual understanding, collaboration and cooperation in evaluating and advancing
a proposed development project for a renewable energy generation facility which will provide an average base load of up to 600
kW of electrical energy from the CAT CAY DGU (the “Project”) for sale to Cat Cay. The initial phase of the
project includes the on-site operation of a solid waste receiving and processing station. The operation will process solid waste
for use as syngas fuel to partially power a conventional diesel engine generator set. The Project will use the Cirque Energy Deployable
Gasification Unit technology.

 

The Parties
seek to pursue negotiations, further study and begin preliminary engineering regarding the Project, including technological, environmental
and economic evaluation and cost estimates regarding the Project. The criteria to be used in the evaluation are set forth below
in Section 10. The principal terms and understanding of the key business terms to be negotiated are contained in the Term Sheet
attached in Appendix 1 hereto.

 

		2.	Conditions
                                         Precedent:

 

Each of the
Parties acknowledges that this JDA is an expression of their present understanding and intention only, except as specifically
set forth herein. Any such transactions are subject to the negotiation, execution and delivery of mutually satisfactory definitive
agreements approved by their respective governing bodies in their sole discretion. In addition, there are a number of conditions
precedents that must occur in order for the Parties to contemplate proceeding to execution of any definitive agreement or agreements.

 

    	1

    	 

    

 

These conditions
precedent include but are not limited to the following: a) mutually satisfactory economic projections; b) mutually satisfactory
system performance projections: c) requisite federal, state, or local environmental, legal and regulatory approvals for the Project;
d) execution of definitive agreements; and e) approval by the Parties respective Boards of Directors or Managers of any such agreement
or agreements.

 

		3.	Statement
                                         of Intent:

 

This JDA is
specifically made subject to the obtaining of all necessary corporate authorizations required on the part of Cat Cay and Cirque,
including the approval of their respective Board of Directors or Managers; the negotiation of all necessary definitive agreements
to be subject, in all respects, to the approval of all Parties hereof and their counsel; and the obtaining of any necessary governmental
approvals.

 

		4.	Confidential
                                         Information:

 

The Parties
agree that all information disclosed by one Party to the other regarding the Project, pursuant to this JDA, will be deemed to
be confidential information (“Confidential Information”). The receiving party will not use (other than for the discussions
under this JDA) or disclose to any third party any Confidential Information; provided, however, this restriction will not apply
to any Confidential Information: (a) that is or becomes generally known to the public, not due to any fault of the receiving party;
(b) that must be disclosed due to operation of law, government regulation or court order, provided that the Party required to
make such disclosure gives the Party that originally disclosed the information reasonable prior notice and also uses reasonable
efforts to prevent public disclosure of the disclosing Party’s Confidential Information. In the absence of a protective
order or the receipt of a waiver hereunder, the Party may disclose confidential Information without liability if it is nevertheless,
in the opinion of its counsel, compelled to disclose the Confidential Information to any tribunal or else be liable for contempt
or suffer other censure or penalty; (c) if and to the extent required by any securities exchange or regulatory or governmental
body to which that Party is subject, whether or not the requirement for information has the force of law; and (d) to its professional
advisers, auditors, and bankers. The receiving Party will take any appropriate security precautions requested by the disclosing
Party. Neither Party shall at any time without the prior written consent of the other make any announcement, issue any press release
or make any statement to any third party (except its affiliates and representatives) regarding any of these possible transactions.
The obligations under this paragraph cease on the earlier of (a) execution of a written definitive agreement by the Parties which
includes terms regarding publicity regarding the proposed transactions; and (b) the issuance of a mutually agreed announcement
at the mutually agreed time regarding the closing of the proposed transactions.

 

    	2

    	 

    

  

		5.	Public
                                         Announcements:

 

Except as
(i) is required by applicable law or the rules of any securities exchange on which the securities of a Party or any of its affiliates
are listed or (ii) in connection with any disclosure to a governmental authority having jurisdiction in connection with any transaction
contemplated by this JDA or to any other interested person in any relevant proceedings by or before such government authority
that is entitled pursuant to applicable law to receive the same, no Party or any affiliate thereof may issue any press release
or otherwise make any oral or written public statements with respect to this JDA, the definitive agreements or the transactions
contemplated hereby without first obtaining the prior written consent of the other Party, which consent may be withheld in the
sole discretion of such Party. In connection with any permitted disclosure, the Party proposing to disclose must first provide
a draft to, consult with and obtain the written consent of the other Party to the disclosure, such consent not to be unreasonably
withheld.

