Document:

TRANSITION
ASSET MANAGEMENT AGREEMENT

    

    by and
between

    

    WELLHEAD
ELECTRIC EQUIPMENT,  LLC, and

    

    CALIFORNIA
HOLDINGS McCALL, LLC

    

    and

    

    MMC
ENERGY, INC.,

    

    MMC
ENERGY NORTH AMERICA, LLC,  and

    

    MMC CHULA
VISTA, LLC

    

    Dated as
of May 21, 2009

    
      
        
          	
                   

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TRANSITION
ASSET MANAGEMENT AGREEMENT

    Chula
Vista Project

    

    This
Transition Asset Management Agreement (this “Agreement”) dated as of
May 21, 2009 (the “Execution Date”), is by and
between California Holdings McCall, LLC, a Delaware limited liability company
(“Buyer”), Wellhead
Electric Equipment, LLC, a Delaware limited liability company (the “Guarantor” and, together with
Buyer, “Buyer Parties”),
and each of  MMC Energy, Inc., a Delaware corporation (“Seller”), MMC Energy North
America, LLC, a Delaware limited liability company(“Parent”) and MMC Chula Vista,
LLC, a Delaware limited liability company( “Company” and, together with
Seller and Parent, the “Seller
Parties” and each of (i) the Seller Parties collectively, on the one hand
and (ii) the Buyer Parties collectively, on the other hand, a “Party”).

     

    WHEREAS, Buyer, Seller and
certain other parties have entered into a Membership Interests Purchase
Agreement, dated as of May 21, 2009 (the “Purchase Agreement”; and all
capitalized terms not defined herein have the meanings ascribed to them
therein), pursuant to which among other things Seller has agreed to sell to
Buyer and Buyer has agreed to purchase from Seller the MMC 1 Interest in MMC1,
the Acquired Company to which the relevant Purchased Assets and certain related
liabilities (if any) in respect thereof are to be transferred;

     

    WHEREAS, the Purchased Assets
under the Purchase Agreement include that certain electric power generating
facility and related site located in Chula Vista, California (the “Project”) and certain assets
related thereto, which Project and related assets are owned, as of the date
hereof, by the Seller Parties;

     

    WHEREAS, (i) by its execution
of this Agreement, Seller has agreed commencing on the Execution Date to allow
Buyer, Guarantor and their representatives access to the Project to undertake,
as they may elect, the maintenance, improvement or upgrade of the equipment
associated with the Project, and (ii) in accordance with Section 4.16 of the
Purchase Agreement, the Seller Parties desire to transfer to Buyer the right to
manage the operation of the Project and certain related assets as specified in
this Agreement commencing on the date specified in writing by Buyer to Seller,
provided such date is at least three (3) Business Days after the date of such
notice (the “Effective
Date”), in each case, for the applicable term set forth herein for such
rights of Buyer, and Buyer desires, as it may elect, to undertake such
maintenance, improvement or upgrade of the equipment and such operational and
management control over the Project and such related assets, in each case,
subject to the limitations set forth herein;

     

    NOW THEREFORE, the Seller
Parties and Buyer, each agreeing to be bound hereby and acknowledging the
sufficiency of the consideration, promises and commitments made one to the other
agree to the promises and obligations set forth herein:

    
      
         

      

      
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    ARTICLE
I

    TERM

     

    1.1           Term.  The
term of this Agreement shall commence on the Execution Date and shall continue
until the earliest of  (i) the Closing; (ii) the date and time of
termination of this Agreement pursuant to Article VIII, or (iii) such date and
time as otherwise agreed by the parties (the “Term”); provided that (1) the
applicable term hereunder for the performance of, to the extent elected by
Buyer, of the Remediation Services hereunder and other rights and obligations
described herein in respect of the Remediation Services shall commence upon the
Execution Date and shall continue until the end of the Term (such applicable
term relating to the Remediation Services, the “Remediation Services Term”)
and (2) the applicable term hereunder for the performance of the Transition
Services shall commence at 12:00 a.m. (the “Effective Time”) on the
Effective Date and shall continue until the end of the Term (such applicable
term relating to the Transition Services, the “Transition Services Term”).

     

    ARTICLE
II

    SCOPE
OF SERVICES

     

    2.1           Scope of
Services.

     

    (a)           Commencing
on the Execution Date and continuing throughout the Remediation Services Term,
Buyer, at Buyer’s and Guarantor’s sole cost and expense (except as specifically
contemplated in Section 4.14(a) of the Purchase Agreement), may, if they so
elect and in their sole discretion, perform such items of maintenance,
improvement or upgrade of the Project (subject to (i) the reporting requirements
below and (ii) upon Buyer’s and/or Guarantor’s request, the execution and
delivery by Seller or another applicable Seller Party to Buyer and/or Guarantor
of one or more bailment agreements (or similar agreements) in form and substance
reasonably satisfactory to all Parties with respect to any Replacement Property
pursuant to which Seller or such other applicable Seller Party acknowledges the
creation and existence of a bailment and agrees to only accept instructions from
the Buyer and/or Guarantor with respect to the treatment, storage, maintenance,
use and disposition of any such Replacement Property), as Buyer or Guarantor may
elect to bring the equipment up to its desired maintenance standards as and to
the extent contemplated by the Wellhead Reports or as otherwise notified in
advance by Buyer as remediation work in any advance notice (with material
details included therein) provided by Guarantor to Seller (collectively, the
“Remediation Services”),
and Buyer and its Affiliates and representatives are expressly authorized to
perform the Remediation Services.

     

    (b)           Commencing
at the Effective Time and continuing throughout the Transition Services Term,
each of the Seller Parties hereby engages Buyer, and Buyer hereby accepts such
engagement, to undertake all commercially reasonable actions necessary or
desirable for the management and operation of the Project and any assets and
activities related thereto, including the management of the compliance by the
Project with and performance by the Project under the Resource Adequacy
Contracts and the other project contracts listed on Exhibit C (the “Project Contracts”; and the
counterparty to each such Project Contract, individually a “Project Contractor”) and the
Seller Permits related to the Project, as the sole and exclusive agent of each
Seller Party.  Buyer shall use commercially reasonable efforts to
perform such activities in a manner that does not give rise to any breach or
other violation on the part of a Seller Party under the provisions of any
Project Contract and shall use commercially reasonable efforts to perform all
the applicable Company and Parent operational and asset management services
appurtenant thereto, including without limitation the services more specifically
described on Exhibit
A (collectively, the “Transition
Services”).

    
      
         

      

      
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    (c)           As
part of the Transition Services, subject to the terms of this Agreement, Buyer
shall have the right and obligation and all requisite authority to undertake all
day-to-day operation and management decisions of the Company and Parent relating
to the Project and its related assets except for decisions relating to the
actions or activities set forth below (“Owner Decisions”) for which
the Seller Parties shall have sole responsibility; provided that,
notwithstanding the foregoing, the Seller Parties shall not take any of the
Owner Decisions set forth in Sections 2.1(c)(i) through 2.1(c)(iv) below without
first obtaining the consent and direction of Buyer with respect to such actions
or activities, which consent and direction from Buyer shall not be unreasonably
withheld:

     

    (i)           terminating,
amending or waiving, in any respect, any material duty of a Project Contractor
under any of the Project Contracts;

     

    (ii)           entering
into any new agreement on behalf of the Company or for the benefit of the
Project;

     

    (iii)           the
cancellation, amendment to or material diminution of the Company’s or the
Project’s right in any way under, any Seller Permits, approvals, licenses or
other similar rights or benefits held by the Company;

     

    (iv)           the
termination of any material vendor account of the Company or Parent, although
nothing herein shall be construed as limiting Buyer’s choice of reputable
vendors to perform any services as Buyer so desires;

     

    (v)           take
any action that would constitute a change in control under the Federal Power Act
, as amended, or the regulations and administrative decisions promulgated
thereunder or which affect the Company’s market based rate tariff;

     

    (vi)           making
dispatch decisions under Energy Management Contracts (as defined in Exhibit C); provided,
however, that the Seller Parties shall make all such dispatch decisions in
accordance with the procedures and guidelines set forth in Exhibit F hereto;
and

     

    (vii)           taking
any action with respect to any Excluded Asset, including the cash and accounts
receivable held by Parent;

     

    provided that nothing in this
Section 2.1(c) shall be construed to limit the obligations of any party under
the Purchase Agreement.

    
      
         

      

      
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    (d)           For
the avoidance of doubt, the Remediation Services and Transition Services shall
not include, and Buyer shall not have any responsibility for, any of the
activities  set forth in Exhibit E, all of
which shall remain the obligation of Seller, the Company or Parent
(collectively, the “Seller
Obligations”).  In addition to the Seller Obligations, the
Seller Parties shall each (i) provide or cause to be provided to Buyer, its
subcontractors, agents, representatives and employees full unconditional access
to the Project at all times and without prior notice (but without limiting the
notice requirements under Section 2.2(a)), for the purpose of conducting the
Remediation Services and Transition Services and the other obligations of Buyer
hereunder, (ii) cause each Project Contractor to cooperate and coordinate with
Buyer in order to permit Buyer to perform the Remediation Services and
Transition Services, (iii) provide or cause to be provided to Buyer full access
to any computer monitoring systems and information systems relating to the
Project and the related assets and the performance by Buyer of the Remediation
Services and Transition Services and (iv) make such payments under the Project
Contracts required to be made by the Seller Parties thereunder, and provide such
funds, including those contemplated pursuant to Sections 3.4 and 3.5, so as to
permit Buyer to perform its obligations hereunder; provided, however, that the
Seller Parties may withhold any such payments under the Project Contracts in the
event of a good faith dispute between the Seller Parties and a Project
Contractor and notice to Buyer.  Buyer shall in any event have no
responsibility for any failure or delay in performing the Transition Services
due to any failure of any Seller Party to perform the Seller Obligations and its
other obligations hereunder.  Other than the costs and expenses
associated with the Remediation Services (“Remediation Expenses”), which
shall be borne by Buyer or Guarantor (except as specifically contemplated by
Section 4.14(a) of the Purchase Agreement), Buyer may, but in no event shall be
obligated to, make payments on its own account on behalf of a Seller Party in
relation to its performance of the Transition Services or
otherwise.

     

    (e)           As
part of the Transition Services, subject to Section 2.1(c), Buyer may arrange
for the engagement of Affiliates or independent contractors necessary for the
performance by Buyer of the Transition Services, and the costs of such
Affiliates or independent contractors shall, without duplication, be for the
account of the Seller Parties as an Operating Expense (as defined below) or, if
advanced by Buyer at Buyer’s sole option (but without any obligation to do
so),  recoverable by Buyer as a Buyer Operating Expense in accordance
with this Agreement.

     

    2.2           Reporting
Requirements.

     

    (a)           Advance
Notices.  Buyer shall provide commercially reasonable advance
notice to Seller’s Designated Representative before (i) undertaking the removal
or replacement of any material asset of the Company or Parent from the Project
or (ii) declaring an outage at the Project (other than any forced
outages).

     

    (b)           Operations
Reports.

     

    (i)           During
the Transition Services Term, the Seller Parties agree to cause Pro Energy
Services, Inc. (“Pro”)
to provide daily, weekly, and monthly reports consistent with its past practice
to each of Buyer and Seller, provided that Buyer may
tailor such reporting at its discretion.  Buyer shall cooperate with
the Seller Parties in causing Pro to provide such reports.

     

    (ii)           For
each two week period falling after the Effective Date and during the Transition
Services Term (each, a “Reporting Period”), Buyer
shall use commercially reasonable efforts to provide to Seller a report setting
forth in reasonable detail the expenses incurred by the Buyer in the performance
of the Transition Services in accordance with the terms of this Agreement
(collectively, the “ Buyer
Operating Expenses”) for each Reporting Period, said report to be
delivered on the Friday after each respective Reporting Period.  For
the avoidance of doubt, Buyer Operating Expenses shall not include (x) any
expenses or costs incurred by Buyer or its Affiliates in connection with or as
Remediation Expenses or (y) any costs to Buyer of any insurance obtained by
Buyer pursuant to Sections 6.2 and 6.3.  Such bi-weekly report shall
also (1) specify material scheduled activities to occur in the future, (2)
identify any of the material Project assets physically removed and/or replaced,
and (3) identify all other material equipment or other items installed as part
of the Project.  The bi-weekly report shall have attached detailed
time sheets for any of Buyer’s personnel working at the Project and shall
clearly distinguish between Remediation Expenses and Buyer Operating
Expenses.  Seller shall have the right to review such time sheets and
allocations.

    
      
         

      

      
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    (iii)           During
the Transition Services Term, the Seller Parties shall cause Macquarie Cook
Power Inc. (“Macquarie”)
to provide periodic revenue reports to Buyer concurrent with their delivery to
any Seller Party.

     

    (iv)           During
the Transition Services Term, Buyer shall reasonably communicate with Seller
regarding the status of the Transition Services at such times as Seller may
reasonably request.

     

    (c)           Financial Reports to
Buyer.  The Seller Parties shall continue to have
responsibility for and to keep the books and records of the Project, the Company
and Parent in accordance with GAAP, and, during the Transition Services Term,
shall use commercially reasonable efforts to provide to Buyer (i) separate
monthly financial statements (consisting of an income statement, balance sheet,
detailed general ledger and detailed check register) for the Project and each of
Company and Parent, and (ii) a calculation of the EBITDA as determined in
accordance with Article III  hereunder, in each case within thirty
(30) days of the end of each month during the Transition Services
Term.  Buyer shall promptly forward to Seller for processing any
invoices relating to Buyer Operating Expenses (which invoices shall be issued on
a monthly basis) and any other third party invoices for payments or expenses or
other similar financial record with respect to the Project, the Company or
Parent received directly by Buyer, and shall copy Seller on any purchase orders
issued by Buyer.

     

    (d)           Reports to Third
Parties.  To the extent not otherwise required to be prepared
or submitted by a Project Contractor under a Project Contract, during the
Transition Services Term, Buyer shall prepare and submit as agent for and on
behalf of Seller, all those reports as required by the North American
Electricity Reliability Council, the U.S. Department of Energy, California
Public Utilities Commission, the U.S. Energy Information Administration, the
California Independent System Operator or any other governmental entities or
self-regulatory organizations relative to the operations of the Project; provided that Seller shall
have provided Buyer on a timely basis with such information as is necessary to
prepare such reports that is not otherwise available to Buyer pursuant to its
performance of the Transition Services.  During the Transition
Services Term, (i) Seller shall cooperate with Buyer in the collection of
relevant information and preparation of such reports to the extent reasonably
necessary and (ii) Buyer shall provide to Seller a copy of all reports prepared
and submitted by Buyer pursuant to this subsection 2.2(d).

     

    2.3           Standard of
Care.  Buyer shall use commercially reasonable efforts to
perform the Transition Services and any Remediation Services it undertakes in a
commercially reasonable manner and (i) in the case of the Transition Services,
in accordance with the terms and conditions of the Project Contracts (it being
acknowledged, however, that Buyer is assuming the operations and management of
the Project as of the Effective Date in its existing condition, and Buyer makes
no guarantee or warrantee of any nature whatsoever as to the performance (or
non-performance) of the Project during the Term) and (ii) in the case of the
Remediation Services, so as not give rise to any breach or other violation on
the part of a Seller Party under the provisions of the Project Contracts in
respect of the Project, or under the terms of any Seller Permit or applicable
Law and to plan such Remediation Services to minimize both the length and number
of outages and other operational disruptions.  No other obligation or
duty (fiduciary or otherwise) or standard of care of Buyer shall be implied
under the terms of this Agreement or under applicable Law except as expressly
set forth in this Section 2.3.

    
      
         

      

      
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    2.4           Dealings with
Seller.  In all dealings with any Seller Party and in
performing the Transition Services and any Remediation Services, Buyer shall be
entitled to rely upon any instruction, statement or approval given to Buyer by
the Seller’s Designated Representatives, who shall have the authority to act and
make decisions on behalf of each Seller Party with respect to this
Agreement.

     

    2.5           Guaranty.  Without
limiting Section 7.3, Guarantor hereby absolutely, unconditionally and
irrevocably guarantees, as a primary obligor and not merely as a surety, to
Seller Parties the punctual performance of all covenants, agreements,
undertakings and obligations of the Buyer under this Agreement.

