Document:

Exhibit

Exhibit 10.4

PURCHASE AND SALE AGREEMENT

by and between
PATTERN CANADA FINANCE COMPANY ULC,
Purchaser

and
PATTERN ENERGY GROUP LP,
Seller

Dated as of 
October 10, 2019

Direct or Indirect Interests
in
Henvey Inlet Wind LP
and 
Pattern Henvey Inlet GP Holdings Inc. 
and
HIW Property Holdings LP and HIW Property Holdings GP Inc.
and
NPC Loans

TABLE OF CONTENTS

	
			
	ARTICLE 1
	 

	 
	PURCHASE AND SALE OF THE ACQUIRED INTERESTS AND NPC LOANS
	1

	 
	1.1Agreement to Sell and Purchase
	1

	 
	1.2Signing Date Deliverables
	1

	 
	1.3Purchase Price
	1

	 
	1.4The Closing
	2

	 
	1.5Conduct of Closing
	2

	 
	1.6Property Company Assets
	2

	ARTICLE 2 
	 

	 
	REPRESENTATIONS AND WARRANTIES OF SELLER
	3

	 
	2.1Organization and Status
	3

	 
	2.2Power; Authority; Enforceability
	3

	 
	2.3No Violation
	3

	 
	2.4No Litigation
	4

	 
	2.5Consents and Approvals
	4

	 
	2.6Acquired Interests
	4

	 
	2.7Solvency
	4

	 
	2.8Compliance with Law
	4

	 
	2.9Taxes
	5

	 
	2.10Unregistered Securities
	6

	 
	2.11Broker’s Fees
	6

	 
	2.12Material Contracts
	6

	ARTICLE 3
	 

	 
	REPRESENTATIONS AND WARRANTIES OF PURCHASER
	6

	 
	3.1Organization and Status
	6

	 
	3.2Power; Authority; Enforceability
	6

	 
	3.3No Violation
	7

	 
	3.4No Litigation
	7

	 
	3.5Consents and Approvals
	7

	 
	3.6Solvency
	7

	 
	3.7Compliance with Law
	7

	 
	3.8No Reliance
	7

	 
	3.9Investment Intent
	8

	 
	3.10Accredited Investor
	8

	 
	3.11Broker’s Fee
	8

	ARTICLE 4
	 

	 
	COVENANTS; OTHER OBLIGATIONS
	8

	 
	4.1Covenants Between Signing and Closing
	8

	 
	4.2Other Covenants
	9

	ARTICLE 5
	 

	 
	CONDITIONS TO CLOSING; TERMINATION
	10

	 
	5.1Conditions Precedent to Each Party’s Obligations to Close
	10

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TABLE OF CONTENTS
(continued)

	
			
	 
	5.2Conditions Precedent to Obligations of Purchaser to Close
	11

	 
	5.3Conditions Precedent to the Obligations of Seller to Close
	12

	 
	5.4Termination
	13

	ARTICLE 6 
	 

	 
	REMEDIES FOR BREACHES OF THIS AGREEMENT
	13

	 
	6.1Indemnification
	13

	 
	6.2Limitations on Seller’s or Purchaser’s Indemnification
	14

	 
	6.3Reimbursements; Refunds
	15

	 
	6.4Right to Control Proceedings for Third Party Claims
	15

	 
	6.5Mitigation; Treatment of Indemnification
	16

	 
	6.6Exclusive Remedy
	17

	ARTICLE 7
	 

	 
	MISCELLANEOUS
	17

	 
	7.1Entire Agreement
	17

	 
	7.2Notices
	17

	 
	7.3Successors and Assigns
	17

	 
	7.4Jurisdiction; Service of Process; Waiver of Jury Trial
	18

	 
	7.5Headings; Construction; and Interpretation
	20

	 
	7.6Further Assurances
	20

	 
	7.7Amendment and Waiver
	20

	 
	7.8No Other Beneficiaries
	20

	 
	7.9Governing Law
	20

	 
	7.10Schedules
	20

	 
	7.11Limitation of Representation and Warranties
	20

	 
	7.12Counterparts
	21

	 
	7.13Severability
	21

	 
	7.14Limit on Damages
	21

	 
	7.15Specific Performance
	21

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LIST OF APPENDICES
Appendix A-1        General Definitions 

Appendix A-2        Rules of Construction

Appendix B        Transaction Terms and Conditions

		
	Appendix C
	Acquired Interests; NPC Loans; Ownership Structure; and Wind Project Information

Appendix D        Documents and Key Counterparties

LIST OF SCHEDULES
		
	Schedule 2.4
	Litigation

		
	Schedule 2.5
	Seller Consents and Approvals

		
	Schedule 3.5
	Purchaser Consents and Approvals

Schedule 4.1(a)    Seller’s Pre-Closing Covenants

Schedule 4.2(e)    Tax Allocation

Schedule 6.4(b)    Control of Defense of Third Party Claims

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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of October 10, 2019, is made by and between Pattern Canada Finance Company ULC, a Nova Scotia unlimited liability company (“Purchaser”), and Pattern Energy Group LP, a Delaware limited partnership (“Seller”).  Capitalized terms used in this Agreement shall have the respective meanings specified in Appendix A-1 attached hereto.
RECITALS
WHEREAS, Seller owns, directly or indirectly through one or more Seller Affiliates (each such Seller Affiliate, a “Subsidiary Transferor”), some or all of the membership or partnership interest, shares, voting securities, or other equity interests, as applicable, in (i) the project company which owns the wind project (herein referred to as the “Project Company”, as described on Part I of Appendix C attached hereto; and the “Wind Project”, as described on Part II of Appendix C); and (ii) HIW Property Holdings LP (herein referred to as the “Property Company”, as described on Part I of Appendix C attached hereto); 
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Acquired Interests defined and described in Part I of Appendix C attached hereto (herein referred to as the “Acquired Interests”) and the NPC Loans defined and described in Part I of Appendix C attached hereto (herein referred to as the “NPC Loans”).
NOW, THEREFORE, in consideration of the foregoing premises and the mutual terms, conditions and agreements set forth herein, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

    

ARTICLE 1 
PURCHASE AND SALE OF THE ACQUIRED INTERESTS AND NPC LOANS

1.1    Agreement to Sell and Purchase.  Subject to the satisfaction or waiver (by the party for whose benefit such condition exists) of the conditions set forth in Article 5 and the other terms and conditions of this Agreement, at the Closing (a) Seller shall sell, assign, transfer and convey (or, if applicable, cause the Subsidiary Transferors to sell, assign, transfer and convey) the Acquired Interests and the NPC Loans to Purchaser, and (b) Purchaser shall purchase the Acquired Interests and the NPC Loans from Seller (or, if applicable, the Subsidiary Transferors), for the Purchase Price.

1.2    Signing Date Deliverables.  On the date of this Agreement, each of Seller and Purchaser shall deliver to the other party the deliverables set forth in Part II of Appendix B. 

1.3    Purchase Price.  The purchase price payable by the Purchaser to Seller (or, if applicable, the Subsidiary Transferor) for the Acquired Interests and the NPC Loans at Closing shall be the Purchase Price set forth in Part I of Appendix B. The Purchase Price shall be subject to adjustment by the Purchase Price Adjustment (if any) set forth in Part I of Appendix B. All payments of the Purchase Price and any Purchase Price Adjustment shall be paid by wire transfer of same day funds in the applicable Currency to the applicable accounts set forth in Part I of Appendix B, or as otherwise directed in writing by Seller to Purchaser on or prior to the Closing. The Post-Closing Adjustment shall be paid as set forth in Part I of Appendix B.

1.4    The Closing.  The closing of the transactions contemplated by this Agreement (the “Closing”) will take place on the date and at the location specified in Part III of Appendix B or such other time and place as the parties hereto shall mutually agree (including Closing by facsimile or “PDF” electronic mail transmission exchange of executed documents or signature pages followed by the exchange of originals as soon thereafter as practicable), and will be effective as of 12:01 a.m. Eastern Time on the day the Closing occurs.

1.5    Conduct of Closing.
(a)    At or prior to the Closing, Seller shall deliver, or cause to be delivered, to Purchaser:
		
	(i)
	The original certificates representing the Acquired Interests duly endorsed for transfer by Seller (or, if applicable, the Subsidiary Transferors) to Purchaser or with appropriate powers with respect thereto duly endorsed by Seller (or, if applicable, such Subsidiary Transferors); provided, that if the Acquired Interests are not in certificated form, Seller shall deliver to Purchaser a duly executed assignment agreement or other instrument conveying such Acquired Interests to Purchaser in form and substance reasonably acceptable to Purchaser;

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	(ii)
	Any other documents and certificates contemplated by Article 4 and Article 5 hereof to be delivered by or on behalf of Seller, including the certificate referred to in Section 5.2(d); and

		
	(iii)
	Any other Closing deliverables set forth in Appendix B-1.

(b)    At or prior to the Closing, Purchaser shall deliver to Seller:
		
	(i)
	The documents and certificates contemplated by Article 4 and Article 5 hereof to be delivered by or on behalf of Purchaser, including the certificate referred to in Section 5.3(d); and

		
	(ii)
	Any other Closing deliverables set forth in Appendix B-2.