 

		6.	Notices:

 

Any notice
required to be given under this JDA shall be in writing in the English language and shall be given or made (and shall be deemed
to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile with receipt confirmed
(followed by delivery of an original via overnight courier service, by email (followed by delivery of an original via overnight
courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the
following addresses (at or such other address for a Party as shall be specified in a notice given in accordance with this section.

 

	If
    to Cat Cay:	 	If
    to CIRQUE:
	 	 	 
	Cat Cay Yacht Club	 	Cirque Energy Inc.
	1050 Lee Wagener Blvd, Suite 106	 	414 W. Wackerly Street
	Ft Lauderdale, FL 33315	 	Midland, MI 48640
	Attention:  Paul Benton	 	Attention:  Richard L. Fosgitt, P.E.
	Email: pbenton@catcayyachtclub.com	 	Email: richf@cirque-energy.com
	Phone: (242) 473-4042	 	Phone: (989) 513-4058

 

		7.	No
                                         Assignment:

 

There shall
be no assignment of this JDA or the rights and obligations hereunder by a Party without the prior written consent of the other
Party.

 

		8.	Third
                                         Party Commitments:

 

Neither
of the Parties will be entitled to make any commitments to any third party that would be binding on any other Party without the
prior written consent of such other Parties, and no rights or benefits accrue to any third party as a result of this Joint Development
Agreement.

 

		9.	Expenses:

 

Each of the
Parties shall be responsible for payment of all of such Party’s own costs and expenses incurred by it in connection with
the negotiation, execution and delivery of this JDA and the development of any written definitive agreements.

 

    	3

    	 

    

 

		10.	Criteria
                                         and Schedule:

 

The project
will be evaluated on the following criteria.

 

		1.	Electric
                                         Power Purchase Agreement (PPA), resulting in acceptable project economics for both Cirque
                                         and Cat Cay

		2.	Long
                                         Term Fuel Security and Delivery Plan

		3.	Finance
                                         - Validate economic analysis

		4.	Identify
                                         and define other value drivers

 

The proposed
schedule for the project, critical path items, and long lead items under this JDA are as follows:

 

	 	1.	Proposal Agreement
    and  Execute JDA	 	May 15, 2015
	 	2.	Initiate Preliminary Engineering	 	May, 2015
	 	3.	Initiate Air Permitting	 	Not Anticipated
	 	4.	Initiate Project Financing	 	June 2015
	 	5.	Complete Definitive Agreements
    and PPA	 	July 31, 2015
	 	6.	Complete Project Financing	 	August 31, 2015
	 	7.	Commercial Operations	 	1st Qtr. 2016

 

		11.	Collaboration

 

Cat Cay acknowledges
that Cirque has entered into certain supply agreements and memoranda of understanding for materials, services, engineering, technology,
management and other related items. The Parties agree that the Existing Agreements and Cirque are integral parts of the success
of the Project and shall not be terminated, amended or replaced (as applicable) without the prior written consent of the Parties.

 

Notwithstanding
anything to the contrary herein, the Parties agree that Cat Cay shall have the right to review and approve project finance partners
who will provide; pre-development funding, equity and/or debt financing for the Project, provided that the terms for such equity
and debt financing shall be subject to market conditions.

 

		12.	Governing
                                         Law:

 

This JDA shall
be governed by and construed in accordance with the laws of the State of Florida.

 

		13.	Termination

 

		a.	Unless
                                         otherwise agreed in writing by Cat Cay and Cirque, this Agreement shall terminate on
                                         the earlier to occur of (a) the Closing Date Deadline of August 31, 2015, (b) the date
                                         upon which the Project achieves financial close, (c), ten (10) business days following
                                         the delivery of a written notice from Cat Cay to Cirque stating that Cat Cay wishes to
                                         terminate this agreement for convenience, such notice may be delivered at any time prior
                                         to the Closing Date Deadline or (d) upon the mutual agreement of the parties.

 

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		b.	Cirque
                                         and Cat Cay agree that the success of the Project requires successfully obtaining various
                                         approvals and agreements. The following items are considered integral to the success
                                         of the Project:

 

		i.	Power
                                         Purchase Agreement (PPA) – A contract between Cirque and Cat Cay Dairy, who will
                                         purchase substantially all of the electric power generated by the Project for a mutually
                                         acceptable term and price.

 

		ii.	Permits
                                         and Approvals – All required local, State, and Federal permits that may be required
                                         for the Project, including, but not limited to, zoning, site plan approval, air permit,
                                         and other environmental approvals.

