Document:

Exhibit 10.15

 

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

 

RPS STANDARD FORM CONTRACT

 

BY AND BETWEEN

 

THE NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT
AUTHORITY

 

AND

 

NOBLE ELLENBURG WINDPARK, LLC

 

Dated: MARCH 14, 2007

 

 

Agreement No. 10073

 

This
Agreement (“Agreement”) is entered into as of March 14, 2007 (the “Effective
Date”) by and between the New York State Energy Research and Development
Authority (“NYSERDA”), a public benefit corporation, having a principal
business address of 17 Columbia Circle, Albany, New York 12203, and Noble
Ellenburg Windpark, LLC (“Seller”), a Delaware limited liability company,
having a principal business address of 8 Railroad Avenue, Suite 8, Essex,
Connecticut 06426. NYSERDA and Seller are each referred to herein as a “Party”
and are collectively referred to herein as the “Parties.”

 

WHEREAS, the New York State Public Service Commission (“PSC”) adopted a
Renewable Portfolio Standard (“RPS”) program to address the energy, economic,
and environmental objectives of New York State by creating the potential to
build new industries in the State based on clean, environmentally responsible
energy technologies (See Case
03-E-0188, “Order Regarding Retail Renewable Portfolio Standard” issued and
effective September 24, 2004, and subsequent orders under Case No. 03-E-0188
(the “Orders”)) and the Orders designate NYSERDA as the Central Procurement
Administrator of the RPS Program and all associated funding; and

 

WHEREAS, NYSERDA has conducted a competitive Request for Proposals (“RFP
1037”) to procure rights to RPS-eligible renewable energy attributes; and

 

WHEREAS, NYSERDA RFP 1037, which is incorporated herein and made part
hereof, provided, among other things, that this RPS Standard Form Contract
(“Agreement”) would be employed to govern the rights and obligations of the
Parties; and

 

WHEREAS, Seller has participated in such competitive solicitation and
has been selected by NYSERDA as a winning bidder with respect to the Noble
Ellenburg Windpark (“Bid Facility”); and

 

WHEREAS, the Seller desires to sell to NYSERDA, and NYSERDA desires to
purchase from Seller, the RPS-eligible renewable energy attributes (“RPS
Attributes,” as defined herein) associated with the energy production of the
Bid Facility described in the Application Package filed by Seller (which is
incorporated herein, made part hereof, and annexed hereto at Exhibit D),
and the Bid Proposal during the Contract Delivery Term, on the terms and
subject to the conditions set forth herein;

 

NOW, THEREFORE, this Agreement has been entered into by the Parties to
define, among other things, their rights and obligations concerning the
generation of RPS Attributes by Seller and delivery of all right and title to
RPS Attributes to NYSERDA, and the payments by NYSERDA to Seller during the
term of this Agreement.

 

1

 

Article I

 

Definitions

 

The terms defined in this Article I, whenever used in this
Agreement (including in any Exhibit hereto), shall have the respective
meanings indicated below for all purposes of this Agreement (each such meaning
to be equally applicable to the singular and the plural forms of the respective
terms so defined). All references herein to a Section, Article or Exhibit are
to a Section, Article or Exhibit of or to this Agreement, unless
otherwise indicated. The words “hereby”, “herein”, “hereof”, “hereunder” and
words of similar import refer to this Agreement as a whole (including any
Exhibit) and not merely to the specific section, paragraph or clause in which
such word appears. The words “include”, “includes”, and “including” shall be
deemed, in every instance, to be followed by the phrase “without limitation.”
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. Except as otherwise expressly provided
herein, all references to “dollars” and “$” shall be deemed references to the
lawful money of the United States of America.

 

Actual
Annual Production:
The amount, in MWh, of the total electric energy produced by the Bid Facility
during any Contract Year, measured at the Injection Point.

 

Actual
Annual Eligible Production: The amount, in MWh, of the Actual Eligible Production during a full
Contract Year.

 

Actual
Eligible Production:
The amount, in MWh, of the electric energy produced by the Bid Facility during
any period within a Contract Year, measured at the Injection Point.

 

Actual
Production: The
amount, in MWh, of the total electric energy production of the Bid Facility
during any period within a Contract Year.

 

Application
Package: The
Application Package document submitted by Seller in response to RFP 1037, which
is incorporated herein, made part hereof, and annexed hereto as Exhibit D.

 

Bid
Capacity: Bid
Capacity shall equal the Bid Quantity Percentage multiplied by the Nameplate
Capacity of the Bid Facility. The Bid Capacity under this Agreement shall be
76.95 MW.

 

Bidder: An entity submitting an Application Package
and Bid Proposal in response to RFP 1037. Such entity need not be the owner of
the Bid Facility, but must have secured rights to the RPS Attributes from the
Bid Facility sufficient to satisfy all performance requirements stated in this
RFP and the RPS Standard Form Contract.

 

Bid
Facility: The “Noble
Ellenburg Windpark” electric generating station that has been identified and
described in the Application Package and Bid Proposal submitted by Seller to
RFP 1037, consisting of a specified Nameplate Capacity of 81 MW. The Noble
Ellenburg Windpark is an Intermittent Bid Facility.

 

2

 

Bid
Price: A single fixed
production payment, expressed in $/MWh, applicable to each MWh of RPS
Attributes offered as performance throughout the Contract Delivery Term. For
all transactions contemplated and consummated under this Agreement, the Bid
Price shall be $*** per MWh.

 

Bid
Quantity: The amount,
in MWh, of RPS Attributes the Bid Facility expects to proffer as performance
under the RPS Standard Form Contract over each Contract Year during the
Contract Delivery Term. This number will equal the Expected Annual Eligible
Production multiplied by the Bid Quantity Percentage. The Bid Quantity must be
the same for each Contract Year throughout the Contract Delivery Term. For all
transactions contemplated and consummated under this Agreement, the Bid
Quantity shall be *** MWh.

 

Bid
Quantity Percentage:
The percentage of the Bid Facility’s Expected Annual Eligible Production that
will be committed to performance under this Agreement. For all transactions
contemplated and consummated under this Agreement, the Bid Quantity Percentage
shall be *** percent (***%), which Bid Quantity Percentage will be applied to
Actual Eligible Production in any period during the Contract Delivery Term to
establish compliance with contract requirements.

 

Commercial
Operation: A state of
operational readiness under which (i) the Bid Capacity is available and
physically able to produce electric energy, and (ii) all rights,
abilities, permits and approvals to schedule and deliver energy to the
Injection Point have been obtained.

 

Commercial
Operation Milestone Date:
December 31, 2007, unless extended pursuant to Section 2.08 and/or
15.01 hereto.

 

Contract
Delivery Term: The
fixed duration of the period of performance under the RPS Standard Form Contract,
which shall commence on the later of (i) January 1, 2008 or, (ii) if
the Commercial Operation Milestone Date is extended pursuant to the provisions
of Section 2.08, the first day of the month after the Bid Facility
commences Commercial Operation and which shall continue thereafter for ten
Contract Years.

 

Contract
Security: All amounts
provided to NYSERDA by Seller pursuant to Sections 15.01 hereto.

 

Contract
Year: A 12-month
period commencing with the beginning of the Contract Delivery Term and each
anniversary thereof within the Contract Delivery Term.

 

Delivery
Point: The Delivery
Point shall be the Injection Point.

 

Delivery
Requirement: The
mandatory electricity delivery requirement applicable to performance under this
Agreement, as described at Article III hereto.

 

Expected
Annual Eligible Production: The amount, in MWh, of the Expected Average Annual Production of the
Bid Facility, measured at the Injection Point.

 

3

 

Expected Average Annual
Production: The expected electric energy production of the
entire Bid Facility during any Contract Year.

 

External Bid Facility:
Any Bid Facility not located within the New York Control Area (NYCA); such Bid
Facilities are subject to the delivery requirement specified in Article III
(External Bid Facility Delivery Requirements).

 

Injection
Point: The generator bus
or location where the administrator of the local control area measures, or otherwise determines, energy
delivery from the Bid Facility into the local wholesale market.

 

Intermittent
Bid Facility: Intermittent
Bid Facilities shall include the following: wind, solar, tidal, ocean,
and run-of-river hydroelectric.

 

Knowledge.
Knowledge shall mean actual knowledge of any officer or manager of Seller, or
the knowledge that any such person would be expected to have after conducting a
reasonable inquiry, whether or not such an inquiry was actually conducted.

 

Nameplate
Capacity: The gross
generating capacity of the entire Bid Facility, in MW.

 

New
York Control Area (NYCA):
The control area that is under the control of the NYISO which includes
transmission facilities listed in the ISO/TO Agreement Appendices A-l and A-2,
as amended from time-to-time.

 

NYISO: The New York Independent System Operator, Inc.
that administers the wholesale power
markets in New York and manages the physical electrical operations of the New
York Control Area (NYCA).

 

Quantity Obligation:
Shall mean, for any period during the Contract Delivery Term, the number of MWh calculated as the Bid Quantity Percentage
multiplied by the Actual Eligible Production; subject, however, to
adjustments pursuant to Article V (Adjustments).

 

RPS-eligible Attributes:
Shall mean all environmental characteristics, claims, credits, benefits,
emissions reductions, offsets, allowances, allocations, howsoever characterized,
denominated, measured or entitled, attributable to the generation of Actual
Eligible Production by a Bid Facility. One
RPS-eligible Attribute shall be created upon the generation by a Bid Facility
of one MWh of Actual Eligible Production. RPS-eligible Attributes include but
are not limited to: (i) any
direct emissions of pollutants to the air, soil or water; (ii) any avoided emissions of
pollutants to the air, soil or water including but not limited to sulfur oxides
(SOx), nitrogen oxides (NO), carbon monoxide (CO), particulate matter and other
pollutants; (iii) any avoided emissions of carbon dioxide (CO2),
methane (CH4) and other greenhouse gases (GHGs) that have been
or may be determined by the United Nations Intergovernmental Panel on Climate
Change to contribute to the actual or
potential threat of altering the Earth’s climate by trapping heat in the atmosphere; (iv) all set-aside
allowances and/or allocations from emissions trading programs, including
but not limited to allocations available under 6 NYCRR §§ 204, 237 and 238; and
(v)

 

4

 

all
credits, certificates, registrations, recordations, or other memorializations
of whatever type or sort, representing any of the above.

 

RPS-eligible Attributes
do not include (i) any energy,
capacity, reliability or other power products,
such as ancillary services; (ii) production tax credits associated with the
construction or operation of the Bid Facility or other financial
incentives in the form of credits, reductions, or allowances associated with
the Bid Facility that are applicable to a state or federal income taxation obligation; (iii) fuel-related
subsidies or “tipping fees” that may be paid to the Seller to accept
certain fuels, or local subsidies received by the generator for the destruction
of particular pre-existing pollutants or the promotion of local environmental
benefits; or (iv) emission reduction credits encumbered or used by the Bid
Facility for compliance with local, state, or federal operating and/or air
quality permits.

 

RPS Attributes:
The RPS-eligible Attributes offered and delivered as performance during the Contract Delivery Term. See Articles II, III,
and IV.

 

Substitute Bid Facility:
Any Bid Facility that has submitted a complete Application Package and has been
qualified through Step One of RFP 1037 and is not committed to perform under a
Standard Form Contract awarded under RFP 1037 or any previous NYS RPS
procurement.

 

Article II

 

Purchase and Sale of Rights to RPS Attributes

 

Section 2.01.
On the terms and subject to the conditions and provisions of this Agreement,
Seller agrees to sell, assign, convey and deliver to NYSERDA, and NYSERDA agrees to purchase from the Seller, all right,
title and interest in the RPS Attributes associated with the Quantity
Obligation of the Bid Facility during each month of the Contract Delivery Term.