1.6    Property Company Assets.  In respect of the purchase and sale of the Acquired Interests under this Agreement, the Purchaser shall file all requisite returns and pay directly to the appropriate Governmental Authority all land transfer taxes payable by it and, upon the reasonable request of the Seller, the Purchaser shall furnish proof of such payment.

ARTICLE 2     
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in, or qualified by any matter set forth in, the Schedules attached hereto, Seller hereby represents and warrants to Purchaser as set forth in this Article 2 as of (a) the date hereof and (b) if the Closing Date is not the date of this Agreement, the Closing Date, in each case, unless otherwise specified in the representations and warranties below, in which case the representation and warranty is made as of such date.  Whether or not a particular Section of this Article 2 refers to a specific, numbered Schedule, such Section shall, to the extent applicable, be subject to the exceptions, qualifications, and other matters set forth in the Schedules to the extent that the relevance of such exceptions, qualifications or other matters is reasonably apparent on the face thereof.

2.1    Organization and Status.  Each of Seller and each Subsidiary Transferor (a) is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation as set forth in the preamble to this Agreement or Part I of Appendix C, as applicable, (b) is duly qualified, authorized to do business and in good standing in each other jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary, and (c) has all requisite power and authority to own or hold under lease the property it purports to own or hold under lease and to carry on its business as now being conducted.  Seller has made available to Purchaser complete and correct copies of the Organization Documents for Seller and each Subsidiary Transferor.

2.2    Power; Authority; Enforceability.  Each of Seller and each Subsidiary Transferor has the legal capacity and power to enter into, deliver and perform its obligations under this Agreement and has been duly authorized, in accordance with its Organization Documents, to enter into, deliver and perform its obligations under this Agreement.  This Agreement has been duly executed and 

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delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law.

2.3    No Violation.  The execution, delivery and performance by Seller of its obligations under this Agreement, and the performance by each Subsidiary Transferor of this Agreement, in each case including without limitation the sale of the Acquired Interests and the NPC Loans to the Purchaser, do not, and will not, (a) violate any Governmental Rule to which Seller or any Subsidiary Transferor is subject or the Organization Documents of Seller or any Subsidiary Transferor, (b) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Seller or any Subsidiary Transferor is a party or by which Seller or any Subsidiary Transferor is bound or (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel or require any notice under any Material Contract, except, in the case of this clause (c), as would not reasonably be expected to be material in the context of the Wind Project or otherwise prevent or materially impair or delay the consummation of the transactions contemplated by this Agreement.

2.4    No Litigation.  Except for any potential claims associated with construction cost overruns relating to the Wind Project or as set forth in Schedule 2.4, none of Seller or its Affiliates is a party to or has received written notice of any pending or, to the Knowledge of Seller, threatened litigation, action, suit, proceeding or governmental investigation against Seller or its Affiliates which would reasonably be expected to be material to the Project Company, the Property Company and the Wind Project or the ownership of the Acquired Interests or which seeks the issuance of an order restraining, enjoining, altering or materially delaying the consummation of the transactions contemplated by this Agreement.

2.5    Consents and Approvals.  Except as set forth in Schedule 2.5, no Consent of any Governmental Authority or any other Person, is required by or with respect to Seller in connection with the execution and delivery of this Agreement by Seller, or the consummation by Seller or any Subsidiary Transferor of the transaction contemplated hereby, except for any Consents which if not obtained would not reasonably be expected to prevent or materially impair or delay the consummation of the transactions contemplated by this Agreement and which can be reasonably expected to be obtained or made in the ordinary course after the Closing. 

2.6    Acquired Interests.  Seller owns, directly or indirectly through one or more Seller Affiliates as identified in Part I of Appendix C, of record and beneficially one hundred percent (100%) of the Acquired Interests.  Part I of Appendix C sets forth the equity capitalization of the Project Company and the Property Company.  All of the interests described in Part I of Appendix C have been duly authorized, validly issued and are fully-paid and non-assessable and, except as set forth on Part I of Appendix C, there are no outstanding (i) equity interests or voting securities of the Project Company or Property Company, (ii) securities of the Project Company or Property 

4

Company convertible into or exchangeable for any equity interests or voting securities of the Project Company or Property Company, as applicable, or (iii) options or other rights to acquire from the Project Company or Property Company, or other obligation of the Project Company or Property Company to issue, any equity interests or voting securities or securities convertible into or exchangeable for equity interests or voting securities of the Project Company or Property Company, or any obligations of the Project Company, the Property Company or any of their Subsidiaries to repurchase, redeem or otherwise acquire any of the foregoing.  The Seller (or, if applicable, the Subsidiary Transferors) has good and valid title to, and has, or will have, full power and authority to convey, the Acquired Interests, as of the Closing Date.  The Acquired Interests have been, or will be, validly issued, and are, or will be, fully paid and non-assessable.  On the Closing Date, Seller (or, if applicable, the Subsidiary Transferors) will convey to Purchaser good and valid title to the Acquired Interests free and clear of all Liens other than Permitted Liens. Each of the Project Company and the Property Company has good title to, or subject to the terms and conditions of any leases, the right to use, its respective material real property and other material assets free and clear of all Liens other than Permitted Liens.

2.7    Solvency.  There are no bankruptcy, reorganization or arrangement proceedings pending against, being contemplated by or, to the Knowledge of Seller, threatened against, Seller or any Subsidiary Transferor.  None of Seller or any Subsidiary Transferor (a) has had a receiver, receiver and manager, liquidator, sequestrator, trustee or other officer with similar powers appointed over all or part of its business or its assets, and to the Knowledge of Seller, no application therefor is pending or threatened, (b) is insolvent or presumed to be insolvent under any law or is unable to pay its debts as and when they fall due, (c) has made a general assignment for the benefit of its creditors, or (d) has taken any action to approve any of the foregoing. 

2.8    Compliance with Law.  To the Knowledge of Seller, there has been no actual violation by Seller or any Subsidiary Transferor of or failure of Seller or any Subsidiary Transferor to comply with any Governmental Rule that is applicable to it, or allegation by any Governmental Authority of such a violation, that would reasonably be expected to be material and relates to the Wind Project or would otherwise reasonably be expected to prevent or materially impair or delay the consummation of the transactions contemplated by this Agreement.

2.9    Taxes.
(a)    Each of the Project Company and the Property Company has been, since its formation, a partnership or a disregarded entity for U.S. federal income tax purposes.
(b)    Each of Pattern Henvey Inlet GP Holdings Inc. (“GP1”), Henvey Inlet Wind GP Inc. (“GP2”), HIW Property Holdings GP Inc. (“GP3”) and any Subsidiary Transferor is, and has been at all times, a resident of Canada for the purposes of the Income Tax Act (Canada) (the “Canadian Tax Act”). 
(c)    Each of GP1, GP2, GP3, the Project Company and the Property Company has filed all federal, provincial and local Tax Returns that it is required to file, has paid or has caused to be paid all Taxes it is required to pay to the extent due (other than those Taxes that it is contesting in good faith and by appropriate proceedings, with adequate, segregated reserves established for 

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such Taxes) and, to the extent such Taxes are not due, has established or caused to be established reserves that are adequate for the payment thereof as required by GAAP.
(d)    Each of GP1, GP2, GP3, the Project Company and the Property Company has withheld from each payment made to any Person, including a Person who is or is deemed to be a non-resident of Canada, all amounts required by applicable law to be withheld, and has remitted such withheld amounts within the prescribed periods to the appropriate Governmental Authorities.
(e)    Each of GP1, GP2, GP3, the Project Company and the Property Company has charged, collected and remitted on a timely basis all Taxes as required under applicable laws on any sale, supply or delivery whatsoever, made by it.
(f)    Each of GP1, GP2, GP3, the Project Company and the Property Company has maintained and continues to maintain at its place of business in Canada all records and books of account required to be maintained under the Canadian Tax Act, the Excise Tax Act (Canada) and any comparable law of any province in Canada, including laws relating to sales and use Taxes.
(g)    No reassessments of the Taxes of GP1, GP2, GP3, the Project Company or the Property Company have been issued and are outstanding.  None of the Seller, the Subsidiary Transferor, GP1, GP2, GP3, the Project Company or the Property Company has received any indication from any Governmental Authority that an assessment or reassessment of GP1, GP2, GP3, the Project Company or the Property Company is proposed in respect of any Taxes, regardless of its merits.  None of GP1, GP2, GP3, the Project Company or the Property Company has executed or filed with any Governmental Authority any agreement or waiver extending the period for assessment, reassessment or collection of any Taxes.
(h)    The terms and conditions made or imposed in respect of every transaction (or series of transactions) between GP1, GP2, GP3, the Project Company or the Property Company and any Person that is (i) a non-resident of Canada for purposes of the Canadian Tax Act, and (ii) not dealing at arm’s length with it for purposes of the Canadian Tax Act, do not differ from those that would have been made between persons dealing at arm’s length for purposes of the Canadian Tax Act.

2.10    Unregistered Securities.  It is not necessary in connection with the sale of the Acquired Interests, under the circumstances contemplated by this Agreement, to register such Acquired Interests under the Securities Act of 1933 (the “Securities Act”) or under any other applicable securities laws.

2.11    Broker’s Fees.  None of Seller or any Subsidiary Transferor has any liability or obligation for any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

2.12    Material Contracts.  A true, complete and correct list of all Material Contracts as of the date hereof is set forth on Parts I, III and IV of Appendix D.  