 

		iii.	Project
                                         Finance – Cirque to obtain project financing through equity, debt, or some other
                                         combination thereof as necessary to fully develop and construct the project by the Closing
                                         Date Deadline of August 31, 2015.

 

Cirque
will work to achieve these approvals and agreements for the Project. Failure to obtain any of these items as needed may effectively
terminate the Project. Should Cirque and Cat Cay mutually agree to terminate the Project, or should Cirque or Cat Cay individually
terminate the project, then Cat Cay will have no obligation to reimburse Cirque for any expenses incurred.

 

		c.	Upon
                                         termination of this Agreement, neither Cirque nor Cat Cay shall have any further liability
                                         to each other under the terms of this Agreement.

 

		d.	Except
                                         as otherwise set forth in this Agreement, after the termination of this Agreement for
                                         any reason other than reaching financial closing of the Project, Cat Cay will promptly
                                         return all of Cirque's confidential information, including all reproductions and copies
                                         thereof in any medium.

 

		14.	Binding
                                         Provisions.

 

Notwithstanding
anything to the contrary herein, Sections 4-14 shall be binding on the Parties.

 

    	5

    	 

    

 

Please
indicate your acceptance of the foregoing as a statement of our mutual intention, which intention is subject in all respects to
the conditions stated hereinabove and to the execution and delivery of the definitive agreements referred to above.

 

	CAT CAY YACHT CLUB	 	CIRQUE ENERGY INC.
	 	 	 	 	 
	By:	/s/ Paul Benton	 	By:	/s/ Richard L. Fosgitt, PE
	 	 	 	 	 
	Paul Benton	 	Richard L. Fosgitt, PE
	(Print)	 	 	 
	 	 	 	 
	Title: 	Alternative Energy Manager	 	Title: 	Vice President
	 	 	 	 	 
	Date:	5/13/15	 	Date:	May 13, 2015

 

    	6

    	 

    

 

APPENDIX
1

 

Term
Sheet

 

	Buyer	Cat Cay Yacht Club
	 	 
	Seller	Cat Cay DGU Station, LLC (“CCD”) a subsidiary of Cirque Energy
    Inc.
	 	 
	Location	North Cat Cay Island, Bahamas
	 	 
	Expected Commercial Operation Date	First Quarter 2016
	 	 
	Summary	This electric generating facility which will provide an average base load
    generation of up to 600 kWh’s per hour (kWh) at 90% availability for an annual total of up to 4,700 kWh’s of electrical
    energy from the Cat Cay DGU  (the “Project”).
	 	 
	Description of Technology and Scope of Facility	For the Project, the DGU system will consist of the following components:

 

	 	·	One (1) 600 kW
    dual fuel engine generator
	 	·	Deployable gasification unit
    (DGU) module
	 	·	Fuel handling module

 

	 	It is anticipated that the generation facility will be located
    on approximately 0.5 acres of the Cat Cay facility to be located at the main Cat Cay generator station.
	 	 
	 	The facility will be designed, constructed and maintained by CCD to provide
    in excess of 25 years of service, recognizing that periodic replacement of motors, pumps, valves and engine components, etc.
    will be an on-going maintenance requirement.
	 	 
	Contract Capacity	Cirque proposes a Power Contract Capacity of 600 KW of electricity from
    the Cat Cay DGU Station (the “Project”) to be located in Cat Cay, Bahamas. The proposed generation facility will
    provide an estimated minimum of (90%) availability for a total annual electrical generation of up to 4,700 MWh of electricity,
    based on an average generation capacity of 600 KW.

 

 

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	Power Purchase Agreement (“PPA”) Term	The initial term for any Purchase Power Agreement shall be
    ten (10) years beginning on the Commercial Operations Date of the facility, currently estimated to be March 15, 2016. Two
    (2) five (5) year renewal options shall be negotiated and provided for in the PPA.
	 	 
	Pricing Structure Overview	The proposed pricing structure consists of an Energy Payment, Capacity
    Payment and O&M Payment assuming operating at up to 100% of stated capacity at 90% availability. Operating at under dispatch
    conditions may require adjustment based upon expected operational profiles which will be mutually agreed upon.
	 	 
	Pricing	To Be Determined.  Based on initial evaluations, Cirque Energy
    estimates that the proposed Project can provide Cat Cay with an initial annual electric price of $0.25-$0.30 per kWH, net
    of any pilot diesel fuel expenses. Cirque will work with Cat Cay to determine an energy pricing structure that minimizes risks
    and maximizes economic benefits for both parties’ interests.
	 	 
