Document:

Exhibit 4.131

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

EXHIBIT 4.131

FIRST AMENDMENT TO

LONG-TERM FIRM PORTFOLIO ENERGY CREDIT AND RENEWABLE

POWER PURCHASE AGREEMENT

This First Amendment to Long-Term Firm Portfolio Energy Credit and Renewable Power Purchase Agreement (this "First Amendment") dated as of November 3, 2008 (this "First Amendment Execution Date") is made and entered into by and between NEVADA POWER COMPANY, a Nevada corporation d/b/a NV Energy ("Buyer") and NGP BLUE MOUNTAIN I LLC, a Delaware limited liability company ("Supplier"). Each of Buyer and Supplier is sometimes referred to herein as a "Party" and collectively as the "Parties."

Recitals

A. 

Buyer and Nevada Geothermal Power Company ("NGPC") entered into that certain Long-Term Firm Portfolio Energy Credit and Renewable Power Purchase Agreement dated as of August 18, 2006 (as assigned as further described herein, the "Existing PPA"), which was approved by the PUCN pursuant to an Order issued February 2, 2007 in connection with Docket No. 06-10021. NGPC assigned its rights and interests in and to the Existing PPA to Supplier pursuant to that certain Assignment and Assumption of Power Purchase Agreement between NGPC and Supplier, dated as of October 24, 2007. All terms capitalized and not defined in this First Amendment will have the meanings ascribed thereto in the Existing PPA.

B. 

In the course of drilling activities in connection with the development of the Generating Facility, Supplier has determined that the available geothermal resources can support additional capacity for the Generating Facility above and beyond the level projected at the time the Parties entered into the Existing PPA. In light of such additional capacity, Buyer and Supplier wish to amend the Existing PPA in accordance with the terms and provisions of this First Amendment.

C. 

This First Amendment will require the approval of the PUCN in accordance with Section 11 of this First Amendment, and, pending such approval, the Existing PPA will remain in full force and effect in accordance with its terms.

Agreement

In consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.

 Existing PPA. For the avoidance of doubt, the Parties acknowledge and agree that the Existing PPA will remain in full force and effect in accordance with its terms unless and until this First Amendment is approved by the PUCN in accordance with Section 11 hereof, and that from and after such approval, the Existing PPA will continue in force and effect as amended by this First Amendment. All section references made in this First Amendment will be deemed references to sections in the Existing PPA, unless it is expressly stated to be a reference to a section of this First Amendment.

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2. 

Definitions. As used in the Agreement, the following terms will have the meanings set forth below. Where a term defined below is also defined in the Existing PPA, the definition provided below will replace the Existing PPA definition in its entirety for purposes of the Agreement.

"Adjusted Non-PTC Product Rate" has the meaning ascribed to that term on Exhibit 2A.

"Adjusted PTC Product Rate" has the meaning ascribed to that term on Exhibit 2A.

"Affiliate" means, with respect to any Person, each Person that directly or indirectly, controls or is controlled by or is under the common control with such Person. For the purposes of the definition, "control" (including, with correlative meanings the terms "controlled by" and "under common control" with) as used with respect to any Person, shall mean the possession directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of the voting securities or by contract or otherwise. All lower-case usage of "affiliate" in the PPA will be deemed to be usage of the term "Affiliate" as defined herein.

"Agreement" means the Existing PPA, as amended by this First Amendment.

"Curtailed Product" has the meaning ascribed to that term in Section 8 of this First Amendment.

"Development Security" has the meaning ascribed to that term in Section 9 of this First Amendment.

"First Amendment Effective Date" has the meaning ascribed to that term in Section 12 of this First Amendment.

"Generating Facility" means Supplier's geothermal generating power plant, geothermal well field, and associated re-injection wells, located in Humboldt County, Nevada and including any associated facilities and equipment required to operate any of the foregoing and deliver Energy to the Delivery Point, as further described in Exhibits 1, 5 and 14 hereto.

"IOA" means that certain Large Generator Interconnection Agreement dated as of November 5, 2007 by and between Supplier and Transmission Provider for the Generating Facility, as it may be amended from time to time.

"Maximum Amount" means, with respect to any Dispatch Hour, an amount of Energy equal to [***] MWh.

"New Facility" has the meaning ascribed to that term in Section 3 of this First Amendment.

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"Operating Security" has the meaning ascribed to that tern in Section 9 of this First Amendment.

"Pre-COD Cap Rate" means [***]/MWh.

"Related PPA Amendment" means that certain amendment to the Related PPA, such amendment being entered into by and between Buyer and Sierra Pacific Power Company concurrently with Buyer and Supplier entering into this First Amendment.

"Supply Amount," with respect to any Dispatch Hour, means the amount of Energy stated in Exhibit 13, unless reduced pursuant to Section 12.2 (Planned Outage), Section 11.6 (Emergency), or as may be adjusted pursuant to Sections 3.7.1 and Sections 3.7.2 (Adjustment to Supply Amount). The Supply Amount is firm Energy.

3.

Supply Service Obligations.  Section 3 is amended as follows: 

Section 3.2 Dedication is replaced in its entirety with the following:

3.2 

Dedication. All Product shall be dedicated exclusively to Buyer for the Term of this Agreement. Supplier shall not, without Buyer's prior written consent (which Buyer may withhold in its sole discretion), (a) sell, divert, grant, transfer, or assign Product to any person other than Buyer or (b) subject to Section 3.6.4, provide Buyer electric energy, PCs, or Renewable Energy Benefits from any source other than the Generating Facility. Supplier may, without requirement of prior consent of Buyer, use the geothermal resource utilized by the Generating Facility to develop a facility (a "New Facility") other than the Generating Facility, provided that such use of the geothermal resource would not be reasonably expected to adversely impact the Supplier's ability to deliver the Supply Amount, and further provided that if Supplier elects to develop a New Facility utilizing such geothermal resource, then Supplier will notify Buyer in writing of such development as soon as practicable, but in no event later than eighteen (18) months prior to the commercial operation of such New Facility. Immediately and automatically upon Buyer's receipt of any such notice, this Agreement will be deemed amended to provide that (i) the Average Annual Supply Amount will be immediately and automatically adjusted to equal, for the remainder of the Term, the higher of (A) the Average Annual Supply Amount in effect as of the First Amendment Execution Date, or (B) the Average Annual Supply Amount in effect as of the date of such notice; (ii) the Supply Amount and the Yearly PC Amount will be immediately and automatically adjusted to equal, for the remainder of the Term, such amounts as are in effect as of the date that yields the "higher of" Average Annual Supply Amount in accordance with the foregoing clause (i); (iii) Section 3.7 (including subsections 3.7.1. and 3.7.2) is deleted in its entirety, and (iv) the definition of "Minimum Supply Amount" in Section 3.5.1 will be revised to mean, for all Contract Years, one hundred percent (100%) of the Supply Amount (as it has been adjusted in accordance with the foregoing clause (ii)).

Section 3.4 Consumption is replaced in its entirety with the following:

3.4

Consumption. Supplier shall supply its Station Usage directly from the Generating Facility, with back-up for such supply provided by either of the following, as Supplier may elect between the two: (i) an on-site generator as necessary for the supply of power only on a back-up basis or (ii) Standby Service, as governed by the special conditions relating to "Backup Power"

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pursuant to the Standby Service tariff referenced on Exhibit 3 hereto. For the avoidance of doubt, in no event may electrical energy provided by such on-site generator or through Standby Service be used as Energy for purposes of this Agreement, nor for a sale to a third party or onto the Transmission System.

Section 3.5.6 The following provision is inserted into the Agreement as the new Section 3.5.6:

3.5.6

In the event that Supplier has paid Replacement Costs to Buyer pursuant to this Section 3.5 (Replacement Costs) for an aggregate of thirty-six (36) consecutive monthly Billing Periods, Supplier shall have no further liability hereunder to pay Replacement Costs to Buyer after such 36th Billing Period, provided that in such event Buyer may, in its sole discretion, (a) terminate this Agreement after such 36th Billing Period upon sixty (60) days written notice to Supplier, provided that such written notice must be provided by Buyer within one hundred eighty (180) days after such 36th Billing Period or (b) elect to accept an offer from Supplier to reduce the Average Annual Supply Amount, Yearly PC Amount, and Supply Amount, which offer Supplier shall deliver to Buyer within fifteen (15) days after the 34th consecutive Monthly Billing Period during which Supplier has accrued Replacement Costs to Buyer. Notwithstanding the foregoing, if Buyer elects to accept such Supplier offer to reduce the Average Annual Supply Amount, Yearly PC Amount, and Supply Amount, then beginning with the Billing Period during which such reductions become effective Supplier's obligation to pay Replacement Costs to Buyer pursuant to this Section 3.5 (Replacement Costs) shall be reinstated. If Buyer delivers a written notice to Supplier of Buyer's intent to terminate this Agreement pursuant to this Section 3.5.6. then Supplier may within thirty (30) days of receipt of such termination notice deliver to Buyer written notice that Supplier agrees to continue its obligation to pay Replacement Costs to Buyer pursuant to this Section 3.5 (Replacement Costs) and upon Buyer's receipt of such notice (i) Buyer's termination notice shall automatically be deemed rescinded and (ii) Supplier's obligation to pay Replacement Costs to Buyer pursuant to this Section 3.5 (Replacement Costs) shall be reinstated.