 

Section 2.02.  Such right, title and interest shall include
perpetual and exclusive rights to all RPS Attributes, including but not limited
to the exclusive rights to claim, consistent with New York State Environmental Disclosure rules: (a) that
the energy associated with RPS Attributes was generated by the Bid
Facility; and (b) that New York State and or the RPS Program is
responsible for the reductions in emissions and/or other pollution resulting
from the generation of the Bid Facility’s
energy.

 

Section 2.03.  At the time of such sale, assignment and
conveyance by Seller to NYSERDA, the RPS
Attributes shall be free and clear of all liens, judgments, encumbrances and restrictions.

 

Section 2.04. Assignment
and Transfer of Rights to RPS Attributes. 
The assignment and transfer (“Transfer”) of RPS Attributes to
NYSERDA shall be accomplished through their inclusion on the Certification and
Assignment of Rights Form, which must accompany each invoice. Should the PSC or NYSERDA create, sanction, adopt or begin
participation in a tracking system
for accounting for generation attributes or certificates associated with
generation in the New York Control Area, Transfer will also include the
delivery of the attributes or

 

5

 

certificates
associated with each RPS Attribute, at the earliest time such certificates or
attributes become available for delivery, to an account designated by
NYSERDA.

 

Section 2.05.  In the event that Seller must apply for or
take some other action under any emission-trading or other regime other
than the NY RPS in order to secure a claim, title, ownership, or rights of any
type, nature or sort to any RPS-eligible Attributes associated with Quantity Obligations, or any certification,
registration, verification or other memorialization of the creation of
such RPS-eligible Attributes by the Bid Facility to which Seller may be
entitled (Title), Seller shall (i) take
all actions necessary to apply for and secure such Title, to the maximum extent to which Seller is entitled, (ii) provide
NYSERDA with evidence of taking such action; and (iii) Transfer such
Title to NYSERDA whenever so secured.

 

Section 2.06.
NYSERDA’s obligations under this Agreement are expressly conditioned on the
eligibility of Seller’s Bid Facility, at the time of execution of this
Agreement and throughout the
duration of the Contract Delivery Term, under the Main Tier eligibility rules and
requirements, as such requirements existed on December 12, 2006, as
originally stated at Appendix C to the September 24,
2004 Order and as modified by subsequent Orders. Bid Facilities selected
under this RFP will not be subject to subsequent changes in RPS eligibility
rules; however, in the event that the Bid Facility fails to maintain
eligibility consistent with the RPS
requirements as they existed on December 12, 2006 such ineligibility will
extend to the attributes emanating from the Bid Facility

 

Section 2.07.  NYSERDA’s obligations to purchase RPS
Attributes and to make payment under this Agreement are conditional on
the ability of Seller to demonstrate to the satisfaction of the DPS that the
creation of and title to the RPS-eligible Attributes is sufficiently verifiable
for purposes of the New York Environmental Disclosure Program. Solely for
purposes of this Agreement, RPS Attributes emanating from Bid Facilities
participating in the NEPOOL Generation Information System or the
Pennsylvania-Jersey-Maryland Generation Attribute Tracking System are deemed
sufficiently verifiable for this purpose.

 

Section 2.08.  NYSERDA’s obligations to purchase RPS
Attributes and to make payment under this Agreement are conditional on
the commencement by the Bid Facility of Commercial Operation at a minimum of 80
percent of the Bid Capacity on or before the Commercial Operation Milestone
Date. The Commercial Operation Milestone date shall be December 31, 2007; Seller may elect to extend the Commercial
Operation Milestone Date to November 1, 2008 if such election is
made by written Notice to NYSERDA on or before December 1, 2007 and such
election is accompanied by additional Contract Security in the amount of three
dollars (S3.00) multiplied by the Bid Quantity.

 

Section 2.09.  Subject to authorization by the PSC, NYSERDA
shall be free to sell, assign, transfer or
otherwise subject to any encumbrance, any of the RPS Attributes or the right, title  and
interest to the RPS Attributes NYSERDA shall acquire under this Agreement, at
any time and from time to time to any entity and on such terms and
conditions as NYSERDA may desire. Any financial or other consideration received
by NYSERDA from any such action shall inure solely to NYSERDA’s benefit, to be
applied as NYSERDA determines as the Central

 

6

 

Procurement Administrator
of the RPS Program, and shall not affect the Seller’s obligations under the
terms of this Agreement.

 

Section 2.10.
Suspension of Performance. Seller may, at its option, and upon
sufficient notice to NYSERDA, suspend its obligation to deliver RPS-eligible
Attributes to NYSERDA, in whole or in part, if such RPS-eligible Attributes are
sold into the New York State voluntary market or pursuant to a New York State
Executive Order 111 or other mandated New York State governmental procurement.
Such notice must be written, as provided under Section 19.01 hereto, must
be provided to NYSERDA at least one month prior to the commencement of the
requested suspension period, must identify the quantity of the RPS-eligible
Attributes as to which delivery is to be suspended and the duration of such
suspension, which shall be no less than six (6) months in duration. The
quantity suspended may be either a specific percentage of the Quantity
Obligation or a specific quantity of RPS Attributes to be suspended each month
during the suspension period; in either case the quantity to be suspended must
exceed the lower of (i) ten percent (10%) of the Bid Quantity or (ii) one
thousand (1,000) RPS-eligible Attributes per month. During each month during
the period of suspension, Seller shall present documentation to NYSERDA
establishing that the RPS-eligible Attributes created during the prior month as
to which delivery has been suspended were either (a) settled into an
account of an entity serving retail load in New York (“LSE”) or otherwise
accounted for as a part of the residual system mix for purposes of the
Environmental Disclosure Program administered by the Department of Public Service,
or (b) should a New York renewable energy generation certificate system (“REC”)
or other automated tracking system enter operation during the suspension
period, documentation from such system administrator verifying the retirement
of such RPS-eligible Attributes and/or RECs into a voluntary customer account
in New York, including accounts associated with compliance with a mandated New
York State governmental procurement. The suspension of RPS-eligible Attributes
shall not relieve or excuse Sellers from compliance with the Delivery
Requirement for suspended RPS Attributes.

 

Section 2.11.
Substitution of Bid Facility. At any time on or before September 1,
2007, Seller may request a novation or modification to this Agreement to
designate one or more Substitute Bid Facilities in replacement of the Bid
Facility designated herein for performance under this Agreement. Such request
must be in writing; consent by NYSERDA will not be unreasonably denied. Consent
by NYSERDA is conditioned on the ability of NYSERDA and Seller to agree upon
modifications to this Agreement necessary to accomplish the substitution.
Should NYSERDA consent to a substitution, all amounts provided by Seller as
Contract Security must remain in force or be replaced prior to the execution of
the novation or other modification. Under no circumstance shall the Bid
Quantity be increased. NYSERDA will not permit the substitution of an External
Bid Facility for a Bid Facility within the NYCA.

 

Article III

 

External Bid Facility Delivery Requirements.

 

Not applicable.

 

7

 

Article IV

 

Payment

 

Section 4.01.
Invoices. Seller shall submit monthly invoices throughout the term of
this Agreement for RPS Attributes created in the prior month during the
Contract Delivery Term. Such invoices shall be addressed to the attention of “Accounts
Payable,” and shall include a statement of the amount due and payable by
NYSERDA to Seller, which amount shall be calculated in accordance with Section 4.02;
such invoices shall also identify any RPS Attributes which Seller wishes to
carry forward to future Contract Years, and may include a request for payment
for RPS Attributes Transferred in prior Contract Years pursuant to Section 4.05.
All such invoices must and shall be accompanied by a completed Certification
and Assignment of Rights Form, in the form provided at Exhibit B hereto,
and must otherwise demonstrate the Transfer of the RPS Attributes. All invoices
must be accompanied by a completed Hourly Data Report.

 

Section 4.02.
Payment. NYSERDA will make payment to Seller of the amount of Quantity
Obligation in MWh invoiced. NYSERDA may adjust payments to subsequent invoices
consistent with NYISO or other local control area billing settlement true-up
procedures, based on actual metered production data measured at the injection
point, actual and verified data reflecting deliveries to the Delivery Point
from the Bid Facility, and/or based on the number of RPS Attributes
Transferred. NYSERDA will not pay for RPS Attributes beyond the maximum it is
required to purchase under this Agreement, in accordance with Sections 4.04 and
4.05. Amounts payable in a given month shall be calculated as the
multiplicative product of (a) the Actual Eligible Production of the Bid
Facility during the prior month; (b) the Bid Quantity Percentage; and (c) the
Bid Price. In addition, payment will be made for RPS Attributes Transferred to
NYSERDA in accordance with Article II during a prior Contract Year, to the
extent such payment is consistent with Section 4.05 hereto.

 

Section 4.03.
Prompt Payment Policy. NYSERDA will make payments to the Seller in
accordance with and subject to its Prompt Payment Policy Statement, attached
hereto as Exhibit F. The Seller shall be notified by NYSERDA in accordance
with Section 5.04.4 of such Exhibit F of any information or
documentation that the Seller did not include with such invoice. Such payments
shall be made by check or wire transfer to an account designated by the Seller.
NYSERDA will not pay any invoice not accompanied by a completed Certification
and Assignment of Rights Form and a completed Hourly Data Report.

 

Section 4.04.
Maximum Commitment/Limitation. The maximum number of RPS Attributes
NYSERDA shall be obligated to purchase under this Agreement shall be equal to
105 percent of the Bid Quantity multiplied by the number of years in the
Contract Delivery Term. The maximum aggregate amount payable by NYSERDA to
Seller hereunder is *** dollars ($***). Should Seller elect to suspend
performance under Section 2.10, such maximum aggregate amounts will be
modified by subtracting any periods of Suspension from the number of Contract
Years, and by reducing the Bid Quantity by the number of RPS Attributes
suspended.

 

8

 

Section 4.05.
Carry Forward of RPS Attributes. During any Contract Year, the maximum
number of RPS Attributes NYSERDA shall be obligated to purchase under this
Agreement shall be equal to 110% percent of the Bid Quantity. Seller will be
permitted to carry forward RPS Attributes in excess of 110% of the Bid Quantity
for payment in subsequent Contract Years during which the Quantity Obligation
is less than 110 % of the Bid Quantity. All RPS Attributes that Seller wishes
to carry forward to subsequent Contract Years must be Transferred to NYSERDA
during the month following their creation; such RPS Attributes must be assigned
by the Certification and Assignment of Rights Form for such month (See Section 2.04).

 

Article V

 

Adjustments

 

Section 5.01.
True-Up Adjustments. NYSERDA may adjust payments to subsequent invoices
consistent with NYISO or other control-area billing settlement true-up
procedures, based on actual metered production data reflecting deliveries to
the Delivery Point.

 

Section 5.02.
Other Adjustments. NYSERDA may adjust its contractual Payment
obligations under this Agreement under the following circumstances:

 

(a) Not
applicable.

 

(b) Should an
Intermittent Bid Facility’s Quantity Obligation fail to achieve 80% of the Bid
Quantity for three (3) consecutive Contract Years, the Bid Quantity will
be modified for the remainder of the Contract Delivery Term to equal the
average Actual Annual Eligible Production over that three-year period
multiplied by the Bid Percentage.

 

(c) Not
applicable.

 

(d) Not applicable.