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ARTICLE 3     
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in, or qualified by any matter set forth in, the Schedules attached hereto, Purchaser hereby represents and warrants to Seller as set forth in this Article 3 as of (A) the date hereof and (B) if the Closing Date is not the date of this Agreement, the Closing Date, in each case, unless otherwise specified in the representations and warranties below, in which case the representation and warranty is made as of such date.  Whether or not a particular Section of this Article 3 refers to a specific, numbered Schedule, such Section shall, to the extent applicable, be subject to the exceptions, qualifications, and other matters set forth in the Schedules to the extent that the relevance of such exceptions, qualifications or other matters is reasonably apparent on the face thereof.

3.1    Organization and Status.  Purchaser (a) is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation as set forth in the preamble to this Agreement, (b) is duly qualified, authorized to do business and in good standing in each other jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary, and (c) has all requisite power and authority to own or hold under lease the property it purports to own or hold under lease and to carry on its business as now being conducted.  Purchaser has made available to Seller complete and correct copies of the Organization Documents for Purchaser.

3.2    Power; Authority; Enforceability.  Purchaser has the legal capacity and power to enter into and perform its obligations under this Agreement and has been duly authorized, in accordance with its Organization Documents, to enter into and perform its obligations under this Agreement.  This Agreement has been duly executed and delivered by Purchaser and constitutes the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law.

3.3    No Violation.  The execution, delivery and performance by Purchaser of its obligations under this Agreement, including without limitation the purchase of the Acquired Interests and the NPC Loans from Seller or the Subsidiary Transferors, do not, and will not, (a) violate any Governmental Rule to which Purchaser is subject or the Organization Documents of Purchaser, or (b) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Purchaser is a party or by which Purchaser is bound.

3.4    No Litigation.  Purchaser is not a party to or has not received written notice of any pending or, to the Knowledge of Purchaser, threatened litigation, action, suit, proceeding or governmental investigation against Purchaser, which, in either case, would reasonably be expected to result in a material adverse effect on the ability of Purchaser to perform its obligations under this 

7

Agreement or which seeks the issuance of an order restraining, enjoining, altering or materially delaying the consummation of the transactions contemplated by this Agreement.

3.5    Consents and Approvals.  Except as set forth in Schedule 3.5, no Consent of any Governmental Authority or any other Person, is required by or with respect to Purchaser in connection with the execution and delivery of this Agreement by Purchaser, or the consummation by Purchaser of the transaction contemplated hereby, except for any Consents which if not obtained would not reasonably be expected to result in a material adverse effect on the ability of Purchaser to perform its obligations under this Agreement.

3.6    Solvency.  There are no bankruptcy, reorganization or arrangement proceedings pending against, being contemplated by or, to the Knowledge of Purchaser, threatened against Purchaser.  Purchaser (a) has not had a receiver, receiver and manager, liquidator, sequestrator, trustee or other officer with similar powers appointed over all or part of its business or assets, and to the Knowledge of Purchaser, no application therefor is pending or threatened, (b) is not insolvent or presumed to be insolvent under any law and is able to pay its debts as and when they fall due, (c) has not made a general assignment for the benefit of its creditors, and (d) has not taken any action to approve any of the foregoing.

3.7    Compliance with Law.  To the Knowledge of Purchaser, there has been no actual violation by Purchaser of or failure of Purchaser to comply with any Governmental Rule that is applicable to it, or allegation by any Governmental Authority of such a violation, that would reasonably be expected to prevent or materially impair or delay the consummation of the transactions contemplated by this Agreement.

3.8    No Reliance.  Purchaser has had the opportunity to inspect all of the information made available by Seller and to ask questions of and receive answers from Seller with respect to the Acquired Interests and the NPC Loans, the Project Company, the Property Company, the Seller Affiliates (if any) and the Wind Project.  Purchaser acknowledges and warrants to Seller as of the date hereof and the Closing Date (as applicable) that, in accepting the transfer of the Acquired Interests and the NPC Loans, except for the representations and warranties expressly provided herein, it has (a) relied on its own investigations and assessments including its own inquiries into the Acquired Interests, the NPC Loans, the Project Company, the Property Company, the Seller Affiliates (if any) and the Wind Project; and (b) not relied on any other representations or warranties (written or oral) of Seller or its Affiliates.

3.9    Investment Intent.  Purchaser is acquiring the Acquired Interests for its own account, for investment and with no view to the distribution thereof in violation of the Securities Act or the securities laws of any state of the United States or any other jurisdiction.

3.10    Accredited Investor.   Purchaser is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3), (7) or (8) of the Securities Act, and is able to bear the economic risk of losing its entire investment in the Acquired Interests, and is an “accredited investor” for the purposes of the Securities Act (Ontario).

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3.11    Broker’s Fee.   Purchaser has no liability or obligation for any fees or commissions payable to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

ARTICLE 4     
COVENANTS; OTHER OBLIGATIONS

4.1    Covenants Between Signing and Closing.  If the Closing Date is not the date of this Agreement, the provisions of this Section 4.1 shall apply during the period from the date hereof to the earlier of the Closing Date and the termination of this Agreement pursuant to Section 5.4:
(a)    Project Specific Pre-Closing Covenants of Seller.  Unless consented or otherwise agreed to by Purchaser (such consent not to be unreasonably withheld or delayed) and except as required by Governmental Rule, Seller agrees to comply with the provisions, if any, of Schedule 4.1(a). 
(b)    Access, Information and Documents.  Seller will give to Purchaser and to Purchaser’s counsel, accountants and other representatives reasonable access during normal business hours to all material Books and Records and the Wind Project (subject to all applicable safety and insurance requirements and any limitations on Seller’s rights to, or right to provide others with, access) and will furnish to Purchaser all such documents and copies of documents and all information, including operational reports, with respect to the affairs of the Project Company, the Property Company, the Seller Affiliates, and the Wind Project as Purchaser may reasonably request subject to any confidentiality obligations imposed on Seller by any unaffiliated counterparties to such contracts and agreements.  Purchaser agrees to comply with any confidentiality obligations which would be applicable to it under any such contracts, documents or agreements received from Seller hereunder.
(c)    Updating of Disclosure Schedules.  Seller shall notify Purchaser in writing of any material changes, additions, or events occurring after the date of this Agreement which require a representation and warranty of Seller (other than any representations or warranties in Sections 2.6 and 2.11) to be supplemented with a new Schedule or cause any material change in or addition to a Schedule promptly after Seller becomes aware of the same by delivery of such new Schedule or appropriate updates to any such Schedule (each, an “Updated Disclosure Schedule”) to Purchaser.  Each Updated Disclosure Schedule shall (i) expressly state that it is being made pursuant to this Section 4.1(c), (ii) specify the representations and warranties to which it applies and (iii) describe in reasonable detail the changes, additions or events to which it relates.  No Updated Disclosure Schedule delivered pursuant to this Section 4.1(c) shall be deemed to cure any breach of any representation or warranty unless Purchaser specifically agrees thereto in writing or, as provided in and subject to Article 5, consummates the Closing under this Agreement after receipt of such written notification, nor shall any such Updated Disclosure Schedule be considered to constitute or give rise to a waiver by Purchaser of any condition set forth in this Agreement, unless Purchaser specifically agrees thereto in writing or consummates the Closing under this Agreement after receipt of such written notification.

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(d)    Further Assurances.  Each of the parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated hereby as soon as practicable.

4.2    Other Covenants
(a)    Costs, Expenses.  Except as may be specified elsewhere in this Agreement, Purchaser shall pay all costs and expenses, including legal fees and the fees of any broker, environmental consultant, insurance consultant, independent engineer, and title company retained by Purchaser for Purchaser’s due diligence and the negotiation, performance of and compliance with this Agreement by Purchaser.  Seller shall pay all costs and expenses (including in connection with any reports, studies or other documents listed in Part II of Appendix D, unless specifically noted in Part II of Appendix D), including legal fees and the fees of any broker of Seller or its Affiliates, relating to or resulting from the negotiation, performance of and compliance with this Agreement by Seller.
(b)    Public Announcement; Confidentiality.  No party hereto shall make or issue, or cause to be made or issued, any public announcement or written statement concerning this Agreement or the transactions contemplated hereby without the prior written consent of the other party, except to the extent required by law (including any disclosure which, in the reasonable judgment of the disclosing party, is necessary or appropriate to comply with Governmental Rules and standards governing disclosures to investors) or in accordance with the rules, regulations and orders of any stock exchange.  Seller shall not, and shall cause its Affiliates and directors, officers, employees, agents, consultants advisors and partners not to, disclose any confidential information in or relating to this Agreement other than (i) to its Affiliates and its and their directors, officers, employees, agents, consultants, advisors and partners, provided in each case that such recipient is bound by reasonable confidentiality obligations, (ii) as required by applicable law or regulation or (iii) with the prior consent of Purchaser.  Seller shall not use, and shall not enable any third party to use, any confidential information in or relating to this Agreement that constitutes material non-public information regarding Purchaser in a manner that is prohibited by the U.S. securities laws.
(c)    Regulatory Approvals. Each party shall use its commercially reasonable efforts to obtain all required regulatory approvals (including the Required Governmental Approvals set forth in Part VII of Appendix B) as promptly as possible and, in any event, prior to the Closing Date. To that end, each of the parties shall make, or cause to be made, all other filings and submissions, and submit all other documentation and information that in the reasonable opinion of the Purchaser is required or advisable, to obtain the regulatory approvals, and will use its commercially reasonable efforts to satisfy all requests for additional information and documentation received under or pursuant to those filings, submissions and the applicable legislation and any orders or requests made by any Governmental Authority.  Notwithstanding any other provision of this Agreement, the Purchaser will not be required to (i) propose or agree to accept any undertaking or condition, enter into any consent agreement, make any divestiture or accept any operational restriction or other behavioral remedy, (ii) take any action that, in the reasonable judgment of the Purchaser, could be expected to limit the right of the Purchaser to own or operate all or any portion of the business or 