     

    ARTICLE
III

    CONSIDERATION

     

    3.1           Buyer Reimbursement and
Purchase Price Reduction.  In consideration for Buyer’s
providing the Transition Services, from and after the commencement of the
Transition Services Term, Buyer shall (i) be reimbursed for the Buyer Operating
Expenses as provided in Section 3.4 and (ii) in the event the Closing under the
Purchase Agreement shall occur, be entitled to a reduction of the Purchase Price
payable at the Closing under the Purchase Agreement in an amount equal to (1)
from and after the commencement of the Transition Services Term until the giving
of the Buyer EBITDA Notice, 50% of the EBITDA arising from the
Project  during such portion of the Transition Services Term and (2)
from and after the giving of a Buyer EBITDA Notice until the end of the
Transition Services Term, 100% of the EBITDA arising from the Project during
such portion of the Transition Services Term, if such aggregate EBITDA over the
Transition Services Term allocated to Buyer is a positive number (the “Positive EBITDA
Amount”).  For purposes of this Agreement, “EBITDA” arising from the
Project during the Transition Services Term (or the applicable portion thereof)
shall mean the following items as determined in accordance with
GAAP:

     

    (a)           the
sum (without duplication) of:

     

    (x)           all
revenue generated or accrued by the Project and its related assets (including
the Project Contracts) during the Transition Services Term (or the applicable
portion thereof);

     

    (y)           except
as otherwise expressly provided in Section 3.6(c) or (d), all proceeds payable
under any insurance maintained by any Seller Party with respect to property
damage or loss with respect to the Project that occurs during the Transition
Services Term (or the applicable portion thereof); and

    
      
         

      

      
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    (z)           if
Buyer so elects, all proceeds payable under any insurance maintained by Buyer
for Seller-owned equipment with respect to property damage or loss with respect
to the Project that occurs during the Transition Services Term (or the
applicable portion thereof);

     

    less

     

    (b)           the
sum of:

     

    (w)           Buyer
Operating Expenses actually reimbursed by the Seller Parties pursuant to Section
3.3;

     

    (x)           operating
and maintenance expenses (other than Buyer Operating Expenses) with respect to
the Project and its related assets (including the Project Contracts) accrued
during the Transition Services Term (or the applicable portion thereof) and, to
the extent not arising under the Project Contracts or otherwise representing a
recurring cost, reasonably approved by Buyer in the performance of the
Transition Services, including, without duplication, all amounts payable for the
period falling in the Transition Services Term (or the applicable portion
thereof) (1) to Project Contractors under the Project Contracts, (2) under
leases, (3) for property taxes and other non-income or franchise taxes payable
with respect to the Project (as pro-rated for the period falling under the
Transition Services Term (or the applicable portion thereof)), (4) utilities
(including telecommunications), (5) interconnection costs, (6) in connection
with compliance with ongoing requirements of existing permits relating to the
Project, (7) in connection with the consulting services of Donelle Griffon with
respect to the current permitting activities with respect to the Project (and
excluding, for the avoidance of doubt, any services relating to the transfer of
any permits as contemplated under the Purchase Agreement) and (8) other repair
and  maintenance expenses and other direct operating expenses (but
excluding Remediation Expenses, any extraordinary or non-recurring items and
damage or loss with respect to the Project for which an insurance claim may be
made (which damage or loss is covered by clause (y) below));

     

    (y)           except
as otherwise expressly provided in Section 3.6(c) or (d), any costs of repairs
and other expenses incurred with respect to property damage or loss with respect
to the Project that occurs during the Transition Services Term (or the
applicable portion thereof) for which an insurance claim may be made under any
insurance maintained by Buyer or any Seller Party; and

     

    (z)           any
fines or penalties assessed on the Project, Company or Parent by a Governmental
Authority or under a Project Contract as a result of the performance of the
Transition Services or the Remediation Services by Buyer hereunder during the
Transition Services Term (or the applicable portion thereof) to the extent (i)
not borne or payable by Buyer or Guarantor under Section 3.8 or (ii) not borne
or payable by any Project Contractor under the terms of the related Project
Contract or otherwise;

    
      
         

      

      
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    (collectively,
all such expenses in this clause (b), “Operating Expenses”); provided that, for the
avoidance of doubt, Operating Expenses shall not include (A) any cost, expense,
charge, fine or penalty of any nature arising as a result of events or acts that
occurred prior to or after the Transition Services Term, (B) notwithstanding any
allocation under GAAP to the contrary, any item of cost or expense that does not
directly result from acts or operations occurring during the Transition Services
Term, and (C) any allocation to the Project, Company or Parent of any employee
or overhead expense of any Seller Party or any of their Affiliates or any costs
and expenses of any Seller Party arising from activities other than those
directly related to the Project.

     

    3.2           Buyer EBITDA
Notice.  At any time during the Transition Services Term, Buyer
may deliver a written notice to Seller that, from and after the date of such
written notice, Buyer desires to have the benefit of 100% of the Positive EBITDA
Amount for purposes of Section 3.1 arising after the date of such written notice
until the end of the Transition Services Term (a “Buyer EBITDA
Notice”).

     

    3.3           Seller Purchase Price
Increase.  In the event (i) the Closing under the Purchase
Agreement shall occur and (ii) the aggregate amount of the EBITDA of the Company
from the Project allocated to Buyer during the Transition Services Term as
calculated pursuant to Section 3.1 (including the specified allocation to Buyer
of such EBITDA before and after the giving of any Buyer EBITDA Notice, if any)
is a negative number (the “Negative EBITDA Amount”), then
Seller shall be entitled to an increase of the Purchase Price payable at the
Closing under the Purchase Agreement in an amount equal to the lesser of (1)
such Negative EBITDA Amount and (2) the Negative EBITDA Amount based on a
calculation where (x) the maximum Negative EBITDA Amount during the portion of
the Transition Services Term when Buyer shall be entitled to 50% of the EBITDA
under Section 3.1 shall be $250,000 and (y) the maximum Negative EBITDA Amount
during the portion of the Transition Services Period when Buyer shall be
entitled to 100% of the EBITDA under Section 3.1, together with any Negative
EBITDA Amount allocated under clause (x), shall be $500,000 (the “Capped Negative EBITDA
Amount”); provided that in no event
shall the amount of the adjustment to the Purchase Price to be made pursuant to
this Section 3.3, together with any other amounts payable by Buyer under this
Agreement, exceed the Maximum Liability Amount.

     

    3.4           Reimbursement of Buyer
Operating Expenses.  From and after the commencement of the
Transition Services Term, the Seller Parties shall reimburse Buyer for all Buyer
Operating Expenses and any other Operating Expenses advanced by Buyer (at its
sole discretion) on behalf of the Project or any Seller Party within thirty (30)
days of the receipt by Seller of Buyer’s invoice therefor pursuant to Section
2.2(c); provided that
the amount of Buyer Operating Expenses required to be reimbursed by the Seller
Parties under this Section 3.4 with respect to routine labor costs of Buyer
shall not exceed $10,000 per month or such higher amount as shall be approved by
Seller (the “Buyer Labor Cost
Monthly Cap”), it being expressly acknowledged and agreed by the parties
that such Buyer Labor Cost Monthly Cap shall not apply to any major repairs
undertaken by Buyer as part of its performance of the Transition
Services.  This obligation of the Seller Parties shall remain in
effect whether or not the Closing occurs under the Purchase
Agreement

     

    3.5           Revenue and Operating
Expense Allocation During the Term.  Notwithstanding anything
to the contrary set forth in this Agreement (but without limiting the
adjustments to the Purchase Price contemplated pursuant to Sections 3.1 and 3.3
or the Termination Payment contemplated in Section 3.6), (i) all revenue
generated or accrued by the Project and its related assets (including the
Project Contracts) during the Term shall be for the account of the Seller, the
Company or Parent, as the case may be, and (ii) all Operating Expenses during
the Term shall be the responsibility of the Seller Parties.

    
      
         

      

      
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    3.6           Termination
Consideration.  (a)  In the event that (i) the
Closing does not occur, (ii) the Purchase Agreement is terminated, (iii) in
connection with such termination Buyer shall be entitled to a return of the
Deposit under the terms of the Purchase Agreement and (iv) there shall be a
Positive EBITDA Amount for the Transition Services Term so that a decrease to
the Purchase Price would have been in effect under Section 3.1 if the Closing
had occurred, then, in addition to the reimbursement of the Buyer Operating
Expenses pursuant to Section 3.4, the Seller Parties shall pay or cause to be
paid to Buyer a termination payment under this Agreement in an amount equal to
the Positive EBITDA Amount that would have been applied as a decrease to the
Purchase Price under Section 3.1 (the “Seller Termination
Payment”).

     

    (b)           In
the event that (i) the Closing does not occur, (ii) the Purchase Agreement is
terminated, (iii) in connection with such termination Buyer shall be entitled to
a return of the Deposit under the terms of the Purchase Agreement and (iv) there
shall be Negative EBITDA Amount for the Transition Services Term so that an
increase to the Purchase Price would have been in effect under Section 3.3 if
the Closing had occurred, then Buyer shall pay or cause to be paid to Seller a
termination payment under this Agreement in an amount equal to the Negative
EBITDA Amount that would have been applied as an increase to the Purchase Price
under Section 3.3 (the “Buyer
Termination Payment”).

     

    (c)           Notwithstanding
the foregoing provisions of this Section 3.6 or anything to the contrary set
forth in Section 6.1, if (i) the Closing does not occur, (ii) the Purchase
Agreement is terminated, (iii) in connection with such termination Buyer shall
be entitled to a return of the Deposit under the terms of the Purchase Agreement
and (iv) there has been an event of loss with respect to the Project such that
there shall be proceeds under the Existing Project Insurance constituting all,
or substantially all, of the replacement value of the Project (a “Total Loss Event”), then for
purposes of calculating any termination payment payable to Buyer or Seller under
this Section 3.6, (x) 50% of the amount of such insurance proceeds paid under
the Existing Project Insurance with respect to such Total Loss Event shall be
payable by the Seller Parties to Buyer as an additional termination payment
hereunder (a “Total Loss
Payment”), and (y) the amount of such insurance proceeds payable under
the Existing Project Insurance and any amounts relating to the cost of repair or
replacement cost of the Project shall not be included in the calculation of
EBITDA under Section 3.1.

     

    (d)           Notwithstanding
the foregoing provisions of this Section 3.6 or anything to the contrary set
forth in Section 6.1, if (i) there shall have been an event of loss (other than
a Total Loss Event) with respect to the Project (a “Material Insured Event”), (ii)
Buyer shall elect not to proceed with a Closing under the Purchase Agreement
solely on the basis of such Material Insured Event in accordance with the terms
of the Purchase Agreement, (iii) the Purchase Agreement is terminated as a
result thereof and (iv) in connection with such termination Buyer shall be
entitled to a return of the Deposit under the terms of the Purchase Agreement,
then for purposes of calculating any termination payment payable to Buyer or
Seller under this Section 3.6, (i) the amount of insurance proceeds payable
under the Existing Project Insurance with respect to such Material Insured Event
shall not be included for purposes of Section 3.1(a)(y) of the EBITDA
calculation and (ii) the costs of all repairs and other expenses incurred with
respect to such Material Insured Event shall not be included for purposes of
Section 3.1(b)(y) of the EBITDA calculation.

    
      
         

      

      
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    (e)           For
purposes of the calculation of any termination payment under this Section 3.6,
each Party shall provide to the other Party such additional details pertaining
to the calculation of EBITDA or a Total Loss Payment that is in its possession
as is reasonably requested by the other Party.  Within fourteen (14)
days following the termination of the Purchase Agreement, Seller shall make an
initial calculation of the Seller Termination Payment, Buyer Termination Payment
and/or Total Loss Payment and give written notice of such initial calculations
to Buyer.  Each of the Seller Termination Payment, Buyer Termination
Payment and/or Total Loss Payment, as applicable, shall be payable within thirty
(30) days of the receipt by the Party required to make such payment of the
invoice setting forth such Seller Termination Payment, Buyer Termination
Payment  and/or Total Loss Payment or, if later, within ten (10) days
of receipt of the insurance proceeds included within such payment from the Party
entitled to the same as set forth hereunder.

    

    3.7           Calculation of
EBITDA.

     

    (a)           At
least seven (7) days prior, but no earlier than fourteen (14) days
prior,  to the date expected to be the Closing Date as agreed between
the Parties, Seller shall give Buyer written notice of (i) such expected date of
the Closing and (ii) the amount, reasonably estimated by Seller, acting in good
faith, of the EBITDA for the estimated Transition Services Term and the
applicable EBITDA Positive Amount or EBITDA Negative Amount, as the case may be,
based on the Closing Date occurring on the expected Closing date, together with
such information regarding the calculation of such estimated amounts as Buyer
may reasonably request.  If Buyer identifies any error in any of the
estimates used or computations undertaken by Seller, Buyer will promptly (and in
any event within three (3) days after the receipt of such written notice from
Seller) notify Seller of such error in writing with specificity  (an
“Error
Notice”).  If Buyer does not give such an Error Notice, the
estimated amount of the EBITDA and the applicable EBITDA Positive Amount or
EBITDA Negative Amount notified by Seller under this Section 3.7 shall be the
EBITDA and applicable EBITDA Positive Amount or EBITDA Negative Amount, as the
case may be, to be applicable under the Purchase Agreement for purposes of the
calculation of the Purchase Price payable by Buyer at the Closing
Date.

     

    (b)           If
Buyer gives such Error Notice, the parties will promptly meet and review the
estimates and computations and, if necessary, Seller will recalculate the EBITDA
and applicable EBITDA Positive Amount or EBITDA Negative Amount, as the case may
be, to correct any error so identified and agreed by Seller, and provide such
recalculated amounts to Buyer for Buyer’s review pursuant to this Section
3.7.  If the parties are not in agreement as to the estimates and
computation of  EBITDA and applicable EBITDA Positive Amount or EBITDA
Negative Amount, as the case may be, at the time all other conditions to Closing
have been satisfied or waived, the EBITDA and applicable EBITDA Positive Amount
or EBITDA Negative Amount, as the case may be, under the Purchase Agreement
shall be the last amounts estimated by Seller pursuant to this Section 3.7 (the
“Closing EBITDA
Amounts”); provided that, in the event
that the amount in dispute between the parties with respect to the Closing
EBITDA Amounts is greater than or equal to $100,000, then the parties agree
that, as part of the Closing procedures under the Purchase Agreement, an amount
equal to such disputed amount shall be deducted from the Purchase Price and
deposited into the Escrow Account, subject to release from the Escrow Account
only upon the Joint Written Direction of Seller and Wellhead.

    
      
         

      

      
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    (c)           If
the Closing shall be delayed for any reason for more than five (5) Business Days
after the expected Closing Date assumed in the notices delivered by Seller under
this Section 3.7, such notices shall become void and Seller shall send another
written notice to Buyer for the newly expected Closing Date in accordance with
this Section 3.7.

     

    (d)           If
the Purchase Price is determined on the basis of disputed Closing EBITDA Amounts
under this Section 3.7, after the Closing Date, the parties will continue to
work in good faith to resolve any disagreement among the parties with respect to
the Closing EBITDA Amounts, as the case may be, utilized to determine the
Purchase Price and to determine any mutually agreed revised amounts within
thirty (30) days following the Closing Date (the “EBITDA Adjustment Period”),
taking into account all financial information and reports received or updated
during that period with respect to the EBITDA calculations (it being understood
that during the EBITDA Adjustment Period, Buyer and Seller may revise their
respective estimates used for the Closing EBITDA Amounts).   If
(i) the parties agree on a revised EBITDA and EBITDA Positive Amount or EBITDA
Negative Amount, as the case may be, during the EBITDA Adjustment Period or (ii)
the parties do not so agree during the EBITDA Adjustment Period and there is a
final determination of such dispute in accordance with this Agreement of the
applicable EBITDA and EBITDA Positive Amount or EBITDA Negative Amount, as the
case may be (in the case of a resolution under either of clause (i) and (ii),
the “Final EBITDA
Amounts”), the Purchase Price amount under the Purchase Agreement shall
be recalculated using such Final EBITDA Amounts (the “Revised Purchase Price
Amount”) and (1) if the Revised Purchase Price Amount is greater than the
amount of the Purchase Price paid under the Purchase Agreement, Buyer shall pay
to Seller such differential and (2) if the Revised Purchase Price Amount is less
than the amount of the Purchase Price paid under the Purchase Agreement, Seller
shall pay to Buyer such differential, in each case together with interest
thereon at a rate equal to the prime rate as published by Bank of America from
the Closing Date until the date such payment is made, in immediately available
finds by wire transfer to the accounts designated in writing by the Party
entitled to such payment.  If a Final EBITDA Amounts is determined
pursuant to clause (ii) above, the Party determined pursuant to such final
determination to be most in error in its proposed applicable Final Adjusted
Amounts shall bear all of the costs of the proceedings leading to such final
determination, including the reasonable legal costs and expenses of the other
Party with respect thereto, and shall reimburse the other Party for any such
amounts incurred by the other Party at the time of making the payment referenced
in the immediately preceding sentence.

     

    (e)           Nothing
in this Section 3.7 shall be construed to modify or affect the effectiveness or
timing of a Closing under the Purchase Agreement on the basis of disputed
Closing EBITDA Amounts.

     

    3.8           Penalties.  If
any penalties, fines, special charges or similar items are incurred under the
Resource Adequacy Contracts in respect of the Project, any Seller Permit in
respect of the Project or applicable Law as a result of actions taken by Buyer in connection with
the Remediation Services performed by Buyer or Guarantor or their
Representatives, Buyer shall, subject to Section 7.3, immediately pay over to
Seller the amount of such item or, at the election of Seller, Seller shall have
the right of offset for the amount of such item against the Deposit and Seller
and Buyer shall, or shall cause Wellhead to, promptly issue a Joint Written
Direction to the Escrow Agent to cause the Escrow Agent to immediately pay
over to the Seller
such item.  In the event of any offset from the Deposit, the amount
payable under Section 1.3(a)(iii) of the Purchase Agreement shall be increased
by the amount of such offset.

    
      
         

      

      
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    ARTICLE
IV

    COOPERATION

     

    4.1           Designated
Representatives; Meetings.  To facilitate the
efficient performance of the Remediation Services and the Transition Services,
Buyer and the Seller Parties hereby designate their initial respective
representatives (“Designated
Representatives”) as
identified at Exhibit
B hereto, as may be
revised from time to time with reasonable notice prior to the effectiveness of
such change in personnel, as the individuals in charge of primary contact
between the Seller Parties, on the one hand, and Buyer, on the other, with
respect to this Agreement during the Term.  The Designated
Representatives shall use commercially reasonable efforts to meet in person, or
if not by teleconference, no less than bi-weekly, and more often as may be
requested by Seller or Buyer.