 

(e) Should
Seller fail to reasonably demonstrate, through its submittal of the Economic
Benefits Report as so required by Section 6.03 below, the actualization of
at least ***
percent of the sum of the Expected Total Dollars (in dollars per MW of Bid
Capacity) of the projected economic benefits included at Section 3 of the
Bid Proposal (Economic Benefits Created by the Bid Facility)($*** x *** = $***),
NYSERDA may reduce the Bid Price payable for the remainder of the Contract
Delivery Term to an amount equal to the Bid Price multiplied by (the
demonstrated amount divided by the Expected Total Dollars). Amounts included by
Seller at Section 3, subsection (a) (Payments to New York State
and/or its Municipalities) that have been or are subject to tax credits under
the New York State Empire Zones program will not be included in, nor will such
amounts be recognized as demonstrated for purposes of, this calculation.

 

9

 

Article VI

 

Records
and Reports

 

Section 6.01.
Monthly Reports. Sellers shall submit with each invoice an hourly data
report (“Hourly Data Report”) including hourly electricity generation data
measured at the Injection Point, in Microsoft Excel format or such other format
to be agreed upon. NYSERDA will also require the Seller to provide detailed
monthly market accounting settlement or other pertinent data from the
administrator(s) of the energy market into which energy from the Bid
Facility was delivered and from the administrator of any attribute accounting
system operating in such control area. Seller may be required to waive
confidentiality, as to NYSERDA, for the direct transfer to NYSERDA by an energy
market administrator of transactional and/or delivery information and data
pertinent to the verification of RPS Attribute creation and electricity
delivery.

 

Section 6.02.
Progress Reports. On a bi-monthly or more frequent schedule beginning
with the Effective Date and continuing through the commencement of the Contract
Delivery Term, Seller shall provide written reports to NYSERDA, which reports
shall be in letter form, and which shall describe (1) Seller’s progress in
obtaining and securing all required environmental or other permits and/or local
approvals; (2) the status of development and/or construction planning or
activities with regard to the Bid Facility; (3) the status of the
interconnection process between the Bid Facility and the administrator of the
control area; and (4) purchases, delivery, and/or installation of any
major equipment associated with the Bid Facility. Such reports shall also
include copies of any permits or approvals granted and/or copies of any
correspondence of any type denying or refusing any permit or approval.

 

Section 6.03.
Economic Benefits Report. Sellers shall submit a report including
documentation demonstrating the actual economic benefits that resulted from the
construction and operation of the Bid Facility. Such report should include
copies of sufficient records and documentation relating to employment,
purchases, and other payments necessary to demonstrate the economic benefits
created by the Bid Facility under the categories listed under Section 3 of
RFP 1037. Seller will be required to submit such report within sixty (60) days
of the third anniversary of the Commercial Operation Milestone Date.

 

Section 6.04.
Annual Economic Report. Sellers shall submit, annually for the duration
of the Contract Delivery Term, a report identifying the number of short and
long-term jobs actually created as a result of the development, operation
and/or construction of the Bid Facility. Such report shall also include an
accounting of all payments made to any State, municipal or local governmental
entity, and any payments made for the usage of land or fuel purchases. Such
report shall be filed with NYSERDA within sixty (60) days of each anniversary
of the Commercial Operation Milestone Date.

 

Section 6.05.
Additional Documents. On or before March 27, 2007, Seller shall
provide to NYSERDA:

 

10

 

(a) certificates,
dated as of the most recent practicable date prior to the Effective Date,
issued by the Delaware Secretary of State confirming the corporate good
standing of the Seller;

 

(b) a certificate of
an appropriate officer of the Seller, dated as of the Effective Date, in form
and substance reasonably satisfactory to NYSERDA and certifying: (1) the
names and signatures of the officers of the Seller authorized to sign a
Certification and Assignment of Rights Form and any other documents to be
delivered hereunder, and (2) the accuracy and completeness of resolutions
of the Seller, authorizing and approving all matters in connection with the
transactions contemplated thereby.

 

(c) Seller shall promptly
provide NYSERDA with updated and corrected versions of the above-referenced
certificates upon any change in the information provided therein.

 

Section 6.06.
Maintenance of Records. The Seller shall keep, maintain, and preserve at
its principal office throughout the term of the Agreement and for a period of
seven (7) years following the expiration of this Agreement, full and
detailed books, accounts, and records pertaining to Seller’s performance under
the Agreement, including without limitation, all bills, invoices, payrolls,
subcontracting efforts and other data evidencing, or in any material way
related to, the direct and indirect costs and expenses incurred by the Seller
in the course of such performance.

 

Article VII

 

Audit

 

Section 7.01.
Audit. NYSERDA shall have the right from time to time and at all
reasonable times during the term of the Agreement and such period thereafter to
inspect and audit any and all books, accounts and records pertaining to Seller’s
performance under this Agreement, at the office or offices of the Seller where
they are then being kept, maintained and preserved. If such books, accounts and
records are not kept at an office within the State of New York, within a
reasonable time of a request by NYSERDA, Seller shall make such books, accounts
and records available to NYSERDA at NYSERDA’s offices or at an agreed upon
location within the State of New York. Any payment made under this Agreement
shall be subject to retroactive adjustment (reduction or increase) regarding
amounts included therein which are found by NYSERDA on the basis of any audit
of the Seller by an agency of the United States, the State of New York or
NYSERDA not to constitute a properly invoiced amount.

 

Section 7.02.
Eligibility Audit. NYSERDA may require periodic audits of the Bid
Facility to verify that the Bid Facility remains eligible under the eligibility
rules and requirements, as such requirements existed on December 12,
2006. Prior to any material modification of the Bid Facility, including but not
limited to any modification that is expected to result in a change in the
Nameplate Capacity of the Bid Facility, Seller shall provide NYSERDA with
written Notice and will provide to NYSERDA a written description of the planned
modification.

 

11

 

Article VIII

 

Assignments

 

Section 8.01.
General Restrictions. Except as specifically provided otherwise in this
Article, the assignment, transfer, conveyance, subcontracting or other disposal
of this Agreement or any of the Seller’s rights, obligations, interests or
responsibilities hereunder, in whole or in part, without the express consent in
writing of NYSERDA shall be void and of no effect as to NYSERDA. Such consent
shall not be unreasonably withheld.

 

Section 8.02.
Seller may, without NYSERDA’s prior written consent, grant a security interest
in or assign this Agreement as collateral in connection with financing
arrangements.

 

Section 8.03.
Either Party may, upon written notice, assign its rights and obligations hereunder,
or transfer such rights and obligations by operation of law, to any entity with
which or into which such Party shall merge or consolidate or to which such
Party shall transfer all or substantially all of its assets, provided that such
other entity agrees to be bound by the terms hereof and provided further, that
such other entity’s creditworthiness is comparable to or higher than that of
such Party at the time this Agreement was executed and such Party is not
relieved of any obligation or liability hereunder as a result of such
assignment.

 

Article IX

 

Seller’s
Warranties and Guarantees

 

Section 9.01.
As a material inducement to NYSERDA to enter into this Agreement, Seller makes
the following warranties and guarantees, all of which shall survive the execution
and delivery of this Agreement:

 

(a)                    (1) that
Seller is a Delaware limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization; (2) has
or will have all requisite corporate power, and has or will have all material
governmental permits necessary to own its assets or lease and operate its
properties and carry on its business as now being or as proposed to be
conducted, to construct, finance, own, maintain and operate the Bid Facility,
to execute and deliver this Agreement, and to consummate the transactions
contemplated herein; and (3) is qualified to do business and is in good
standing in all jurisdictions necessary for Seller to perform its obligations
under this Agreement.

 

(b)                   that the
execution, delivery and performance by Seller, the entry into this Agreement by
Seller, and the consummation of the transactions contemplated by this
Agreement: (1) have been duly authorized by all requisite corporate action
(including any required action of its members); and (2) will not (i) violate
any applicable provision of law, statute, rule, regulation or order of any
governmental agency of which Seller has Knowledge, or any provision of the
limited liability

 

12

 

company agreement or
other governing documents of Seller; (ii) violate, conflict with, result
in a material breach of or constitute (alone or with notice or lapse of time or
both) a material default or event of default under any indenture, agreement
(including the respective limited liability company agreements of Seller),
mortgage, deed of trust, note, lease, contract or other instrument to which
Seller is a party or by which it or any of its property is bound; or (iii) result
in the creation or imposition of any lien upon any property or assets of the
Seller.

 

(c)                    that the Bid
Facility is or will be eligible under the Order and that it will remain so
throughout the Contract Delivery Term.

 

(d)                   that the RPS
Attributes, as to which right and title is to be transferred to NYSERDA under
this Agreement, are eligible and compliant with the Renewable Portfolio
Standard;

 

(e)                    that the RPS
Attributes, as to which right and title is to be transferred to NYSERDA under
this Agreement, are free and clear of any liens, encumbrances and/or defects of
title;

 

(f)                      that the RPS
Attributes, as to which right and title is to be Transferred to NYSERDA under
this Agreement shall not have otherwise been, nor will be sold, retired,
claimed or represented as part of electricity output or sales, or used to
satisfy obligations in any other jurisdiction;

 

(g)                   that Seller
will comply with all general and special Federal, State, municipal and local
laws, ordinances and regulations, if any, that may in any way affect the
performance of this Agreement;

 

(h)                   that this
Agreement and each Certification and Assignment of Rights Form will be
duly executed and delivered by Seller and will constitute the legal, valid and
binding obligation of Seller enforceable against Seller in accordance with the
terms thereof;

 

(i)                       that the
Seller has no Knowledge of any patent issued under the laws of the United
States or any other matter which could constitute a basis for any claim that
Seller’s performance under this Agreement will infringe any patent or otherwise
interfere with any other right of any Person;

 

(j)                       that there
are no existing undisclosed or threatened legal actions, claims, or
encumbrances, or liabilities that may adversely affect Seller’s performance of
this Agreement or NYSERDA’s rights hereunder;

 

(k)                    that Seller
has no Knowledge that any information or document or statement furnished by the
Seller in connection with this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statement
not misleading under the circumstances in which they were made;

 

13

 

(l)                       that Seller
shall not, and shall not cause or permit any voluntarily abandonment of the
development, construction or operation of the Facility;

 

(m)                 Seller certifies
that all information provided to NYSERDA with respect to State Finance Law
Sections 139-j and 139-k is complete, true and accurate as of the date
delivered.

 

Article X

 

NYSERDA’s Warranties and Guarantees

 

Section 10.01.
As a material inducement to Seller to enter into this Agreement, NYSERDA makes
the following warranties and guarantees, all of which shall survive the
execution and delivery of this Agreement:

 

(a)                    that NYSERDA
is an instrumentality of the State of New York and a public authority and
public benefit corporation, created under the New York State Public Authorities
Law, validly existing and in good standing under the laws of the State of New
York.

 

(b)                   that NYSERDA
has all necessary power and authority to execute and deliver this Agreement and
all other agreements contemplated herein and hereby and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
NYSERDA of this Agreement and all other agreements contemplated herein and
hereby and the consummation of the transactions contemplated hereby and thereby
have been or, if not yet executed and delivered, will be when executed and
delivered, and no other actions or proceedings on the part of NYSERDA are necessary
to authorize this Agreement or any other agreement contemplated herein and
hereby or the consummation of the transactions contemplated hereby and thereby.

 

(c)                    that the
execution, delivery and performance by NYSERDA of this Agreement will not (1) violate
any applicable provision of law, statute, rule, regulation or order of any
governmental agency or, any provision of the Public Authorities Law; (2) violate,
conflict with, result in a material breach of or constitute (alone or with
notice or lapse of time or both) a material default or event of default under
any indenture, agreement, mortgage, deed of trust, note, lease, contract or
other instrument to which NYSERDA is a party or by which NYSERDA or any of its
property is bound; or (3) result in the creation or imposition of any lien
upon any property or assets of NYSERDA. This Agreement will not conflict with
any other agreement or contract to which NYSERDA is a party.