Section 3.6

PC Replacement Costs. Section 3.6 is amended as follows: 

Section 3.6.2 is replaced in its entirety with the following:

3.6.2 

The cost to Buyer to replace any PCs not delivered pursuant to Section 3.6.1 shall be reasonably determined by Buyer based on the cost of purchasing replacement PCs of comparable character and with a comparable expiration date or the cost of replacing PCs not delivered with PCs of the Buyer's choice already in Buyer's PC Account; provided, however, that Buyer shall not be required to purchase such replacement PCs in order to receive payment for PC Replacement Costs.

Section 3.6.5 The following provision is inserted into the Agreement as the new Section 3.6.5:

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3.6.5 

In the event that Supplier has paid PC Replacement Costs to Buyer pursuant to this Section 3.6 (PC Replacement Costs) for three (3) consecutive Contract Years, Supplier shall have no further liability hereunder, after such 3rd Contract Year to pay PC Replacement Costs to Buyer, provided that in such event Buyer may, in its sole discretion, (a) terminate this Agreement after such 3rd Contract Year upon sixty (60) days written notice to Supplier, provided that such written notice must be provided by Buyer within one hundred eighty (180) days after such 3rd Contract Year or (b) elect to accept an offer from Supplier to reduce the Average Annual Supply Amount, Yearly PC Amount, and Supply Amount, which offer Supplier shall deliver to Buyer within ten (10) months after the 2nd consecutive Contract Year during which Supplier has paid PC Replacement Costs to Buyer. Notwithstanding the foregoing, if Buyer elects to accept such Supplier offer to reduce the Average Annual Supply Amount, Yearly PC Amount and Supply Amount, then beginning with the Billing Period during which such reductions become effective Supplier's obligation to pay PC Replacement Costs to Buyer pursuant to this Section 3.6 (PC Replacement Costs) shall be reinstated. If Buyer delivers a written notice to Supplier of Buyer's intent to terminate this Agreement pursuant to this Section 3.6.4, then Supplier may within thirty (30) days of receipt of such termination notice deliver to Buyer written notice that Supplier agrees to continue its obligation to pay PC Replacement Costs to Buyer with respect to PC's pursuant to this Section 3.6 (PC Replacement Costs) and upon Buyer's receipt of such notice (i) Buyer's termination notice shall automatically be deemed rescinded and (ii) Supplier's obligation to pay PC Replacement Costs to Buyer pursuant to this Section 3.6 (PC Replacement Costs) shall be reinstated.

Section 3.7      Adjustment to Supply Amount.  Section 3.7 is amended as follows:

Section 3.7.1 is deleted in its entirety and replaced with the following:

3.7.1 

Prior to the first anniversary of the Commercial Operation Date, the Supplier may, up to two times as set forth herein, adjust the Average Annual Supply Amount, Yearly PC Amount, and Supply Amount (but not the Maximum Amount) by providing written notice of such adjustment to Buyer, such that (i) the Average Annual Supply Amount shall not be lower than [***] MW nor greater than [***] MW, (ii) the Supply Amount shall be adjusted in the same proportion as the adjustment of the Average Annual Supply Amount, (iii) the Yearly PC Amount for each Contract Year shall be adjusted such that the Yearly PC Amount reflects the gross generation output for that Contract Year, but in no event shall the adjusted Yearly PC Amount be less than one hundred fifteen percent (115%) of the adjusted Average Annual Supply Amount for that Contract Year (expressed in kWhs), and (iv) all of the amounts as so adjusted will be the same for each Contract Year over the remainder of the Term. The Supplier may make the adjustment allowed for pursuant to this Section 3.7.1 (x) only one time prior to the Commercial Operation Date, and (y) only one time from and after the Commercial Operation Date and until the first anniversary thereafter, Subsequent to the first anniversary of the Commercial Operation Date, the Supplier will not have the right to make adjustments pursuant to this Section 3.7.1.

Section 3.7.2 is deleted in its entirety and replaced with the following:

 

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3.7.2

After the first anniversary of the Commercial Operation Date, Supplier may adjust the Average Annual Supply Amount, Yearly, PC Amount, and Supply Amount for all subsequent Contract Years remaining during the Term, by providing notice of such adjustment to Buyer, provided that: (i) the adjusted Average Annual Supply Amount shall not be less than [***] MW nor greater than [***] MW, (ii) in no event may the adjusted Average Annual Supply Amount be less than [***] less than, nor more than [***] more than, the Average Annual Supply Amount for the immediately preceding Contract Year, (iii) the Yearly PC Amount for each affected Contract Year shall be adjusted such that the Yearly PC Amount reflects the gross generation output for that Contract Year, but in no event shall the adjusted Yearly PC Amount be less than one hundred fifteen percent (115%) of the adjusted Average Annual Supply Amount for that Contract Year (expressed in kWhs), (iv) the Supply Amount for each affected Contract Year shall be adjusted by the same proportion as the adjustment to the Average Annual Supply Amount for the affected Contract Years, and (v) all of the amounts as so adjusted will be the same for each Contract Year over the remainder of the Term. A reduction in the Average Annual Supply Amount, Yearly PC Amount, or Supply Amount shall in no event be made to assist, accommodate or otherwise allow for the sale or transfer of Product, Energy PCs, or Renewable Energy Benefits to third parties. Each adjustment to the Average Annual Supply Amount, Yearly PC Amount, and Supply Amount shall apply to (x) the immediately following Contract Year and remaining Contract Years, if such notice is received by Buyer prior to October 1 of a Contract Year, and (y) to the second subsequent Contract Year and remaining Contract Years, if such notice is received by Buyer from October 1 and before December 31 of a Contract Year.

Section 3.7.3 is deleted in its entirety.

4.

Purchase Price for Product.     Section 4 is amended as follows: 

Section 4.1.1 is deleted and replaced in its entirety with the following:

4.1.1 

Upon the Operation Date and prior to the Commercial Operation Date, all Product associated with Delivered Amounts of Energy from the Generating Facility shall be paid for by Buyer at the lesser of (i) [***] of the daily Off-Peak Dow Jones Mead/Marketplace Electricity Index for firm energy or (ii) [***] of the daily Off-Peak Dow Jones Mead/Marketplace Electricity Index for non-firm energy, or (iii) the Pre-COD Cap Rate.

Section 4.2 The following provision is inserted into the Agreement as the new Section 4.2:

4.2 

Adjustment to PTC Product Rate (or Non-PTC Product Rate, as applicable). In the event that, over any period comprised of twenty-four (24) consecutive calendar months during the Term (a "Rolling 24-Month Period"), the Rolling 24-Month Average of the Delivered Amount of Energy from the Generating Facility is less than [***] MW (the "Adjustment Threshold"), then, immediately and automatically upon the occurrence of such event, the PTC Product Rate (or Non-PTC Product Rate, as applicable) for the entire Supply Amount will be adjusted to equal the Adjusted PTC Product Rate (or Adjusted Non-PTC Product Rate, as applicable), such adjustment to be applied prospectively for the remainder of the Term. For purposes of the foregoing, with respect to any Rolling 24-Month Period, the "Rolling 24-Month Average" of the Delivered Amount shall be the entire aggregate of all Delivered Amounts for all Dispatch Hours during such Rolling 24-Month Period, expressed in MWh, divided by the total number of Dispatch Hours during such Rolling 24 Month Period.

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5.

Tax Credits. Section 6 is amended as follows: 

Section 6.3.1 is deleted and replaced in its entirety with the following:

6.3.1 

In the event that the Generating Facility is placed in service on a date when the Generating Facility is eligible to receive the PTC, irrespective of whether or not Supplier or any of its Affiliates actually utilizes the PTC, Supplier shall be paid the PTC Product Rate for Product associated with Delivered Amounts of Energy in accordance with Section 4.1.2.1. Subject to Section 6.3, Supplier and Buyer agree that the PTC Product Rate is not subject to adjustment or amendment if Supplier fails to receive any Tax Credits, or if such Tax Credits expire, are repealed or otherwise cease to apply to Supplier or the Generation Facilities in whole or in part, or Supplier or its investors are unable to benefit from such Tax Credits.

Section 6.4 The following provision is inserted into the Agreement as the new Section 6.4:

6.4

In the event that, as of the date that the Generating Facility is placed in service, the value of the economic benefit of the PTC has been changed by legislation in a uniform manner (i.e., as opposed to the value of the PTC to Supplier in particular) from its value as the PTC was legislatively constituted as of the First Amendment Execution Date, then the PTC Product Rate will be adjusted to reflect the value of the PTC as it is legislatively constituted as of the date the Generating Facility is placed in service. Any decrease in the value of the PTC will result in an upward adjustment to the PTC Product Rate, and any increase in value of the PTC will result in a downward adjustment to the PTC Product Rate. Upon any such legislative change, Buyer and Supplier will negotiate in good faith towards agreement on such PTC Product Rate. Any such adjusted PTC Product Rate will: (a) in no event be equal to or greater than the Non-PTC Product Rate, and (b) reflect that [***] of the change in value of the PTC will be passed through to Buyer.

6.