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assets of the Project Company, Property Company or any of their Subsidiaries, or of the Purchaser or any of its Affiliates, or to conduct their respective affairs in a manner consistent with how they each conduct their affairs as of the date of this Agreement, or (iii) contest or defend any judicial or administrative proceeding brought by any Governmental Authority seeking to prohibit, prevent, restrict or unwind the consummation of all or a part of the transaction contemplated herein. 
(d)    Other Obligations of Seller and Purchaser.  The parties mutually covenant as follows:
		
	(i)
	to use all reasonable efforts in good faith to obtain promptly the satisfaction of the conditions to Closing of the transactions contemplated herein, including obtaining all required Consents;

		
	(ii)
	to furnish to the other party and to the other party’s counsel all such information as may be reasonably required in order to effectuate the foregoing actions; and

		
	(iii)
	to advise the other party promptly if such party determines that any condition precedent to its obligations hereunder will not be satisfied in a timely manner.

(e)    Allocation of Purchase Price.
		
	(i)
	The Purchase Price shall be allocated between the Acquired Interests and the NPC Loans based on the percentages set forth on Schedule 4.2(e).

ARTICLE 5     
CONDITIONS TO CLOSING; TERMINATION

5.1    Conditions Precedent to Each Party’s Obligations to Close.  The obligations of the parties to proceed with the Closing under this Agreement are subject to the fulfillment prior to or at Closing of the following conditions (any one or more of which may be waived in whole or in part by both parties in their sole discretion):
(a)     No Violations.  The consummation of the transactions contemplated hereby shall not violate any applicable Governmental Rule.
(b)    No Adverse Proceeding.  No order of any court or administrative agency shall be in effect which restrains or prohibits the transactions contemplated hereby, and there shall not have been threatened, nor shall there be pending, any action or proceeding by or before any court or Governmental Authority challenging any of the transactions contemplated by this Agreement or seeking monetary relief by reason of the consummation of such transactions.
(c)    COD. COD shall have occurred.

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(d)    No Termination.  This Agreement shall not have been terminated pursuant to Section 5.4.
(e)    Other Conditions Precedent to Closing to Each Party’s Obligations.  The conditions precedent, if any, set forth on Appendix B-3 shall have been satisfied (any one or more of which may be waived in whole or in part by both parties in their sole discretion). 

5.2    Conditions Precedent to Obligations of Purchaser to Close.   The obligations of Purchaser to proceed with the Closing under this Agreement with respect to the purchase of the Acquired Interests and the NPC Loans are subject to the fulfillment prior to or at Closing of the following conditions (any one or more of which may be waived in whole or in part by Purchaser in Purchaser’s sole discretion):
(a)    Representations and Warranties.  The representations and warranties of Seller set forth in Article 2 shall be true and correct in all material respects at and as of the Closing Date as if made at and as of such date (other than any representations or warranties that are made as of a specific date, which shall be true and correct as of such date), except to the extent that (i) Seller has delivered to Purchaser any Updated Disclosure Schedules and (ii) Purchaser has specifically agreed in writing that such Updated Disclosure Schedules shall be deemed to cure a breach of any representation or warranty, in each case of clauses (i) and (ii) in accordance with Section 4.1(c).
(b)    Performance and Compliance.  Seller shall have performed, in all material respects, all of the covenants and complied with all of the provisions required by this Agreement to be performed or complied with by it on or before the Closing.
(c)    Material Contracts.  Each of the Material Contracts shall be in full force and effect (subject to the EPC Issues) and shall not have been amended, waived (in whole or in part), supplemented or otherwise modified in any manner that has a Material Adverse Effect without the prior written approval of Purchaser (which approval shall not be unreasonably withheld or delayed).
(d)    Certificate of Seller.  Purchaser shall have received a certificate of Seller dated the date of the Closing confirming the matters set forth in Sections 5.2(a), (b) and (c) in a form reasonably acceptable to Purchaser.
(e)    Material Adverse Effect.  No Material Adverse Effect shall have occurred from the date hereof to the Closing.
(f)    Transmission Line Interference. The issue relating to potential interference by the Wind Project’s transmission line on radio frequency shall have been resolved to the reasonable satisfaction of the Purchaser.
(g)    Preferred Stock Financing. The closing of the offering of Pattern Energy Group Inc.’s Series A Perpetual Preferred Stock pursuant to the terms set forth in that certain Securities Purchase and Rights Agreement among Pattern Energy Group Inc. and the investors party thereto dated October 10, 2019 shall have occurred.

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(h)    Good Standing Certificate.  Purchaser shall have received a good standing certificate of Seller and each Subsidiary Transferor, in each case issued by the secretary of state of the state or provincial authority of the province (as applicable) of its formation.
(i)    Satisfactory Instruments.  All instruments and documents reasonably required on the part of Seller to effectuate and consummate the transactions contemplated hereby shall be delivered to Purchaser and shall be in form and substance reasonably satisfactory to Purchaser. 
(j)    Other Conditions Precedent to Purchaser’s Obligation to Close.  The conditions precedent, if any, set forth in Appendix B-4 shall have been satisfied (any one or more of which may be waived in whole or in part by Purchaser in Purchaser’s sole discretion).

5.3    Conditions Precedent to the Obligations of Seller to Close.  The obligations of Seller to proceed with the Closing hereunder with respect to Seller’s sale of the Acquired Interests and the NPC Loans are subject to the fulfillment prior to or at Closing of the following conditions (any one or more of which may be waived in whole or in part by Seller in its sole discretion):
(a)    Purchase Price.  Purchaser shall have transferred in immediately available funds the Purchase Price pursuant to, in accordance with and into the account or accounts designated in, Part I of Appendix B. 
(b)    Representations and Warranties.  The representations and warranties set forth in Article 3 shall be true and correct in all material respects at and as of the Closing Date as if made at and as of such date (other than any representations or warranties that are made as of a specific date, which shall be true and correct as of such date).
(c)    Performance and Compliance.  Purchaser shall have performed all of the covenants and complied, in all material respects, with all the provisions required by this Agreement to be performed or complied with by it on or before the Closing.
(d)    Certificate of Purchaser.  Seller shall have received a certificate of Purchaser dated the date of the Closing confirming the matters set forth in Sections 5.3(b) and (c) in a form reasonably acceptable to Seller.
(e)    Satisfactory Instruments.  All instruments and documents required on the part of Purchaser to effectuate and consummate the transactions contemplated hereby shall be delivered to Seller and shall be in form and substance reasonably satisfactory to Seller.
(f)    Other Conditions Precedent to Seller’s Obligation to Close.  The conditions precedent, if any, set forth in Appendix B-5 shall have been satisfied or waived in whole or in part by Seller in Seller’s sole discretion.

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5.4    Termination. If the Closing Date is not the date of this Agreement, the following termination provisions shall be applicable: 
(a)    By the Parties.  This Agreement may be terminated at any time by mutual written consent of Purchaser and Seller.
(b)    By Either Party.  This Agreement may be terminated at any time prior to the Closing by either Seller or Purchaser, if (i) a Governmental Approval required to be obtained as set forth on Part VII of Appendix B shall have been denied and all appeals of such denial have been taken and have been unsuccessful, (ii) one or more courts of competent jurisdiction in the United States or Canada (as applicable), any state, provincial or any other applicable jurisdiction has issued an order permanently restraining, enjoining, or otherwise prohibiting the Closing, and such order has become final and non-appealable, or (iii) the Closing has not occurred by the Outside Closing Date.
(c)    Other Termination Rights.  This Agreement may be terminated at any time prior to the Closing by the applicable party if and to the extent permitted in Part V of Appendix B.
(d)    Termination Procedure.  In the event of termination of this Agreement by either or both parties pursuant to this Section 5.4, written notice thereof will forthwith be given by the terminating party to the other party and this Agreement will terminate and the transactions contemplated hereby will be abandoned, without further action by either party.  If this Agreement is terminated as permitted by this Section 5.4, such termination shall be without liability of either party (or any stockholder, shareholder, director, officer, employee, agent, consultant or representative of such party) to the other party to this Agreement; provided that (i) the foregoing will not relieve any party for any liability for willful and intentional material breaches of its obligations hereunder occurring prior to such termination and (ii) except as specifically set forth herein, nothing in this Agreement shall derogate from the provisions of the Purchase Rights Agreement, which agreement shall remain in full force and effect after termination of this Agreement.