 

(d)                   that this
Agreement has been duly executed and delivered by NYSERDA and constitutes the
legal, valid and binding obligation of NYSERDA enforceable against NYSERDA in
accordance with the terms thereof.

 

14

 

(e)                    that NYSERDA
is familiar with and in compliance with all general and specific laws, except
where the failure to so comply would not result in a material adverse effect on
NYSERDA’s ability to perform its obligations.

 

(f)                      that there
is no action, suit or claim at law or in equity, or before or by a governmental
authority pending or, to the best knowledge of NYSERDA after due inquiry,
threatened against NYSERDA or affecting any of its properties or assets which
could reasonably be expected to result in a material adverse effect on NYSERDA’s
ability to perform its obligations.

 

(g)                   that as a
public benefit corporation and instrumentality of the State of New York,
NYSERDA may not file, and is not subject to the involuntary filing of a
petition for relief pursuant to the United States Bankruptcy Code.

 

Article XI

 

Indemnification

 

Section 11.01.
Indemnification. Seller shall protect, indemnify and hold harmless
NYSERDA and the State of New York from and against all liabilities, losses,
claims, damages, judgments, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys’ and/or experts’ fees and
expenses) imposed upon or incurred by or asserted against NYSERDA or the State
of New York resulting from, arising out of or relating to Seller’s performance
under this Agreement. The obligations of Seller under this Article shall
survive any expiration or termination of this Agreement, and shall not be
limited by any enumeration herein of required insurance coverage.

 

Article XII

 

Insurance

 

Section 12.01.
Maintenance of Insurance; Policy Provisions. The Seller, at no cost to
NYSERDA, shall maintain or cause to be maintained, commencing on or before April 15,
2007 and continuing throughout the duration of the Contract Deliver Term,
insurance of the types and in the amounts specified in the Section hereof
entitled Types of Insurance. All such insurance shall be evidenced by
insurance policies, each of which shall:

 

(a)                    name or be
endorsed to cover NYSERDA and the State of New York as additional insureds;

 

(b)                   provide that
such policy may not be cancelled or modified until at least 30 days after
receipt by NYSERDA of written notice thereof; and

 

(c)                    be reasonably
satisfactory to NYSERDA in all other respects.

 

Section 12.02.
Types of Insurance. Seller shall be required to maintain commercial
general liability insurance for bodily injury liability, including death, and
property damage

 

15

 

liability, incurred in
connection with the performance of this Agreement, with minimum limits of
$2,000,000 in respect of claims arising out of personal injury or sickness or
death of any one person; $2,000,000 in respect of claims arising out of
personal injury, sickness or death in any one accident or disaster; and
$2,000,000 in respect of claims arising out of property damage in any one
accident or disaster.

 

Section 12.03.
Delivery of Policies; Insurance Certificates. On or before April 15,
2007, Seller shall deliver to NYSERDA certificates of insurance issued by the
respective insurers, indicating the Agreement number thereon, evidencing the
insurance required by this Article and bearing notations evidencing the
payment of the premiums thereon or accompanied by other evidence of such
payment satisfactory to NYSERDA. In the event that any policy furnished or
carried pursuant to this Article will expire on a date prior to the
expiration date of this Agreement, Seller, not less than 15 days prior to such
expiration date, shall deliver to NYSERDA certificates of insurance evidencing
the renewal of such policies, and Seller shall promptly pay all premiums
thereon due. In the event of threatened legal action, claims, encumbrances, or
liabilities that may affect NYSERDA hereunder, or if deemed necessary by
NYSERDA due to events rendering a review necessary, upon request Seller shall deliver
to NYSERDA a certified copy of each policy.

 

Article XIII

 

Events of Default

 

Section 13.01.
Event of Default. For the purposes of this Agreement, “Event of Default”
shall mean any of the following:

 

(a)                     Representations
and Warranties. Any representation or warranty made in this Agreement that
shall prove to have been false or misleading in any material respect as of the
time made or deemed to be made; or

 

(b)                    Other
Obligations. A Party shall default in the performance of any of its
obligations under this Agreement and such default shall continue unremedied for
a period of 30 days after Seller receives Notice or otherwise has actual
knowledge thereof; or

 

(c)                     Voluntary
Proceedings. A Party shall (a) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its property; (b) make
a general assignment for the benefit of its creditors; (c) commence a
voluntary case under the Bankruptcy Code; (d) file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts; (e) fail
to convert in a timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the Bankruptcy Code; or (f) take
any corporate action for the purpose of effecting any of the foregoing; or

 

(d)                    Involuntary
Proceedings. A proceeding or case shall be commenced against a Party,
without its application or consent, in any court of competent jurisdiction,
seeking (a) its

 

16

 

liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment
of its debts; (b) the appointment of a trustee, receiver, custodian,
liquidator or the like of all or any substantial part of its assets; or (c) similar
relief under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order for relief against a
Party, shall be entered in an involuntary case under the Bankruptcy Code; or

 

(e)                     Judgments.
A judgment or judgments for the payment of money in the amount of $1,000,000 or
more shall be rendered by a court or courts against Seller, and the same shall
not be paid or otherwise discharged for a period of more than 60 days unless
such judgment has been stayed, released or vacated; or

 

(f)                       Unauthorized
Transfer. The transfer or attempted transfer by Seller to any transferee
other than NYSERDA of any RPS Attribute associated with this Agreement, except
as authorized pursuant to Section 2.10 of this Agreement.

 

(g)                    Commercial
Operation. Failure of the Bid Facility to commence Commercial Operation at
a minimum of 80 percent of the Bid Capacity on or before the Commercial
Operation Milestone Date (December 31, 2007, unless extended pursuant to Section 2.08
of this Agreement).

 

(h)                    Abandonment.
Seller’s abandonment of the Facility or its intentional delay of completion of
construction in connection therewith;

 

(i)                        Failure
to Produce. The failure of the Quantity Obligation of any Bid Facility to
achieve at least 65 percent of the Bid Quantity during any Contract Year.

 

(j)                        Failure
to Deliver. Not applicable.

 

(k)                     Failure to
Transfer RPS Attributes. The failure by Seller to Transfer rights to
NYSERDA in the RPS Attributes associated with the Quantity Obligation of the
Bid Facility, in conformity with Article II.

 

Section 13.02.
Effect of an Event of Default. In addition to any other remedy available
to it under this Agreement or under applicable Law, upon any occurrence of an
Event of Default, the non-defaulting Party shall be entitled to suspend
performance of its obligations under this Agreement until the earlier of such
time as (a) such Event of Default has been cured, or (b) the non-defaulting
Party has elected to terminate this Agreement pursuant to Article XIV
below.

 

Article XIV

 

Termination

 

Section 14.01.
Termination. This Agreement may be terminated:

 

17

 

(a)                    at any time by
either NYSERDA or Seller if: (1) an Event of Default occurs (and following
the expiration of any applicable cure period), (2) the Party seeking to
terminate this Agreement hereunder is the non-defaulting Party, and (3) the
non-defaulting Party has not waived such Event of Default in writing;

 

(b)                   at any time by
the mutual written consent of Seller and NYSERDA;

 

(c)                    unless
otherwise mutually agreed upon by NYSERDA and Seller in writing, on the
expiration of the Contract Delivery Term (subject to Section 18.03 of this
Agreement);

 

(d)                   by Seller, on
or before July 15, 2007;

 

(e)                    by Seller,
after January 1, 2008 and on or before January 8, 2008, if: (1) less
than 60 percent of the Bid Capacity of the Bid Facility has commenced
Commercial Operation by December 31, 2007; AND (2) the “placed in
service” eligibility deadline date under the Federal Production Tax Credit (see 26 U.S.C. § 45, et seq.)
has NOT been extended beyond December 31, 2007 by at least ten (10) months;

 

(f)                      by NYSERDA
in the event it is found that the certification filed by the Seller in
accordance with State Finance Law Sections 139-j and 139-k was intentionally
false or intentionally incomplete;

 

(g)                   by NYSERDA in
the event it is found that the certification filed by the Seller in accordance
with New York State Tax Law Section 5-a was intentionally false when made.

 

Section 14.02.
Effect of Termination. Except as otherwise set forth in Section 18.03
below, in the event of a termination of this Agreement as provided in Section 14.01
above, neither Party shall have any further right or obligation hereunder. In
addition, the Parties hereto agree that irreparable damage would occur in the
event that NYSERDA could not obtain rights to RPS Attributes pursuant this
Agreement from the date of Event of Default in which Seller was the Defaulting
Party, and accordingly, each Party hereby agrees that NYSERDA shall be entitled
to elect to compel specific performance of this Agreement to compel the
delivery of Certification and Assignment Forms and Transfer of all RPS-eligible
Attributes that the Bid Facility produces following the date of any termination
for such an Event of Default in accordance with the terms hereof, together with
any other remedy at law or equity available to NYSERDA in connection therewith,
without the necessity of demonstrating the inadequacy of money damages. In
addition, for any termination by NYSERDA or Seller prior to the date of
commencement of Commercial Operations, NYSERDA shall be entitled only to
Stipulated Damages pursuant to Article XV.

 

Section 14.03.
Good Faith Negotiation. Both Parties agree that, should any dispute
arise during the term of this Agreement, the Parties will make a good faith,
though non-binding effort to reconcile any difference or dispute before the
filing of an action in any court.

 

18

 

Article XV

 

Contract
Security

 

Section 15.01.
On or before March 27, 2007, Seller shall provide to NYSERDA Contract
Security, in the form of cash, certified funds, or a Letter of Credit conforming
to the requirements below, in an amount equal to the product of (1) Bid
Quantity and (2) six dollars ($6.00). In the event that Seller elects to
extend the Commercial Operation Milestone Date pursuant to Section 2.08,
Seller shall provide additional Contract Security, on or before December 1,
2007, in an amount equal to the product of (1) Bid Quantity and (2) three
dollars ($3.00).

 

Section 15.02.
Letter of Credit. A Letter of Credit shall be a clean unconditional and
irrevocable standby letter of credit in favor of NYSERDA as beneficiary, issued
for direct payment by a bank which is a member of the New York Clearinghouse
Association, substantially in the form of the letter of credit attached hereto
as Exhibit C (“Letter of Credit”), in a face amount equal to the Contract
Security Amount, and which Letter of Credit shall provide that the issuing bank
will pay to NYSERDA amounts in aggregate up to that same face amount upon
presentation of only the Sight Draft in the amount to be drawn and the Payment
Certificate, in the form of Annex A and Annex B, respectively, to the Letter of
Credit, and have an expiration date not shorter than one (1) year. Should
the Bid Facility not have commenced Commercial Operation by a date 30 days
prior to the expiration date of the letter of Credit, and Seller not having
provided NYSERDA or arranged with NYSERDA to provide a substitute Letter of
Credit prior to such expiration, NYSERDA shall be thereupon entitled to draw on
the Letter of Credit for the full amount then outstanding and the funds
received shall be held by NYSERDA until a substitute Letter of Credit has been
provided, or for application against subsequent obligations of Seller.

 

Section 15.03.
Replacement. Any assignee within Article VIII of this Agreement
shall, simultaneously with its receipt of the assignment, deliver to NYSERDA a
Replacement Letter of Credit meeting the requirements of this Article, and
NYSERDA shall, within twenty (20) business days after receipt of a compliant
Replacement Letter of Credit, return the original Letter of Credit to Seller.
Upon the failure of an assignee to deliver a compliant Replacement Letter of
Credit to NYSERDA simultaneously with its receipt of the assignment, NYSERDA
shall be thereupon entitled to draw on the Letter of Credit for the full amount
then outstanding and the funds received shall be held by NYSERDA for
application against subsequent obligations of Seller and/or the assignee under
this Agreement.