Portfolio Standard. Section 7 is amended as follows: 

Section 7.2 is deleted and replaced in its entirety with the following:

7.2 

Should a failure of any obligation under this Agreement by Supplier cause Buyer to incur or suffer Penalties, Supplier shall indemnify and hold Buyer harmless from any Penalties in accordance with the terms hereof to the extent the incurrence of such Penalties are attributable to failures of Supplier to perform under this Agreement (as opposed to being attributable to the acts or omissions of third parties).

7.

Planned Outages. Section 12 is amended as follows: 

Section 12.2 The following provision is inserted into the Agreement as the new Section 12.2:

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12.2

If, subsequent to Buyer's approval of a Planned Outage schedule, Buyer requests (for reasons other than Force Majeure or Emergency) that Supplier not institute a Planned Outage as so scheduled, then Supplier may present a reasonable estimate of costs expected to be incurred as a result of the Supplier not instituting the Planned Outage. If Buyer agrees to the estimated costs, Supplier will re-schedule the Planned Outage to a time reasonably agreeable to the Buyer, and the Buyer shall reimburse Supplier for actual out-of-pocket costs incurred, not to exceed the estimated amounts.

8.

Scheduling Notification. Section 15 is amended as follows:

Section 15.2 The following provision is inserted into the Agreement as the new Section 15.2:

15.2

Elective Curtailments by Buyer. Supplier shall curtail deliveries of Energy at any time, in whole or in part, in a quantity and for any duration specified by Buyer upon at least thirty (30) minutes prior notice (which may be given by email or telephone) to Supplier; provided, however, that with respect to any Dispatch Hour, in no event will the delivery of Energy be curtailed to a level below [***] of the Supply Amount for such Dispatch Hour. The amount of Energy curtailed and any associated PC's ("Curtailed Product") shall be reasonably determined by Supplier after the curtailment has ended based upon the Energy that could have been generated and delivered to Buyer at the Delivery Point(s), but that was not generated and delivered solely as a result of Buyer's curtailment notice. Supplier shall promptly provide Buyer with such information and data as Buyer may request to confirm to its satisfaction the amount of Curtailed Product that was not generated as a result of Buyer's curtailment notice. Supplier shall be paid for the Curtailed Product at the Non-PTC Product Rate, regardless of whether the PTC Product Rate or Non-PTC Product Rate is in effect. If the PTC Product Rate is in effect, then the Buyer's payment for Curtailed Product at the Non-PTC Product Rate will be deemed Buyer's compensation to Supplier for the value of the PTCs, if any, that Supplier or any of its Affiliates were unable to utilize as a result of Buyer's curtailment notice. Notwithstanding anything in the preceding sentence to the contrary, Supplier will be paid the Excess Product Rate for any Curtailed Product (or any portion thereof) that would have been payable by Buyer at the Excess Product Rate. During any such period of curtailment, Supplier shall not produce Product (to the extent curtailed by Buyer) or sell Product to any third party. Curtailed Product shall be deemed to be Delivered Amount for purposes of calculating a Shortfall. Under no circumstance shall the provisions of this Section 15.2 apply to curtailment of the Generating Facility based upon an Emergency.

9.

Security. Section 18 is deleted and replaced in its entirety as follows:

18. SECURITY

 

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18.1

Development Security. As a condition of Buyer's execution of and continuing obligations under this Agreement, Supplier shall provide to Buyer, as security for the performance of Seller's obligations hereunder, either (a) a letter of credit from a Qualified Financial Institution in the form attached hereto as Exhibit 17 or (b) a cash deposit, in either case, in an amount equal to [***] (the 'Development Security"). Buyer shall have the right to draw upon the Development Security, at Buyer's sole discretion, in the event Supplier fails to make any payments owing under this Agreement or to reimburse Buyer for costs, including Replacement Costs, PC Replacement Costs and Penalties, that Buyer has incurred or may incur as a result of Suppliers failure to perform its obligations under this Agreement. In the event that no amounts are due and owing by Supplier to Buyer under this Agreement and Supplier has provided the Operating Security to Buyer, the Development Security shall be released to Supplier upon the earlier of (x) termination of this Agreement in accordance with its terms or (y) on the fifteenth (15th) Business Day alter the Generating Fatality achieves Commercial Operations. Upon the consent of Buyer, Supplier may apply and maintain the Development Security as a portion of Operating Security required to be provided by Supplier pursuant to Section 18.2 of this Agreement.

18.2

Operating Security. As a condition of Buyer's continuing obligation under this Agreement, Supplier shall provide to Buyer, as security for the performance of Seller's obligations hereunder, either (a) a letter of credit from a Qualified Financial Institution in the form attached hereto as Exhibit 17 or (b) a cash deposit, in either case, in an amount equal to [***] (the "Operating Security"). Buyer shall have the right to draw upon the Operating Security, at Buyer's sole discretion, in the event Supplier falls to make any payments owing under this Agreement or to reimburse Buyer for costs, including Replacement Costs, PC Replacement Costs and Penalties, that Buyer has incurred or may incur as a result of Supplier's failure to perform under this Agreement. The Operating Security shall be posted no later than five (5) Business Days after the Generating Facility achieves Commercial Operations.  In the event that no amounts are due and owing by Supplier to Buyer under this Agreement, the Operating Security shall be released to Supplier upon the earlier of (x) termination of this Agreement in accordance with its terms or (y) on the fifteenth (15th) Business Day after the expiration of the Term.

18.3 

Letters of Credit With respect to any letter of credit posted by Supplier as Development Security or Operating Security: (a) No later than thirty (30) days prior to the expiration date of any letter of credit, Supplier shall cause the letter of credit to be renewed or replaced with another letter of credit in an equal amount; (b) in addition to the conditions specified in Sections 18.1 and 18.2, Buyer shall have the right to draw on such letter of credit, at Buyer's sole discretion (i) if such letter of credit has not been renewed or replaced at least thirty (30) days prior to the date of its expiration or (ii) if the Credit Rating of the financial institution that issued such letter of credit has been downgraded to below the Minimum Credit Rating and Supplier has not caused a replacement letter of credit to be issued for the benefit of Buyer within five (5) Business Days of such downgrade pursuant to Section 18.4.

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18.4

Maintaining Security. If at any time after the Effective Date of this Agreement, Standard & Poor's, Moody's or another nationally recognized firm downgrades the Credit Rating of the financial institution issuing a letter of credit pursuant to this Agreement to below the Minimum Credit Rating, then Supplier shall (a) provide Buyer with written notice of such downgrade within two (2) Business Days of Supplier being notified of any such downgrade and (b) cause a replacement letter of credit satisfying the conditions of Section 18.3 to be issued in favor of Buyer within ten (10) Business Days of such downgrade. In the event such a downgrade also constitutes an Event of Default pursuant to Section 25 (Default and Remedies), the requirements of this Section 18.4 are in addition to, and not in lieu of, the provisions of Section 25 (Default and Remedies). Supplier shall take all necessary action and shall be in compliance with this Section 18 within fifteen (15) days of the downgrade.

18.5

Waiver of Buyer Security. Supplier hereby waives any and all rights it may have, including rights at law or otherwise, to require Buyer to provide financial assurances or security (including, but not limited to, cash, letters of credit, bonds or other collateral) in respect of its obligations under this Agreement. Supplier shall not earn or be entitled to any interest on any security provided pursuant to this Section 18, including cash amounts deposited pursuant to Section 18.1 or 18.2.

18.6

Financial Statements. Upon Buyer's written request, Supplier shall, within thirty (30) days of such request, provide Buyer with copies of the most recent quarterly and annual financial statements available for Supplier. Such financial statements shall be prepared in accordance with generally accepted accounting principles.

Supplier will cause the Development Security referred to above in the newly inserted Section 18.1 to be delivered to Buyer within ten (10) Business Days after the First Amendment Execution Date.

10. 

Exhibits. Each of the following exhibits attached to this First Amendment replaces the corresponding exhibit to the Existing PPA in its entirety (or if there is no corresponding exhibit to the Existing PPA, such exhibit is made an exhibit to and part of the Agreement for all purposes):

Exhibit 1

Description of Generating Facility

Exhibit 2A

Product Rates

Exhibit 2B

Excess Product Rate

Exhibit 4

Notices, Billing and Payment Instructions

Exhibit 5

One-Line Diagram of Generating Facility and Interconnection Facilities

Exhibit 6

Project Milestone Schedule

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Exhibit 12

Supplier's Required Agreements

Exhibit 13

Supply Amount

Exhibit 18

Yearly PC Amount

11.

PUCN Approval. Within ninety (90) days after the First Amendment Execution Date:

(a)

Buyer shall submit this First Amendment to the PUCN for: (i) a determination that the terms and conditions of this Agreement (i.e., the Existing PPA as amended by this First Amendment) are just and reasonable, and (ii) a determination that the costs of purchasing energy and Portfolio Energy Credits under this Agreement are prudently incurred and that Buyer may recover all just and reasonable costs of Energy and PCs purchased under this Agreement. Except for Sections 1, 11, 12, 13, 14 and 15 of this First Amendment, this First Amendment shall be of no force or effect unless and until the PUCN has approved this First Amendment (including the items described in clauses (i) and (ii) of the foregoing sentence). If the PUCN does provide such approval, then the date on which an order of the PUCN approving this First Amendment becomes effective pursuant to Nevada Administrative Code Section 703.790 will be the "First Amendment Effective Date" for all purposes.