     

    ARTICLE
V

    BOOKS,
RECORDS AND ACCOUNTING

     

    5.1           Seller Parties’
Records.  At all times during the Term, each Seller Party shall
maintain a reasonably complete and accurate set of files, records, books, and
accounts (“Records”) of
all business activities and operations during the Term for the Project,
including those undertaken by the Seller Parties.  Each Seller Party
shall make all such Records available to Buyer at all times as required herein,
or otherwise for copying and review upon request, including all such Records
relevant to the calculation of EBITDA under Article III as Buyer may request
from time to time both during and after the Transition Services Term as
reasonably necessary to permit the calculation of EBITDA.

     

    5.2           Buyer’s
Records.  At all times during the Term, Buyer shall maintain a
reasonably complete and accurate set of Records of all business activities and
operations conducted by the Buyer or any of its Affiliates or Representatives in
connection with its performance by Buyer of the Transitions Services or
Remediation Services.  Buyer shall make all such Records available to
the Seller Parties at all times as required herein, or otherwise for copying and
review upon request, including all such Records relevant to the calculation of
EBITDA under Article III as Seller may request from time to time both during and
after the Transition Services Term as reasonably necessary to permit the
calculation of EBITDA.

    
      
         

      

      
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    ARTICLE
VI

    INSURANCE

     

    6.1           Seller
Insurance.  Throughout the Term, the Seller Parties shall
maintain all insurance related to the Project as currently in place in the name
of the current insured in accordance with all insurance requirements applicable
to the Project, including those set forth in the Project Contracts (the “Insurance Requirements”), all
as further set forth on Exhibit D hereto with
respect to the Seller Parties, including without  limitation any
amendments or modifications thereto required by the parties providing financing
to Seller Parties or for the Project (collectively, the “Existing Project
Insurance”);  provided that the Seller
Parties shall cause Buyer to be named as (i) an additional insured and a loss
payee under such Existing Project Insurance relating to commercial general
liability insurance and (ii) as an additional insured for all other Existing
Project Insurance, and require the insurers thereunder to waive subrogation
against Buyer and its Affiliates together with their respective officers,
directors, Affiliates and employees.  In no event shall the Seller
Parties be required to cause Buyer to be named as a loss payee under any
property damage insurance and business interruption insurance with respect to
the Project.  Should Buyer terminate the Purchase Agreement solely as
a result of a Material Insured Event, Buyer shall be deemed to have waived its
right to payment under any property damage insurance or business interruption
insurance maintained as part of the Existing Project Insurance in connection
with such Material Insured Event.

     

    6.2           Buyer Property
Insurance.  Buyer may, at its option and its own expense (but
without any obligation to do so), obtain it its own property and business
interruption insurance with respect to the Project and the Buyer's assets and
equipment located on the Project site (the “Buyer Property Damage
Insurance”).  In no event shall Buyer be required to cause any
Seller Party to be named as an additional insured or a loss payee under any
Buyer Property Damage Insurance obtained by Buyer.  The Seller Parties
shall reasonably cooperate with Buyer should it desire to obtain any such Buyer
Property Damage Insurance.

     

    6.3           Buyer Liability
Insurance.  During the Term, Buyer shall maintain insurance
coverage as described in Exhibit D to be
maintained by Buyer.

     

    6.4           Notice of
Damage.  Each Party shall promptly notify the other Party of
any actual or potential claim under any of the insurances provided by either
Party under the terms of this Agreement.  Each such notice shall be
accompanied by full details of the incident giving rise to such
claims.  Each Party shall provide the other Party with all such
commercially reasonable assistance as may be required for the notification,
preparation, negotiation and resolution of any claims under insurance maintained
pursuant to this Agreement.

     

    ARTICLE
VII

    LIMITATION
OF LIABILITY

     

    7.1           Liability of
Parties.  (a)  Notwithstanding anything to the
contrary set forth in this Agreement, Buyer, its Affiliates and each of their
respective members, directors, officers, agents, employees and representatives
(collectively, the “Buyer
Affiliates”), shall not, either directly or indirectly, be liable,
answerable or accountable to any Seller Parties or any Affiliate thereof, for,
and each of the Seller Parties hereby waives, for the benefit of the Buyer
Affiliates, on its own behalf and on behalf of its Affiliates, all claims,
causes of action and demands whatsoever, in law or at equity (whether any such
claim, action or demand is fashioned in contract, tort, strict liability,
warrantee, or any other manner whatsoever), that it or they may have against the
Buyer Affiliates for, any loss or damage resulting from, incidental to or
relating to the performance or non-performance of the services hereunder by any
of the Buyer Affiliates, including any exercise or refusal to exercise a
discretion, any mistake or error of judgment or any act or omission by the Buyer
Affiliates reasonably believed by the Buyer Affiliates to be within the scope of
authority conferred thereon by this Agreement, except to the extent such loss or
damage (i) was proximately caused by the gross negligence, bad faith or willful
misconduct of such Buyer Affiliates in performing its obligations hereunder,
(ii) is expressly covered as an obligation of the Buyer pursuant to Section 7.2
or (iii) is based upon or arises out of the breach of any covenant, undertaking,
representation or warranty of Buyer under this Agreement.

    
      
         

      

      
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    (b)           Notwithstanding
anything to the contrary set forth in this Agreement, Seller, its Affiliates and
each of their respective members, directors, officers, agents, employees and
representatives (collectively, the “Seller Affiliates”), shall
not, either directly or indirectly, be liable, answerable or accountable to any
Buyer Parties or any Affiliate thereof, for, and each of the Buyer Parties
hereby waives, for the benefit of the Seller Affiliates, on its own behalf and
on behalf of its Affiliates, all claims, causes of action and demands
whatsoever, in law or at equity (whether any such claim, action or demand is
fashioned in contract, tort, strict liability, warrantee, or any other manner
whatsoever), that it or they may have against the Seller Affiliates for, any
loss or damage resulting from, incidental to or relating to the performance or
non-performance of the services hereunder by any of the Seller Affiliates,
including any exercise or refusal to exercise a discretion, any mistake or error
of judgment or any act or omission by the Seller Affiliates reasonably believed
by the Seller Affiliates to be within the scope of authority conferred thereon
by this Agreement, except to the extent such loss or damage (i) was proximately
caused by the gross negligence, bad faith or willful misconduct of such Seller
Affiliates in performing its obligations hereunder, (ii) is expressly covered as
an obligation of the Seller Parties pursuant to Section 7.2 or (iii) is based
upon or arises out of the breach of any covenant, undertaking, representation or
warranty of any Seller Party under this Agreement.

     

    7.2           Indemnification.  Each
Party shall indemnify and hold harmless the other Party, its members, directors,
officers, agents, employees and representatives, from all liability or expense
(including but not limited to reasonable attorney fees and costs of
investigation and defense) on account of any claim by a third party for bodily
injury  (including injury resulting in death) or damage to property
(for the avoidance of doubt, excluding the Project property, for which the
Parties will look exclusively to insurance) against the indemnified Party based
upon or arising out of (A) the negligent act or omission of the indemnifying
Party or the indemnifying Party’s employees, officers, directors, members,
contractors, subcontractors or agents, in connection with the performance of its
respective undertakings under this Agreement or (B) any breach of any covenant,
undertaking, representation or warranty of such indemnifying Party under this
Agreement.  Each Party shall be obligated to indemnify the other Party
under this Section 7.2 only for those claims arising under this Section 7.2 as
to which the Party seeking indemnification shall have given notice to the
indemnifying Party prior to (i) December 15, 2009 in the event the Closing shall
not occur or (ii) the end of the Survival Period in the event the Closing shall
occur.  Any written notice delivered by a Party seeking
indemnification hereunder shall set forth with as much specificity as reasonable
practicable the basis for the claim hereunder and, to the extent reasonably
practicable, a reasonable estimate of the amount thereof.

    
      
         

      

      
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    7.3           Maximum Liability
Amount.  Notwithstanding anything to the contrary set forth in
this Agreement, the maximum aggregate liability of the Buyer Parties to the
Seller Parties (and any Affiliate thereof) for all losses, claims, damages,
liabilities, obligations, costs and expenses (including legal fees) of
whatsoever kind or nature which in any way arise from or in connection with this
Agreement or the performance or non-performance of the Transition Services, the
Remediation Services or any other obligations of a Buyer Party hereunder
(including those arising under Article III and this Article VII) shall be
limited to a total aggregate amount of (i) $250,000, in the event the Buyer does
not deliver to Seller a Buyer EBITDA Notice and (ii) $500,000, in the event the
Buyer does deliver to Seller a Buyer EBITDA Notice (the “Maximum Liability
Amount”).

     

    7.4           Limitation on
Liability.  Notwithstanding anything to the contrary set forth
in this Agreement, in no event shall either Party be liable for any
consequential, exemplary, special, indirect, incidental or punitive loss,
damage, or expenses (or equivalents thereof, no matter how claimed, computed or
characterized, including but not limited to business interruption, lost
business, or savings, or whether claimed as a matter of contract, tort, strict
liability, warrantee, or any other manner whatsoever)) arising out of or in
connection with this Agreement, its subject or its performance or breach of
performance by either Party.  In addition, neither Party shall be
liable to the other Party for any claim, damage, or loss to the extent that same
shall be covered by a manufacturer’s or similar warranty.  Each Party
shall, if necessary or useful for the realization of the benefits thereof,
assign to the respective Party any such warranties, but only if or to the extent
such are assignable.  Each Party shall provide the other Party
reasonable cooperation with respect to any such claims.  The
limitation of liability contained in this Article shall be effective without
regard to said Party’s performance or failure or delay of performance under any
other term or condition of this Agreement.

     

    7.5           Unsafe
Conditions.  Buyer shall not be liable for performance of any
of its obligations hereunder for so long as, and to the extent that, they become
impossible or unsafe to perform as a result of the existence of any hazardous or
potentially hazardous condition at or around the Project site (which condition
Buyer could not reasonably control in the reasonable commercial exercise of its
rights and obligations and which was not caused by Buyer, its subcontractors or
personnel).

     

    7.6           Insurance.  The
indemnifying Party shall be subrogated to the rights of the indemnified Party in
respect of any insurance relating to damages to the extent of any
indemnification payments made hereunder.

     

    ARTICLE
VIII

    TERMINATION

     

    8.1           Termination of Purchase
Agreement.  Upon the termination of the Purchase Agreement in
accordance with its terms prior to the Closing, this Agreement shall terminate
upon the receipt by a Party from the other Party of a written notice of
termination of this Agreement as a result of such termination of the Purchase
Agreement; provided
that (i) at Seller’s option, Buyer shall continue to perform the Transition
Services if then in effect for an additional fourteen (14) days following the
receipt or giving of such notice of termination (taking into account the
intended transition of such Transition Services to the Seller Parties by the end
of such fourteen (14) day period); and (ii) for the avoidance of doubt,
notwithstanding any such termination, Buyer and its Affiliates shall retain the
right to have such access to the Project as Buyer and its Affiliates may
reasonably require in order to remove any upgraded equipment  from the
Project as contemplated in Section 4.14(a) of the Purchase Agreement or other
equipment or property of Buyer or its Affiliates located on the Project
site.  In the event that the Parties agree that Buyer will continue to
perform Transition Services under clause (i) of this Section 8.1 for an
additional fourteen (14) day period, the Parties acknowledge and agree that, for
purposes of the calculation of any termination payment payable pursuant to
Section 3.6, the Transition Services Term shall include such additional fourteen
(14) day period,

    
      
         

      

      
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    8.2           Other Termination;
Default.  Each Party (the “Terminating Party”) may
terminate this Agreement for Cause (as hereinafter defined) of the other Party
(the “Defaulting Party”)
at or after any time that Cause exists upon the giving of written notice of such
termination for Cause to the Defaulting Party.  As used herein, the
term “Cause” means, with
respect to a Party, any of the following in relation to such Party or any of its
Designated Representatives or Affiliates: (i) any willful malfeasance or gross
negligence relating to the Project; (ii) any material breach by such Party under
this Agreement, which breach has not been cured within ten (10) Business Days
after the Terminating Party has given the Defaulting Party written notice
thereof or, if such breach is not reasonably remediable within such ten (10)
Business Day period, the Defaulting Party has failed to commence to take, within
such ten (10) Business Day period, steps to remedy such default and to
thereafter proceed diligently and as expeditiously as reasonably possible to
cure or remedy such breach; or (iii) the discovery or occurrence of any fact or
circumstance that would cause the Defaulting Party to be in material breach of
(i) Section 3.2(d) of the Purchase Agreement in the case of Buyer as the
Defaulting Party or (ii) Section 9.13 of this Agreement or Article II (the
representations and warranties contained in Article II to be deemed made as of
the time as of which they speak as set forth in the Purchase Agreement) or
Section 4.14(a) of the Purchase Agreement in the case of any Seller Party as the
Defaulting Party, which breach cannot be cured to the reasonable satisfaction of
the Terminating Party within ten (10) Business Days of the receipt of notice by
the Defaulting Party of such breach or, if such breach is not reasonably
remediable within such ten (10) Business Day period, the Defaulting Party has
failed to commence to take, within such ten (10) Business Day period, steps to
remedy such breach and to thereafter proceed diligently and as expeditiously as
reasonably possible to cure or remedy such breach.

     

    8.3           Post-Termination
Obligations.  Articles VII, VIII and IX (other than Sections
9.13 and 9.17) shall survive any termination of this
Agreement.  Notwithstanding any termination of this Agreement, Seller
shall remain obligated to pay to Buyer any amounts payable pursuant to Section
3.4 or, if applicable, Section 3.6, and such obligation to make such payments to
Buyer shall survive the termination of this Agreement until any such payments
shall have been paid in full as required hereunder.  Notwithstanding
any termination of this Agreement, Buyer shall, subject to Section 7.3, remain
obligated to pay to Seller any amounts, if applicable, payable pursuant to
Section 3.6 or Section 3.8 and such obligation to make such payment to Seller
shall survive the termination of this Agreement until any such payments have
been paid in full as required hereunder.

     

    ARTICLE
IX

    MISCELLANEOUS

     

    9.1           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
principles of conflicts of laws thereof.

    
      
         

      

      
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    9.2           Jurisdiction;
Enforcement.  Each of the Seller Parties and Buyer agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached.  It is accordingly agreed that only the Parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any court of the United States located in the State and City of New York or
in New York state court located in the State and City of New York, this being in
addition to any other remedy to which they are entitled hereunder.  In
addition, each of the Seller Parties and Buyer (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State and City of
New York or any New York state court located in the State and City of New York
in the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (c) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any court
other than a federal or state court sitting in the State and City of New
York.

     

    9.3           Waiver of Jury
Trial.  EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.

     

    9.4           Confidentiality.  The
Parties hereto acknowledge and agree that the terms of this Agreement and any
information or materials furnished or made available by any Party to the other
Party in connection herewith shall be treated as confidential information
subject to the provisions of the Confidentiality Agreement between Seller and
Wellhead Electric Company, Inc, dated as of June 10, 2008 (the “Confidentiality Agreement”) as
if each of Buyer and each Seller Party were a party thereto and bound thereby;
provided, however, that
either Party may disclose such information as required by law, including
applicable securities laws and policies.  Buyer hereby acknowledges
that Seller is required to disclose the terms of this Agreement, and file a copy
of this Agreement with the Securities and Exchange Commission, under securities
laws and the rules of the Nasdaq Stock Market.

     

    9.5           Notices.  The
provisions of Section 8.7 of the Purchase Agreement are hereby incorporated
herein by reference and shall apply to this Agreement, where the reference to
“Buyers or Guarantor” in such Section 8.7 shall be to the Buyer hereunder and
the reference to “Seller” in such Section 8.7 shall be to each of the Seller
Parties hereunder.

     

    9.6           Independent
Contractor.  Buyer shall be considered an independent
contractor acting as agent to the Seller Parties and shall not be a joint
venturer, partner, officer or employee of any Seller Party and neither Party nor
their respective Affiliates shall make any claim to the
contrary.  Nothing herein shall be construed so as to impose any
liability as a partner or joint venturer on any party.  Under no
circumstances shall any of the employees of the Parties (if any) be deemed to be
employees of the other Party for any purpose.  Each Party shall
maintain control over its employees (if any), subcontractors and subcontractors’
employees (if any) (except as otherwise expressly provided herein or in the
Purchase Agreement) and shall comply with all withholding of income at source
requirements.  Except as otherwise provided herein or in the Purchase
Agreement, neither Party shall have the right to bind the other Party to any
agreement with a third party.

    
      
         

      

      
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    9.7           Assignment.  Neither
this Agreement nor the rights, interests or obligations of a party hereunder
shall be assigned in whole or in part (whether by operation of law or otherwise)
by such party without the prior written consent of the other
parties.  Subject to the preceding sentence of this Section 9.7, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective permitted successors and assigns.

     

    9.8           Counterparts;
Effectiveness.  This Agreement may be executed in two or more
consecutive counterparts (including by facsimile), each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered (by telecopy or otherwise)
to the other party.

     

    9.9           Severability.  Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement in any other
jurisdiction.  If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.

     

    9.10           Entire Agreement; No
Third-Party Beneficiaries.  This Agreement (including the
exhibits and schedules hereto), the Purchase Agreement, the Escrow Agreement,
the Escondido Asset Management Agreement and the Confidentiality Agreement
constitute the entire agreement, and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.  Nothing in this Agreement, express or implied,
is intended to or shall confer upon any person (other than the parties hereto)
any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

     

    9.11           Rights Cumulative;
Waiver.  Except as expressly provided otherwise in this
Agreement, all rights, powers and privileges conferred under this Agreement
shall be cumulative and not restrictive of those given by law.  No
waiver by any party of any condition or right of termination granted by this
Agreement may be relied upon by the other parties unless such waiver is in
writing signed by the party against whom enforcement of such wavier is
sought.