ARTICLE 6     
REMEDIES FOR BREACHES OF THIS AGREEMENT

6.1    Indemnification. 
(a)    By Seller.  Subject to the limitations set forth in this Article 6 and Section 7.14, from and after the Closing Seller agrees to indemnify and hold harmless Purchaser and Purchaser’s Affiliates together with their respective directors, officers, managers, employees and agents (each a “Purchaser Indemnified Party”) from and against any and all Losses that any Purchaser Indemnified Party incurs by reason of or in connection with any of the following circumstances: 
		
	(i)
	Any breach by Seller of any representation or warranty made by it in Article 2 (subject to any Updated Disclosure Schedules delivered pursuant to Section 4.1(c) that are deemed to cure a breach of any 

14

representation or warranty in accordance with the last sentence of Section 4.1(c)) or any breach or violation of any covenant, agreement or obligation of Seller contained herein; and
		
	(ii)
	As set forth in Part VI of Appendix B.

(b)    By Purchaser.  Subject to the limitations set forth in this Article 6 and Section 7.14, from and after the Closing Purchaser agrees to indemnify and hold harmless Seller and Seller’s Affiliates together with their respective directors, officers, managers, employees and agents (each a “Seller Indemnified Party”) from and against any and all Losses that any Seller Indemnified Party incurs by reason of or in connection with any of the following circumstances: 
		
	(i)
	Any breach by Purchaser of any representation or warranty made by it in Article 3 or any breach or violation of any covenant, agreement or obligation of Purchaser contained herein; and

		
	(ii)
	As set forth in Part VI of Appendix B.

6.2    Limitations on Seller’s or Purchaser’s Indemnification.
(a)    Minimum Limit on Claims.  A party required to provide indemnification under this Article 6 (an “Indemnifying Party”) shall not be liable under this Article 6 to an Indemnified Party for any Claim for breach of any representation or warranty unless and until the aggregate amount of all Claims for which it would, in the absence of this provision, be liable exceeds the Basket Amount, and in such event the Indemnified Party will be liable for the amount of all Claims, including the Basket Amount; provided that the foregoing limitation shall not apply in the case of actual fraud by the Indemnifying Party.
(b)    Maximum Limit on Claims. 
		
	(i)
	Limitation on Seller’s Liability.  Seller’s maximum aggregate liability for Claims for breaches of representations and warranties under this Agreement is limited to Seller’s Maximum Liability set forth in Part VI of Appendix B; provided that the Seller’s Maximum Liability will not apply to any Claim based on (A) actual fraud or (B) any breach of the representations and warranties set forth in Sections 2.1, 2.2, 2.3, 2.5, 2.6, 2.9, and 2.11.

		
	(ii)
	Limitation on Purchaser’s Liability.  Purchaser’s maximum aggregate liability for Claims for breaches of representations and warranties under this Agreement is limited to Purchaser’s Maximum Liability set forth in Part VI of Appendix B; provided that the Purchaser’s Maximum Liability will not apply to any Claim based on (A) actual fraud or (B) any breach of the representations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.5 and 3.11.

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(c)    Time Limit for Claims.  No Indemnified Party may make a Claim for indemnification under Section 6.1 in respect of any Claim unless notice in writing of the Claim, incorporating a statement setting out in reasonable detail the grounds on which the Claim is based, has been given by the Indemnified Party prior to the expiration of the applicable Survival Period as set forth in Part VI of Appendix B.

6.3    Reimbursements; Refunds.  
(a)    Right of Reimbursement. The amount of Losses payable under Section 6.1 by an Indemnifying Party shall be net of (i) any amounts recovered by the Indemnified Party under applicable insurance policies or from any other Person responsible therefor, and (ii) any Tax benefit actually realized by the Indemnified Party arising from the incurrence or payment of any such Losses.  If the Indemnified Party receives any amounts under applicable insurance policies, or from any other Person responsible for any Losses subsequent to an indemnification payment by the Indemnifying Party and such amounts would result in a duplicative recovery, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to the amount received by the Indemnified Party, net of any expenses incurred by such Indemnified Party in collecting such amount.
(b)    Other Refund Obligations.  In addition to the obligations set forth in Section 6.3(a), the applicable Indemnified Party shall be obligated to reimburse or refund to the Indemnifying Party for payments made by it to such Indemnified Party under this Article 6 as set forth in Part VI of Appendix B.

6.4    Right to Control Proceedings for Third Party Claims.
(a)    If a third party shall notify any party with respect to any matter that may give rise to a Claim (a “Third Party Claim”), the Indemnified Party must give notice to the Indemnifying Party of the Third Party Claim (a “Third Party Claim Notice”) within twenty (20) Business Days after it becomes aware of the existence of the Third Party Claim and that it may constitute a Third Party Claim.  The Indemnified Party’s failure to give a Third Party Claim Notice in compliance with this Section 6.4(a) of any Third Party Claim which may give rise to a right of indemnification hereunder shall not relieve the Indemnifying Party of any liability which it may have to the Indemnified Party unless, and solely to the extent that, the failure to give such notice materially and adversely prejudiced the Indemnifying Party.
(b)    The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume control of the defense of any Third Party Claim with the Indemnifying Party’s own counsel, in each case at the Indemnifying Party’s own cost and expense (provided that prior to assuming control of such defense, the Indemnifying Party must acknowledge its indemnity obligations under this Article 6), and the Indemnified Party shall cooperate in good faith in such defense.  The Indemnified Party shall have the right, at its own cost and expense, to participate in the defense of any Third Party Claim with separate counsel selected by it, subject to the Indemnifying Party’s right to control the defense thereof; provided that in such event the Indemnifying Party shall pay the fees and expenses of such separate counsel (i) incurred 

16

by the Indemnified Party prior to the date the Indemnifying Party assumes control of the defense of the Third Party Claim, (ii) if such Third Party Claim would reasonably be expected to be materially detrimental to the business, reputation or future prospects of any Indemnified Party or (iii) if representation of both the Indemnifying Party and the Indemnified Party by the same counsel would create a conflict of interest.  If the Indemnifying Party (i) fails to promptly notify the Indemnified Party in writing of its election to defend or fails to acknowledge its indemnity obligations under this Article 6 as provided in this Agreement, (ii) elects not to defend (or compromise at its sole cost and expense) such Third Party Claim, (iii) has elected to defend such Third Party Claim but fails to promptly and diligently pursue the defense such Third Party Claim, (iv) otherwise breaches any of its obligations under this Article 6 or (v) as set forth on Schedule 6.4(b) hereto, or if the Third Party Claim is reasonably expected by the Indemnified Party to result in a payment obligation on the Indemnified Party in an amount that exceeds the maximum indemnification then available to the Indemnified Party pursuant to this Article 6, then the Indemnifying Party shall not be entitled to assume or maintain control of the defense of such Third Party Claim and the Indemnified Party may (by written notice to the Indemnifying Party) assume control of such defense (in which case the Indemnifying Party shall pay the fees and expenses of counsel retained by the Indemnified Party) and/or compromise such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim.  The parties shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim.
(c)    Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into any settlement of any Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed), except as provided in this Section 6.4(c).  If a firm offer is made to settle a Third Party Claim that (i) does not (A) result in any liability or create any financial or other obligation on the part of the Indemnified Party and (B) result in the loss of any right or benefit on the part of any Indemnified Party, (ii) does not impose injunctive or other equitable relief against any Indemnified Party, and (iii) provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim, and the Indemnifying Party desires to accept and agree to such firm offer, then the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within twenty (20) days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer within such twenty (20) day period and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim.  If the Indemnified Party has assumed the defense pursuant to Section 6.4(b), it may settle the Third Party Claim; provided that if the settlement is made without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed), the Indemnifying Party shall have no indemnity obligation pursuant to this Article 6 with respect to such Third Party Claim.

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6.5    Mitigation; Treatment of Indemnification.
(a)    The Indemnified Party shall use commercially reasonable efforts to mitigate all Losses relating to a Claim for which indemnification is sought under this Article 6.
(b)    All indemnification payments under this Article 6 shall be deemed adjustments to the Purchase Price.

6.6    Exclusive Remedy.  Each of Seller and Purchaser acknowledges and agrees that, should the Closing occur, and excluding liability for actual fraud, the foregoing indemnification provisions of this Article 6 and the provisions of Section 7.15 shall be the sole and exclusive remedy of Seller and Purchaser with respect to any misrepresentation, breach of warranty, covenant or other agreement (other than any Purchase Price Adjustment set forth in Part I of Appendix B) or other claim arising out of this Agreement or the transactions contemplated hereby.  Without limiting the generality of the foregoing, effective as of the Closing each of Purchaser and Seller covenants to the other party that in respect of any matters under or contemplated in this Agreement, it will not make any Claim whatsoever against any Affiliate of the other party or the directors, officers, managers, shareholders, member, controlling persons, employees and agents of any of the foregoing, in each case in their capacities as such, and its rights in respect of any such Claim for breach of any provision of this Agreement are limited solely to such rights as it may have against Seller or Purchaser, as the case may be, under this Agreement.

ARTICLE 7     
MISCELLANEOUS

7.1    Entire Agreement.  This Agreement and the Schedules and Appendices hereto, each of which is hereby incorporated herein, set forth all of the promises, covenants, agreements, conditions, undertakings, representations and warranties between the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written.

7.2    Notices.   All notices, requests, demands and other communications hereunder shall be in writing (including facsimile transmission and electronic mail (“email”) transmission) and shall be deemed to have been duly given if personally delivered, telefaxed (with confirmation of transmission), e-mailed (so long as confirmation of receipt is requested and received) or, if mailed, when mailed by United States first-class or Canadian Lettermail or Letter-post (as the case may be), certified or registered mail, postage prepaid, or by any international or national overnight delivery service, to the other party at the addresses as set forth in Part VII of Appendix B (or at such other address as shall be given in writing by any party to the other).  All such notices, requests, demands and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.