(b)

Buyer shall submit the Related PPA Amendment to the PUCN and FERC for approval. If Buyer determines that the Related PPA Amendment is required to be approved by any Governmental Authority in addition to PUCN and FERC, then Buyer shall notify the Supplier of such determination within ninety (90) days of the date of the PUCN filing. Buyer shall make any required filings with FERC and other appropriate Governmental Authorities within ninety (90) days of the date of the PUCN filing. If any Governmental Authority, including PUCN or FERC, for which approval or acceptance of the Related PPA Amendment is required, fails to grant approval or acceptance of the Related PPA Amendment and its terms and conditions in their entirety within one hundred and eighty (180) days of submittal of same for approval, then Buyer shall, in its sole, unreviewable discretion, have the right to terminate this First Amendment within thirty (30) days of such failure upon fourteen (14) days written notice to Supplier. For the avoidance of doubt, no termination of the First Amendment in accordance with the foregoing shall in any manner serve as a termination of or otherwise affect the Existing PPA.

12.

Representations and Warranties of Supplier. The Supplier represents and warrants to Buyer as follows:

(a)

The Supplier is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, is qualified to do business in the State of Nevada, and is registered and in good standing with the Nevada Secretary of State as a foreign limited liability company.

(b)

The Supplier has full authority to execute, deliver and perform this First Amendment.

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 (c) All representations and warranties made by Supplier under the existing PPA are repeated and made by Supplier to Buyer as of the First Amendment Execution Date, and such representations and warranties, as they related to the Existing PPA when made by Supplier pursuant to the Existing PPA, relate to this First Amendment and the Agreement.

13.

Representations and Warranties of Buyer. The Buyer represents and warrants to Supplier as follows:

(a)

The Buyer has full authority to execute, deliver and perform this First Amendment.

(b)

All representations and warranties made by Buyer under the existing PPA are repeated and made by Buyer to Supplier as of the First Amendment Execution Date, and such representations and warranties, as they related to the Existing PPA when made by Buyer pursuant to the Existing PPA, relate to this First Amendment and the Agreement.

14.

Governing Law. This First Amendment will be governed by and construed in accordance with the laws of the State of Nevada.

 15. 

Counterparts. This First Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall be deemed one and the same instrument.

IN WITNESS WHEREOF, the Parties have caused this First Amendment to be executed by their duly authorized representative as of the First Amendment Execution Date.

		
	BUYER:   

	 SUPPLIER:

	 
	 

	NEVADA POWER COMPANY

	NGP BLUE MOUNTAIN 1, LLC

	 
	 

	 
	 

	 
	By:  NGP BLUE MOUNTAIN HOLDCO

	 
	LLC, its Managing Member

	By: Signed                                          

Name: Robert R. Denis                       

Title: SVP                                           

	 

	 
	By: Signed                                            

Name: Brian Fairbank                           

Title: President and CEO                      

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List of Attachments to First Amendment

Attachment A 

Exhibit 1 (Description of Generating Facility)

Attachment B 

Exhibit 2A (Product Rates)

Attachment C 

Exhibit 2B (Excess Product Rate)

Attachment D 

Exhibit 4 (Notices, Billing and Payment Instructions)

Attachment E

Exhibit 5 (One-Line Diagram of Generating Facility and Interconnection Facilities)

Attachment F 

Exhibit 6 (Project Milestone Schedule)

Attachment G 

Exhibit 12 (Supplier’s Required Agreements)

Attachment H 

Exhibit 13 (Supply Amount)

Attachment I

Exhibit 18 (Yearly PC Amount)

13

Attachment A to First Amendment

EXHIBIT 1

DESCRIPTION OF GENERATING FACILITY

			
	1.

	Name of Facility:

	Faulkner 1

	 
	(a)

Location:

	Blue Mountain, Humboldt County, Nevada

	2.

	Owner:

	Nevada Geothermal Power Company

	3.

	Operator:

	Nevada Geothermal Power Company

	4.

	Equipment:

	 

(a)

Type of Facility:

Geothermal

(b)

Capacity

Total nominal nameplate capacity: 49.5 MW

Total nominal net capacity (as of Commercial Operation): 40.1 MW

A-1

Attachment B to First Amendment

EXHIBIT 2A

PRODUCT RATES

Escalated Price: The Product Rate through the end of the first Contract Year ("Initial Product Rate") shall be:

i.

[***] per MWh, if the Generating Facility is placed in service on a date when the Generating Facility is eligible to receive the PTC ("PTC Product Rate"), or

ii.

[***] per MWh, if the Generating Facility is placed in service on a date when the Generating Facility is ineligible to receive the PTC ("Non-PTC Product Rate.").

The Product Rate shall be increased at the beginning of each Contract Year by an amount equal to [***] of the Product Rate for the previous Contract Year, for the duration of the Agreement; provided, however, that the Product Rate for the second Contract Year shall be determined by the following formula:

Product Rate = Initial Product Rate * [1 + ([***] * FCM/l2)]

Where FCM is the number of full calendar months the Generating Facility is in Commercial Operation during the first Contract Year.

Adjusted Product Rates:

Through the end of the first Contract Year, the Adjusted PTC Product Rate through the end of the first Contract Year shall be [***] per MWh (the "Initial PTC Product Rate"), and the Adjusted Non-PTC Product Rate shall be [***] per MWh (the "Initial Non-PTC Product Rate"). The foregoing described rates are the "Initial Adjusted Product Rates."

The rates described in the immediately preceding paragraph shall be increased at the beginning of each Contract Year by an amount equal to [***] of the applicable rate for the previous Contract Year, for the duration of the Agreement; provided, however, that the Initial Adjusted Product Rate for the second Contract Year shall be determined by the following formula:

Product Rate = Initial Adjusted Product Rate * [1 + ([***] * FCM/12)]

Where FCM is the number of full calendar months the Generating Facility is in Commercial Operation during the first Contract Year.

B-1

Attachment B to First Amendment

"Adjusted PTC Product Rate," as of any date of determination, means the Initial PTC Product Rate as it has been adjusted in accordance with the foregoing provisions set forth in this Exhibit 2A under the header "Adjusted Product Rates."

"Adjusted Non-PTC Product Rate," as of any date of determination, means the Initial Non-PTC Product Rate as it has been adjusted in accordance with the foregoing provisions set forth in this Exhibit 2A under the header "Adjusted Product Rates."

B-2

Attachment C to First Amendment

EXHIBIT 2B 

EXCESS PRODUCT RATE

The "Excess Product Rate" for the Term shall be [***] per MWh.

The Excess Product Rate shall be increased at the beginning of each Contract Year by an amount equal to [***] of the Excess Product Rate for the previous Contract Year, for the duration of the Agreement; provided, however, that the Excess Product Rate for the second Contract Year shall be determined by the following formula:

Excess Product Rate = Initial Excess Product Rate * [1 + ([***]* FCM/12)]

Where FCM is the number of full calendar months the Generating Facility is in Commercial Operation during the first Contract Year.

C-1

Attachment D to First Amendment

EXHIBIT 4

NOTICES, BILLING AND PAYMENT INSTRUCTIONS

NV ENERGY

				
	Contact

	Mailing Address

	Phone

	E-mail

	Contract Representative

Manager, Contract Administration

	P.O. Box 98910, M/S 26A

Las Vegas, NV 89151

Physical Delivery

Address:

6226 W Sahara Ave, MS

26A

Las Vegas, NV 89146

	702-402-5667

	ContractAdmin_Renewables@nvenergy.com

	 

	Operating Representatives

Scheduling

	 
	 
	 

	Short-term Analysis

	 
	702-402-5864

	ST Analysis@nvenergy.com

	Generation Dispatch

	 
	775-834-5143

	Generation_Dispatch@nvenergy.com

	Emergencies (including Force

 Majeure)

	 
	 
	 

	Grid Reliability

	 
	702-402-7111

	Grid_Reliability@nvenergy.com

	Transmission - Nevada Power

	 
	702-402-7107

	Transmission@nvenergy.com

	Transmission - Sierra Pacific

Power

	 
	775-834-4541

	Transmission@nvenergy.com

	Short-term Analysis

	 
	702-402-5864

	ST_Analysis@nvenergy.com

	Planned Outages - NPC

	 
	702-402-7161

	Planned_Outages@nvenergy.com

	Planned Outages - SPPC

	 
	775-834-4716

	Planned_Outages@nvenergy.com

	Metering - NPC

	 
	702-402-4160

	NPCMeterOps@nvenergy.com

	Metering - SPPC

	 
	775-834-4406

	_DLSPPCMetering@nvenergy.com

	Invoices

	 
	 
	 

	Renewables Contracts

Accountant

	

c/o Sierra Pacific Resources

	775-834-4122

	Invoicing@nvenergy.com

	CC all invoices to

	6100 Neil Road, MS S2A20

Reno, NV 89511

	 
	 

	Renewables Contracts

Consultant

	P.O. Box 98910, M/S 26A

	702-402-2476

	ContractAdmin_Renewable@nvenergy.com

	 
	Las Vegas, NV 89151

Physical Delivery

Address:

6226 W Sahara Ave, M/S

26A

	 
	 

	 
	Las Vegas, NV 89146

	 
	 

D-1

Attachment D to First Amendment

NGP Blue Mountain I,

LLC

				
	Contact

	Mailing Address

	Phone

	Email

	Contract Representative:

Max Walenciak

	Nevada Geothermal Power Co.