 

Section 15.04.
Refund of Security. The amount provided by Seller as Contract Security
will be returned or refunded to Seller by NYSERDA as follows:

 

a.                         In the
amount of fifty percent (50%) of the amount provided if the Bidder elects to
terminate this Agreement on or before July 15, 2007.

 

b.                        In its
entirety if the Bid Capacity of the Bid Facility that enters Commercial
Operation on or before the Commercial Operation Milestone Date is equal to or
greater than the Bid Capacity of the Bid Facility described in the Bid
Proposal.

 

19

 

c.                         At a
prorated amount if the Bid Capacity of the Bid Facility that enters Commercial
Operation on or before the Commercial Operation Milestone Date is less than the
Bid Capacity of the Bid Facility described in the Bid Proposal. Such amount
that will be returned, expressed as a percentage of the total Contract
Security, will be equal to Bid Capacity of the Bid Facility that enters
Commercial Operation on or before the Commercial Operation Milestone Date
divided by the Bid Capacity of the Bid Facility described in the Bid Proposal.

 

Section 15.05.
Retention Security. Amounts provided by Seller as Contract Security will
be retained by NYSERDA as follows:

 

a.                         In the
amount of (50%) of the amount provided if the Bidder elects to terminate this
Agreement on or before July 15, 2007;

 

b.                        At a
prorated amount if the Bid Capacity of the Bid Facility that is in Commercial
Operation on the Commercial Operation Milestone Date is less that the Bid
Capacity of the Bid Facility described in the Bid Proposal. Such amount that
will be retained, expressed a percentage of the total Contract Security, will
be equal to the Bid Capacity of the Bid Facility described in the Bid Proposal
minus the Bid Capacity of the Bid Facility that enters Commercial Operation on
or before the Commercial Operation Milestone Date; divided by the Bid Capacity
of the Bid Facility described in the Bid Proposal.

 

c.                         In its
entirety if the Seller elects to terminate the contract under Section 14.01(e) of
the RPS Standard Form Contract.

 

Section 15.06.
Stipulated Damages. NYSERDA and Seller hereby agree, acknowledge and
stipulate that NYSERDA’s retention of amounts provided by Seller as Contract
Security pursuant to Article XV, in the proportions stated within this
Article, is fair and reasonable under the circumstances and in light of the
uncertainty and inability to adequately quantify the harm that would result to
NYSERDA as a result of the events that permit NYSERDA to retain such amounts of
the Contract Security.

 

Article XVI

 

Force
Majeure

 

Section 16.01.
Force Majeure. Neither Party hereto shall be liable for any failure or
delay in the performance of its respective obligations hereunder if and to the
extent that such delay or failure is due to a cause or circumstance beyond the
reasonable control of such Party, including, without limitation, acts of God or
the public enemy, expropriation or confiscation of land or facilities,
compliance with any law, order or request of any Federal, State, municipal or
local governmental authority, acts of war, rebellion or sabotage or damage
resulting therefrom, fires, floods, storms, explosions, accidents, riots, or
strikes. Variability in the frequency or force of the wind, of rainfall, or of
water levels will in no event constitute force majeure events. Failure by
Seller to obtain or secure any permit or approval or delay in obtaining any
permit or approval of any sort with regard to Seller’s performance under the
Agreement shall not constitute a force majeure event.

 

20

 

Article XVII

 

Compliance
with Certain Laws

 

Section 17.01.
Governing Law; Venue. This Agreement shall be governed by, and construed
in accordance with the laws of the State of New York applicable to contracts
executed and to be performed in New York State without regard to its conflicts
of laws principles. The Parties irrevocably acknowledge and accept that all
actions arising under or relating to this Agreement, and the transactions
contemplated hereby and thereby shall be brought exclusively in a United States
District Court or New York State Court located in Albany, New York having
subject matter jurisdiction over such matters, and each of the Parties hereby
consents to and accepts such personal jurisdiction of, and waives any objection
as to the laying of venue in, such courts for purposes of such action.

 

Section 17.02.
Laws of the State of New York. Seller shall comply with all of the
requirements set forth in Exhibit A hereto.

 

Section 17.03.
All Legal Provisions Deemed Included. It is the intent and understanding
of the Seller and NYSERDA that each and every provision of law required by the
laws of the State of New York to be contained in this Agreement shall be
contained herein, and if, through mistake, oversight or otherwise, any such
provision is not contained herein, or is not contained herein in correct form,
this Agreement shall, upon the application of either NYSERDA or the Seller,
promptly be amended so as to comply strictly with the laws of the State of New
York with respect to the inclusion in this Agreement of all such provisions.

 

Section 17.04.
Permits and Approvals. The Seller shall be responsible to obtain all
applicable permits and regulatory approvals that may be required in order to
develop and/or operate the Bid Facility over the duration of the Contract
Delivery Term. Neither the RPS Program nor selection under this RFP in any way
replaces or modifies the necessity or applicability of any permit or approval
process by any jurisdiction. NYSERDA’s obligations to make payments to Sellers
will be conditional on the acquisition of all such permits and approvals. Upon
request by NYSERDA Seller must demonstrate such acquisition and/or provide
copies of all permits and approvals acquired. Seller shall provide prompt
Notice to NYSERDA of the initiation of any criminal or regulatory
investigation, hearing, proceeding, or review process (“Process”) by any
federal or State entity regarding any actual or alleged violation of any permit
or approval obtained or applied for with respect to the Bid Facility, as well
as of any modification, penalty and/or fine that may be imposed or occur as a
result of such a Process or violation.

 

Section 17.05.
Other Legal Requirements. The references to particular laws of the State
of New York in this Article and elsewhere in this Agreement are not
intended to be exclusive and nothing contained in such Article, Exhibit and
Agreement shall be deemed to modify the obligations of the Seller to comply
with all legal requirements.

 

21

 

Article XVIII

 

Additional Provisions

 

Section 18.01.
Forward Contract. Each Party represents and warrants to the other that
it is a “forward contract merchant” within the meaning of the United States
Bankruptcy Code, that this Agreement is a “forward contract” within the meaning
of the United States Bankruptcy Code, and that the remedies identified in this
Agreement shall be “contractual rights” as provided for in 11 U.S.C. § 556 as
that provision may be amended from time to time.

 

Section 18.02.
Taxes. Seller shall be responsible for and obligated to pay all present
and future taxes, fees and levies that may be assessed by any entity upon the
Seller’s provision of Attributes to NYSERDA, or with respect to the creation of
the RPS Attributes and/or the energy with which they are associated, up to the
Delivery Point.

 

Section 18.03.
Term. Unless terminated earlier under this Article, this Agreement shall
expire upon the expiration of the Contract Delivery Term, provided that payment
has been made for all RPS Attributes as to which a Certification and Assignment
of Rights Form has been delivered to NYSERDA. Upon such date or upon
earlier Termination of this Agreement under Article XIV, neither Party
shall have any further obligation to the other, except that Sections 11.01,
17.01, 20.01, 21.02, 21.03, 21.04, and NYSERDA’s Payment obligation under Article IV
shall survive.

 

Section 18.04.
Waiver. Either Party to this Agreement may (a) extend the time for
the performance of any of the obligations or other acts of the other Party, (b) waive
any inaccuracies in the representations and warranties of the other Party
contained herein or in any document delivered by the other Party pursuant
hereto, or (c) waive compliance with any of the agreements or conditions
of the other Party contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the Party to be
bound thereby. Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this Agreement. No
provision of this Agreement will be deemed to have been waived unless the
waiver is in writing; no delay by NYSERDA in exercising its rights hereunder,
including the right to terminate this Agreement, shall be deemed to constitute
or evidence any waiver by NYSERDA of any right hereunder. The rights granted in
this Agreement are cumulative of every other right or remedy that the enforcing
Party may otherwise have at law or in equity or by statute.

 

Section 18.05.
Independent Contractor. The status of the Seller under this Agreement
shall be that of an independent contractor and not that of an agent, and in
accordance with such status. Seller and its respective officers, agents,
employees, representatives and servants shall at all times during the term of
this Agreement conduct themselves in a manner consistent with such status and
by reason of this Agreement shall neither hold themselves out as, nor claim to
be acting in the capacity of, officers, employees, agents, representatives or
servants of NYSERDA nor make any claim, demand or application for any right or
privilege applicable to NYSERDA,

 

22

 

including, without
limitation, rights or privileges derived from workers’ compensation coverage,
unemployment insurance benefits, social security coverage and retirement
membership or credit.

 

Section 18.06.
Severability. If any provision of this Agreement shall be declared by
any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement shall not be affected and shall remain in
full force and effect. If any provision of this Agreement is so broad as to be
unenforceable, that provision shall be interpreted to be only so broad as will
enable it to be enforced.

 

Section 18.07.
Seller Expense. Seller shall, at its own expense, make all arrangements
necessary to interconnect the Bid Facility with a transmission or distribution
system and to comply with the Delivery Requirement. This requirement
encompasses Seller’s purchasing or arranging for all services including without
limitation transmission, ancillary services, any control area services, line
losses and transaction fees necessary to deliver energy to the New York Control
Area, in accordance with all rules and protocols of the NYISO, throughout
the Contract Delivery Term.

 

Section 18.08.
Environmental Disclosure. At the time of the execution of this
Agreement, New York does not employ any registry for the tracking,
registration, or trading of renewable or environmental attributes or credits,
but rather has instituted the Environmental Disclosure program, under which the
Department of Public Service will conduct Conversion Transactions to accomplish
verification of the transactions consummated hereunder. In the event that an
attribute or credit registry is adopted in the future, Seller and Buyer agree
to: (1) take such steps as are required under such system to continue to
transfer RPS Attributes to NYSERDA in accordance with the terms of this
Agreement; and (2) amend this Agreement as needed to effect its intent and
to comply with any requirements of such attribute or credit registry. Should
the PSC create, sanction, adopt or begin participation in a tracking system for
accounting for attributes or certificates associated with generation in the New
York Control Area, Seller shall deliver the attributes or certificates
associated with each RPS Attribute to an account designated by NYSERDA.

 

Section 18.09.
Covenant. Seller hereby covenants and promises that the Bid Facility is
or will be eligible under the Order and that it will remain so throughout the
Contract Delivery Term.

 

Article XIX

 

Notices, Entire Agreement, Amendment, Counterparts

 

Section 19.01.
Notices. All notices, demands and other communications hereunder shall
be effective only if given in writing and shall be deemed given when (a) delivered
in person, (b) delivered by private courier (with confirmation of
delivery), (c) transmitted by facsimile (with confirmation of
transmission) or (d) five Business Days after being deposited in the
United States mail, first-class, registered or certified, return receipt
requested, with postage paid. For purposes hereof, notices, demands and other
communications shall be sent to the following (or to such other address as the
Seller or NYSERDA shall have furnished to the other party in writing):

 

23

 

	
   To Seller:

  	
   

  	
  Noble Ellenburg Windpark, LLC

  
	
   

  	
   

  	
  c/o Noble Environmental Power

  
	
   

  	
   

  	
  Attn: Charles C. Hinckley, CEO

  
	
   

  	
   

  	
  8 Railroad Avenue

  
	
   

  	
   

  	
  Essex, CT 06426

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Latham & Watkins, LLP

  
	
   

  	
   

  	
  Attn: John Sachs

  
	
   

  	
   

  	
  555 Eleventh Street, NW

  
	
   

  	
   

  	
  Washington, DC 20004-1304

  
	
   

  	
   

  	
   

  
	
  To NYSERDA:

  	
   

  	
  NYSERDA

  
	
   

  	
   

  	
  Attn: Office of General Counsel

  
	
   

  	
   

  	
  17 Columbia Circle

  
	
   

  	
   

  	
  Albany, New York 12203-6399

  

 

Section 19.02.
Entire Agreement; Amendment. This Agreement embodies the entire
agreement and understanding between NYSERDA and the Seller and supersedes all
prior agreements and understandings relating to the subject matter hereof.
Except as otherwise expressly provided for herein, this Agreement may be
amended, modified, changed, waived, discharged or terminated only by an
instrument in writing, signed by the Party against which enforcement of such
amendment, modification, change, waiver, discharge or termination is sought.