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7.3    Successors and Assigns.  
(a)    Neither party shall assign this Agreement or any of its rights or obligations herein without the prior written consent of the other party, in its sole discretion except as provided herein and except that either party may assign this Agreement or any of its rights or obligations herein to an Affiliate of such party.  Subject to the foregoing, this Agreement, and all rights and powers granted hereby, will bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 
(b)    Notwithstanding Section 7.3(a), each of Seller and Purchaser may assign this Agreement without the consent of the other party as specified in Part VII of Appendix B. 

7.4    Jurisdiction; Service of Process; Waiver of Jury Trial.
(a)    EACH OF THE PARTIES HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(b)    Any and all claims, counterclaims, demands, causes of action, disputes, controversies, and other matters in question arising out of or relating to this Agreement, or the alleged breach hereof, or in any way relating to the subject matter of this Agreement or the relationship between the parties created by this Agreement (hereafter, a “Dispute”) shall be finally resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under the AAA Commercial Arbitration Rules, including the Procedures for Large, Complex Commercial Disputes (the “Rules”) then in force to the extent such Rules are not inconsistent with the provisions of this Agreement.  The party commencing arbitration shall deliver to the other party a written notice of intent to arbitrate (a “Demand”) in accordance with Rule R-4.  The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq.
		
	(i)
	Selection of Arbitrators.  Disputes shall be resolved by a panel of three independent and impartial arbitrators, (the “Arbitrators”).  The party initiating the arbitration shall appoint an arbitrator in its Demand; the responding party shall appoint an arbitrator in its answering statement, which is due thirty (30) days after receipt of the Demand.  If any party fails or refuses to timely nominate an arbitrator within the time permitted, such arbitrator shall be appointed by the AAA from individuals with significant experience in renewable energy projects from its Large, Complex Commercial Case Panel.  Within thirty (30) days of the appointment of the second arbitrator, the two party-appointed arbitrators shall appoint the third arbitrator, who shall act as the chair of the arbitration panel.  If the two party-appointed arbitrators fail or refuse to appoint the third arbitrator within such thirty (30)-day period, the third arbitrator shall be appointed by the AAA from individuals with significant experience in renewable energy projects from its Large, Complex Commercial 

19

Case Panel in accordance with Rule R-12.  The Arbitrators, acting by majority vote, shall resolve all Disputes. 
		
	(ii)
	To the fullest extent permitted by law, the arbitration proceedings and award shall be maintained in confidence by the parties.

		
	(iii)
	Place of Arbitration.  The place of arbitration shall be New York, New York.  Any action in connection therewith shall be brought in the United States District Court for the Southern District of New York or, if that court does not have jurisdiction, any New York state court in New York County.  Each party consents to the exclusive jurisdiction of such courts in any such suit, action or proceeding, and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Each party further agrees to accept service of process out of any of the before mentioned courts in any such dispute by registered or certified mail addressed to the party at the address set forth in Part VII of Appendix B.

		
	(iv)
	Conduct of the Arbitration.  The arbitration shall be conducted in accordance with the Rules and in a manner that effectuates the parties’ intent that Disputes be resolved expeditiously and with minimal expense.  The Arbitrators shall endeavor to commence the arbitration hearing within one hundred and eighty (180) days of the third arbitrator’s appointment.  

		
	(v)
	Interim Relief.  Either party may apply to the Arbitrators seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the establishment of the arbitral tribunal (or pending the Arbitrators’ determination of the merits of the controversy).

		
	(vi)
	Discovery.  The Arbitrators, upon a showing of good cause, may require and facilitate such limited discovery as it shall determine is appropriate in the circumstances, taking into account the needs of the parties, the burden on the parties, and the desirability of making discovery limited, expeditious, and cost-effective. The Arbitrators shall issue orders to protect the confidentiality of proprietary information, trade secrets and other sensitive information disclosed in discovery.

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	(vii)
	Arbitration Award.  The Arbitrators shall endeavor to issue a reasoned, written award within thirty (30) days of the conclusion of the arbitration hearing.  The Arbitrators shall have the authority to assess some or all of the costs and expenses of the arbitration proceeding (including the Arbitrators’ fees and expenses) against any party.  The Arbitrators shall also have the authority to award attorneys’ fees and expenses to the prevailing party.  In assessing the costs and expenses of the arbitration and/or awarding attorneys’ fee and expenses, the Arbitrators shall consider the relative extent to which either party has prevailed on the disputed issues and the relative importance of those issues.  The limitations of Section 7.14 shall apply to any award by the Arbitrators.

7.5    Headings; Construction; and Interpretation.  The headings preceding the text of the sections and subsections hereof are inserted solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.  Except as otherwise expressly provided, the rules of construction set forth in Appendix A-2 shall apply to this Agreement.  The parties agree that any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived.

7.6    Further Assurances.  Each party shall cooperate and take such action as may be reasonably requested by the other party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby.

7.7    Amendment and Waiver.  The parties may by mutual agreement amend this Agreement in any respect, and any party, as to such party, may (a) extend the time for the performance of any of the obligations of any other party, (b) waive any inaccuracies in representations by any other party, (c) waive compliance by any other party with any of the agreements contained herein and performance of any obligations by such other party, and (d) waive the fulfillment of any condition that is precedent to the performance by such party of any of its obligations under this Agreement.  To be effective, any such amendment or waiver must be in writing and be signed by the party against whom enforcement of the same is sought.

7.8    No Other Beneficiaries.  This Agreement is being made and entered into solely for the benefit of Purchaser and Seller, and neither Purchaser nor Seller intends hereby to create any rights in favor of any other Person as a third party beneficiary of this Agreement or otherwise.

7.9    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction specified in Part VII of Appendix B.

7.10    Schedules.  References to a Schedule shall include any disclosure expressly set forth on the face of any other Schedule even if not specifically cross-referenced to such other Schedule to the extent that the relevance of such matter is reasonably apparent on the face thereof.  The fact that any item of information is contained in a disclosure schedule shall not be construed as an admission of liability under any Governmental Rule, or to mean that such information is material.  

21

Such information shall not be used as the basis for interpreting the term “material”, “materially,” “Material Adverse Effect,” or any similar qualification in this Agreement.

7.11    Limitation of Representation and Warranties.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE 2, SELLER HAS NOT MADE AND SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, OF ANY KIND OR NATURE, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE ACQUIRED INTERESTS AND THE NPC LOANS, SELLER OR SELLER AFFILIATES, THE PROJECT COMPANY, THE PROPERTY COMPANY, THE WIND PROJECT OR THE SUBJECT MATTER OF THIS AGREEMENT.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE 2, THE ACQUIRED INTERESTS ARE BEING CONVEYED “AS IS” IN ALL RESPECTS, AND SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF FITNESS, MERCHANTABILITY OR SUITABILITY FOR A PARTICULAR PURPOSE.  Purchaser acknowledges that except as expressly provided in Article 2 of this Agreement, Seller has not made, and Seller hereby expressly disclaims and negates, and Purchaser hereby expressly waives, any other representation or warranty, express, implied, at common law, by statute or otherwise relating to the Acquired Interests, the NPC Loans, Seller or Seller Affiliates, the Project Company, the Property Company, the Wind Project or this Agreement.  

7.12    Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.  A facsimile or electronically imaged version of this Agreement may be executed by one or more parties hereto and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or “PDF” electronic mail pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes.

7.13    Severability.  If any provision of this Agreement or any other agreement entered into pursuant hereto is contrary to, prohibited by or deemed invalid under applicable law or regulation, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated thereby and shall be given full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.  

7.14    Limit on Damages.  Each party hereto acknowledges and agrees that neither party shall be liable to the other party for any punitive damages (except to the extent paid to a third party in respect of a Third Party Claim) or damages that were not reasonably foreseeable.

7.15    Specific Performance.  The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in the courts and other 

22

bodies specified in Section 7.4, in addition to any other remedy to which they are entitled at law or in equity.
[SIGNATURE PAGE FOLLOWS]

23

IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale Agreement as of the day and year first above written.
	
		
	

PATTERN CANADA FINANCE COMPANY ULC

By:   /s/ Dyann Blaine    
Name:   Dyann Blaine   
Its:   Vice President   

	 

[Signature Page to Henvey Inlet Wind Purchase and Sale Agreement]

    

	
		
	PATTERN ENERGY GROUP LP 

By:   /s/ Dyann Blaine       
Name:   Dyann Blaine      
Its:   Vice President      

	 

[Signature Page to Henvey Inlet Wind Purchase and Sale Agreement]

    

APPENDIX A-1: GENERAL DEFINITIONS

“AAA” shall have the meaning set forth in Section 7.4(b).
“Acquired Interests” shall have the meaning set forth in the recitals, as more fully described in Part I of Appendix C.

“Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person specified, or who holds or beneficially owns 50% or more of the equity interest in the Person specified or 50% or more of any class of voting securities of the Person specified; provided that notwithstanding the foregoing (a) Purchaser and its Subsidiaries shall not be deemed to be Affiliates of Seller and (b) Seller and its Affiliates (other than Purchaser and its Subsidiaries) shall not be deemed to be Affiliates of Purchaser.