     

    9.12           Headings.  Headings
of the Articles and Sections of this Agreement are for convenience of the
parties only, and shall be given no substantive or interpretive effect
whatsoever.

     

    9.13           Confirmation of
Representations and Warranties.  The Parties acknowledge that
each such Party is entering into this Agreement in reliance on the
representations and warranties given by the other Party in the Purchase
Agreement (such representations and warranties deemed to be given by each such
Party as of the date of the Purchase Agreement).  Without limiting the
representations and warranties of any Party under the Purchase Agreement and the
applicability thereto to this Agreement, (i) the Seller Parties hereby confirm,
as of the date hereof and the Effective Date, that, except as set forth in the
Seller Disclosure Schedule, the representations and warranties of Seller set
forth in Section 2.3 of the Purchase Agreement are true and correct with respect
to the execution and delivery of this Agreement by each Seller Party and the
transactions contemplated by this Agreement and (ii) the Buyer hereby confirms,
as of the date hereof and the Effective Date, that, except as set forth in the
Buyer Disclosure Schedule, the representations and warranties of Buyer set forth
in Section 3.2(d) of the Purchase Agreement are true and
correct.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    9.14           Amendment.  This
Agreement may not be amended, changed, supplemented or otherwise modified except
by an instrument in writing signed on behalf of all of the Parties.

     

    9.15           Expenses.  Except
as otherwise provided in this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring or required to incur such expenses.

     

    9.16           Severability.  Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement in any other
jurisdiction.  If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.

     

    9.17           Further
Assurances.  Each of the Parties agree to provide such
information, execute and deliver any instruments and documents and to take or
cause to be taken such other commercially reasonable actions as may be necessary
or requested by the other Party which are not inconsistent with the provisions
of this Agreement and which do not involve the assumptions of obligations other
than those provided for in this Agreement, in order to give full effect to this
Agreement and to carry out the intent of this Agreement.

     

    9.18           Seller
Parties.  Each undertaking by the Seller Parties hereunder
shall be a deemed to be a joint and several undertaking of each of Seller,
Parent and the Company.  For purposes of this Agreement and the
performance of the Remediation Services and Transition Services, Buyer and its
Affiliates shall be entitled to rely on any instructions or actions by any
Seller Party as the joint instructions and actions of all Seller
Parties.

    

    [Signature
page follows]

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the parties have executed this Agreement through their duly
authorized representatives.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                WELLHEAD
      ELECTRIC EQUIPMENT, LLC

                              
	 
      	 
      	 
      
	
                                By:

                              	
                                San
      Joaquin Dryers, LP, Managing

                              
	 
      	
                                Member

                              	 
      
	 
      	 
      	 
      
	 
      	
                                By:

                              	
                                Fresno
      Cogen, Inc., its General

                              
	 
      	 
      	
                                Partner

                              
	 
      	 
      	 
      
	 
      	
                                By:

                              	
                                /s/  
      Harold E. Dittmer

                              
	 
      	 
      	
                                Name:  Harold
      E. Dittmer

                              
	 
      	 
      	
                                Title:  President

                              
	 
      	 
      	 
      
	
                                CALIFORNIA
      HOLDINGS McCALL, LLC

                              
	 
      	 
      	 
      
	
                                By:

                              	
                                /s/
      Harold E. Dittmer  

                              
	 
      	
                                Name:  Harold
      E. Dittmer

                              
	 
      	
                                Title:  Managing
      Member

                              
	 
      	 
      	 
      
	
                                MMC
      ENERGY NORTH AMERICA, LLC

                              
	 
      	 
      	 
      
	
                                By:

                              	
                                /s/
      Michael J. Hamilton  

                              
	 
      	
                                Name:  Michael
      J. Hamilton

                              
	 
      	
                                Title:  Chairman
      and Chief Executive

                              
	 
      	
                                Officer

                              
	 
      	 
      	 
      
	
                                MMC
      ENERGY, INC.

                              
	 
      	 
      	 
      
	
                                By:

                              	
                                /s/
      Michael J. Hamilton  

                              
	 
      	
                                Name:  Michael
      J. Hamilton

                              
	 
      	
                                Title:  Chairman
      and Chief Executive

                              
	 
      	
                                Officer

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    
      
        
          
            	
                    MMC
      CHULA VISTA, LLC

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ Michael J.
      Hamilton

                  
	 
      	
                    Name:  Michael
      J. Hamilton

                  
	 
      	
                    Title:  Chairman
      and Chief Executive

                  
	 
      	
                    Officer

                  

          

        

      

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

    EXHIBIT
A

    SCOPE
OF SERVICES

    

    The
Transition Services shall include, but not be limited by, the
following:

    

    1.  Administration
of each Project Contract other than Energy Management Agreements, including
directions to be given to each Project Contractor thereunder on behalf of a
Seller Party as set forth in such Project Contract; provided that all payments
required to be made by or on behalf of a Seller Party shall be made by the
applicable Seller Party.

    

    2.  Management
of all Project equipment repair, replacement and servicing.

    

    3.  Management
of supplies and materials.

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    

    EXHIBIT
B

    DESIGNATED
REPRESENTATIVES

    

    Buyer
–  Paul Cummins, Vice President (Primary)

    Harold
Dittmer, President (Backup)

    

    
      Seller
Parties –  Harry Scarborough, Senior Vice President Business Development
& Operations

      (Primary)

    

    Denis
Gagnon, Chief Financial Officer (Backup)

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    

    EXHIBIT
C

    PROJECT
CONTRACTS

    

    
      A.
Chula
Vista Contracts

    

    

    
      	
              1.

            	
              Resource
      Adequacy Capacity Confirmation, between MMC Energy North America, LLC and
      Occidental Power Services, Inc., dated as of November 19, 2008 (CV –
      2009).

            

    

    

    
      	
              2.

            	
              Land
      lease dated as of March 28, 2000 between John S. Marquez and Carole G.
      Marquez Trustees U.D.T., March 20, 1991 (collectively “Landlord”) and
      PG&E Disbursed Generating Co., LLC (“Tenant”), dated March 28, 2000,
      assigned to Seller on January 9, 2006, together with the lease amendments
      set forth in Section 2.11 incorporated herein by
  reference.

            

    

    

    
      	
              3.

            	
              Base
      Contract for Retail Sale and Purchase of Natural Gas or Electricity
      between Macquarie Cook Energy LLC and MMC Chula Vista, LLC, dated November
      1, 2008.

            

    

    

    
      	
              4.

            	
              Master
      Power Purchase and Sale Agreement Cover Sheet, dated as of November 1,
      2008, between Macquarie Cook Power Inc. and MMC Chula Vista, LLC,
      Escondido, with EEI Standard Master Power Purchase and Sale Agreement
      Version 2.1 (modified 4/25/00) incorporated therein by
      reference.

            

    

    

    
      	
              5.

            	
              Request
      for Retail Noncore Gas services between San Diego Gas & Electric
      Company and MMC Chula Vista, LLC, effective June 1,
  2007.

            

    

    

    
      	
              6.

            	
              Participating
      Generator Agreement, between MMC Chula Vista, LLC and California
      Independent System Operator, dated January 12,
  2006.

            

    

    

    
      	
              7.

            	
              Meter
      Service Agreement for ISO Metered Entities, between MMC Chula Vista, LLC
      and California Independent System Operator dated January 12,
      2006.

            

    

    

    
      	
              8.

            	
              Interconnection
      agreement dated as of April 12, 2001 between PG&E Dispersed Generating
      Company, Inc. (successor-in-interest to Ramco Inc.) and San Diego Gas
      & Electric Company, assigned to MMC Chula Vista, LLC on December 14,
      2005.

            

    

    

    
      	
              9.

            	
              Expedited
      Interconnection Facilities Agreement, dated April 12, 2001, between
      PG&E Dispersed Generating Company, Inc. (successor-in-interest to
      Ramco Inc.) and San Diego Gas & Electric Company, assigned to MMC
      Chula Vista, LLC on December 14,
2005.

            

    

    

    
      	
              10.

            	
              Owner
      Participation Agreement dated between the Redevelopment Agency of the City
      of Chula Vista and PG&E Dispersed Generating Company, LLC, effective
      September 26, 2000.

            

    

    

    
      	
              11.

            	
              Estoppel
      Certificate issued by the Redevelopment Agency of the City of Chula Vista
      and the City of Chula Vista on April 14, 2006 to TD Banknorth NA fbo MMC
      Chula Vista, LLC, which document serves to assign the Owner Participation
      Agreement (per number 12 above) to MMC Chula Vista,
  LLC.

            

    

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

    

    B.   Contracts
Applicable to Both Chula Vista and Escondido

    

    
      	
              1.

            	
              Resource
      Adequacy Capacity Marketing Services Agreement between MMC Energy North
      America, LLC and Occidental Power Services, Inc., dated as of May 15, 2006
      “RACMSA”), together with the amendments set forth
  below:

            

    

    

    
      	
               
      

            	
              a.

            	
              Addendum
      to RACMSA effective May 15, 2006

            

    

    
      	
               
      

            	
              b.

            	
              Attachment
      2 dated January 26, 2007

            

    

    
      	
               
      

            	
              c.

            	
              Attachment
      2 dated May 15, 2007

            

    

    

    
      	
              2.

            	
              Energy
      Management Agreement, between Macquarie Cook Power Inc., Macquarie Cook
      Energy, LLC, (collectively, the “Energy
      Manager”), MMC Energy North America, LLC, MMC Mid-sun LLC, MMC
      Chula Vista, LLC and MMC Escondido, LLC, dated as of November 1, 2008 (the
      “Energy Management
      Contract”).

            

    

    

    
      	
              3.

            	
              Master
      Netting, Setoff, Security and Collateral Agreement between Macquarie Cook
      Power Inc., Macquarie Cook Energy, LLC, (collectively, the “Energy
      Manager”), MMC Energy North America, LLC, MMC Mid-sun LLC, MMC
      Chula Vista, LLC and MMC Escondido, LLC,
  undated.

            

    

    

    
      	
              4.

            	
              Premises
      Pollution Liability II Insurance Policy No. PPI G2389533A 001, effective
      October 25, 2007,  issued by Ace American Insurance Co. to MMC
      Energy, Inc. covering its Chula Vista and Escondido sites, with
      endorsements.

            

    

    

    
      	
              5.

            	
              Assignment
      Agreement executed as of December 14, 2005, between Dispersed Generating
      Company, LLC (assignor and successor-in-interest to Ramco Inc.) and MMC
      Chula Vista LLC and MMC Escondido LLC. (Assignment of interconnection and
      expedited interconnection facilities agreements for Escondido and Chula
      Vista.)

            

    

    

    
      	
              6.

            	
              FT4
      Dry Low NOX-Equipped Engine Special Support Agreement between Pratt &
      Whitney Power Systems, Inc. and MMC Energy, Inc., dated as of January 10,
      2007.

            

    

    

    
      	
              7.

            	
              Services
      Agreement (Revised 12/31/07), between Pro Energy Services, LLC, and MMC
      Energy, Inc., dated as of December 31, 2007 (O&M contract for
      Escondido & Chula Vista
plants).

            

    

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    

    EXHIBIT
D

    INSURANCE

    

    Seller Parties
Insurance:

    

    Seller
Parties shall maintain the following Existing Project Insurance during the
Term:

    

    1.  Commercial
or Business Automobile Liability insurance for coverage of owned, non-owned and
hired vehicles, with a minimum limit of One Million Dollars ($1,000,000)
combined single limit for bodily injury and property damage.

    

    2 .
Commercial General Liability insurance against claims for personal injury
(including bodily injury and death) and property damage.  Such
insurance shall provide premises / operations, products-completed operations,
blanket contractual liability, explosion, collapse and underground coverage,
broad form of property damage, independent contractor’s and personal injury
insurance, punitive damages to the extent insurable under the laws of the State
of California, with a minimum limit of One Million Dollars ($1,000,000) per
occurrence and Two Million Dollars ($2,000,000) in the annual aggregate for
combined bodily injury and property damage.

    

    3. Excess
or Umbrella Liability insurance over and above the insurance required above,
except for Workers Compensation coverage, with a limit of Ten Million Dollars
($10,000,000) per occurrence / Ten Million Dollars ($10,000,000)
aggregate.

    

    4.
Pollution Liability insurance for coverage against claims for pollution
incidents, with a minimum limit of One Million Dollars ($1,000,000) per
occurrence / Two Million Dollars ($2,000,000) in aggregate.

    

    4A.
Pollution Liability insurance for coverage against claims for pre-existing
pollution incidents, with a minimum limit of Five Million Dollars ($5,000,000)
per occurrence / Five Million Dollars ($5,000,000) in aggregate.

    

    5.
Property insurance for coverage against risks to real and personal property,
with a minimum limit of One Hundred Thousand Dollars ($100,000) with respect to
real and personal property, Two Hundred and Fifty Thousand Dollars ($250,000)
with respect to loss to turbines per occurrence / Eighteen Million Dollars
($18,000,000) in aggregate for both real and personal property and loss to
turbines. Property insurance for coverage against  equipment breakdown
risk to real and personal property, with a minimum limit of Twenty Five Thousand
Dollars ($25,000) per occurrence/ Eighteen Million Dollars ($18,000,000) in
aggregate and Five Hundred Thousand ($500,000) in aggregate for Expediting
Expense.

    

    6 . Flood
Liability insurance for coverage against claims for flood incidents, with a
minimum limit of Two Hundred and Fifty Thousand Dollars ($250,000) per
occurrence / One Million Dollars ($1,000,000) in aggregate.

    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    

    

    7 .
Earthquake Liability insurance for coverage against claims for earthquake
incidents, with a minimum limit of Two Hundred and Fifty Thousand Dollars
($250,000) per occurrence / Five Million Dollars ($5,000,000) in
aggregate.

    

    8.
Workers’ Compensation insurance as prescribed by applicable law, including
insurance covering liability under the longshoremen’s and Harbor Worker’s Act,
the Jones Act and the Outer Continental Shelf Land Act, if
applicable.  Workers’ Compensation insurance should be in accordance
with the laws and regulations of the State of California, providing statutory
benefits and covering loss resulting from injury, sickness, disability or death
of employees of Seller.

    

    Buyer
Insurance:

    

    Buyer
shall maintain the following insurance during the Term:

    

    1.           Workers’
Compensation insurance as prescribed by applicable law, including insurance
covering liability under the longshoremen’s and Harbor Worker’s Act, the Jones
Act and the Outer Continental Shelf Land Act, if applicable.  Workers’
Compensation insurance should be in accordance with the laws and regulations of
the State of California, providing statutory benefits and covering loss
resulting from injury, sickness, disability or death of employees of
Buyer.

    

    2.           Commercial
or Business Automobile Liability insurance for coverage of owned, non-owned and
hired vehicles, with a minimum limit of One Million Dollars ($1,000,000)
combined single limit for bodily injury and property damage.

    

    3.           Commercial
General Liability insurance against claims for personal injury (including bodily
injury and death) and property damage.  Such insurance shall provide
premises / operations, products-completed operations, blanket contractual
liability, explosion, collapse and underground coverage, broad form of property
damage, independent contractor’s and personal injury insurance, punitive damages
to the extent insurable under the laws of the State of California, with a
minimum limit of One Million Dollars ($1,000,000) per occurrence and Two Million
Dollars ($2,000,000) in the annual aggregate for combined bodily injury and
property damage.

    

    4.           Excess
or Umbrella Liability insurance over and above the insurance required above,
except for Workers Compensation coverage, with a limit of Ten Million Dollars
($10,000,000) per occurrence / Ten Million Dollars ($10,000,000)
aggregate.

    

    With the
exception of the Workers’ Compensation insurance, Buyer shall cause the Seller
Parties to be named as an additional insured and a loss payee under the
insurance specified in this Exhibit D and shall require the insurers thereunder
to waive subrogation against the Seller Parties and their Affiliates together
with their respective officers, directors, Affiliates and
employees.

    

    Insurance Requirements for
Seller Parties and Buyers:

    

    Each
Seller Party and Buyer shall cause the insurers providing insurance required to
be maintained by it hereunder, on a best endeavors basis, to provide thirty (30)
days advance written notice to the other Party in the event of cancellation,
non-renewal or any material change in the coverage or conditions included
thereunder, with the exception of non-payment of premium, in which case ten (10)
days written notice shall be provided for all policies.

    
      
         

      

      
        D-2

        
          

        

      

      
         

      

    

    

    EXHIBIT
E

    SELLER
OBLIGATIONS

    

    1.  Financial
accounting and control for each Seller Party

    

    2.  Tax
reporting and tax compliance

    

    3.  Insurance
of Seller Parties set forth on Exhibit D

    

    4.  Making
of all payments owed by any Seller Party under any Project Contract

    

    5.  Market
participation and dispatch decisions under the Energy Management
Agreements

    
      
         

      

      
        E-1

        
          

        

      

      
         

      

    

    EXHIBIT
F

    DISPATCH
DECISIONS REQUIRED PROCEDURES AND GUIDELINES

    

    1.           Buyer
shall from time to time make recommendations to Seller regarding dispatch
decisions, bidding strategy and plant status communications to the CAISO for the
Project.

     

    2.           Seller
agrees to fully take into account in good faith Buyer’s recommendations but
shall retain the full legal right to make decisions regarding the topics
outlined in No. 1 above.