 

Section 19.03.
Counterparts. This Agreement may be executed in counterparts each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

 

Article XX

 

Publicity

 

Section 20.01.
Publicity. Seller and/or the Bid Facility owner will collaborate with
NYSERDA’s Communications Unit, or RPS program staff, with regard to the
preparation of any press release, public announcement, publication or media
interview with respect to the Parties’ entry into this Agreement or the subject
matter thereof or which concerns NYSERDA or the RPS Program. Staff can be
contacted by calling 518-862-1090. In any such press release, public
announcement publication, or media interview Seller and/or the Owner of the Bid
Facility and/or its employees shall credit NYSERDA and the funding
participation of the Renewable Portfolio Standard in the activities of the Bid
Facility. Seller will not represent that positions taken or advanced by Seller
represent the opinion or position of NYSERDA or the State of New York.

 

24

 

Article XXI

 

Confidentiality

 

Section 21.01.
In order to enable NYSERDA and the administrator of the NYS Environmental
Disclosure Program to verify delivery of RPS Attributes, NYSERDA will require
the Seller to provide detailed monthly market accounting settlement or other
pertinent data from the administrator(s) of the energy market into which
energy from the Bid Facility was delivered. Seller may also be required to
waive confidentiality, as to NYSERDA, for the direct transfer to NYSERDA by an
energy market administrator of transactional and/or delivery information and
data pertinent to the verification of RPS Attribute creation and delivery.

 

Section 21.02.
Freedom of Information Law. Seller acknowledges that NYSERDA is subject
to and must comply with the requirements of New York’s Freedom of Information
Law (“FOIL;” see Public Officers’ Law Article 6).

 

Section 21.03.
Claim of Confidentiality. Information of any tangible form including any
document that Seller wishes to be protected from disclosure to third parties,
including any information provided as a part of a Bid Proposal Package
submitted in response to RFP 916, must be marked “Confidential” or “Proprietary”
at the time such information is provided to NYSERDA.

 

Section 21.04.
Trade Secrets/Commercial Information. The FOIL Law (Public Officers Law
§ 87(d)(2)) provides an exception to disclosure for records or portions thereof
that “are trade secrets or are submitted to an agency by a commercial
enterprise or derived from information obtained from a commercial enterprise
and which if disclosed would cause substantial injury to the competitive
position of the subject enterprise.” If NYSERDA receives a request from a
third party for information or a document received from Seller and which has
been marked “Confidential” or “Proprietary,” NYSERDA will process such request
under the procedures provided by NYSERDA’s FOIL regulations (see www.nvserda.org/About/NYSERDA.Regulations.pdf.)

 

IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed and delivered by their
duly authorized representatives.

 

	
  NOBLE
  ELLENBURG WINDPARK, LLC

  	
  NEW
  YORK STATE ENERGY RESEARCH

  AND DEVELOPMENT AUTHORITY

  
	
   

  	
   

  
	
  By

  	
  /s/ Thomas F. Swank

  	
   

  	
  By

  	
  /s/ Peter R. Smith

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
  Thomas F. Swank

  	
   

  	
  Name

  	
  Peter R. Smith

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
  Vice President

  	
   

  	
  Title

  	
  President

  
								

 

25

 

	
  STATE/PROVINCE OF
  Connecticut

  	
  )

  
	
   

  	
  ) SS:

  
	
  COUNTY/CITY OF Middlesex

  	
  )

  

 

On the 23 day of March,
2007, before me, the undersigned, personally appeared Thomas Swank, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person on behalf of which the individual(s) acted,
executed the instrument.

 

	
  /s/ Jennifer Kovacs

  	
   

  	
   

  	
   

  
	
  Notary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JENNIFER KOVACS

  NOTARY PUBLIC

  MY COMMISSION EXPIRES MAY 31, 2011

  	
   

  	
   

  	
   

  

 

26Exhibit 10.16

 

COMMERCIAL LEASE

 

THIS IS A COMMERCIAL LEASE
made between Macbeth
Ventures, LLC, of Essex, Connecticut (hereinafter referred to as
the “Lessor”), and Noble
Environmental Power, LLC (hereinafter collectively referred to
as the “Lessee”), in which the parties hereto covenant and agree as follows:

 

1.                    GRANT OF PREMISES -  Lessor leases to Lessee and Lessee agrees to lease from Lessor certain
commercial premises consisting of 2572 rentable square feet. The
demised premises is comprised of Units T8 and T10 totaling 2,572 rentable
square feet located in the Tank Building at 8 Railroad Ave., Essex,
Connecticut, and more particularly described in EXHIBIT “A” appended hereto,
hereinafter referred to as the “leased premises” for the term and at the rental
rate prescribed below.

 

2.                    TERM OF LEASE / BASE RENT / CAM CHARGES

 

2.1   Term –
The term of the lease shall be for a period of 2 years 7 months, commencing on
the first day of March 1, 2006 and ending on September 30, 2008.
There shall be one (1) two (2) year option period at the expiration
of this lease term as is provided for in Paragraph 17 herein. Under no
circumstances will Lessee be allowed to occupy premises until a Certificate of
Occupancy has been issued.

 

2.2   Base
Rent Rates – The base rent rate for

 

March 1, 2006 –September 1,
2006 @ $12.00 s/f $18,004.00 @ $2,572.00 per mo.

October 1, 2006 –
September 1, 2007 @ $12.50 s/f $32,150.00 @ $2,679.17 per mo.

October 1, 2007 –
September 1, 2008 @ $12.75 s/f $32,793.00 @ $2,732.75 per mo.

 

First Option Period Rental
Rates

October 1, 2008 – September 1,
2010 @ $13.00 s/f $ 66,842.00 @ $2,786.33 per mo.

 

This is a net lease,
utilities plus CAM to be paid by the Lessee.

 

2.3   CAM
Charges – In addition to the base rent, Lessee will pay Lessor CAM charges of
$4.36 per square foot. CAM charges will be adjusted annually on the first day
of July each year of the term of this Lease as set forth in Paragraph
6.13C, below. For all purposes, CAM charges shall be considered additional
rent.

 

3.                    RENT -  Lessee agrees to pay to Lessor the full amount due for the entire
initial lease term. Lessee shall pay to Lessor rent in monthly installments.
Said rent shall be paid by cash, check or direct wire transfer, in the
prescribed monthly installments on or before the first day of each calendar
month, plus any an additional wire transfer fee; an additional charge of an
amount equal to ten percent (10%) of any monthly rental payment plus additional
payments due hereunder shall be due and payable to Lessor in the event that such
payment is not received by Lessee within ten (10) days of the due date. In
addition to the foregoing late payment charge as above provided, a further
service, handling and collection charge of $75.00 shall be due and payable in
the event any check tendered in payment of amounts due hereunder shall fail to
clear for payment and the same is returned to Lessor for any reason whatsoever.

 

 

4.                    WARRANTY OF THE LESSOR - The Lessor warrants:

 

4.1   Ownership - That
Lessor is, upon execution of this lease, the owner in fee simple of the leased
premises and good and marketable title to the same subject only to the interest
of Lessee created hereunder and such encumbrances and restrictions as of record
may appear;

 

4.2   Disclaimer of Other Warranties - The Lessee has been given, and hereby acknowledges, full opportunity
to inspect the leased premises and neither Lessor, nor any person on Lessor’s
behalf, has made any representation concerning the leased premises. Lessor
makes no warranty, expressed or implied, of the condition of the leased
premises or of its suitability for any intended use by Lessee.

 

5.                    COVENANTS OF THE LESSOR -  The Lessor covenants and agrees:

 

5.1   Delivery of Possession - That at the commencement of the term of
this lease, Lessor shall deliver to Lessee physical
possession of the leased premises; and

 

5.2   Quiet Enjoyment -
That during the term of this lease, Lessor shall permit Lessee to have and to
hold the leased premises without hindrance or molestation from Lessor or any
other person within Lessor’s control and shall warrant and defend the leasehold
against the lawful claims and demands of all persons in derogation of the
leasehold interest created herein subject only to the encumbrances referred to
in Paragraph 4.1.

 

6.                    COVENANTS OF THE LESSEE - The Lessee covenants and agrees:

 

6.1   Payment of Rent - To pay the rent punctually without demand;

 

6.2   Payment of Utility Charges - To pay promptly when due all charges for electricity, telephone
services, and all other utilities furnished to or used upon the leased
premises;

 

6.3   Repairs of Lessee -
To make or cause to be made the following repairs to the  leased premises;

 

6.3.1 of damage caused
intentionally, negligently or wrongfully by Lessee or his agents
or employees.

 

6.3.2 of damage, not caused
by the Lessor, of a minor structural nature to the walls, woodwork, and doors
and of a minor functional nature to the heating system, air conditioning
system, plumbing, wiring, lighting, and doors (minor being defined as those
repairs of less than $200 an incident). Replacement of all broken windows is
the responsibility of the Lessee and should be covered by a plate glass
insurance policy as required below in Paragraph 6.9.

 

 

6.4                                   Cleaning: Removal
of Refuse - To remove all garbage, ashes, refuse and waste from the leased
premises to be placed in facilities provided
by Lessor; to permit no hazardous
accumulation of boxes, barrels, packages, wastepaper or other refuse in or upon
the leased premises; to keep the leased premises clean, neat and in good order,
all at the Lessee’s own expense;

 

6.5                                 Compliance with
Governmental Regulations - To comply with all the laws and regulations of
the State of Connecticut, and the laws, ordinances
and regulations of the municipality in which the leased premises are located
relating to the use, occupancy and condition of the leased premises; and to
save the Lessor harmless from all fines, penalties and costs for violation thereof;

 

6.6                                 Alterations -
To make no improvements in, additions to, or other interior or exterior alterations of the
leased premises other than cosmetic, non-structural changes without the prior
written consent of Lessor, which consent shall not be unreasonably withheld;  and Lessee agrees
that any such consent shall not be construed to make Lessor a party to any such
work or to any agreement to have such work performed; and Lessee agrees to pay
promptly when due the entire cost of any services, labor and materials performed
or furnished in the course of any such improvements; and Lessee agrees to save
Lessor harmless from and to indemnify Lessor against any and  all injury, loss or damage to any person or
property resulting from or occasioned by any such work or improvements;

 

6.7                                 Ownership of
Permanent Improvements - That all permanent improvements in, additions to,
or other permanent interior or exterior alterations of the leased premises made
shall, upon annexation, become the property of Lessor except that trade
fixtures will be considered Lessee’s property, but if removed in such a way as to
leave premises in any state that requires repairs to same, such areas shall be
repaired at Lessee’s expense to Lessor’s satisfaction at termination of Lease,
and in the event that Lessee fails to effect such repairs, if required, Lessor
may make such repairs as necessary and recover the cost thereof from Lessee or
charge same against security deposit; 