1755 East Plumb Lane

Suite 220

Reno, NV USA 89502

	775-786-3399

	

mwalenciak

@nevadageothermal.com

	

Operating Representative:

Max Walenciak

	

Nevada Geothermal Power Co.

1755 East Plumb Lane

Suite 220

Reno, NV USA 89502

	

775-786-3399

	

mwalenciak

@nevadageothermal.com

	Operating Notifications:

Prescheduling

Real-Time

Monthly Checkout

	

Max Walenciak

	

775-786-3399

	

mwalenciak

@nevadageothermal.com

	Invoices:

Max Walenciak

	

Nevada Geothermal Power Co.

1755 East Plumb Lane

Suite 220

Reno, NV USA 89502

	

775-786-3399

	

mwalenciak

@nevadageothermal.com

	 

	 

	 

	 

PAYMENT INSTRUCTIONS

Payment Check:

Name and/or

Title/Department

   Address [inc. Mail/Suite #s)

City, ST & Zip

OR

Payment Wire Transfer: 

Bank Name 

Bank of the West

Bank Address

4850 Kietzke Lane

Bank City. ST & Zip

Reno, NV 89509

TCW/NGP Blue Mountain HoldCo

Account Name

Collection Account

ABA

[***]

Account Number

[***]

Reference

D-2

E-1

Attachment F to First Amendment

EXHIBIT 6

PROJECT MILESTONE SCHEDULE

All milestones may be completed earlier than stated times, at the sole option of Supplier. Certain milestones have been completed, as indicated below.

A) Project Milestone: Supplier shall provide a geophysical or geological exploration plan on the geothermal resource which would define the geothermal resource. Such plan shall specify start and completion dates of the geophysical or geological exploration work.

Completed Date:

October 16, 2007.

B)  Project Milestone: Supplier shall obtain all permits, licenses, easements and approvals to construct and operate the Generating Facility, including UEPA permit.

Construction Permits Completion Date:   February 28, 2009

Operating Permits Completion Date:   February 12, 2010

C)   Project Milestone: Supplier shall demonstrate to Buyer that it has obtained adequate water rights for the operation the Generating Facility.

Completed Date:

February 6, 2008

D)   Project Milestone: Supplier shall demonstrate to Buyer that it has complete financing for construction of the Generating Facility.

Completed Date:

February 6, 2008.

E)  Project Milestone: Notice to proceed has been issued to the construction contractor under the turnkey engineering, procurement and construction contract (the"EPC Contract") for the Generating Facility and construction of the Generating Facility has commenced.

Completed Date:   August 31, 2008

Documentation: Supplier shall provide Buyer a copy of the executed Notice to Proceed acknowledged by the construction contractor and documentation from qualified professionals which indicates that work has begun regarding the engineering, procurement and construction of the Generating Facility.

F-1

Attachment F to First Amendment

F)   Project Milestone: Supplier shall complete the drilling and testing of the initial production wells, which shall deliver hot water sufficient to demonstrate a viable geothermal resource with a minimum net capacity of [***] MW. Wells are to have flowed for a test period of 48 continuous hours or until stabilization occurs. Stabilization shall be considered met when the flow rate and temperature at the end of any 8-hour continuous period shall not be less than 98% of the first hour of the 8-hour period. Supplier shall provide Buyer pursuant to Section 29 (Notices) of this Agreement with written notification 48 hours prior to conducting such drilling and testing, but shall provide such notice with as much advance notice as practicable.

Completed Date:   February 6, 2008

Documentation: Supplier shall provide Buyer with the data from the well test, which well test is performed by qualified professionals, which indicates delivery of hot water of the quantity and quality as indicated. An authorized representative of Buyer shall have the right to be present during and witness such test.

G)    Project Milestone: Supplier's major equipment shall be delivered to Generating Facility's construction site.

Completion Date: December 31, 2009.

Documentation: Supplier shall provide Buyer with documentation that the major equipment has been delivered to the Generating Facility's construction site.

H)  Project Milestone: Supplier shall complete the drilling of all the production and injection wells, which shall deliver a combined rate of hot water sufficient to generate a minimum of [***] net MW of electrical energy, and shall be capable of injecting fluids produced by the production wells. Supplier shall provide Buyer pursuant to Section 29 (Notices) of this Agreement with written notification 48 hours prior to conducting any such drilling and testing, but shall provide such notice with as much advance notice as practicable.

Completion Date: August 31, 2009.

Documentation: Supplier shall provide Buyer with the data from the well tests, which well tests are performed by qualified professionals, which indicate delivery of hot water of the quantity and quality as indicated and the capability of injection of all production fluids from the production wells. An authorized representative of Buyer shall have the right to be present during and witness such drilling and testing.

F-2

Attachment F to First Amendment

I)    Project Milestone: Supplier shall qualify as a QF or such similar status under applicable law.

Completion Date: December 12, 2009

Documentation: Supplier shall provide Buyer with documentation that it has filed for and obtained EWG, QF or such similar status under applicable Law and shall remain a QF or such similar status for the entire Term of this Agreement.

J)   Protect Milestone: Supplier shall have installed two (2) or more generators with a total installed capacity nameplate rating stated in Exhibit 1.

Completion Date: December 12, 2009

Documentation: Supplier provides written notice to Buyer that the Generating Facility is comprised of a total of two (2) or more turbine generators, all of which are fully installed and operational at the Generating Facility site, and further satisfies the definition of the Generating Facility in the Agreement.

K)  Project Milestone: The Generating Facility achieves the Commercial Operation Date.

Completion Date: February 12, 2010

Documentation: Supplier provides written notice to Buyer that the Generating Facility satisfies the definition of the Commercial Operation Date in the Agreement.

F-3

Attachment G to First Amendment

EXHIBIT 12

SUPPLIER'S REQUIRED AGREEMENTS

 

1.

the Existing PPA and this First Amendment

 

2.

the IOA

 

3.

Sierra Pacific Power Company Schedule Large Standby Service Rider

 

4.

EPC Agreement

 

5.

Operating and Maintenance Agreement

 

6.

Right of Way, Bureau of Land Management

 

7.

Right of Way, Private Properties

 

8.

Geothermal Leases

G-1

Attachment H to First Amendment

EXHIBIT 13

SUPPLY AMOUNT

FAULKNER 1 - TOTAL SUPPLY AMOUNT

CONTRACT YEAR

[***]

H-1

[***]

H-2

Attachment I to First Amendment

EXHIBIT 18

YEARLY PC AMOUNT

CONTRACT YEARS 1 – 20

		
	Year

	Amount

	1

	[***]

	2

	[***]

	3

	[***]

	4

	[***]

	5

	[***]

	6

	[***]

	7

	[***]

	8

	[***]

	9

	[***]

	10

	[***]

	11

	[***]

	12

	[***]

	13

	[***]

	14

	[***]

	15

	[***]

	16

	[***]

	17

	[***]

	18

	[***]

	19

	[***]

	20

	[***]

I-1Exhibit 4.132

Exhibit 4.132

CASH SETTLED OPTION

NGP BLUE MOUNTAIN HOLDCO LLC

		
	Applicable Percentage of Option Settlement

	New York, New York

	 
	 

	Amount Represented by this Option:  0.41667%1

	August 29, 2008

This Cash Settled Option (this option and all options issued upon the partial exercise, transfer or division of or in substitution for any such option, an “Option”) is to certify that, for value received, TEP EQUITY HOLDINGS CAYMAN BLOCKER, LTD. (the “Option Holder”), is entitled to receive upon exercise of this Option, from NGP BLUE MOUNTAIN HOLDCO LLC, a Delaware limited liability company (“Issuer”), the Applicable Percentage (as defined below) of the Option Settlement Amount (as defined below) in accordance with Section 5.4 hereof.

This Option is issued pursuant to the terms of the Note Purchase Agreement dated as of August 29, 2008 by and among Issuer, the Note Purchasers party thereto and TCW Asset Management Company, as Agent (as amended, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”).  Capitalized terms used but not defined herein shall have the meanings assigned to them in the Note Purchase Agreement (regardless of whether such agreement is in full force and effect).

-------------------

THIS OPTION HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

1.

Options, Exchanges and Replacements.

1.1

Option.  This Option is issued by Issuer pursuant to the Note Purchase Agreement.  Neither the grant nor the ownership of this Option shall entitle the Option Holder to any rights or subject the Option Holder to any duties or obligations as an equity holder in Issuer, either at law or in equity.

1.2

Transfer and Exchange of Option.  Subject to Section 6 below, the Option Holder may, at its option, either in person or by a duly authorized attorney, surrender this Option along with a duly executed assignment at the principal office of Issuer, and Issuer, at its expense (including the cost of delivery of one or more new Options by Issuer to the address specified in the request), will issue in exchange therefor one or more new Options, registered in the name or names of the person or persons designated by the Option Holder, representing a right to receive the same aggregate percentage of the Option Settlement Amount as is represented by the Option surrendered for exchange.