    
      
         

      

      
        F-1TRANSITION
ASSET MANAGEMENT AGREEMENT

     

    by and
between

     

    WELLHEAD
ELECTRIC EQUIPMENT,  LLC, and

     

    CALIFORNIA
HOLDINGS McCALL, LLC

     

    and

     

    MMC
ENERGY, INC.,

     

    MMC
ENERGY NORTH AMERICA, LLC,  and

     

    MMC
ESCONDIDO, LLC

     

    Dated as
of May 21, 2009

    
      
        
          	
                   

                	 
      	  
      	
                   

                	
                   

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TRANSITION
ASSET MANAGEMENT AGREEMENT

    Escondido
Project

    

    This
Transition Asset Management Agreement (this “Agreement”) dated as of
May 21, 2009 (the “Execution Date”), is by and
between California Holdings McCall, LLC, a Delaware limited liability company
(“Buyer”), Wellhead
Electric Equipment, LLC, a Delaware limited liability company (the “Guarantor” and, together with
Buyer, “Buyer Parties”),
and each of  MMC Energy, Inc., a Delaware corporation (“Seller”), MMC Energy North
America, LLC, a Delaware limited liability company(“Parent”) and MMC Escondido,
LLC, a Delaware limited liability company (“Company” and, together with
Seller and Parent, the “Seller
Parties” and each of (i) the Seller Parties collectively, on the one hand
and (ii) the Buyer Parties collectively, on the other hand, a “Party”).

     

    WHEREAS, Buyer, Seller and
certain other parties have entered into a Membership Interests Purchase
Agreement, dated as of May 21, 2009 (the “Purchase Agreement”; and all
capitalized terms not defined herein have the meanings ascribed to them
therein), pursuant to which among other things Seller has agreed to sell to
Buyer and Buyer has agreed to purchase from Seller the MMC 2 Interest in MMC 2,
the Acquired Company to which the relevant Purchased Assets and certain related
liabilities (if any) in respect thereof are to be transferred;

     

    WHEREAS, the Purchased Assets
under the Purchase Agreement include that certain electric power generating
facility and related site located in Escondido, California (the “Project”) and certain assets
related thereto, which Project and related assets are owned, as of the date
hereof, by the Seller Parties;

     

    WHEREAS, (i) by its execution
of this Agreement, Seller has agreed commencing on the Execution Date to allow
Buyer, Guarantor and their representatives access to the Project to undertake,
as they may elect, the maintenance, improvement or upgrade of the equipment
associated with the Project, and (ii) in accordance with Section 4.16 of the
Purchase Agreement, the Seller Parties desire to transfer to Buyer the right to
manage the operation of the Project and certain related assets as specified in
this Agreement commencing on the date specified in writing by Buyer to Seller,
provided such date is at least three (3) Business Days after the date of such
notice (the “Effective
Date”), in each case, for the applicable term set forth herein for such
rights of Buyer, and Buyer desires, as it may elect, to undertake such
maintenance, improvement or upgrade of the equipment and such operational and
management control over the Project and such related assets, in each case,
subject to the limitations set forth herein;

     

    NOW THEREFORE, the Seller
Parties and Buyer, each agreeing to be bound hereby and acknowledging the
sufficiency of the consideration, promises and commitments made one to the other
agree to the promises and obligations set forth herein:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    ARTICLE
I

    TERM

     

    1.1           Term.  The
term of this Agreement shall commence on the Execution Date and shall continue
until the earliest of  (i) the Closing; (ii) the date and time of
termination of this Agreement pursuant to Article VIII, or (iii) such date and
time as otherwise agreed by the parties (the “Term”); provided that (1) the
applicable term hereunder for the performance of, to the extent elected by
Buyer, of the Remediation Services hereunder and other rights and obligations
described herein in respect of the Remediation Services shall commence upon the
Execution Date and shall continue until the end of the Term (such applicable
term relating to the Remediation Services, the “Remediation Services Term”)
and (2) the applicable term hereunder for the performance of the Transition
Services shall commence at 12:00 a.m. (the “Effective Time”) on the
Effective Date and shall continue until the end of the Term (such applicable
term relating to the Transition Services, the “Transition Services Term”).

     

    ARTICLE
II

    SCOPE
OF SERVICES

     

    2.1           Scope of
Services.

     

    (a)           Commencing
on the Execution Date and continuing throughout the Remediation Services Term,
Buyer, at Buyer’s and Guarantor’s sole cost and expense (except as specifically
contemplated in Section 4.14(a) of the Purchase Agreement), may, if they so
elect and in their sole discretion, perform such items of maintenance,
improvement or upgrade of the Project (subject to (i) the reporting requirements
below and (ii) upon Buyer’s and/or Guarantor’s request, the execution and
delivery by Seller or another applicable Seller Party to Buyer and/or Guarantor
of one or more bailment agreements (or similar agreements) in form and substance
reasonably satisfactory to all Parties with respect to any Replacement Property
pursuant to which Seller or such other applicable Seller Party acknowledges the
creation and existence of a bailment and agrees to only accept instructions from
the Buyer and/or Guarantor with respect to the treatment, storage, maintenance,
use and disposition of any such Replacement Property), as Buyer or Guarantor may
elect to bring the equipment up to its desired maintenance standards as and to
the extent contemplated by the Wellhead Reports or as otherwise notified in
advance by Buyer as remediation work in any advance notice (with material
details included therein) provided by Guarantor to Seller (collectively, the
“Remediation Services”),
and Buyer and its Affiliates and representatives are expressly authorized to
perform the Remediation Services.

     

    (b)           Commencing
at the Effective Time and continuing throughout the Transition Services Term,
each of the Seller Parties hereby engages Buyer, and Buyer hereby accepts such
engagement, to undertake all commercially reasonable actions necessary or
desirable for the management and operation of the Project and any assets and
activities related thereto, including the management of the compliance by the
Project with and performance by the Project under the Resource Adequacy
Contracts and the other project contracts listed on Exhibit C (the “Project Contracts”; and the
counterparty to each such Project Contract, individually a “Project Contractor”) and the
Seller Permits related to the Project, as the sole and exclusive agent of each
Seller Party.  Buyer shall use commercially reasonable efforts to
perform such activities in a manner that does not give rise to any breach or
other violation on the part of a Seller Party under the provisions of any
Project Contract and shall use commercially reasonable efforts to perform all
the applicable Company and Parent operational and asset management services
appurtenant thereto, including without limitation the services more specifically
described on Exhibit
A (collectively, the “Transition
Services”).

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (c)           As
part of the Transition Services, subject to the terms of this Agreement, Buyer
shall have the right and obligation and all requisite authority to undertake all
day-to-day operation and management decisions of the Company and Parent relating
to the Project and its related assets except for decisions relating to the
actions or activities set forth below (“Owner Decisions”) for which
the Seller Parties shall have sole responsibility; provided that,
notwithstanding the foregoing, the Seller Parties shall not take any of the
Owner Decisions set forth in Sections 2.1(c)(i) through 2.1(c)(iv) below without
first obtaining the consent and direction of Buyer with respect to such actions
or activities, which consent and direction from Buyer shall not be unreasonably
withheld:

     

    (i)           terminating,
amending or waiving, in any respect, any material duty of a Project Contractor
under any of the Project Contracts;

     

    (ii)           entering
into any new agreement on behalf of the Company or for the benefit of the
Project;

     

    (iii)           the
cancellation, amendment to or material diminution of the Company’s or the
Project’s right in any way under, any Seller Permits, approvals, licenses or
other similar rights or benefits held by the Company;

     

    (iv)           the
termination of any material vendor account of the Company or Parent, although
nothing herein shall be construed as limiting Buyer’s choice of reputable
vendors to perform any services as Buyer so desires;

     

    (v)           take
any action that would constitute a change in control under the Federal Power Act
, as amended, or the regulations and administrative decisions promulgated
thereunder or which affect the Company’s market based rate tariff;

     

    (vi)           making
dispatch decisions under Energy Management Contracts (as defined in Exhibit C); provided,
however, that the Seller Parties shall make all such dispatch decisions in
accordance with the procedures and guidelines set forth in Exhibit F hereto;
and

     

    (vii)           taking
any action with respect to any Excluded Asset, including the cash and accounts
receivable held by Parent;

     

    provided that nothing in this
Section 2.1(c) shall be construed to limit the obligations of any party under
the Purchase Agreement.

    
      
         

      

      
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    (d)           For
the avoidance of doubt, the Remediation Services and Transition Services shall
not include, and Buyer shall not have any responsibility for, any of the
activities  set forth in Exhibit E, all of
which shall remain the obligation of Seller, the Company or Parent
(collectively, the “Seller
Obligations”).  In addition to the Seller Obligations, the
Seller Parties shall each (i) provide or cause to be provided to Buyer, its
subcontractors, agents, representatives and employees full unconditional access
to the Project at all times and without prior notice (but without limiting the
notice requirements under Section 2.2(a)), for the purpose of conducting the
Remediation Services and Transition Services and the other obligations of Buyer
hereunder, (ii) cause each Project Contractor to cooperate and coordinate with
Buyer in order to permit Buyer to perform the Remediation Services and
Transition Services, (iii) provide or cause to be provided to Buyer full access
to any computer monitoring systems and information systems relating to the
Project and the related assets and the performance by Buyer of the Remediation
Services and Transition Services and (iv) make such payments under the Project
Contracts required to be made by the Seller Parties thereunder, and provide such
funds, including those contemplated pursuant to Sections 3.4 and 3.5, so as to
permit Buyer to perform its obligations hereunder; provided, however, that the
Seller Parties may withhold any such payments under the Project Contracts in the
event of a good faith dispute between the Seller Parties and a Project
Contractor and notice to Buyer.  Buyer shall in any event have no
responsibility for any failure or delay in performing the Transition Services
due to any failure of any Seller Party to perform the Seller Obligations and its
other obligations hereunder.  Other than the costs and expenses
associated with the Remediation Services (“Remediation Expenses”), which
shall be borne by Buyer or Guarantor (except as specifically contemplated by
Section 4.14(a) of the Purchase Agreement), Buyer may, but in no event shall be
obligated to, make payments on its own account on behalf of a Seller Party in
relation to its performance of the Transition Services or
otherwise.

     

    (e)           As
part of the Transition Services, subject to Section 2.1(c), Buyer may arrange
for the engagement of Affiliates or independent contractors necessary for the
performance by Buyer of the Transition Services, and the costs of such
Affiliates or independent contractors shall, without duplication, be for the
account of the Seller Parties as an Operating Expense (as defined below) or, if
advanced by Buyer at Buyer’s sole option (but without any obligation to do
so),  recoverable by Buyer as a Buyer Operating Expense in accordance
with this Agreement.

     

    2.2           Reporting
Requirements.

     

    (a)           Advance
Notices.  Buyer shall provide commercially reasonable advance
notice to Seller’s Designated Representative before (i) undertaking the removal
or replacement of any material asset of the Company or Parent from the Project
or (ii) declaring an outage at the Project (other than any forced
outages).

     

    (b)           Operations
Reports.

     

    (i)           During
the Transition Services Term, the Seller Parties agree to cause Pro Energy
Services, Inc. (“Pro”)
to provide daily, weekly, and monthly reports consistent with its past practice
to each of Buyer and Seller, provided that Buyer may
tailor such reporting at its discretion.  Buyer shall cooperate with
the Seller Parties in causing Pro to provide such reports.

     

    (ii)           For
each two week period falling after the Effective Date and during the Transition
Services Term (each, a “Reporting Period”), Buyer
shall use commercially reasonable efforts to provide to Seller a report setting
forth in reasonable detail the expenses incurred by the Buyer in the performance
of the Transition Services in accordance with the terms of this Agreement
(collectively, the “ Buyer
Operating Expenses”) for each Reporting Period, said report to be
delivered on the Friday after each respective Reporting Period.  For
the avoidance of doubt, Buyer Operating Expenses shall not include (x) any
expenses or costs incurred by Buyer or its Affiliates in connection with or as
Remediation Expenses or (y) any costs to Buyer of any insurance obtained by
Buyer pursuant to Sections 6.2 and 6.3.  Such bi-weekly report shall
also (1) specify material scheduled activities to occur in the future, (2)
identify any of the material Project assets physically removed and/or replaced,
and (3) identify all other material equipment or other items installed as part
of the Project.  The bi-weekly report shall have attached detailed
time sheets for any of Buyer’s personnel working at the Project and shall
clearly distinguish between Remediation Expenses and Buyer Operating
Expenses.  Seller shall have the right to review such time sheets and
allocations.

    
      
         

      

      
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    (iii)           During
the Transition Services Term, the Seller Parties shall cause Macquarie Cook
Power Inc. (“Macquarie”)
to provide periodic revenue reports to Buyer concurrent with their delivery to
any Seller Party.

     

    (iv)           During
the Transition Services Term, Buyer shall reasonably communicate with Seller
regarding the status of the Transition Services at such times as Seller may
reasonably request.

     

    (c)           Financial Reports to
Buyer.  The Seller Parties shall continue to have
responsibility for and to keep the books and records of the Project, the Company
and Parent in accordance with GAAP, and, during the Transition Services Term,
shall use commercially reasonable efforts to provide to Buyer (i) separate
monthly financial statements (consisting of an income statement, balance sheet,
detailed general ledger and detailed check register) for the Project and each of
Company and Parent, and (ii) a calculation of the EBITDA as determined in
accordance with Article III  hereunder, in each case within thirty
(30) days of the end of each month during the Transition Services
Term.  Buyer shall promptly forward to Seller for processing any
invoices relating to Buyer Operating Expenses (which invoices shall be issued on
a monthly basis) and any other third party invoices for payments or expenses or
other similar financial record with respect to the Project, the Company or
Parent received directly by Buyer, and shall copy Seller on any purchase orders
issued by Buyer.

     

    (d)           Reports to Third
Parties.  To the extent not otherwise required to be prepared
or submitted by a Project Contractor under a Project Contract, during the
Transition Services Term, Buyer shall prepare and submit as agent for and on
behalf of Seller, all those reports as required by the North American
Electricity Reliability Council, the U.S. Department of Energy, California
Public Utilities Commission, the U.S. Energy Information Administration, the
California Independent System Operator or any other governmental entities or
self-regulatory organizations relative to the operations of the Project; provided that Seller shall
have provided Buyer on a timely basis with such information as is necessary to
prepare such reports that is not otherwise available to Buyer pursuant to its
performance of the Transition Services.  During the Transition
Services Term, (i) Seller shall cooperate with Buyer in the collection of
relevant information and preparation of such reports to the extent reasonably
necessary and (ii) Buyer shall provide to Seller a copy of all reports prepared
and submitted by Buyer pursuant to this subsection 2.2(d).

     

    2.3           Standard of
Care.  Buyer shall use commercially reasonable efforts to
perform the Transition Services and any Remediation Services it undertakes in a
commercially reasonable manner and (i) in the case of the Transition Services,
in accordance with the terms and conditions of the Project Contracts (it being
acknowledged, however, that Buyer is assuming the operations and management of
the Project as of the Effective Date in its existing condition, and Buyer makes
no guarantee or warrantee of any nature whatsoever as to the performance (or
non-performance) of the Project during the Term) and (ii) in the case of the
Remediation Services, so as not give rise to any breach or other violation on
the part of a Seller Party under the provisions of the Project Contracts in
respect of the Project, or under the terms of any Seller Permit or applicable
Law and to plan such Remediation Services to minimize both the length and number
of outages and other operational disruptions.  No other obligation or
duty (fiduciary or otherwise) or standard of care of Buyer shall be implied
under the terms of this Agreement or under applicable Law except as expressly
set forth in this Section 2.3.

    
      
         

      

      
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    2.4           Dealings with
Seller.  In all dealings with any Seller Party and in
performing the Transition Services and any Remediation Services, Buyer shall be
entitled to rely upon any instruction, statement or approval given to Buyer by
the Seller’s Designated Representatives, who shall have the authority to act and
make decisions on behalf of each Seller Party with respect to this
Agreement.

     

    2.5           Guaranty.  Without
limiting Section 7.3, Guarantor hereby absolutely, unconditionally and
irrevocably guarantees, as a primary obligor and not merely as a surety, to
Seller Parties the punctual performance of all covenants, agreements,
undertakings and obligations of the Buyer under this Agreement.