 

6.8                                 Surrender of
Premises Upon Termination - To surrender, at the termination of this lease,
whether by expiration or otherwise, the leased premises in as good state and condition
as reasonable wear and tear will permit and to leave same neat, clean and in  good order; and in the event of default of
performance by Lessee of this covenant, Lessor may, at Lessor’s option, clean
or have commercially cleaned, the leased premises and, upon presentation to
Lessee of cancelled checks or other proof of payment therefore, Lessee shall
pay to Lessor the amount thereof; but nothing herein shall be construed to
enlarge or diminish the obligation of Lessee to make repairs under this lease; 

 

6.9                                 Insurance - To maintain in
effect during the term of this lease, liability insurance in the amount of
$1,000,000 against the risk of liability to any person for injury, loss or damage
to any person or property upon, or resulting from or occasioned by any use of or
condition upon, the leased premises or by reason of any act or omission of
Lessee or Lessee’s agents, employees, guests or invitees; and to deliver to
Lessor, upon request, 

 

 

a
certificate or certificates evidencing such insurance coverage; and to have
Lessor named as additional insured under any liability policy if requested by
Lessor;

 

6.10                           Use - To use the
leased premises for the purpose of general offices.

 

6.11                           Subordination - Upon the request
of Lessor, to subordinate, in form and manner prescribed by Lessor, this lease
and the lien thereof to the lien of any present or future mortgage or mortgages
upon the leased premises or the property of Lessor of which the leased
premises form a part irrespective of the time of execution or of recording of
any such mortgage. The word “mortgage” as used in this subparagraph shall
include mortgages, deeds of trust and any other security interest and
modifications, extensions, renewals and replacements thereof and any future
advances thereunder;

 

6.12                           Indemnification of
Lessor - To save Lessor harmless from, and indemnify Lessor against, any
liability to any person for injury, loss or damage to any person or property upon,
resulting from or occasioned by any use of or condition upon, the leased premises
or by reason of any act or omission of Lessee or Lessee’s
agents, employees, guests or invitees; and to save Lessor harmless from, and to
indemnify Lessor against, any claim or demand alleging any such liability;

 

6.13A                 Reimbursement for
Real Estate Property Taxes - To pay to the Lessor, in addition to the rent
herein before prescribed, a pro-rata share (based on percentage of total square
footage) of the amount of the total real property taxes assessed, and on each
assessment day thereafter during the term of this lease, in respect of the
land and building in which the leased premises are located. This amount is
included under

 

6.13B      Reimbursement
for Insurance - To also pay to Lessor, in addition to the rent herein
before prescribed, a pro-rata share (based on percentage of total square
footage) of the amount of building insurance premiums during the term of this
lease in respect to the entire building in which the leased premises are
located. This amount is included under Paragraph 6.13C.

 

6.13C                   Reimbursement for
Common Area Maintenance - A base common area maintenance (CAM) charge of
FOUR DOLLARS AND 36/100 DOLLARS ($4.36) per square foot per annum totaling
ELEVEN THOUSAND TWO HUNDRED THIRTEEN AND 92/100 DOLLARS ($11,213.92). A minimum
of NINE HUNDRED THIRTY FOUR AND 49/100 DOLLARS ($934.49) per month shall be added to the monthly rent payment
to cover the base year expenses for general maintenance, Lessee’s pro-rata share
of real estate taxes, repairs and maintenance, ground care and snow plowing, trash
removal, common area maintenance, management, cleaning services and insurance.
The CAM charges will be calculated and billed annually in the month of July of
each year of the lease.

 

6.13D                  Energy – Lessee is
responsible for contracting and payment of their individual heating, air
conditioning and electricity. This includes arranging for
delivery service of the propane for heating and arranging for electrical
service. 

 

 

6.14                           General Conduct - That Lessee will
not allow or suffer any act or thing to be done upon the leased premises which
may make void or voidable any insurance of Lessor’s property, of which the
leased premises are a part, or which may render any increased or  extra premium payable for, or which
may prevent the obtaining of, any such insurance; and to reimburse Lessor, upon
demand, for all extra premiums for such insurance attributable to Lessee’s use
of the leased premises, not to exceed $1,000.00 for the first year and if there
is any increase from the first year premium, the tenant shall pay a 10% increase
of the $1,000.00 per year;

 

6.15                           Signs - That, except as
may otherwise be permitted hereunder, Lessee will not display any sign,
picture, advertisement or awning within the building, outside or on the exterior
thereof unless the same shall have previously been approved, as to location, style
and design, by Lessor; 

 

6.16                           Lessor’s Access to
Show Premises - To permit the Lessor to show said premises, at any time during the
one-hundred twenty (120) days next preceding expiration of the term of this
lease, to prospective purchasers or lessees during the day by appointment or
upon reasonable notice; 

 

6.17                           Assignment;
Sublease - That Lessee shall not assign, mortgage, pledge, encumber or otherwise
transfer this lease or the estate hereby granted in any manner nor sublet or
underlet the leased premises or any part thereof, and then to do so only with
prior written consent of Lessor, such consent not to be withheld provided that
such sublease meets commercially-reasonable standards. However, in the event of
such a permitted sublease, Lessor shall have the right to increase the rent to
bring it to fair market value rate, as comparison area
rents shall determine. In the event Lessor consents , as aforesaid, Lessee
shall remain liable. 

 

6.18                           Timely Vacating:
Holdover Penalty - That Lessee shall promptly and timely vacate the subject premises on
or no later than the date upon which the lease term or any extension or renewal
period thereof shall have expired; and, that in the event Lessee fails to so
promptly vacate, it shall be liable to Lessor for any and all costs, expenses, damages
or claims of whatever nature, directly or indirectly, incurred, sustained or suffered by Lessor as a result of such wrongful holding
over by Lessee including any and all claims made or damages sustained by a new
tenant for the premises of Lessor; and, further in addition thereto, that in
the event of such holding over, Lessee shall pay to or be liable for Lessor as a penalty for such
wrongful delay in vacating the subject premises the sum of THREE HUNDRED
DOLLARS ($300.00) per day for each day of such continued occupancy, together
with all costs and expenses incurred by Lessor to regain possession of the
premises in order to re-let or lease the same. 

 

6.19                           Attorneys Fees - That Lessee
shall be responsible for attorney’s fees plus any court costs, sheriff fees,
and related expenses incurred by Lessor in enforcing the terms and provisions
of this Lease, and that it shall not be necessary for Lessor to institute legal
proceedings in order for Lessee’s obligation for such payment hereunder to commence.

 

 

7.                    COVENANTS OF BOTH PARTIES - The Lessor and the Lessee covenant and agree:

 

7.1                                 Termination of Lease - That in addition to all other legal or
equitable remedial rights to which they may respectively be entitled, under
this lease or otherwise, Lessor may terminate this lease if: 

 

7.1.1                             Non-Payment of Rent - Any rental payment shall be in arrears and
unpaid for a period of ten days after written demand by the Lessor therefore
made after the same has become due and payable under this lease; or

 

7.1.2                             Destruction of Leased Premises - At any time during the term of this lease,
the leased premises become untenable by reason of total or partial destruction
thereof, otherwise than through the intentional, negligent or wrongful conduct
of Lessor;

 

7.1.3.                          Default of Lessee - Lessee shall fail to perform any one or
more of Lessee’s obligations hereunder, other than a default in the payment of
rent, and such default shall continue for a period of thirty (30) days after
written demand for performance has been made specifying such default; or 

 

7.1.4.                            Vacation of Leased Premises - The
leased premises become vacant, abandoned or unattended for a period of more
than fifteen (15) days; not including holidays or vacation; or 

 

7.1.5.                          Involuntary Transfer of Lease - The leasehold interest of Lessee under this
lease, or any interest therein, shall by operation of law desolve upon or pass
to any person or persons other than Lessee; or 

 

7.1.6                             Eminent Domain - All or any portion of the leased premises
are taken by exercise of the power of eminent domain, in which case the Lessee
shall have no right to or interest in any portion of the award made in
compensation for such taking (except that the Lessee may be entitled to pursue
its own claims against the condemning agency for its own loss or interruption
of business; 

 

and Lessee may terminate
this lease if: 

 

7.1.7                             Destruction of Leased Premises - At any time during the term of this lease,
the leased premises become untenable for more than ninety days by reason of
total or partial destruction thereof, otherwise than through the intentional
negligent or wrongful conduct of Lessee or Lessee’s agents or employees or by
reason of any fire or motor vehicle damage other than that caused by Lessee or
Lessee’s agents or employees; or  

 

7.1.8                             Default of Lessor - Lessor shall fail to perform any one or
more of Lessor’s obligations hereunder and such default shall continue for a
commercially reasonable period of ninety days after written demand for
performance has been made specifying such default. 

 

 

Any
such right of termination shall be exercised in the following manner only; the party
entitled to terminate shall dispatch notice by certified mail, return receipt requested,
of that party’s intention to terminate at 12:00 noon on the day following the minimum
number of days required above for giving of such notice where so provided; otherwise,
upon fifteen (15) days written notice. 

 

7.2                               Exercise
of Remedial Rights - The remedial
rights available to either party in respect of this lease may be exercised
simultaneously, cumulatively or alternately as may be necessary or appropriate to enforce that party’s primary rights in respect hereof. However, the
failure of either to exercise any of such remedial rights shall not constitute a
waiver of any default by the other party nor relieve such other party from the performance
of any obligation hereunder.

 

8.                    LESSOR’S RIGHT OF RE-ENTRY
AND REPOSSESSION UPON TERMINATION in the event that Lessor shall terminate this lease, pursuant to its
terms,  then
at the time of termination, and thereafter, Lessor may re-enter and repossess
the leased premises without further notice to Lessee or the institution of any
action or proceeding therefore and may remove and store, at Lessee’s sole risk
and expense and in the name of Lessee, all
property of Lessee found thereon and may alter the character of the leased
premises and may at any time and from time to time lease the leased premises,
or any part or parts thereof, for the whole or any portion or portions of the remaining
term of this lease and receive the rents therefore, applying the same to the payment
of any and all expenses paid or incurred by Lessor in recovering possession of and
in altering and re-letting the leased premises and in collecting such rents,
and then to the fulfillment of Lessee’s covenants hereunder. After Lessor shall
have re-entered and repossessed upon such termination, Lessee, not withstanding
such re-entry and repossession, shall pay to Lessor, at the times herein
specified thereto, such of the several installments of rent and other payments,
that may or would have become payable hereunder had this lease not been
terminated, as shall remain after the application, prescribed herein before, of
the rents, if any, collected by Lessor from re-letting the leased premises. No
re-entry and repossession of the leased premises shall be deemed to absolve or
discharge Lessee from the performance of his obligations hereunder. Lessee
hereby expressly waives the service of such notice of intention to re-enter and
repossess, or of instituting legal proceedings to that end, as may be provided for
in any statute. LESSEE FURTHER WAIVES, PURSUANT TO SECTION 52-278f OF THE
CONNECTICUT GENERAL STATUTES, ANY RIGHT TO NOTICE AND HEARING PRIOR TO THE
ISSUANCE OF A WRIT FOR A PRE JUDGMENT REMEDY IN ANY ACTION BY LESSOR AGAINST
LESSEE UPON ANY DEFAULT BY LESSEE OR OTHER CAUSE OF ACTION ARISING UNDER OR BY
REASON OF THIS LEASE.