“Agreement” shall have the meaning set forth in the preamble to this Agreement.
“Arbitrators” shall have the meaning set forth in Section 7.4(b).
“ARC” means an advance ruling certificate issued by the Commissioner of Competition pursuant to subsection 102(1) of the Competition Act with respect to the transactions contemplated by this Agreement.
“Basket Amount” shall have the meaning set forth in Part VI of Appendix B.
“Books and Records” means books, Tax Returns, contracts, commitments, and records of a Person.
“Business Day” means any day other than a Saturday, a Sunday or any other day on which banks are authorized to be closed in New York, New York or Toronto, Ontario.
“Canadian Tax Act” shall have the meaning set forth in Section 2.9(b).
“Claim” means a claim by an Indemnified Party for indemnification pursuant to Section 6.1.
“Closing” shall have the meaning set forth in Section 1.4.
“Closing Date” shall mean the date a Closing occurs.
“COD” means the Commercial Operation Date of the Wind Project as defined in the power purchase agreement between the Project Company and the Ontario Power Authority, as the predecessor of the Independent Electricity System Operator.
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
“Commissioner of Competition” means the Commissioner of Competition appointed pursuant to the Competition Act or a Person designated or authorized pursuant to the Competition Act to exercise the powers and perform the duties of the Commissioner of Competition.

App. A-1 - 1

“Competition Act” means the Competition Act (Canada).
“Competition Act Approval” means any of: (a) the issuance of an ARC and such ARC has not been rescinded prior to Closing, or (b)  Purchaser and the Seller have given the notice required under Section 114 of the Competition Act with respect to the transactions contemplated by this Agreement and the applicable waiting period under Section 123 of the Competition Act has expired or has been terminated in accordance with the Competition Act, or (c) the obligation to give the requisite notice has been waived pursuant to paragraph 113(c) of the Competition Act, and in the case of (b) and (c), Purchaser has been advised in writing by the Commissioner of Competition that the Commissioner of Competition, at that time, does not intend to make an application under Section 92 of the Competition Act in respect of the transactions contemplated by this Agreement, and such advice has not been rescinded prior to Closing.
“Consent” means any consent, approval, order or Permit of or from, or registration, declaration or filing with or exemption by any Person, including a Governmental Authority.
“Credit Agreement” shall have the meaning set forth in Part III of Appendix D.
“Demand” shall have the meaning set forth in Section 7.4(b).
“Dispute” shall have the meaning set forth in Section 7.4(b).
“Dollars” or “$” means the lawful currency of the United States of America or Canada, as identified in Part I of Appendix B.
“EPC Issues” shall have the meaning set forth in Schedule 2.4.
“First Nations” means any governing body of any first nations, Metis and/or indigenous and/or aboriginal tribe(s) and/or band(s).
“GAAP” means generally accepted accounting principles used by each of the Project Company and the Property Company to prepare its financial statements, consistently applied throughout the specified period and in the immediately prior comparable period.
“GP1” shall have the meaning set forth in Section 2.9(b).
“GP2” shall have the meaning set forth in Section 2.9(b).
“GP3” shall have the meaning set forth in Section 2.9(b).
“Governmental Authority” means any federal or national, state, provincial, county, municipal or local government or regulatory or supervisory department, body, political subdivision, commission, agency, instrumentality, ministry, court, judicial or administrative body, taxing authority, or other authority thereof (including any corporation or other entity owned or controlled by any of the foregoing) having jurisdiction over the matter or Person in question.

App. A-1 - 2

“Governmental Rule” means, with respect to any Person, any applicable law, statute, treaty, rule, regulation, ordinance, order, code, judgment, decree, injunction or writ issued by any Governmental Authority.
“Indemnified Party” means either a Purchaser Indemnified Party or a Seller Indemnified Party, as the case may be.
“Indemnifying Party” shall have the meaning set forth in Section 6.2(a). 
“Insurance Proceeds” means any insurance proceeds received under the business interruption insurance in connection with the Project Company’s claims relating to the 2018 fire at the Wind Project. 
“Knowledge” means (a) with respect to Seller, the actual knowledge of the persons identified in Part VII of Appendix B, and (b) with respect to Purchaser, the actual knowledge of the persons identified in Part VII of Appendix B.
“Lien” on any asset means any mortgage, deed of trust, lien, pledge, charge, security interest, restrictive covenant, easement or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected or effective under applicable law, as well as the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“Loss” means any and all losses (including loss of profit and loss of expected profit), claims, actions, liabilities, damages, expenses, diminution in value or deficiencies of any kind or character including all interest and other amounts payable to third parties, all liabilities on account of Taxes and all reasonable legal fees and expenses and other expenses reasonably incurred in connection with investigating or defending any claims or actions, whether or not resulting in any liability.
“Material Adverse Effect” means any change, effect or circumstance that is materially adverse to the financial condition or results of operations of the Wind Project, the Project Company, the Property Company and their Subsidiaries taken as a whole but the following shall be excluded in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur: (i) any effect resulting from or relating to changes or developments in any Government Rule or GAAP, or in the global, Canadian or Ontario economy or financial markets; (ii) any change generally to the wind energy, construction, electricity generation, transmission or distribution industries; (iii) changes in policies of any Governmental Authority, whether national, provincial, municipal or otherwise, including with respect to climate change and greenhouse gas emissions; (iv) effects of weather, meteorological or geological events; (v) any change attributable to the announcement or pendency of the transactions contemplated by this Agreement or resulting from or relating to compliance with the terms of this Agreement; (vi) any change resulting from an act or omission of the Seller prior to the Closing taken with the prior consent or at the request of the Purchaser; (vii) any curtailment in relation to the presence of bats at the Wind Project; (viii) any curtailment in relation to any turbine tonality; (ix) any effect resulting from or relating to repair work carried out on the foundations of the Wind Project prior to the Closing; (x) any disputes or claims between the partners of the Project Company or the Property Company (and/or a partner’s Affiliate) relating to 

App. A-1 - 3

the Wind Project; (xi) any litigation in connection with the 2018 forest fires at the Wind Project; and (xii) any failure to meet any internal budgets, plans or forecasts of revenues, earnings or other financial performance of results of operation (but for certainty not excluding the underlying causes of such failure, except if excluded pursuant to clause (i) to (xi) above).
“Material Contract” means (i) any Material Lease, (ii) the Contracts set forth in Part I of Appendix D, (iii) the Term Loan Agreement, and (iv) any other Contract not otherwise set forth in Part I of Appendix D that affects the Operating Period to which the Project Company, the General Partner or any of their respective Subsidiaries is a party or by which the Project Company, the General Partner or any of their respective Subsidiaries, or any of their respective assets, is bound (A) providing for past or future payments by or to the Project Company, the General Partner or any of their respective Subsidiaries in excess of $500,000 annually or $1,000,000 in the aggregate, (B) relating to any partnership, joint venture or other similar arrangement, (C) relating to any Indebtedness, (D) limiting the freedom of the Project Company, the General Partner or any of their respective Subsidiaries to compete in any line of business or with any Person or in any area or granting “most favored nation” or similar status, (E) with Seller or any of its Affiliates, (F) with either Purchaser or any of its Affiliates, (G) relating to the acquisition or disposition of any business or material portion thereof (whether by merger, sale of stock, sale of assets or otherwise), (H) that was not entered into in the ordinary course of business of the Project Company or any of its Subsidiaries, (I) with any First Nations; or (J) the loss of which would result in a Material Adverse Effect..
“NPC Loans” shall have the meaning set forth in the recitals to this Agreement, as more fully described in Part I of Appendix C.
“Operating Period” means, in respect of the Wind Project, the period commencing on COD. 
“Organization Documents” means, with respect to (a) any corporation, its articles or certificate of incorporation and by-laws, (b) any limited partnership, its certificate or declaration of limited partnership and its partnership agreement, (c) any limited liability company, its articles or certificate of organization or formation and its operating agreement or limited liability company agreement, or (d) documents of similar substance.
“Outside Closing Date” shall have the meaning set forth in Part III of Appendix B.
“Permitted Lien” means: (a) a charge or lien arising in favor of a Governmental Authority by operation of statute unless there is default in payment of money secured by that charge or lien; (b) any lien for Taxes not yet due or delinquent or being contested in good faith; (c) any mechanics’, workmen’s or other like lien arising in the ordinary course of business; (d) any retention of title arrangement undertaken in the ordinary course of business; (e) any lien, deposit or pledge existing on the date of the Agreement or the Closing Date with regard to the Acquired Interests, the Project Company, the Property Company, any Seller Affiliate or any of their assets disclosed in the disclosure schedules to this Agreement; (f) defects, easements, rights of first refusal, servitudes, rights of way, restrictions, irregularities, encumbrances (other than for borrowed money) and clouds on title and statutory liens that do not (and upon enforcement thereof will not) materially impair the value or use by the Project Company of the real property rights affected or are otherwise listed in the Title 