____________________

1Aggregate percentage  7.5%

1

1.3

Loss, Theft, Destruction or Mutilation of Option.  Upon receipt of evidence reasonably satisfactory to Issuer of the loss, theft, destruction or mutilation of this Option and, in the case of any such loss, theft or destruction, upon receipt of an indemnity agreement reasonably satisfactory to Issuer or, in the case of any such mutilation, upon surrender and cancellation of this Option, Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Option, a new Option, representing a right to purchase the same aggregate percentage of the Option Settlement Amount as was represented by the lost, stolen, destroyed or mutilated Option.

1.4

Form of Replacement Option.  Any Option issued upon transfer or exchange of this Option, or issued in lieu of a lost, stolen, destroyed or mutilated Option, shall be the valid obligations of Issuer, evidencing the same rights, and entitled to the same benefits, as the Option surrendered upon such transfer, exchange or issuance, with any appropriate insertions or variations (including, but not limited to, variations in respect of the Applicable Percentage in the event the Option is partially exercised or divided or substituted as provided in Section 1.5 below).

1.5

Percentage of Option Settlement Amount Represented by this Option.  Upon any partial exercise of this Option, transfer of this Option or other issuance of one or more new Options in exchange, division or substitution for this Option, the new Option or Options will specify on their face the percentage of the Option Settlement Amount into which such Option or Options are exercisable which shall at all times equal the aggregate percentage of the Option Settlement Amount of this Option prior to such partial exercise, transfer or other issuance, less any portion thereof for which an Option has been exercised.  The percentage of the Option Settlement Amount to which a particular option is entitled upon full exercise is referred to as the “Applicable Percentage.”  The Applicable Percentage of the original Option upon issuance is 0.41667%.

2.

Continuing Covenants.

Issuer agrees as follows as long as any portion of this Option remains outstanding:

2.1

Maintenance of Office or Agency.  Issuer will notify the Option Holder as to the address of Issuer in the United States where this Option may be presented or surrendered for exercise, transfer, or exchange and where notices and demands to or upon Issuer in respect of this Option may be served.  Issuer initially designates its office at 1755 East Plumb Lane, Suite 220, Reno, Nevada 89502, as the office of Issuer for such purposes, and such address shall remain effective until Issuer gives the Option Holder written notice of change.

2.2

Restrictive Legend on Limited Liability Company Agreement.  Upon the date hereof, Issuer shall cause to be placed on all copies of its Issuer Limited Liability Company Agreement a legend indicating that one or more Options have been granted providing the Option Holders a right to be paid in the aggregate the Applicable Percentages of the Option Settlement Amount represented by such Option or Options on the terms set forth in such Option or Options.

2.3

No Impairment.  Without limiting the generality of any requirements or restrictions in this Option or any other Note Document, (a) Issuer shall not by any action including, without limitation, amending Issuer’s certificate of formation or effecting a reorganization, transfer of substantially all of Issuer’s assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Option but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Option Holder against impairment and (b) Issuer shall not and shall not permit any Affiliate to take any action to circumvent, diminish or impair the economic or other rights of Option Holder’s under this Option.

2

Upon the request of the Option Holder, Issuer will acknowledge in writing, in form reasonably satisfactory to the Option Holder, the continuing validity of this Option and the obligations of Issuer hereunder.

3.

Covenants.

Except with respect to any provision thereof that is waived from time to time by the Required Option Holders, Issuer agrees that during any Exercise Deferral Period (as defined in Section 5.2 below), and so long as any portion of this Option remains outstanding, it shall comply with the covenants set forth on Annex A hereto, as amended from time to time with the consent of the Required Option Holders.  “Required Option Holders” means holders of a majority (by aggregate applicable percentage of the Option Settlement Amount) of all Cash Settled Options issued pursuant to the Note Purchase Agreement

4.

Representations.

4.1

Representations of Issuer.  Issuer hereby represents and warrants that all of the representations of Issuer set forth in the Note Purchase Agreement are true and correct as of the date of this Option, except for representations expressly stated to relate to a specific earlier date, in which case such representations shall be true and correct in all material respects only as of such earlier date.  Issuer hereby represents and warrants that it is an “eligible contract participant” as that term is defined in Section 1a(12) of the Commodity Exchange Act (an “Eligible Contract Participant”).

4.2

Representations of Option Holder.  Option Holder hereby represents and warrants that it is (i) an “accredited investor” as that term is defined under Securities and Exchange Commission Rule 501 of Regulation D under the Securities Act (an “Accredited Investor”) and (ii) an Eligible Contract Participant.

5.

Exercise of Option.

5.1

Right to Exercise.  On the terms of and subject to the conditions of this Section 5, this Option shall be automatically exercised (i) in full on the Initial Exercise Date (as defined below) or, if applicable, the Deferred Exercise Date (as defined in Section 5.2 below) or on any Acceleration Event (as defined in Section 5.6 below), or (ii) in part, to the extent of the Tag Percentage (as defined in Section 5.6 below), on any Partial Acceleration Event (as defined in Section 5.6 below).  Upon exercise, the Option Holder shall be entitled to receive payment of the Exercise Payment Amount (as defined in Section 5.4 below) in accordance with Section 5.4.  The “Initial Exercise Date” means (x) the Maturity Date or (y) such earlier date on which all Obligations (other than unmatured indemnity obligations) under the Note Documents have been repaid in full.

3

5.2

Exercise Deferral.  Issuer or Required Option Holders may defer the exercise of this Option that would occur on the Initial Exercise Date by providing written notice to the other party of such election (any such notice, a “Deferral Notice”) specifying the later date on which this Option shall become exercisable in full (the “Deferred Exercise Date”) which shall be not later than two (2) years after the Initial Exercise Date.  For the avoidance of doubt, a Deferral Notice may not be given with respect to any exercise on an Acceleration Event or Partial Acceleration Event.  To be effective any Deferral Notice must be given by the Issuer not later than the Initial Exercise Date and by Required Option Holders not later than the earlier of five (5) Business Days after the earlier of (x) receipt of written notice by the Required Option Holders of a notice of prepayment of all Obligations under subsection 3.3C of the Note Purchase Agreement and (y) the Initial Exercise Date.  Any Deferral Notice given by Required Option Holders shall be binding on all holders of Options.  In the event Issuer has elected to defer exercise in accordance with this Section 5.2, the deferral period, through the Deferral Exercise Date, shall be referred to as the “Exercise Deferral Period”. 

5.3

Exercise Price.  The exercise price of this Option (the “Exercise Price”) as of any date of determination shall be equal to $1 for each 1% of the Option Settlement Amount for which this Option is exercised payable as provided in Section 5.4.

5.4

Payments by Issuer.  Upon exercise of this Option Issuer shall, promptly as practicable, and in any event within five (5) days after determination of the Option Settlement Amount in connection with such exercise pay the Applicable Percentage (or, in the case of a Partial Acceleration Event, the Tag Percentage) of the Option Settlement Amount (net of the Exercise Price) (the “Exercise Payment Amount”) to Option Holder in immediately available funds, against delivery by Option Holder of this Option duly endorsed or assigned to Issuer or in blank, at the principal office of Issuer.

If this Option is exercised in part, Issuer shall, at the time of payment of the amount set forth in this Section 5.4, issue and deliver to the Option Holder a new Option evidencing the right of the Option Holder to receive upon exercise the remaining Applicable Percentage of the Option Settlement Amount for which this Option shall not have been exercised, and this Option shall be canceled.

5.5

Option Settlement Amount.  The “Option Settlement Amount” as of any exercise date shall be equal to the fair market value of the equity of the Issuer, assuming a willing buyer and a willing seller, and taking into account the estimated useful life of the Project and any Indebtedness of Issuer and each other Issuer Party, in each case, as of such exercise date (the “Company Value”) as determined in good faith by the members of Issuer, or, if the Option Holder does not accept such determination, by an independent appraiser (the “Joint Appraiser”) selected by mutual agreement of Issuer and Required Option Holders or, if they cannot agree, as provided in the next sentence.  In the event that Issuer and Required Option Holders are unable to agree on an appraiser within thirty (30) days after the date of exercise, Issuer shall forthwith select one appraiser, Required Option Holders shall forthwith select a second appraiser, and the two appraisers so selected shall forthwith select a third appraiser with expertise in the appraisal of geothermal power generation and transmission facilities who shall be the Joint Appraiser.  Such third appraiser shall be instructed to complete the determination of the Company Value as soon as practicable, and in any event within sixty (60) days after the date of exercise.  Any determination of the Company Value reached by the Joint Appraiser shall be final.  No discount for minority interest or lack of liquidity should be applied.  The appraisal fees shall be paid by Issuer.

4

5.6

Acceleration Rights.

(a)

Issuer shall give the Option Holder written notice (an “Acceleration Event Notice”) of the occurrence of any of the following events (each, an “Acceleration Event”) as soon as practicable upon obtaining knowledge that such event is likely to occur, but in any event not later than the consummation thereof:  (i) any sale or other transfer of all or substantially all of the assets of Issuer or any other Issuer Party, in one transaction or a series of transactions, (ii) any merger, combination, consolidation or liquidation involving Issuer or any other Issuer Party, (iii) any Change of Control, (iv) an involuntary case shall be commenced against any Issuer Party under any applicable bankruptcy, insolvency or similar Law now or hereafter in effect, including, without limitation, the Bankruptcy Code, or any Issuer Party shall have an order for relief entered with respect to it or (v) the commencement of a voluntary case by any Issuer Party under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, including, without limitation, the Bankruptcy Code, or consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law.  For the avoidance of doubt, a sale of Permitted Tax Equity shall neither give rise to nor constitute an Acceleration Event.  Upon the occurrence of an Acceleration Event, this Option shall accelerate and this Option shall be deemed to be automatically exercised in full for the Applicable Percentage.