 

9.                    DEPOSIT - Upon execution of this lease, Lessee shall
deliver, and Lessor acknowledges receipt of $3,858.00
as a security deposit. The purpose of the security deposit is to
provide a fund, which will be available to satisfy any lawful claim or claims by
Lessor against Lessee for damage caused to the leased premises by Lessee or his
guest or invitees during the term of this lease. Said security deposit and the
fund created thereby shall not be used by Lessee in payment of the last month’s
rental payment due or any portion thereof under any circumstances. Lessor shall
hold said sum upon the following conditions: upon expiration of the term
or earlier termination of this lease, Lessor shall inspect, or cause to be
inspected, the leased premises within ten (10) business days following
such date of expiration or earlier termination. If such inspection reveals
damage to the leased premises caused by Lessee, his guests or invitees, then
Lessor shall have the right to retain such portion of the security deposit as does
not exceed the reasonable cost or repairing said damage and shall forthwith refund
to Lessee any excess thereof. If such inspection reveals no such damage and all
other provisions of this lease have been complied with and all outstanding
bills of Lessee have been paid, then Lessor shall forthwith refund to Lessee
the whole amount of the security deposit. In accordance with Connecticut State
Law, these monies shall not be used by Lessee for rents during the last month
of this lease. 

 

 

10.              CONDEMNATION AWARDS - Lessor reserves to himself, and Lessee hereby
assigns to Lessor, all rights which may accrue to Lessee on account of the taking
of all or any portion of the leased premises through the exercise of the power
of eminent domain. Lessee agrees to execute such instruments of assignment as
may be required by Lessor to join with Lessor in any petition for the recovery
of damages for any such taking, if requested by Lessor, and to pay Lessor any
damages paid to Lessee, less the amount, if any, of any expense paid or
incurred by Lessee in prosecuting any joint petition made with Lessor. It is
agreed and understood that Lessor does not reserve to himself and Lessee does
not assign to Lessor any right to damages payable for the taking of any
buildings or other improvements constructed or installed on the leased premises
at Lessee’s own expense.

 

11.                RENT
ADJUSTMENTS – No adjustments in the base rent. Annual rent shall be paid in equal monthly
installments.

 

12.              CONSTRUCTION - The words “Lessor” and ‘Lessee” as used
herein shall include the heirs, executors, administrators, successors and
assigns of Lessor and of Lessee as well as Lessor and Lessee themselves; and
the covenants herein contained shall inure to the benefit of and shall be
binding upon the heirs, executors, administrators, successors and assigns of
Lessor and of Lessee as well as Lessor and Lessee themselves. Personal pronouns
have for convenience been cast in the masculine singular, but they should be
read to include other genders and number when the context naturally requires.
This writing contains the entire agreement between  the parties hereto
concerning the lease of said premises and supersedes all prior or contemporaneous
oral or written agreements between them relating thereto. This agreement may be
cancelled, modified or amended only by a written instrument executed by the
parties.

 

13.              RENT PAYMENTS AND NOTICES - All rental payments and notices to be sent to
Lessor hereunder shall be addressed to: Macbeth Ventures, LLC, c/o Realty Concepts, Inc.,
2514 Boston Post Road, 9C, Guilford, CT 06437, unless otherwise directed in
writing by Lessor. 

 

14.              GOVERNING LAW - This lease shall be  construed and
enforced in accordance with the laws of the State of Connecticut. 

 

 

15.  BROKERAGE: Both
Lessor and Lessee acknowledge that no other Real Estate Broker, except Realty
Concepts, Inc., has been involved in this transaction and that the lessor is
responsible for any commission or fee under a separate agreement between the Lessor
and Lessor’s Broker. To the extent that any other broker may make  a claim to a commission or other compensation
as a result of this transaction, Lessee will be responsible to satisfy such
claim (if any), and will indemnify and hold Lessor harmless therefrom.

 

16.
 EXECUTION
AND EFFECTIVE DATE - This writing shall be dated and executed by
each of the parties hereto. This lease may be executed in two or more  counterparts, all of which shall be
considered one and the same lease. The effective date of this lease shall be the date upon which the signatory last to execute the same shall affix his signature.

 

17.
 NOTICE
OF INTENTION TO EXERCISE OPTION TO EXTEND OR TERMINATE LEASE; ABSOLUTE
REQUIREMENT - Lessee hereby expressly agrees  that it shall dispatch to Lessor and Lessor’s
Agent by certified mail written notice of its intention to exercise the option
to extend the lease term beyond the initial five-year period as provided above
in Paragraph 2. Notice of intent to exercise such option shall be mailed to
Lessor and Lessor’s Agent at least one hundred twenty (120) days prior to the
expiration date of the initial lease term or any option period. Lessee
acknowledges and expressly agrees that time shall be considered to be of
absolute essence in  complying
strictly with this notification requirement. Lessee also expressly acknowledges
and agrees the requirement to provide and timely comply with this  notification requirement shall be absolute
and unconditional in all respects so that the failure to provide such notice by
said deadline date shall render any such option and any late notice of
intention to exercise thereof, completely void and ineffective regardless of
how slight the delay or extenuating the circumstances on Lessee’s part and
regardless of whether or not Lessor has leased, agreed to lease or made any arrangements
to lease the premises to any third party. In the event Lessee fails to give such
timely notice and/or strictly comply with the requirements of this provision,
Lessee stipulates and further agrees that any and all rights granted herein
with respect to the option to renew or extend the lease term shall completely
lapse in full and Lessee shall have no further right to exercise the same or
cure any  default or failure of notice  for whatever reason or for whatever circumstance. Rental rates for the first option periods shall
as described in paragraph 2.2. Any additional option periods will be at market
rents agreed to by the Lessor and Lessee no later than ninety (90) days prior
to expiration of the prior lease period. If the parties can not agree, then the
lease rates shall be determined by a  Certified General Appraiser to determine
market rent. If both parties cannot agree on Market Base Rent than both
appraisers will select a third Certified General Appraiser and his finding will
be binding on both parties.

 

 

	
  Signed in the Presence of:
  

  	
   

  
	
   

  	
   

  
	
  LESSOR:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  1/24/2006

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Stanley Gwazdowski

  	
   

  	
  /s/ Jennifer
  McCann

  
	
  Witness

  	
   

  	
  Jennifer
  McCann

  
	
   

  	
   

  	
  Its: Member 

  
	
   

  	
   

  	
  duly
  authorized

  
	
   

  	
   

  	
   

  
	
  /s/ James Suzy

  	
   

  	
   

  
	
  witness

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LESSEE:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  19 Jan 06

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Nicole
  Garlock

  	
   

  	
  /s/ Charles C.
  Hinckley

  
	
  Witness

  	
  Charles C.
  Hinckley

  
	
   

  	
  Noble
  Environmental Power, LLC

  
	
   

  	
  Its: CEO

  
	
  /s/ Clinton
  Watz

  	
   

  	
   

  
	
  Witness

  	
   

  
	
   

  	
  NICOLE GARLOCK

  
	
   

  	
  NOTARY PUBLIC

  
	
   

  	
  MY COMMISSION EXPIRES JUNE 30, 2010

  

 

 

MODIFICATION and ADDENDUM TO LEASE

 

The
lease originally entered into between Macbeth Ventures, LLC of Essex,
Connecticut and Noble environmental Power, LLC of 8 Railroad Avenue, Essex.
Connecticut on August 4, 2005 and amended Sept. 7, 2005, is further
amended as follows:

 

All
other terms and conditions of the lease remain in full force and affect except,

 

Article 2.1
Term - The term of the lease is seven (7) years, commencing October 1,
2005. Lessee shall have an option to extend the term of this Lease for one (1) additional
term of five (5) years at the expiration of the Lease term on February 29,
2012.

 

Article 2.2
Base Rent Rates – The annual base rent rate for years five and five months is
$12.00 per square foot net, plus cam charges.

 

10/1/2006
– 2/29/2012, 8,608 s/f @ $12.00 s/f $568,128.00 @ $8,608.00 per mo.

 

All
other terms and conditions in the original lease remain in full force and
effect.

 

In  witness whereof,
the Landlord and Tenant have caused this execution of this lease modification
and addendum by their duly authorized Officers/Members or agents, this 27th day of November,
2006.

 

 

	
  Witnessed

  	
   

  
	
  In
  the presence of:

  	
  Macbeth
  Venture, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Barbara Charett

  	
   

  	
  /s/

  	
  Jennifer R. McCann

  
	
   

  	
   

  	
  Its: Member

  
	
   

  	
   

  	
   

  
	
  /s/
  Stanley Gwazdowski

  	
   

  	
   

  
	
   

  	
  Noble
  Environmental Power, LLC

  
	
   

  	
   

  
	
  /s/
  Stanley

  	
   

  	
  /s/

  	
  Charles
  Hinckley

  
	
   

  	
   

  	
  Its: Manager

  
	
   

  	
   

  	
   

  
	
  /s/
  Scott Akehurst

  	
   

  	
   

  

 

 

The
lease originally entered into between Macbeth Ventures, LLC of Essex,
Connecticut and Noble environmental Power, LLC of 8 Railroad Avenue, Essex,
Connecticut on January 24, 2006 and is amended as follows:

 

All
other terms and conditions of the lease remain in full force and affect except,

 

 

Article 1
Grant of Premises – The lease is amended to add space consisting of unit T4
(778s/f), T6 (900s/f), T7 (778s/f), T9 (778s/f), T11 (1957s/f) for a total of
5,191 s/f additional(additional demised premises), starting March 1, 2007.
The existing lease square footage of 2,572 s/f now totals 7,763 square feet
(s/f).

 

Article 1.2
The Lessee will at their own expense, complete and perform the build-out in the
additional demised premises (5,191 s/f). The build-out will conform to all
local and state building codes. The Lesee at their expense will provide sealed
architectural plans for review by the Lessor, which approval will not be
unreasonably withheld. Occupancy by the lessee will not occur until a
Certificate of Occupancy is issued by the Town of Essex, CT. As per the plans
provided by the lessee, the Lessor at their expense will provide a kitchen
area, removal of exterior stair case if it meets the fire code, and install a
window in the new kitchen area overlooking the existing office area. The lessor
will provide at their expense the lighting fixtures for the new additional
demised premises.

 

Article 2.1
Term - The term of the lease is five (5) years commencing March 1,
2007. Lessee shall have an option to extend the term of this Lease for one (1) additional
term of five (5) years at the expiration of the Lease term on April 30,
2012.

 

Article 2.2
Base Rent Rates- Existing Lease – The base rent rate for S/F 2,572 Oct. 1,
2006 February 29, 2012 @ $12.00s/f $198,044 @ $2,572.00 per mo.

 

Base
Rent Rates for the New Additional S/F 5,191

March 1,
2007 – February 29, 2012 @ $10.00s/f $259,550.00 @ $4,325.83 per mo.

 

This
is a net lease, utilities plus CAM to be paid by the Lessee.

 

All
other terms and conditions in the original lease remain in full force and
effect.

 

 

In
witness whereof, the Landlord and Tenant have caused this execution of this
lease modification and addendum by their duly authorized Officers/Members or
agents, this  27th day of November , 2006.

 

	
  Witnessed

  	
   

  	 

	
  In the
  presence of:

  	
  Macbeth
  Ventures, LLC

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  /s/ Barbara Charett

  	
   

  	
  /s/

  	
  Jennifer McCann

  	 

	
   

  	
   

  	
  Its:

  	
  Member

  	 

	
  /s/ Stanley Gwazdowski

  	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  Noble
  Enviornmental Power, LLC

  	 

	
   

  	
   

  	 

	
  /s/ Stanley Gwazdowski

  	
   

  	
  /s/

  	
  Charles
  Hinckley

  	 

	
   

  	
   

  	
  Its:

  	
  CEO, Manager

  
	
  /s/ Scott Akehurst

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