     

    ARTICLE
III

    CONSIDERATION

     

    3.1           Buyer Reimbursement and
Purchase Price Reduction.  In consideration for Buyer’s
providing the Transition Services, from and after the commencement of the
Transition Services Term, Buyer shall (i) be reimbursed for the Buyer Operating
Expenses as provided in Section 3.4 and (ii) in the event the Closing under the
Purchase Agreement shall occur, be entitled to a reduction of the Purchase Price
payable at the Closing under the Purchase Agreement in an amount equal to (1)
from and after the commencement of the Transition Services Term until the giving
of the Buyer EBITDA Notice, 50% of the EBITDA arising from the
Project  during such portion of the Transition Services Term and (2)
from and after the giving of a Buyer EBITDA Notice until the end of the
Transition Services Term, 100% of the EBITDA arising from the Project during
such portion of the Transition Services Term, if such aggregate EBITDA over the
Transition Services Term allocated to Buyer is a positive number (the “Positive EBITDA
Amount”).  For purposes of this Agreement, “EBITDA” arising from the
Project during the Transition Services Term (or the applicable portion thereof)
shall mean the following items as determined in accordance with
GAAP:

     

    (a)           the
sum (without duplication) of:

     

    (x)           all
revenue generated or accrued by the Project and its related assets (including
the Project Contracts) during the Transition Services Term (or the applicable
portion thereof);

     

    (y)           except
as otherwise expressly provided in Section 3.6(c) or (d), all proceeds payable
under any insurance maintained by any Seller Party with respect to property
damage or loss with respect to the Project that occurs during the Transition
Services Term (or the applicable portion thereof); and

    
      
         

      

      
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    (z)           if
Buyer so elects, all proceeds payable under any insurance maintained by Buyer
for Seller-owned equipment with respect to property damage or loss with respect
to the Project that occurs during the Transition Services Term (or the
applicable portion thereof);

     

    less

     

    (b)           the
sum of:

     

    (w)           Buyer
Operating Expenses actually reimbursed by the Seller Parties pursuant to Section
3.3;

     

    (x)           operating
and maintenance expenses (other than Buyer Operating Expenses) with respect to
the Project and its related assets (including the Project Contracts) accrued
during the Transition Services Term (or the applicable portion thereof) and, to
the extent not arising under the Project Contracts or otherwise representing a
recurring cost, reasonably approved by Buyer in the performance of the
Transition Services, including, without duplication, all amounts payable for the
period falling in the Transition Services Term (or the applicable portion
thereof) (1) to Project Contractors under the Project Contracts, (2) under
leases, (3) for property taxes and other non-income or franchise taxes payable
with respect to the Project (as pro-rated for the period falling under the
Transition Services Term (or the applicable portion thereof)), (4) utilities
(including telecommunications), (5) interconnection costs, (6) in connection
with compliance with ongoing requirements of existing permits relating to the
Project, (7) in connection with the consulting services of Donelle Griffon with
respect to the current permitting activities with respect to the Project (and
excluding, for the avoidance of doubt, any services relating to the transfer of
any permits as contemplated under the Purchase Agreement) and (8) other repair
and  maintenance expenses and other direct operating expenses (but
excluding Remediation Expenses, any extraordinary or non-recurring items and
damage or loss with respect to the Project for which an insurance claim may be
made (which damage or loss is covered by clause (y) below));

     

    (y)           except
as otherwise expressly provided in Section 3.6(c) or (d), any costs of repairs
and other expenses incurred with respect to property damage or loss with respect
to the Project that occurs during the Transition Services Term (or the
applicable portion thereof) for which an insurance claim may be made under any
insurance maintained by Buyer or any Seller Party; and

     

    (z)           any
fines or penalties assessed on the Project, Company or Parent by a Governmental
Authority or under a Project Contract as a result of the performance of the
Transition Services or the Remediation Services by Buyer hereunder during the
Transition Services Term (or the applicable portion thereof) to the extent (i)
not borne or payable by Buyer or Guarantor under Section 3.8 or (ii) not borne
or payable by any Project Contractor under the terms of the related Project
Contract or otherwise;

    
      
         

      

      
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    (collectively,
all such expenses in this clause (b), “Operating Expenses”); provided that, for the
avoidance of doubt, Operating Expenses shall not include (A) any cost, expense,
charge, fine or penalty of any nature arising as a result of events or acts that
occurred prior to or after the Transition Services Term, (B) notwithstanding any
allocation under GAAP to the contrary, any item of cost or expense that does not
directly result from acts or operations occurring during the Transition Services
Term, and (C) any allocation to the Project, Company or Parent of any employee
or overhead expense of any Seller Party or any of their Affiliates or any costs
and expenses of any Seller Party arising from activities other than those
directly related to the Project.

     

    3.2           Buyer EBITDA
Notice.  At any time during the Transition Services Term, Buyer
may deliver a written notice to Seller that, from and after the date of such
written notice, Buyer desires to have the benefit of 100% of the Positive EBITDA
Amount for purposes of Section 3.1 arising after the date of such written notice
until the end of the Transition Services Term (a “Buyer EBITDA
Notice”).

     

    3.3           Seller Purchase Price
Increase.  In the event (i) the Closing under the Purchase
Agreement shall occur and (ii) the aggregate amount of the EBITDA of the Company
from the Project allocated to Buyer during the Transition Services Term as
calculated pursuant to Section 3.1 (including the specified allocation to Buyer
of such EBITDA before and after the giving of any Buyer EBITDA Notice, if any)
is a negative number (the “Negative EBITDA Amount”), then
Seller shall be entitled to an increase of the Purchase Price payable at the
Closing under the Purchase Agreement in an amount equal to the lesser of (1)
such Negative EBITDA Amount and (2) the Negative EBITDA Amount based on a
calculation where (x) the maximum Negative EBITDA Amount during the portion of
the Transition Services Term when Buyer shall be entitled to 50% of the EBITDA
under Section 3.1 shall be $250,000 and (y) the maximum Negative EBITDA Amount
during the portion of the Transition Services Period when Buyer shall be
entitled to 100% of the EBITDA under Section 3.1, together with any Negative
EBITDA Amount allocated under clause (x), shall be $500,000 (the “Capped Negative EBITDA
Amount”); provided that in no event
shall the amount of the adjustment to the Purchase Price to be made pursuant to
this Section 3.3, together with any other amounts payable by Buyer under this
Agreement, exceed the Maximum Liability Amount.

     

    3.4           Reimbursement of Buyer
Operating Expenses.  From and after the commencement of the
Transition Services Term, the Seller Parties shall reimburse Buyer for all Buyer
Operating Expenses and any other Operating Expenses advanced by Buyer (at its
sole discretion) on behalf of the Project or any Seller Party within thirty (30)
days of the receipt by Seller of Buyer’s invoice therefor pursuant to Section
2.2(c); provided that
the amount of Buyer Operating Expenses required to be reimbursed by the Seller
Parties under this Section 3.4 with respect to routine labor costs of Buyer
shall not exceed $10,000 per month or such higher amount as shall be approved by
Seller (the “Buyer Labor Cost
Monthly Cap”), it being expressly acknowledged and agreed by the parties
that such Buyer Labor Cost Monthly Cap shall not apply to any major repairs
undertaken by Buyer as part of its performance of the Transition
Services.  This obligation of the Seller Parties shall remain in
effect whether or not the Closing occurs under the Purchase
Agreement

     

    3.5           Revenue and Operating
Expense Allocation During the Term.  Notwithstanding anything
to the contrary set forth in this Agreement (but without limiting the
adjustments to the Purchase Price contemplated pursuant to Sections 3.1 and 3.3
or the Termination Payment contemplated in Section 3.6), (i) all revenue
generated or accrued by the Project and its related assets (including the
Project Contracts) during the Term shall be for the account of the Seller, the
Company or Parent, as the case may be, and (ii) all Operating Expenses during
the Term shall be the responsibility of the Seller Parties.

    
      
         

      

      
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    3.6           Termination
Consideration.  (a)  In the event that (i) the
Closing does not occur, (ii) the Purchase Agreement is terminated, (iii) in
connection with such termination Buyer shall be entitled to a return of the
Deposit under the terms of the Purchase Agreement and (iv) there shall be a
Positive EBITDA Amount for the Transition Services Term so that a decrease to
the Purchase Price would have been in effect under Section 3.1 if the Closing
had occurred, then, in addition to the reimbursement of the Buyer Operating
Expenses pursuant to Section 3.4, the Seller Parties shall pay or cause to be
paid to Buyer a termination payment under this Agreement in an amount equal to
the Positive EBITDA Amount that would have been applied as a decrease to the
Purchase Price under Section 3.1 (the “Seller Termination
Payment”).

     

    (b)           In
the event that (i) the Closing does not occur, (ii) the Purchase Agreement is
terminated, (iii) in connection with such termination Buyer shall be entitled to
a return of the Deposit under the terms of the Purchase Agreement and (iv) there
shall be Negative EBITDA Amount for the Transition Services Term so that an
increase to the Purchase Price would have been in effect under Section 3.3 if
the Closing had occurred, then Buyer shall pay or cause to be paid to Seller a
termination payment under this Agreement in an amount equal to the Negative
EBITDA Amount that would have been applied as an increase to the Purchase Price
under Section 3.3 (the “Buyer
Termination Payment”).

     

    (c)           Notwithstanding
the foregoing provisions of this Section 3.6 or anything to the contrary set
forth in Section 6.1, if (i) the Closing does not occur, (ii) the Purchase
Agreement is terminated, (iii) in connection with such termination Buyer shall
be entitled to a return of the Deposit under the terms of the Purchase Agreement
and (iv) there has been an event of loss with respect to the Project such that
there shall be proceeds under the Existing Project Insurance constituting all,
or substantially all, of the replacement value of the Project (a “Total Loss Event”), then for
purposes of calculating any termination payment payable to Buyer or Seller under
this Section 3.6, (x) 50% of the amount of such insurance proceeds paid under
the Existing Project Insurance with respect to such Total Loss Event shall be
payable by the Seller Parties to Buyer as an additional termination payment
hereunder (a “Total Loss
Payment”), and (y) the amount of such insurance proceeds payable under
the Existing Project Insurance and any amounts relating to the cost of repair or
replacement cost of the Project shall not be included in the calculation of
EBITDA under Section 3.1.

     

    (d)           Notwithstanding
the foregoing provisions of this Section 3.6 or anything to the contrary set
forth in Section 6.1, if (i) there shall have been an event of loss (other than
a Total Loss Event) with respect to the Project (a “Material Insured Event”), (ii)
Buyer shall elect not to proceed with a Closing under the Purchase Agreement
solely on the basis of such Material Insured Event in accordance with the terms
of the Purchase Agreement, (iii) the Purchase Agreement is terminated as a
result thereof and (iv) in connection with such termination Buyer shall be
entitled to a return of the Deposit under the terms of the Purchase Agreement,
then for purposes of calculating any termination payment payable to Buyer or
Seller under this Section 3.6, (i) the amount of insurance proceeds payable
under the Existing Project Insurance with respect to such Material Insured Event
shall not be included for purposes of Section 3.1(a)(y) of the EBITDA
calculation and (ii) the costs of all repairs and other expenses incurred with
respect to such Material Insured Event shall not be included for purposes of
Section 3.1(b)(y) of the EBITDA calculation.

    
      
         

      

      
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    (e)           For
purposes of the calculation of any termination payment under this Section 3.6,
each Party shall provide to the other Party such additional details pertaining
to the calculation of EBITDA or a Total Loss Payment that is in its possession
as is reasonably requested by the other Party.  Within fourteen (14)
days following the termination of the Purchase Agreement, Seller shall make an
initial calculation of the Seller Termination Payment, Buyer Termination Payment
and/or Total Loss Payment and give written notice of such initial calculations
to Buyer.  Each of the Seller Termination Payment, Buyer Termination
Payment and/or Total Loss Payment, as applicable, shall be payable within thirty
(30) days of the receipt by the Party required to make such payment of the
invoice setting forth such Seller Termination Payment, Buyer Termination
Payment  and/or Total Loss Payment or, if later, within ten (10) days
of receipt of the insurance proceeds included within such payment from the Party
entitled to the same as set forth hereunder.

    

    3.7           Calculation of
EBITDA.

     

    (a)           At
least seven (7) days prior, but no earlier than fourteen (14) days
prior,  to the date expected to be the Closing Date as agreed between
the Parties, Seller shall give Buyer written notice of (i) such expected date of
the Closing and (ii) the amount, reasonably estimated by Seller, acting in good
faith, of the EBITDA for the estimated Transition Services Term and the
applicable EBITDA Positive Amount or EBITDA Negative Amount, as the case may be,
based on the Closing Date occurring on the expected Closing date, together with
such information regarding the calculation of such estimated amounts as Buyer
may reasonably request.  If Buyer identifies any error in any of the
estimates used or computations undertaken by Seller, Buyer will promptly (and in
any event within three (3) days after the receipt of such written notice from
Seller) notify Seller of such error in writing with specificity  (an
“Error
Notice”).  If Buyer does not give such an Error Notice, the
estimated amount of the EBITDA and the applicable EBITDA Positive Amount or
EBITDA Negative Amount notified by Seller under this Section 3.7 shall be the
EBITDA and applicable EBITDA Positive Amount or EBITDA Negative Amount, as the
case may be, to be applicable under the Purchase Agreement for purposes of the
calculation of the Purchase Price payable by Buyer at the Closing
Date.

     

    (b)           If
Buyer gives such Error Notice, the parties will promptly meet and review the
estimates and computations and, if necessary, Seller will recalculate the EBITDA
and applicable EBITDA Positive Amount or EBITDA Negative Amount, as the case may
be, to correct any error so identified and agreed by Seller, and provide such
recalculated amounts to Buyer for Buyer’s review pursuant to this Section
3.7.  If the parties are not in agreement as to the estimates and
computation of  EBITDA and applicable EBITDA Positive Amount or EBITDA
Negative Amount, as the case may be, at the time all other conditions to Closing
have been satisfied or waived, the EBITDA and applicable EBITDA Positive Amount
or EBITDA Negative Amount, as the case may be, under the Purchase Agreement
shall be the last amounts estimated by Seller pursuant to this Section 3.7 (the
“Closing EBITDA
Amounts”); provided that, in the event
that the amount in dispute between the parties with respect to the Closing
EBITDA Amounts is greater than or equal to $100,000, then the parties agree
that, as part of the Closing procedures under the Purchase Agreement, an amount
equal to such disputed amount shall be deducted from the Purchase Price and
deposited into the Escrow Account, subject to release from the Escrow Account
only upon the Joint Written Direction of Seller and Wellhead.

    
      
         

      

      
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    (c)           If
the Closing shall be delayed for any reason for more than five (5) Business Days
after the expected Closing Date assumed in the notices delivered by Seller under
this Section 3.7, such notices shall become void and Seller shall send another
written notice to Buyer for the newly expected Closing Date in accordance with
this Section 3.7.

     

    (d)           If
the Purchase Price is determined on the basis of disputed Closing EBITDA Amounts
under this Section 3.7, after the Closing Date, the parties will continue to
work in good faith to resolve any disagreement among the parties with respect to
the Closing EBITDA Amounts, as the case may be, utilized to determine the
Purchase Price and to determine any mutually agreed revised amounts within
thirty (30) days following the Closing Date (the “EBITDA Adjustment Period”),
taking into account all financial information and reports received or updated
during that period with respect to the EBITDA calculations (it being understood
that during the EBITDA Adjustment Period, Buyer and Seller may revise their
respective estimates used for the Closing EBITDA Amounts).   If
(i) the parties agree on a revised EBITDA and EBITDA Positive Amount or EBITDA
Negative Amount, as the case may be, during the EBITDA Adjustment Period or (ii)
the parties do not so agree during the EBITDA Adjustment Period and there is a
final determination of such dispute in accordance with this Agreement of the
applicable EBITDA and EBITDA Positive Amount or EBITDA Negative Amount, as the
case may be (in the case of a resolution under either of clause (i) and (ii),
the “Final EBITDA
Amounts”), the Purchase Price amount under the Purchase Agreement shall
be recalculated using such Final EBITDA Amounts (the “Revised Purchase Price
Amount”) and (1) if the Revised Purchase Price Amount is greater than the
amount of the Purchase Price paid under the Purchase Agreement, Buyer shall pay
to Seller such differential and (2) if the Revised Purchase Price Amount is less
than the amount of the Purchase Price paid under the Purchase Agreement, Seller
shall pay to Buyer such differential, in each case together with interest
thereon at a rate equal to the prime rate as published by Bank of America from
the Closing Date until the date such payment is made, in immediately available
finds by wire transfer to the accounts designated in writing by the Party
entitled to such payment.  If a Final EBITDA Amounts is determined
pursuant to clause (ii) above, the Party determined pursuant to such final
determination to be most in error in its proposed applicable Final Adjusted
Amounts shall bear all of the costs of the proceedings leading to such final
determination, including the reasonable legal costs and expenses of the other
Party with respect thereto, and shall reimburse the other Party for any such
amounts incurred by the other Party at the time of making the payment referenced
in the immediately preceding sentence.

     

    (e)           Nothing
in this Section 3.7 shall be construed to modify or affect the effectiveness or
timing of a Closing under the Purchase Agreement on the basis of disputed
Closing EBITDA Amounts.

     

    3.8           Penalties.  If
any penalties, fines, special charges or similar items are incurred under the
Resource Adequacy Contracts in respect of the Project, any Seller Permit in
respect of the Project or applicable Law as a result of actions taken by Buyer in connection with
the Remediation Services performed by Buyer or Guarantor or their
Representatives, Buyer shall, subject to Section 7.3, immediately pay over to
Seller the amount of such item or, at the election of Seller, Seller shall have
the right of offset for the amount of such item against the Deposit and Seller
and Buyer shall, or shall cause Wellhead to, promptly issue a Joint Written
Direction to the Escrow Agent to cause the Escrow Agent to immediately pay
over to the Seller
such item.  In the event of any offset from the Deposit, the amount
payable under Section 1.3(a)(iii) of the Purchase Agreement shall be increased
by the amount of such offset.

    
      
         

      

      
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    ARTICLE
IV

    COOPERATION

     

    4.1           Designated
Representatives; Meetings.  To facilitate the
efficient performance of the Remediation Services and the Transition Services,
Buyer and the Seller Parties hereby designate their initial respective
representatives (“Designated
Representatives”) as
identified at Exhibit
B hereto, as may be
revised from time to time with reasonable notice prior to the effectiveness of
such change in personnel, as the individuals in charge of primary contact
between the Seller Parties, on the one hand, and Buyer, on the other, with
respect to this Agreement during the Term.  The Designated
Representatives shall use commercially reasonable efforts to meet in person, or
if not by teleconference, no less than bi-weekly, and more often as may be
requested by Seller or Buyer.

     

    ARTICLE
V

    BOOKS,
RECORDS AND ACCOUNTING

     

    5.1           Seller Parties’
Records.  At all times during the Term, each Seller Party shall
maintain a reasonably complete and accurate set of files, records, books, and
accounts (“Records”) of
all business activities and operations during the Term for the Project,
including those undertaken by the Seller Parties.  Each Seller Party
shall make all such Records available to Buyer at all times as required herein,
or otherwise for copying and review upon request, including all such Records
relevant to the calculation of EBITDA under Article III as Buyer may request
from time to time both during and after the Transition Services Term as
reasonably necessary to permit the calculation of EBITDA.