(b)

Issuer shall also give the Option Holder written notice (a “Partial Acceleration Notice”) if Parent or any of its Affiliates Transfers any equity interests in Issuer or NGP I to any non-affiliated third party, other than a sale of Permitted Tax Equity (a “Partial Acceleration Event”) specifying the equity interests transferred.  Upon the occurrence of a Partial Acceleration Event, a portion of this Option (the “Tag Percentage”) equal to the Applicable Percentage multiplied by the percentage of equity interests in Issuer or NGP I transferred shall accelerate and this Option shall be deemed to be automatically exercised for the Tag Percentage.  For purposes hereof “Transfer” means any direct or indirect sale or other transfer of equity interests in Issuer or NGP I, provided that any sale or transfer of any equity interests in any upstream Affiliate of Issuer that is publicly traded shall not constitute a Transfer under this Option.

(c)

No Distributions to members shall be made from the proceeds of any transaction giving rise to an Acceleration Event or Partial Acceleration Event until the Issuer has fully complied with this Section 5.  The determination of whether any sale of all or substantially all of the assets has occurred shall be made in accordance with Delaware law.  Option Holder agrees to waive any rights to distributions and allocations from the Issuer to the extent and in the event that Option Holder were treated as a partner of Issuer in respect of owning an Option.  Issuer shall not treat Option Holder as a partner for any tax or other purposes, except to the extent otherwise clearly required by law.

5

6.

Transfers; Legends.

6.1

Restrictions on Transfer.  Option Holder may at any time sell, assign or transfer this Option by complying with the transfer procedures set forth in this Section 6.1; provided, that no sale, assignment or transfer of this Option shall be permitted unless (a) the subsequent purchaser, assignee or transferee (the “Transferee”) is a person who qualifies as both an Accredited Investor and an Eligible Contract Participant and (b) the transaction complies with applicable federal and state securities laws.  Issuer hereby acknowledges and agrees that any sale, assignment or transfer of this Option will give rise to a direct obligation of Issuer to the Transferee.

6.2

Legend on Options.  Each Option shall bear a legend in substantially the following form:

THIS OPTION HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

6.3

Tax Certificates.  The Option Holder shall provide the Issuer upon acquisition of this Option two accurate and complete original duly executed copies of the applicable IRS Form W-8 or IRS Form W-9 and associated documentation required under applicable law to establish in accordance with United States Treasury Regulations the Issuer’s withholding obligations, if any.  In addition, the Option Holder shall, at Issuer’s timely written request (with a copy to Agent), update such forms and documentation as necessary under applicable law.

7.

Miscellaneous.

7.1

Notices.  Unless otherwise specifically provided herein, any notice, delivery or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied or sent by registered or certified mail, postage prepaid, and shall be deemed to have been given when delivered in person, or otherwise upon receipt.  For the purposes hereof, the addresses of Option Holder and Issuer (until notice of a change thereof is delivered as provided in this Section 7.1) shall be as follows:

Issuer:

NGP Blue Mountain Holdco LLC

1755 East Plumb Lane, Suite 220

Reno, NV 89502

Attention: Max Walenciak

Telephone: 775-786-3399

Telecopier: 775-786-3399

with copies (which shall not constitute notice) to:

Nevada Geothermal Power Company

Suite 900 - 409 Granville Street

Vancouver, BC V6C 1T2

6

Attention: Andrew Studley

Telephone: 604-688-1553

Telecopier: 604-688-5926

Option Holder:

TEP Equity Holdings Cayman Blocker, 

c/o TCW Asset Management Company

865 South Figueroa Street, Suite 2100

Los Angeles, California 90017

Attn:  R. Blair Thomas and Phil S. Abejar

Telephone No.: 212-244-0000

Telecopier No.: 212-244-0604

with a copy (which shall not constitute notice) to:

TCW Asset Management Company

1251 Avenue of the Americas, Suite 4700

New York, NY 10020

Attn: Brian O’Connor – Energy and Infrastructure Group

Reference: NGP Blue Mountain

Telephone No.: 212-771-4000

Telecopier No.: 212-771-4025

with a copy (which shall not constitute notice) to:

O’Melveny & Myers LLP

Times Square Tower

7 Times Square

New York, New York 10036

Attention :  Todd R. Triller

Telephone No.: 212-326-2000

Telecopier No.: 212-326-2061

7.2

Governing Law.  THIS OPTION SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

7.3

Indemnity and Expenses.

(a)

Issuer agrees to indemnify Option Holder from and against any and all claims, losses and liabilities in any way relating to, growing out of or resulting from this Option and the transactions contemplated hereby or thereby (including, without limitation, enforcement of the terms of this Option, but excluding any income taxes with respect to this Option), except to the extent such claims, losses or liabilities result solely from Option Holder’s gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.

7

(b)

Issuer shall pay all expenses in connection with the issue, sale and delivery of this Option.  Issuer will also pay to Option Holder upon demand the amount of any and all reasonable costs and expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, that Option Holder may incur in connection with (i) the preparation of this Option, or (ii) the enforcement of any of the rights of Option Holder hereunder.

The provisions of this Section 7.3 shall survive any exercise or termination of this Option.

7.4

No Waivers; Remedies.  No failure or delay by Option Holder in exercising any right, power or privilege with respect to this Option shall operate as a waiver of the right, power or privilege.  A single or partial exercise of any right, power or privilege shall not preclude any other or further exercise of the right, power or privilege or the exercise of any other right, power or privilege.  The rights and remedies provided in this Option shall be cumulative and not exclusive of any rights or remedies provided by law.

7.5

Severability of Provisions.  Any provision of this Option that is prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the prohibition or unenforceability without invalidating the remaining provisions of this Option or affecting the validity or enforceability of the provision in any other jurisdiction.

7.6

Independence of Covenants.  Except as otherwise expressly stated in a covenant herein, all covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a breach hereunder if such action is taken or condition exists.

7.7

Headings.  The headings of the sections and subsections of this Option are inserted for convenience only and do not constitute a part of this Option.

7.8

Amendment and Modifications.  This Option may be amended or modified only with the prior written consent of Issuer and Option Holder, provided that any covenant on Annex A may be waived by Required Option Holders.

7.9

Successors and Assigns.  This Option and the provisions hereof shall inure to the benefit of, and shall be binding upon, the parties hereto and their successors and permitted assigns.  This Option may not be assigned or otherwise transferred, in whole or in part, by Issuer.  This Option may be assigned in whole or in part by the Option Holder at any time subject to Section 6.1 hereof.

7.10

Entire Agreement.  This Option, the other Note Documents and the documents and agreements referred to herein and therein, embody the entire agreement and understanding between Issuer and the Option Holder with respect to the matters set forth herein, and supersede all other prior agreements and understandings relating to the subject matter hereof.

7.11

Exclusive Jurisdiction.  EACH OF ISSUER AND OPTION HOLDER, BY ACCEPTANCE HEREOF, AGREES THAT ANY LEGAL ACTION OR PROCEEDING 

8

AGAINST ANY PARTY HERETO WITH RESPECT TO THIS OPTION AND ANY ACTION FOR ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS OPTION, ISSUER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND APPELLATE COURTS FROM ANY THEREOF.  ISSUER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CORPORATION SERVICE COMPANY AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY ACTION OR PROCEEDING.  IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, ISSUER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO AGENT.  ISSUER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ISSUER AT ITS ADDRESS REFERRED TO IN SECTION 7.1.  ISSUER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS OPTION BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED IN ANY OTHER JURISDICTION.

7.12

Waiver of Jury Trial.  EACH OF ISSUER AND OPTION HOLDER HEREBY IRREVOCABLY WAIVES, BY ACCEPTANCE HEREOF, ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS OPTION OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED, OR WHICH IN THE FUTURE MAY BE DELIVERED, IN CONNECTION WITH THIS OPTION.

7.13

Counterparts.  This Option may be executed in multiple counterparts, each of which shall constitute a single, complete agreement.

9

IN WITNESS WHEREOF, Issuer has caused this Option to be signed in its name by one of its officers thereunto duly authorized, and to be dated as of the day and year first above written.

NGP BLUE MOUNTAIN HOLDCO LLC

By:    Signed                                                                     

Name: Andrew Studley

Its:  Chief Financial Officer

Accepted by:

TEP EQUITY HOLDINGS CAYMAN

BLOCKER, LTD.                                                      

By:    Signed                                                                     

Name:  R. blair Thomas 

Title:  President

By:    Signed                                                                       

Name:  Phil Abejar

Title:  Vice President

ANNEX A

EXERCISE DEFERRAL PERIOD COVENANTS

Subject to Section 3 of the Cash Settled Option, Issuer agrees to comply with the covenants set forth on this Annex A during any Exercise Deferral Period and so long as any portion of this Option remains outstanding.  References in this Annex A to the Note Purchase Agreement or the Note Documents shall be to such agreements as most recently in effect prior to the commencement of the Exercise Deferral Period (regardless of whether they remain in full force and effect).