	Scheduling and Dispatch	The Project shall be designed and is intended to run at 100% of design
    capacity on a continuous basis. The actual project generation rate will be dependent on overall island energy demand, solar
    field production, and the availability of sufficient waste fuel supplies.
	 	 
	Operations and Maintenance	Cirque will be responsible for operations and maintenance (O&M) of
    the CCD facility. Cat Cay personnel will be responsible for delivering the waste fuels to the CCD facility and depositing
    the fuels into the DGU infeed hopper.
	 	 
	 	Cirque intends to contract with a major third party O&M provider,
    (i.e. Veolia Energy) to provide the necessary O&M services for the facility. The O&M provider is subject to review
    and approval by Cat Cay. The O&M provider will have a direct point of contact with Cat Cay for coordination of routine
    operations.
	 	 
	Scheduled Maintenance	Actual overhaul duration and frequency will be based on prudent industry
    practice and manufacturer recommendations. CCD will use commercially reasonable efforts to complete all maintenance expeditiously
    and place the unit back into service as soon as practical. All Planned Maintenance will be scheduled in advance and coordinated
    with Cat Cay.

 

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	Power Delivery Point	The Power Delivery Point shall be at the project site or at
    one or more alternate Power Delivery Point(s) subject to mutual agreement of the parties.
	 	 
	Fuel Supply	The engine generators will be designed for being fully fired on diesel
    fuel as required.
	 	 
	 	Cirque Energy will work with Cat Cay to develop an economically viable
    waste strategy that will allow CCD to reduce diesel fuel consumption by generating syngas to replace diesel fuel usage. This
    process will use Cirque Energy’s proprietary DGU technology.
	 	 
	Site Requirements	It is anticipated that approximately 0.5 acres or less will be required
    for the immediate plant site.
	 	 
	Project Ownership And Financing	The estimated capital required to design, construct and initially operate
    the proposed project is over $2.0 million, including all soft costs which will include but are not limited to the following:
    financing, operating budgets, fuel purchasing, and working capital.
	 	 
	 	Cirque and/or its investment partners will provide and arrange debt for
    the project necessary to construct and permanently fund the project. Cirque represents that it has the experience and knowledge
    to properly structure developments to attract non-recourse financing; the relationships and credibility to access the capital
    markets to secure funding; and the common sense and experience to be conservative in the structure and ownership of the project
    companies.
	 	 
	 	Cirque anticipates using non-recourse financing alternatives to fund the
    Project Company. Non-recourse financing can and often does include: construction loans, bridge loans, permanent senior debt,
    credit revolvers, environmental (public) funds, hybrid equity (tax equity), and straight equity. Cirque has existing relationships
    with an Annapolis, MD and Washington, DC based investment banking firms that, on a preliminary basis, have evaluated the opportunity
    to provide funding for this project. Subject to the successful completion of the power purchase agreement and the project
    due diligence process, they are confident that the project can be financed.
	 	 
	 	Cirque cannot guarantee that successful project financing will be secured.
    The offers contained within this document can only be provided upon securing complete, appropriate and acceptable financing
    for the Project.

 

    	9

    	 

    

 

	Corporate and Equity Structure	In order to meet the mutual objectives of the parties for
    development of the Cat Cay DGU Station and future Bahamas projects, two new corporate entities will be formed.  (Names
    are for illustrative purposes only.):

 

	 	·	Cirque Energy Bahamas
    Development, LLC
	 	·	Cat Cay DGU Station, LLC

 

	Project Terms And Conditions	Successful and timely completion of the project will depend
    on negotiating a power purchase agreement (PPA) between Cirque Energy and Cat Cay. We would expect that the PPA documents
    will contain concepts that would be customary for an agreement of this type, such as:

 

	 	·	Development and
    Construction Milestones
	 	·	Construction and Seller’s
    Security
	 	·	Sale and Purchase Obligations
	 	·	Operation of Unit
	 	·	Scheduling and Replacement
    Costs
	 	·	Interconnection
	 	·	Quality
	 	·	Metering
	 	·	Billing and Payment terms
	 	·	Records, Reports, Interface
	 	·	Representations and Warranties;
	 	·	covenants of Seller and Purchaser
	 	·	Taxes
	 	·	Insurance
	 	·	Force Majeure Events
	 	·	Termination and Default
	 	·	Indemnification and Liability
	 	·	Dispute Resolution
	 	·	Safety and Security

 

	 	This listing should not be construed to be exhaustive, but
    an expectation of the major topics to which a successful PPA can be built.

 

****

 

    	10

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