     

    5.2           Buyer’s
Records.  At all times during the Term, Buyer shall maintain a
reasonably complete and accurate set of Records of all business activities and
operations conducted by the Buyer or any of its Affiliates or Representatives in
connection with its performance by Buyer of the Transitions Services or
Remediation Services.  Buyer shall make all such Records available to
the Seller Parties at all times as required herein, or otherwise for copying and
review upon request, including all such Records relevant to the calculation of
EBITDA under Article III as Seller may request from time to time both during and
after the Transition Services Term as reasonably necessary to permit the
calculation of EBITDA.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    ARTICLE
VI

    INSURANCE

     

    6.1           Seller
Insurance.  Throughout the Term, the Seller Parties shall
maintain all insurance related to the Project as currently in place in the name
of the current insured in accordance with all insurance requirements applicable
to the Project, including those set forth in the Project Contracts (the “Insurance Requirements”), all
as further set forth on Exhibit D hereto with
respect to the Seller Parties, including without  limitation any
amendments or modifications thereto required by the parties providing financing
to Seller Parties or for the Project (collectively, the “Existing Project
Insurance”);  provided that the Seller
Parties shall cause Buyer to be named as (i) an additional insured and a loss
payee under such Existing Project Insurance relating to commercial general
liability insurance and (ii) as an additional insured for all other Existing
Project Insurance, and require the insurers thereunder to waive subrogation
against Buyer and its Affiliates together with their respective officers,
directors, Affiliates and employees.  In no event shall the Seller
Parties be required to cause Buyer to be named as a loss payee under any
property damage insurance and business interruption insurance with respect to
the Project.  Should Buyer terminate the Purchase Agreement solely as
a result of a Material Insured Event, Buyer shall be deemed to have waived its
right to payment under any property damage insurance or business interruption
insurance maintained as part of the Existing Project Insurance in connection
with such Material Insured Event.

     

    6.2           Buyer Property
Insurance.  Buyer may, at its option and its own expense (but
without any obligation to do so), obtain it its own property and business
interruption insurance with respect to the Project and the Buyer's assets and
equipment located on the Project site (the “Buyer Property Damage
Insurance”).  In no event shall Buyer be required to cause any
Seller Party to be named as an additional insured or a loss payee under any
Buyer Property Damage Insurance obtained by Buyer.  The Seller Parties
shall reasonably cooperate with Buyer should it desire to obtain any such Buyer
Property Damage Insurance.

     

    6.3           Buyer Liability
Insurance.  During the Term, Buyer shall maintain insurance
coverage as described in Exhibit D to be
maintained by Buyer.

     

    6.4           Notice of
Damage.  Each Party shall promptly notify the other Party of
any actual or potential claim under any of the insurances provided by either
Party under the terms of this Agreement.  Each such notice shall be
accompanied by full details of the incident giving rise to such
claims.  Each Party shall provide the other Party with all such
commercially reasonable assistance as may be required for the notification,
preparation, negotiation and resolution of any claims under insurance maintained
pursuant to this Agreement.

     

    ARTICLE
VII

    LIMITATION
OF LIABILITY

     

    7.1           Liability of
Parties.  (a)  Notwithstanding anything to the
contrary set forth in this Agreement, Buyer, its Affiliates and each of their
respective members, directors, officers, agents, employees and representatives
(collectively, the “Buyer
Affiliates”), shall not, either directly or indirectly, be liable,
answerable or accountable to any Seller Parties or any Affiliate thereof, for,
and each of the Seller Parties hereby waives, for the benefit of the Buyer
Affiliates, on its own behalf and on behalf of its Affiliates, all claims,
causes of action and demands whatsoever, in law or at equity (whether any such
claim, action or demand is fashioned in contract, tort, strict liability,
warrantee, or any other manner whatsoever), that it or they may have against the
Buyer Affiliates for, any loss or damage resulting from, incidental to or
relating to the performance or non-performance of the services hereunder by any
of the Buyer Affiliates, including any exercise or refusal to exercise a
discretion, any mistake or error of judgment or any act or omission by the Buyer
Affiliates reasonably believed by the Buyer Affiliates to be within the scope of
authority conferred thereon by this Agreement, except to the extent such loss or
damage (i) was proximately caused by the gross negligence, bad faith or willful
misconduct of such Buyer Affiliates in performing its obligations hereunder,
(ii) is expressly covered as an obligation of the Buyer pursuant to Section 7.2
or (iii) is based upon or arises out of the breach of any covenant, undertaking,
representation or warranty of Buyer under this Agreement.

    
      
         

      

      
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    (b)           Notwithstanding
anything to the contrary set forth in this Agreement, Seller, its Affiliates and
each of their respective members, directors, officers, agents, employees and
representatives (collectively, the “Seller Affiliates”), shall
not, either directly or indirectly, be liable, answerable or accountable to any
Buyer Parties or any Affiliate thereof, for, and each of the Buyer Parties
hereby waives, for the benefit of the Seller Affiliates, on its own behalf and
on behalf of its Affiliates, all claims, causes of action and demands
whatsoever, in law or at equity (whether any such claim, action or demand is
fashioned in contract, tort, strict liability, warrantee, or any other manner
whatsoever), that it or they may have against the Seller Affiliates for, any
loss or damage resulting from, incidental to or relating to the performance or
non-performance of the services hereunder by any of the Seller Affiliates,
including any exercise or refusal to exercise a discretion, any mistake or error
of judgment or any act or omission by the Seller Affiliates reasonably believed
by the Seller Affiliates to be within the scope of authority conferred thereon
by this Agreement, except to the extent such loss or damage (i) was proximately
caused by the gross negligence, bad faith or willful misconduct of such Seller
Affiliates in performing its obligations hereunder, (ii) is expressly covered as
an obligation of the Seller Parties pursuant to Section 7.2 or (iii) is based
upon or arises out of the breach of any covenant, undertaking, representation or
warranty of any Seller Party under this Agreement.

     

    7.2           Indemnification.  Each
Party shall indemnify and hold harmless the other Party, its members, directors,
officers, agents, employees and representatives, from all liability or expense
(including but not limited to reasonable attorney fees and costs of
investigation and defense) on account of any claim by a third party for bodily
injury  (including injury resulting in death) or damage to property
(for the avoidance of doubt, excluding the Project property, for which the
Parties will look exclusively to insurance) against the indemnified Party based
upon or arising out of (A) the negligent act or omission of the indemnifying
Party or the indemnifying Party’s employees, officers, directors, members,
contractors, subcontractors or agents, in connection with the performance of its
respective undertakings under this Agreement or (B) any breach of any covenant,
undertaking, representation or warranty of such indemnifying Party under this
Agreement.  Each Party shall be obligated to indemnify the other Party
under this Section 7.2 only for those claims arising under this Section 7.2 as
to which the Party seeking indemnification shall have given notice to the
indemnifying Party prior to (i) December 15, 2009 in the event the Closing shall
not occur or (ii) the end of the Survival Period in the event the Closing shall
occur.  Any written notice delivered by a Party seeking
indemnification hereunder shall set forth with as much specificity as reasonable
practicable the basis for the claim hereunder and, to the extent reasonably
practicable, a reasonable estimate of the amount thereof.

    
      
         

      

      
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    7.3           Maximum Liability
Amount.  Notwithstanding anything to the contrary set forth in
this Agreement, the maximum aggregate liability of the Buyer Parties to the
Seller Parties (and any Affiliate thereof) for all losses, claims, damages,
liabilities, obligations, costs and expenses (including legal fees) of
whatsoever kind or nature which in any way arise from or in connection with this
Agreement or the performance or non-performance of the Transition Services, the
Remediation Services or any other obligations of a Buyer Party hereunder
(including those arising under Article III and this Article VII) shall be
limited to a total aggregate amount of (i) $250,000, in the event the Buyer does
not deliver to Seller a Buyer EBITDA Notice and (ii) $500,000, in the event the
Buyer does deliver to Seller a Buyer EBITDA Notice (the “Maximum Liability
Amount”).

     

    7.4           Limitation on
Liability.  Notwithstanding anything to the contrary set forth
in this Agreement, in no event shall either Party be liable for any
consequential, exemplary, special, indirect, incidental or punitive loss,
damage, or expenses (or equivalents thereof, no matter how claimed, computed or
characterized, including but not limited to business interruption, lost
business, or savings, or whether claimed as a matter of contract, tort, strict
liability, warrantee, or any other manner whatsoever)) arising out of or in
connection with this Agreement, its subject or its performance or breach of
performance by either Party.  In addition, neither Party shall be
liable to the other Party for any claim, damage, or loss to the extent that same
shall be covered by a manufacturer’s or similar warranty.  Each Party
shall, if necessary or useful for the realization of the benefits thereof,
assign to the respective Party any such warranties, but only if or to the extent
such are assignable.  Each Party shall provide the other Party
reasonable cooperation with respect to any such claims.  The
limitation of liability contained in this Article shall be effective without
regard to said Party’s performance or failure or delay of performance under any
other term or condition of this Agreement.

     

    7.5           Unsafe
Conditions.  Buyer shall not be liable for performance of any
of its obligations hereunder for so long as, and to the extent that, they become
impossible or unsafe to perform as a result of the existence of any hazardous or
potentially hazardous condition at or around the Project site (which condition
Buyer could not reasonably control in the reasonable commercial exercise of its
rights and obligations and which was not caused by Buyer, its subcontractors or
personnel).

     

    7.6           Insurance.  The
indemnifying Party shall be subrogated to the rights of the indemnified Party in
respect of any insurance relating to damages to the extent of any
indemnification payments made hereunder.

     

    ARTICLE
VIII

    TERMINATION

     

    8.1           Termination of Purchase
Agreement.  Upon the termination of the Purchase Agreement in
accordance with its terms prior to the Closing, this Agreement shall terminate
upon the receipt by a Party from the other Party of a written notice of
termination of this Agreement as a result of such termination of the Purchase
Agreement; provided
that (i) at Seller’s option, Buyer shall continue to perform the Transition
Services if then in effect for an additional fourteen (14) days following the
receipt or giving of such notice of termination (taking into account the
intended transition of such Transition Services to the Seller Parties by the end
of such fourteen (14) day period); and (ii) for the avoidance of doubt,
notwithstanding any such termination, Buyer and its Affiliates shall retain the
right to have such access to the Project as Buyer and its Affiliates may
reasonably require in order to remove any upgraded equipment  from the
Project as contemplated in Section 4.14(a) of the Purchase Agreement or other
equipment or property of Buyer or its Affiliates located on the Project
site.  In the event that the Parties agree that Buyer will continue to
perform Transition Services under clause (i) of this Section 8.1 for an
additional fourteen (14) day period, the Parties acknowledge and agree that, for
purposes of the calculation of any termination payment payable pursuant to
Section 3.6, the Transition Services Term shall include such additional fourteen
(14) day period,

    
      
         

      

      
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    8.2           Other Termination;
Default.  Each Party (the “Terminating Party”) may
terminate this Agreement for Cause (as hereinafter defined) of the other Party
(the “Defaulting Party”)
at or after any time that Cause exists upon the giving of written notice of such
termination for Cause to the Defaulting Party.  As used herein, the
term “Cause” means, with
respect to a Party, any of the following in relation to such Party or any of its
Designated Representatives or Affiliates: (i) any willful malfeasance or gross
negligence relating to the Project; (ii) any material breach by such Party under
this Agreement, which breach has not been cured within ten (10) Business Days
after the Terminating Party has given the Defaulting Party written notice
thereof or, if such breach is not reasonably remediable within such ten (10)
Business Day period, the Defaulting Party has failed to commence to take, within
such ten (10) Business Day period, steps to remedy such default and to
thereafter proceed diligently and as expeditiously as reasonably possible to
cure or remedy such breach; or (iii) the discovery or occurrence of any fact or
circumstance that would cause the Defaulting Party to be in material breach of
(i) Section 3.2(d) of the Purchase Agreement in the case of Buyer as the
Defaulting Party or (ii) Section 9.13 of this Agreement or Article II (the
representations and warranties contained in Article II to be deemed made as of
the time as of which they speak as set forth in the Purchase Agreement) or
Section 4.14(a) of the Purchase Agreement in the case of any Seller Party as the
Defaulting Party, which breach cannot be cured to the reasonable satisfaction of
the Terminating Party within ten (10) Business Days of the receipt of notice by
the Defaulting Party of such breach or, if such breach is not reasonably
remediable within such ten (10) Business Day period, the Defaulting Party has
failed to commence to take, within such ten (10) Business Day period, steps to
remedy such breach and to thereafter proceed diligently and as expeditiously as
reasonably possible to cure or remedy such breach.

     

    8.3           Post-Termination
Obligations.  Articles VII, VIII and IX (other than Sections
9.13 and 9.17) shall survive any termination of this
Agreement.  Notwithstanding any termination of this Agreement, Seller
shall remain obligated to pay to Buyer any amounts payable pursuant to Section
3.4 or, if applicable, Section 3.6, and such obligation to make such payments to
Buyer shall survive the termination of this Agreement until any such payments
shall have been paid in full as required hereunder.  Notwithstanding
any termination of this Agreement, Buyer shall, subject to Section 7.3, remain
obligated to pay to Seller any amounts, if applicable, payable pursuant to
Section 3.6 or Section 3.8 and such obligation to make such payment to Seller
shall survive the termination of this Agreement until any such payments have
been paid in full as required hereunder.

     

    ARTICLE
IX

    MISCELLANEOUS

     

    9.1           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
principles of conflicts of laws thereof.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    9.2           Jurisdiction;
Enforcement.  Each of the Seller Parties and Buyer agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached.  It is accordingly agreed that only the Parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any court of the United States located in the State and City of New York or
in New York state court located in the State and City of New York, this being in
addition to any other remedy to which they are entitled hereunder.  In
addition, each of the Seller Parties and Buyer (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State and City of
New York or any New York state court located in the State and City of New York
in the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (c) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any court
other than a federal or state court sitting in the State and City of New
York.

     

    9.3           Waiver of Jury
Trial.  EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.

     

    9.4           Confidentiality.  The
Parties hereto acknowledge and agree that the terms of this Agreement and any
information or materials furnished or made available by any Party to the other
Party in connection herewith shall be treated as confidential information
subject to the provisions of the Confidentiality Agreement between Seller and
Wellhead Electric Company, Inc, dated as of June 10, 2008 (the “Confidentiality Agreement”) as
if each of Buyer and each Seller Party were a party thereto and bound thereby;
provided, however, that
either Party may disclose such information as required by law, including
applicable securities laws and policies.  Buyer hereby acknowledges
that Seller is required to disclose the terms of this Agreement, and file a copy
of this Agreement with the Securities and Exchange Commission, under securities
laws and the rules of the Nasdaq Stock Market.

     

    9.5           Notices.  The
provisions of Section 8.7 of the Purchase Agreement are hereby incorporated
herein by reference and shall apply to this Agreement, where the reference to
“Buyers or Guarantor” in such Section 8.7 shall be to the Buyer hereunder and
the reference to “Seller” in such Section 8.7 shall be to each of the Seller
Parties hereunder.

     

    9.6           Independent
Contractor.  Buyer shall be considered an independent
contractor acting as agent to the Seller Parties and shall not be a joint
venturer, partner, officer or employee of any Seller Party and neither Party nor
their respective Affiliates shall make any claim to the
contrary.  Nothing herein shall be construed so as to impose any
liability as a partner or joint venturer on any party.  Under no
circumstances shall any of the employees of the Parties (if any) be deemed to be
employees of the other Party for any purpose.  Each Party shall
maintain control over its employees (if any), subcontractors and subcontractors’
employees (if any) (except as otherwise expressly provided herein or in the
Purchase Agreement) and shall comply with all withholding of income at source
requirements.  Except as otherwise provided herein or in the Purchase
Agreement, neither Party shall have the right to bind the other Party to any
agreement with a third party.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    9.7           Assignment.  Neither
this Agreement nor the rights, interests or obligations of a party hereunder
shall be assigned in whole or in part (whether by operation of law or otherwise)
by such party without the prior written consent of the other
parties.  Subject to the preceding sentence of this Section 9.7, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective permitted successors and assigns.

     

    9.8           Counterparts;
Effectiveness.  This Agreement may be executed in two or more
consecutive counterparts (including by facsimile), each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered (by telecopy or otherwise)
to the other party.

     

    9.9           Severability.  Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement in any other
jurisdiction.  If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.

     

    9.10           Entire Agreement; No
Third-Party Beneficiaries.  This Agreement (including the
exhibits and schedules hereto), the Purchase Agreement, the Escrow Agreement,
the Chula Vista Asset Management Agreement and the Confidentiality Agreement
constitute the entire agreement, and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.  Nothing in this Agreement, express or implied,
is intended to or shall confer upon any person (other than the parties hereto)
any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

     

    9.11           Rights Cumulative;
Waiver.  Except as expressly provided otherwise in this
Agreement, all rights, powers and privileges conferred under this Agreement
shall be cumulative and not restrictive of those given by law.  No
waiver by any party of any condition or right of termination granted by this
Agreement may be relied upon by the other parties unless such waiver is in
writing signed by the party against whom enforcement of such wavier is
sought.

     

    9.12           Headings.  Headings
of the Articles and Sections of this Agreement are for convenience of the
parties only, and shall be given no substantive or interpretive effect
whatsoever.