1.

Reporting Covenants.

Issuer shall deliver to the Option Holder:

1.1

the financial statements, forecasts, projections, notices, certificates, and reports required to be delivered to Agent under subsection 6.1 of the Note Purchase Agreement at the times such reports are required to be delivered under the Note Purchase Agreement in each case regardless of whether the Note Purchase Agreement is then in effect or whether statements are then required to be delivered to Agent under the Note Purchase Agreement; and

1.2

from time to time, with reasonable promptness, such other information regarding Issuer and its business as the Option Holder may reasonably request.

2.

Other Covenants.

2.1

Books and Records.  Issuer shall, and shall cause each Issuer Party to, keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all requirements of Law shall be made of all dealings and transactions in relation to its business and activities.  Issuer shall, and shall cause each Issuer Party to, permit officers and designated representatives of Agent or any Option Holder to visit and inspect any of the properties of such Issuer Party and to examine the books of record and accounts of such Issuer Party and discuss the affairs, finances and accounts of such Issuer Party with, and be advised as to the same by, its and their officers and independent accountants, all upon at least seven (7) days’ written notice and at such reasonable times as Agent or such Option Holder may desire.

2.2

Operating Budget.  (a) Issuer shall cause NGP I to, not later than thirty (30) days before the EPC Substantial Completion Date, adopt an operating plan and a budget and provide a copy of such operating plan and budget at such time to Agent.  No less than forty-five (45) Business Days in advance of the beginning of each calendar year thereafter, NGP I shall similarly adopt an operating plan and a budget for the ensuing calendar year and provide a copy of such operating plan and budget at such time to Agent.  (Each such operating plan and budget is herein called an “Operating Budget”).  If NGP I shall not have adopted an annual Operating Budget before the beginning of any calendar year or any Operating Budget adopted by NGP I shall not have been accepted by Agent (acting in consultation with the Independent Engineer) before the beginning of any upcoming calendar year, the Operating Budget for the preceding calendar year shall, until the adoption of an annual Operating Budget by NGP I and acceptance of such Operating Budget by Agent (acting in consultation with the Independent Engineer), as the case may be, be deemed to be in force and effective as the annual Operating Budget for such upcoming calendar year; provided, that if the initial Operating Budget is not approved by Agent (acting in consultation with the Independent Engineer), NGP I may use a budget that is consistent with the Projections delivered pursuant to subsection 4.1U of the Note Purchase Agreement until an initial Operating Budget is approved, and shall work diligently to prepare an initial Operating Budget that is acceptable to Agent (acting in consultation with the Independent Engineer).

(b)

Issuer shall not, and shall not permit any other Issuer Party to, expend any amount or incur any obligation with respect to any Fiscal Year in an aggregate amount for all Issuer Parties which exceeds the aggregate amount of all expenditures set forth in the Operating Budget (including the Operating Budget (as defined in the Note Purchase Agreement) for the Fiscal Year in which the Exercise Deferral Period begins by more than ten percent (10%).

2.3

Equity Issuances; Distributions.

(a)

Except for the sale of Permitted Tax Equity on the Tax Equity Closing Date pursuant to the terms of subsection 7.1B of the Note Purchase Agreement, Issuer shall not, and shall not cause or permit any Issuer Party to, directly or indirectly, issue, sell, transfer, assign, pledge or otherwise encumber, or grant any options, rights or warrants with respect to, any Equity Interests or other ownership interests of any Issuer Party, except for Liens on such Equity Interests or other ownership interests created pursuant to the terms of the Note Documents, any Permitted Senior Construction Indebtedness Documents or any Permitted Refinancing Documents.

(b)

Except as permitted in the Note Purchase Agreement and the Issuer Account Management Agreement, Issuer shall not directly or indirectly, declare, order, pay, make or set apart any sum for any Distribution and, in any event, any such Distribution shall be made solely from operating cash flow.

2.4

Indebtedness; Contingent Obligations.  Issuer shall not, and shall not cause or permit any Issuer Party to, without the prior written consent of Required Option Holders create, incur, assume, suffer to exist or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, or any Contingent Obligation, except indemnities provided under the Transaction Documents, Permitted Senior Construction Indebtedness (subject to the terms of the Note Purchase Agreement), Permitted Refinancing Indebtedness (subject to the terms of the Note Purchase Agreement), Contingent Obligations in connection with any Permitted Tax Equity and other Indebtedness in an aggregate principal amount not to exceed $1,000,000 at any time outstanding.

2.5

Liens.  Issuer shall not, and shall not cause or permit any Issuer Party to, create, incur, assume or suffer to exist, directly or indirectly, any Lien on any of its property now owned or hereafter acquired, other than Permitted Liens.

2.6

Restriction on Fundamental Changes.

(a)

Issuer shall not, and shall not cause or permit any Issuer Party to, enter into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), discontinue its business or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series of transactions, all or any part of its business or property (other than drilling permits that the Geothermal Consultant determines not to be reasonably required for the Project), whether now owned or hereafter acquired, except (i) sales of obsolete and/or replaced equipment, (ii) sales of inventory in the ordinary course of business, or (iii) sales of other property not material to the operation of the Project and with an aggregate book value (a) not in excess of $250,000 during any Fiscal Year or (b) with the prior written consent of Agent, in excess of $250,000 (but not in excess of $1,000,000) during any Fiscal Year.

(b)

Issuer shall not, and shall not cause or permit any Issuer Party to, (i) acquire by purchase or otherwise any property or assets of, or stock or other evidence of beneficial ownership of, any Person, except pursuant to the Project Documents (entered into in accordance with the terms of the Note Purchase Agreement, or after termination thereof, in the ordinary course of business) and except acquisitions of property or assets in the ordinary course of NGP I’s business, (ii) create or acquire any Subsidiary or (iii) enter into any partnership or joint venture.

2.7

Advances, Investments and Loans. Issuer shall not, and shall not cause or permit any Issuer Party to, lend money or credit or make advances or contributions to any Person, or directly or indirectly purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to any Person, except that (a) Issuer may make capital contributions to NGP I and (b) Issuer and NGP I make short term investments in cash equivalents.

2.8

Transactions with Affiliates.  Except as permitted in the Note Documents, Issuer shall not, and shall not cause or permit any Issuer Party to, directly or indirectly, enter into any transaction or series of related transactions with any Affiliate, unless expressly consented to by Required Option Holders.

2.9

Changes in Business.  Issuer shall not cause or permit NGP I to enter into or engage in any business other than the ownership, development, construction, operation and maintenance of the Project in accordance with the Transaction Documents.  Issuer shall not, and shall not cause or permit any Issuer Party (other than NGP I) to, engage in any business other than consummation of the transactions contemplated by the Transaction Documents, and, in the case of Issuer, ownership of the Equity Interests of the other Issuer Parties.

2.10

Modification of Organizational Documents.  Issuer shall not, and shall not permit any Issuer Party to, amend, supplement, terminate or waive, or consent to the amendment, supplement, termination or waiver of any of the provisions of the Issuer Limited Liability Company Agreement or the NGP I Limited Liability Company Agreement except for such modifications as would not be adverse to Option Holder and except for any amendment required in connection with Permitted Tax Equity.

2.11

Compliance with Law; Regulation.

(a)

Issuer shall cause each Issuer Party to own, construct, operate and maintain the Project (or, as applicable, cause the Project to be constructed, operated and maintained) in compliance with all Laws, except such noncompliance as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.  

(b)

Issuer shall not permit any Issuer Party to be deemed by any Governmental Authority to be, or be subject to, or not exempt from, financial, organizational or rate regulation as, an “electric utility,” “electric corporation,” “electrical company,” “gas utility,” “steam company,” “steam utility,” “public utility,” “public utility holding company,” “water utility”, “public service company” or similar entity under (i) the laws of any state respecting the rates, financial or organizational regulation of electric, water or steam utilities or companies, (ii) the Federal Power Act, except Sections 205 and 206 thereof and other provisions of the Federal Power Act from which Issuer as a Qualifying Facility is not exempt as set forth in 18 C.F.R. § 292.601(c)(2)-(5), or (iii) PUHCA.  Issuer shall not permit any Issuer Party to take any action to cause itself to be (or omit to take any action necessary to prevent itself from becoming) subject to securities or rate regulation by the Nevada Public Utilities Commission.

2.12

Debt Repayment or Modification.  Issuer shall not, and shall not permit any Issuer Party to:

(a)

amend or modify, or permit the amendment or modification of, any provision of any agreement relating to any Indebtedness of any Issuer Party with a principal amount in excess of $2,500,000, other than amendments or modifications that are not in any manner adverse to Option Holder; or

(b)

make, or agree or offer to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness of any Issuer Party with a principal amount in excess of $2,500,000 (other than obligations under the Transaction Documents or any Permitted Senior Construction Indebtedness Documents with the proceeds of any Permitted Refinancing Indebtedness or Permitted Tax Equity), whether by prepayment, refinancing, exchange, defeasance or otherwise, other than scheduled principal, interest and fee payments and mandatory prepayments with respect to such Indebtedness.

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