     

    9.13           Confirmation of
Representations and Warranties.  The Parties acknowledge that
each such Party is entering into this Agreement in reliance on the
representations and warranties given by the other Party in the Purchase
Agreement (such representations and warranties deemed to be given by each such
Party as of the date of the Purchase Agreement).  Without limiting the
representations and warranties of any Party under the Purchase Agreement and the
applicability thereto to this Agreement, (i) the Seller Parties hereby confirm,
as of the date hereof and the Effective Date, that, except as set forth in the
Seller Disclosure Schedule, the representations and warranties of Seller set
forth in Section 2.3 of the Purchase Agreement are true and correct with respect
to the execution and delivery of this Agreement by each Seller Party and the
transactions contemplated by this Agreement and (ii) the Buyer hereby confirms,
as of the date hereof and the Effective Date, that, except as set forth in the
Buyer Disclosure Schedule, the representations and warranties of Buyer set forth
in Section 3.2(d) of the Purchase Agreement are true and
correct.

    
      
         

      

      
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    9.14           Amendment.  This
Agreement may not be amended, changed, supplemented or otherwise modified except
by an instrument in writing signed on behalf of all of the Parties.

     

    9.15           Expenses.  Except
as otherwise provided in this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring or required to incur such expenses.

     

    9.16           Severability.  Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement in any other
jurisdiction.  If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.

     

    9.17           Further
Assurances.  Each of the Parties agree to provide such
information, execute and deliver any instruments and documents and to take or
cause to be taken such other commercially reasonable actions as may be necessary
or requested by the other Party which are not inconsistent with the provisions
of this Agreement and which do not involve the assumptions of obligations other
than those provided for in this Agreement, in order to give full effect to this
Agreement and to carry out the intent of this Agreement.

     

    9.18           Seller
Parties.  Each undertaking by the Seller Parties hereunder
shall be a deemed to be a joint and several undertaking of each of Seller,
Parent and the Company.  For purposes of this Agreement and the
performance of the Remediation Services and Transition Services, Buyer and its
Affiliates shall be entitled to rely on any instructions or actions by any
Seller Party as the joint instructions and actions of all Seller
Parties.

    

    [Signature
page follows]

    
      
         

      

      
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    IN
WITNESS WHEREOF, the parties have executed this Agreement through their duly
authorized representatives.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    	
                                                            WELLHEAD
      ELECTRIC EQUIPMENT, LLC

                                                          
	 
      	 
      	 
      	 
      
	
                                                            By:

                                                          	
                                                            San
      Joaquin Dryers, LP, Managing

                                                          
	 
      	
                                                            Member

                                                          
	 
      	 
      	 
      	 
      
	 
      	
                                                            By:

                                                          	 
      	
                                                            Fresno
      Cogen, Inc., its General

                                                          
	 
      	 
      	 
      	
                                                            Partner

                                                          
	 
      	 
      	 
      	 
      
	 
      	
                                                            By:

                                                          	/s/
      Harold E. Dittmer
	 
      	 
      	
                                                            Name:  Harold
      E. Dittmer

                                                          
	 
      	 
      	
                                                            Title:  President

                                                          
	 
      	 
      	 
      
	
                                                            CALIFORNIA
      HOLDINGS McCALL, LLC

                                                          
	 
      	 
      	 
      	 
      
	
                                                            By:

                                                          	/s/
      Harold
      E. Dittmer
	 
      	Name:  Harold
      E. Dittmer
	 
      	Title:  Managing
      Member
	 
      	 
      	 
      	 
      
	
                                                            MMC
      ENERGY NORTH AMERICA, LLC

                                                          
	 
      	 
      	 
      	 
      
	
                                                            By:
      

                                                          	/s/  Michael
      J. Hamilton
	 
      	
                                                            Name:  Michael
      J. Hamilton

                                                          
	 
      	
                                                            Title:  Chairman
      and Chief Executive

                                                          
	 
      	
                                                                  
            Officer

                                                          
	 
      	 
      	 
      	 
      
	
                                                            MMC
      ENERGY, INC.

                                                          
	 
      	 
      	 
      	 
      
	
                                                            By:

                                                          	/s/ Michael
      J. Hamilton
	 
      	
                                                            Name:  Michael
      J. Hamilton

                                                          
	 
      	
                                                            Title:  Chairman
      and Chief Executive

                                                          
	 
      	
                                                             
                 Officer

                                                          

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	
                      MMC ESCONDIDO,
      LLC

                    
	 
      	 
      
	
                      By:

                    	/s/ Michael
      J. Hamilton
	 
      	
                      Name:  Michael
      J. Hamilton

                    
	 
      	
                      Title:  Chairman
      and Chief Executive

                    
	 
      	
                             
           Officer

                    

            

          

        

      

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

    EXHIBIT
A

    SCOPE
OF SERVICES

    

    The
Transition Services shall include, but not be limited by, the
following:

    

    1.  Administration
of each Project Contract other than Energy Management Agreements, including
directions to be given to each Project Contractor thereunder on behalf of a
Seller Party as set forth in such Project Contract; provided that all payments
required to be made by or on behalf of a Seller Party shall be made by the
applicable Seller Party.

    

    2.  Management
of all Project equipment repair, replacement and servicing.

    

    3.  Management
of supplies and materials.

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    

    EXHIBIT
B

    DESIGNATED
REPRESENTATIVES

    

    Buyer –
Paul Cummins, Vice President (Primary)

      
Harold Dittmer, President (Backup)

    

    
      Seller
Parties – Harry Scarborough, Senior Vice President Business Development &
Operations (Primary)

    

      
Denis Gagnon, Chief Financial Officer (Backup)

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    

    EXHIBIT
C

    PROJECT
CONTRACTS

    

    A.  Escondido
Contracts

    

    
      	
               
      

            	
              1.

            	
              Resource
      Adequacy Capacity Confirmation, between MMC Energy North America, LLC and
      Occidental Power Services, Inc., dated as of January 23, 2007 (ESC –
      2009).

            

    

    

    
      	
               
      

            	
              2.

            	
              Resource
      Adequacy Capacity Confirmation, between MMC Energy North America, LLC and
      Occidental Power Services, Inc., dated as of January 23, 2007 (ESC –
      2010).

            

    

    

    
      	
               
      

            	
              3.

            	
              Resource
      Adequacy Capacity Confirmation between MMC Energy North America, LLC and
      Occidental Power Services, Inc., dated as of  January 23, 2007
      (ESC – 2011).

            

    

    

    
      	
               
      

            	
              4.

            	
              Base
      Contract for Retail Sale and Purchase of Natural Gas or Electricity
      between Macquarie Cook Energy LLC and MMC Escondido, LLC, dated November
      1, 2008.

            

    

    

    
      	
               
      

            	
              5.

            	
              Master
      Power Purchase and Sale Agreement Cover Sheet dated as of November 1, 2008
      between Macquarie Cook Power Inc. and MMC Escondido, LLC, with EEI
      Standard Master Power Purchase and Sale Agreement Version 2.1 (modified
      4/25/00) incorporated therein by
reference.

            

    

    

    
      	
               
      

            	
              6.

            	
              Request
      for Retail Noncore Gas services between San Diego Gas & Electric
      Company and MMC Escondido, LLC, effective June 1,
  2007.

            

    

    

    
      	
               
      

            	
              7.

            	
              Participating
      Generator Agreement, between MMC Escondido, LLC and California Independent
      System Operator, dated January 12,
2006.

            

    

    

    
      	
               
      

            	
              8.

            	
              Meter
      Service Agreement for ISO Metered Entities, between MMC Escondido, LLC and
      California Independent System Operator, dated January 12,
      2006.

            

    

    

    
      	
               
      

            	
              9.

            	
              Interconnection
      agreement dated as of April 26, 2001 between PG&E Dispersed Generating
      Company, Inc. (successor-in-interest to Ramco Inc.) and San Diego Gas
      & Electric Company, assigned to MMC Escondido, LLC on December 14,
      2005.

            

    

    

    
      	
            	
              10.

            	
              Expedited
      Interconnection Facilities Agreement, dated April 26, 2001, between
      PG&E Dispersed Generating Company, Inc. (successor-in-interest to
      Ramco Inc.) and San Diego Gas & Electric Company, assigned to MMC
      Escondido, LLC on December 14,
2005.

            

    

    

    
      	
            	
              11.

            	
              License
      Agreement between North San Diego County Transit Development Board and
      PG&E Dispersed Generating Company LLC dated as of December 4, 2002,
      assigned to MMC Escondido, LLC on January 9,
  2006.

            

    

    

    
      	
            	
              12.

            	
              Assignment
      Agreement executed as of January 9, 2006 between Dispersed Generating
      Company, LLC and MMC Escondido LLC. (Assignment of North San Diego County
      Transit Development Board License dated December 4,
  2002.)

            

    

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

    

    
      	
            	
              13.

            	
              Lease
      Agreement between MMC Energy North America, LLC and William Scotsman,
      Inc., effective February 20, 2006.

            

    

    

    B.   Contracts
Applicable to Both Chula Vista and Escondido

    

    
      	
               
      

            	
              1.

            	
              Resource
      Adequacy Capacity Marketing Services Agreement between MMC Energy North
      America, LLC and Occidental Power Services, Inc., dated as of May 15, 2006
      “RACMSA”), together with the amendments set forth
  below:

            

    

    

    
      	
               
      

            	
              a.

            	
              Addendum
      to RACMSA effective May 15, 2006

            

    

    
      	
               
      

            	
              b.

            	
              Attachment
      2 dated January 26, 2007

            

    

    
      	
               
      

            	
              c.

            	
              Attachment
      2 dated May 15, 2007

            

    

    

    
      	
               
      

            	
              2.

            	
              Energy
      Management Agreement, between Macquarie Cook Power Inc., Macquarie Cook
      Energy, LLC, (collectively, the “Energy
      Manager”), MMC Energy North America, LLC, MMC Mid-sun LLC, MMC
      Chula Vista, LLC and MMC Escondido, LLC, dated as of November 1, 2008 (the
      “Energy Management
      Contract”).

            

    

    

    
      	
               
      

            	
              3.

            	
              Master
      Netting, Setoff, Security and Collateral Agreement between Macquarie Cook
      Power Inc., Macquarie Cook Energy, LLC, (collectively, the “Energy
      Manager”), MMC Energy North America, LLC, MMC Mid-sun LLC, MMC
      Chula Vista, LLC and MMC Escondido, LLC,
  undated.

            

    

    

    
      	
               
      

            	
              4.

            	
              Premises
      Pollution Liability II Insurance Policy No. PPI G2389533A 001, effective
      October 25, 2007,  issued by Ace American Insurance Co. to MMC
      Energy, Inc. covering its Chula Vista and Escondido sites, with
      endorsements.

            

    

    

    
      	
               
      

            	
              5.

            	
              Assignment
      Agreement executed as of December 14, 2005, between Dispersed Generating
      Company, LLC (assignor and successor-in-interest to Ramco Inc.) and MMC
      Chula Vista LLC and MMC Escondido LLC. (Assignment of interconnection and
      expedited interconnection facilities agreements for Escondido and Chula
      Vista.)

            

    

    

    
      	
               
      

            	
              6.

            	
              FT4
      Dry Low NOX-Equipped Engine Special Support Agreement between Pratt &
      Whitney Power Systems, Inc. and MMC Energy, Inc., dated as of January 10,
      2007.

            

    

    

    
      	
               
      

            	
              7.

            	
              Services
      Agreement (Revised 12/31/07), between Pro Energy Services, LLC, and MMC
      Energy, Inc., dated as of December 31, 2007 (O&M contract for
      Escondido & Chula Vista
plants).

            

    

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    

    

    EXHIBIT
D

    INSURANCE

    

    Seller Parties
Insurance:

    

    Seller
Parties shall maintain the following Existing Project Insurance during the
Term:

    

    1.  Commercial
or Business Automobile Liability insurance for coverage of owned, non-owned and
hired vehicles, with a minimum limit of One Million Dollars ($1,000,000)
combined single limit for bodily injury and property damage.

    

    2 .
Commercial General Liability insurance against claims for personal injury
(including bodily injury and death) and property damage.  Such
insurance shall provide premises / operations, products-completed operations,
blanket contractual liability, explosion, collapse and underground coverage,
broad form of property damage, independent contractor’s and personal injury
insurance, punitive damages to the extent insurable under the laws of the State
of California, with a minimum limit of One Million Dollars ($1,000,000) per
occurrence and Two Million Dollars ($2,000,000) in the annual aggregate for
combined bodily injury and property damage.

    

    3. Excess
or Umbrella Liability insurance over and above the insurance required above,
except for Workers Compensation coverage, with a limit of Ten Million Dollars
($10,000,000) per occurrence / Ten Million Dollars ($10,000,000)
aggregate.

    

    4.
Pollution Liability insurance for coverage against claims for pollution
incidents, with a minimum limit of One Million Dollars ($1,000,000) per
occurrence / Two Million Dollars ($2,000,000) in aggregate.

    

    4A.
Pollution Liability insurance for coverage against claims for pre-existing
pollution incidents, with a minimum limit of Five Million Dollars ($5,000,000)
per occurrence / Five Million Dollars ($5,000,000) in aggregate.

    

    5.
Property insurance for coverage against risks to real and personal property,
with a minimum limit of One Hundred Thousand Dollars ($100,000) with respect to
real and personal property, Two Hundred and Fifty Thousand Dollars ($250,000)
with respect to loss to turbines per occurrence / Eighteen Million Dollars
($18,000,000) in aggregate for both real and personal property and loss to
turbines. Property insurance for coverage against  equipment breakdown
risk to real and personal property, with a minimum limit of Twenty Five Thousand
Dollars ($25,000) per occurrence/ Eighteen Million Dollars ($18,000,000) in
aggregate and Five Hundred Thousand ($500,000) in aggregate for Expediting
Expense.

    

    6 . Flood
Liability insurance for coverage against claims for flood incidents, with a
minimum limit of Two Hundred and Fifty Thousand Dollars ($250,000) per
occurrence / One Million Dollars ($1,000,000) in aggregate.

    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    

    

    7 .
Earthquake Liability insurance for coverage against claims for earthquake
incidents, with a minimum limit of Two Hundred and Fifty Thousand Dollars
($250,000) per occurrence / Five Million Dollars ($5,000,000) in
aggregate.

    

    8.
Workers’ Compensation insurance as prescribed by applicable law, including
insurance covering liability under the longshoremen’s and Harbor Worker’s Act,
the Jones Act and the Outer Continental Shelf Land Act, if
applicable.  Workers’ Compensation insurance should be in accordance
with the laws and regulations of the State of California, providing statutory
benefits and covering loss resulting from injury, sickness, disability or death
of employees of Seller.

    

    Buyer
Insurance:

    

    Buyer
shall maintain the following insurance during the Term:

    

    1.           Workers’
Compensation insurance as prescribed by applicable law, including insurance
covering liability under the longshoremen’s and Harbor Worker’s Act, the Jones
Act and the Outer Continental Shelf Land Act, if applicable.  Workers’
Compensation insurance should be in accordance with the laws and regulations of
the State of California, providing statutory benefits and covering loss
resulting from injury, sickness, disability or death of employees of
Buyer.

    

    2.           Commercial
or Business Automobile Liability insurance for coverage of owned, non-owned and
hired vehicles, with a minimum limit of One Million Dollars ($1,000,000)
combined single limit for bodily injury and property damage.

    

    3.           Commercial
General Liability insurance against claims for personal injury (including bodily
injury and death) and property damage.  Such insurance shall provide
premises / operations, products-completed operations, blanket contractual
liability, explosion, collapse and underground coverage, broad form of property
damage, independent contractor’s and personal injury insurance, punitive damages
to the extent insurable under the laws of the State of California, with a
minimum limit of One Million Dollars ($1,000,000) per occurrence and Two Million
Dollars ($2,000,000) in the annual aggregate for combined bodily injury and
property damage.

    

    4.           Excess
or Umbrella Liability insurance over and above the insurance required above,
except for Workers Compensation coverage, with a limit of Ten Million Dollars
($10,000,000) per occurrence / Ten Million Dollars ($10,000,000)
aggregate.

    

    With the
exception of the Workers’ Compensation insurance, Buyer shall cause the Seller
Parties to be named as an additional insured and a loss payee under the
insurance specified in this Exhibit D and shall require the insurers thereunder
to waive subrogation against the Seller Parties and their Affiliates together
with their respective officers, directors, Affiliates and
employees.

    

    Insurance Requirements for
Seller Parties and Buyers:

    

    Each
Seller Party and Buyer shall cause the insurers providing insurance required to
be maintained by it hereunder, on a best endeavors basis, to provide thirty (30)
days advance written notice to the other Party in the event of cancellation,
non-renewal or any material change in the coverage or conditions included
thereunder, with the exception of non-payment of premium, in which case ten (10)
days written notice shall be provided for all policies.

    
      
         

      

      
        D-2

        
          

        

      

      
         

      

    

    

    EXHIBIT
E

    SELLER
OBLIGATIONS

    

    1.  Financial
accounting and control for each Seller Party

    

    2.  Tax
reporting and tax compliance

    

    3.  Insurance
of Seller Parties set forth on Exhibit D

    

    4.  Making
of all payments owed by any Seller Party under any Project Contract

    

    5.  Market
participation and dispatch decisions under the Energy Management
Agreements

    
      
         

      

      
        E-1

        
          

        

      

      
         

      

    

    

    EXHIBIT
F

    DISPATCH
DECISIONS REQUIRED PROCEDURES AND GUIDELINES

    

    1.           Buyer
shall from time to time make recommendations to Seller regarding dispatch
decisions, bidding strategy and plant status communications to the CAISO for the
Project.

     

    2.           Seller
agrees to fully take into account in good faith Buyer’s recommendations but
shall retain the full legal right to make decisions regarding the topics
outlined in No. 1 above.

    
      
         

      

      
        F-1

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