App. A-1 - 4

Policy identified in Part II of Appendix D; (g) liens, deposits or pledges arising out of judgments or awards so long as enforcement of any such lien has been stayed and an appeal or proceeding for review is being prosecuted in good faith and in connection with which security has been provided or are fully covered by insurance; (h) reservations, limitations, provisos and conditions expressed in grants of real or immovable property that do not or would not reasonably be expected to materially impair the value or use by the Project Company, the Property Company or any of their respective Subsidiaries of such real or immovable property; (i) security given to a public utility or any Governmental Authority when required by such utility or authority in connection with the operations of the Project Company or Property Company in the ordinary course of business; (j) any Additional Permitted Lien; or (k) any liens granted pursuant to the Credit Agreement or Loan Agreement.  
“Person” means any individual, corporation, partnership, limited partnership, limited liability partnership, trust, business trust, estate, joint venture, unincorporated association, limited liability company, cooperative, Governmental Authority or other entity.
“Project Agreement” shall have the meaning set forth in Part IV of Appendix D.
“Project Company” shall have the meaning set forth in the recitals to this Agreement, and is more particularly described in Part I of Appendix C of the Agreement.
“Property Company” shall the meaning set forth in the recitals to this Agreement, and is more particularly described in Part I of Appendix C of the Agreement. 
“Purchase Price” shall have the meaning set forth in Section 1.3, and as further described in Part I of Appendix B.
“Purchase Price Adjustment” shall have the meaning set forth in Part I of Appendix B.
“Purchase Rights Agreement” means that certain Purchase Rights Agreement dated as of October 2, 2013 by and among Seller, Pattern Energy Group Inc. and, solely with respect to Article IV thereof, Pattern Energy Group Holdings LP and Pattern Energy GP LLC, as such agreement is amended, modified or supplemented in accordance with its terms.
“Purchaser” shall have the meaning set forth in the preamble to this Agreement.
“Purchaser Indemnified Party” shall have the meaning set forth in Section 6.1(a).
“Purchaser’s Maximum Liability” shall have the meaning set forth in Part VI of Appendix B.
“Rules” shall have the meaning set forth in Section 7.4(b).
“Securities Act” shall have the meaning set forth in Section 2.10.
“Seller” shall have the meaning set forth in the preamble to this Agreement.
“Seller Affiliates” shall have the meaning set forth in Part I of Appendix C.

App. A-1 - 5

“Seller Indemnified Party” shall have the meaning set forth in Section 6.1(b).
“Seller’s Maximum Liability” shall have the meaning set forth in Part VI of Appendix B.
“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.
“Survival Period” shall have the meaning set forth in Part VI of Appendix B.
“Tax” or “Taxes” means, collectively all federal, provincial, state and local or foreign income, estimated, payroll, withholding, excise, sales, use, real and personal property, use and occupancy, business and occupation, mercantile, transfer, capital stock and franchise or other taxes of any kind whatsoever (including interest, additions and penalties thereon).
“Tax Returns” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto.
“Third Party Claim” shall have the meaning set forth in Section 6.4(a).
“Third Party Claim Notice” shall have the meaning set forth in Section 6.4(a).
“Wind Project” shall have the meaning set forth in the recitals to this Agreement, and is more particularly described in Part II of Appendix C of the Agreement.
 

App. A-1 - 6

APPENDIX A-2: RULES OF CONSTRUCTION

		
	1.
	The singular includes the plural and the plural includes the singular.

		
	2.
	The word “or” is not exclusive.

		
	3.
	A reference to a Governmental Rule includes any amendment or modification to such Governmental Rule, and all regulations, rulings and other Governmental Rules promulgated under such Governmental Rule.

		
	4.
	A reference to a Person includes its successors and permitted assigns.

		
	5.
	Accounting terms have the meanings assigned to them by GAAP, as applied by the accounting entity to which they refer.

		
	6.
	The words “include,” “includes” and “including” are not limiting and shall be deemed to mean “include, without limitation”, “includes, without limitation” or “including, without limitation”.

		
	7.
	A reference to an Article, Section, Exhibit, Schedule or Appendix is to the Article, Section, Exhibit, Schedule or Appendix of this Agreement unless otherwise indicated.  

		
	8.
	Any reference to “this Agreement”, “hereof,” “herein” and “hereunder” and words of similar import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

		
	9.
	Any reference to another agreement or document shall be construed as a reference to that other agreement or document as the same may have been, or may from time to time be, varied, amended, supplemented, substituted, novated, assigned or otherwise transferred.

		
	10.
	References to “days” shall mean calendar days, unless the term “Business Days” shall be used.  References to a time of day shall mean such time in New York, New York, unless otherwise specified.

		
	11.
	This Agreement is the result of negotiations among, and has been reviewed by, Seller, Purchaser, and their respective counsel.  Accordingly, this Agreement shall be deemed to be the product of the parties thereto, and no ambiguity shall be construed in favor of or against either Seller or Purchaser.

		
	12.
	The words “will” and “shall” shall be construed to have the same meaning and effect.

App. A-2 - 1

APPENDIX B:  TRANSACTION TERMS AND CONDITIONS

	
			
	Henvey Inlet Wind Transaction

	I.    Purchase Price

	“Purchase Price”:

	The sum of CAD$242,400,000 and the principal amount and accrued and unpaid interest outstanding under the NPC Loans as at the Closing Date 

	Currency:
	Canadian Dollars, and all references to Dollar or $ or CAD$ shall refer to such currency.

App. B - 1

	
			
	“Post-Closing Adjustments”

	Definitions
“Cost Overruns” means the construction costs of the Wind Project and reserves established to support potential construction costs of the Wind Project, in excess of $1,061,847,492.36.
“Purchaser Cost Overrun Responsibility” means 50% of an amount equal to 30% of the amount (if any) by which the Cost Overruns exceed the Purchaser Cost Overrun Sharing Threshold.  
“Purchaser Cost Overrun Sharing Threshold” means $206.6 million.  
 “Purchaser Returnable Amount (Post-Term Conversion)” means the lesser of (i) 30% of all Returned Funds (Post-Term Conversion), and (ii) (X) the amount of the Purchaser Cost Overrun Responsibility, less (Y) the amounts of any Returned Funds (Term Conversion) and Returned Funds (Post-Term Conversion) that were not paid over to the Seller or otherwise credited to the Seller in the calculation of the Adjustment Amount (provided for certainty that clause (ii) can never be less than zero).
“Purchaser Returnable Amount (Term Conversion)” means the lesser of (i) 30% of all Returned Funds (Term Conversion), and (ii) the amount of the Purchaser Cost Overrun Responsibility.
“Returned Funds (Post-Term Conversion)” means, in each case after the Term Conversion Date and to the extent allocable to the Purchaser’s direct and indirect ownership interest in the Project Company, the sum of (i) amounts representing a release to the Project Company of reserves for construction costs, to the extent distributed to the partners of the Project Company, and (ii) amounts received by the Project Company as proceeds from construction-related litigation, arbitration or similar proceedings or settlements of same with CER, Powertel, their subcontractors or their sureties, to the extent distributed to the partners of the Project Company.
“Returned Funds (Term Conversion)” means, in each case prior to the Term Conversion Date and to the extent allocable to the Purchaser’s direct and indirect ownership interest in the Project Company, the sum of (i) construction equity amounts returned to the partners of the Project Company, (ii) amounts representing a release to the Project Company of reserves for construction costs, to the extent distributed to the partners of the Project Company, and (iii) amounts received by the Project Company as proceeds from construction-related litigation, arbitration or similar proceedings or settlements of same with CER, Powertel, their subcontractors or their sureties, to the extent distributed to the partners of the Project Company.
“Seller Cost Overrun Responsibility” means (a) 50% of the Cost Overruns, less (b) the amount of the Purchaser Cost Overrun Responsibility.  
“Seller-Funded Overruns” means Cost Overruns which are funded by the Seller (directly or indirectly) through equity contributions to the Project Company.
“Term Conversion Date” means the “Term Conversion Date” as defined in the Credit Agreement.

Term Conversion Date Adjustment 
Promptly after the Term Conversion Date, the “Adjustment Amount” will be calculated, which shall equal:  
(A) $4,500,000, plus
(B) the amount of the Seller-Funded Overruns, less the amount of the Seller Cost Overrun Responsibility, plus
(C) the Returned Funds (Term Conversion) received by the Purchaser less the Purchaser Returnable Amount (Term Conversion).
If the Adjustment Amount is positive, Purchaser shall promptly pay such amount to Seller as an increase to the Purchase Price. If the Adjustment Amount is negative, Seller shall promptly pay such amount to Purchaser representing a decrease to the Purchase Price.
Ongoing Returned Amounts
From and after the Term Conversion Date, Purchaser will pay over to Seller, on a monthly basis, from the Returned Funds (Post-Term Conversion) received by the Purchaser (i) until the total amount of Returned Funds (Post-Term Conversion) received by the Purchaser and not paid over to the Seller under this paragraph equals the Purchaser Returnable Amount (Post-Term Conversion), 70% of such Returned Funds (Post-Term Conversion), and (ii) thereafter, 100% of such Returned Funds (Post-Term Conversion).
Insurance Purchase Price Adjustment
Following Closing, the Purchaser will pay over to the Seller as an increase in the Purchase Price an amount equal to:
(a)  100% of the first CAD$20,000,000 distributed to the Purchaser in relation to the Purchaser’s direct and indirect ownership interest in the Project Company from the Insurance Proceeds paid to the Project Company; and 
(b) 75% of the incremental proceeds over CAD$20,000,000 distributed to the Purchaser in relation to the Purchaser’s direct and indirect ownership interest in the Project Company from the Insurance Proceeds paid to the Project Company.

App. B - 2

	
			
	Payment Mechanics and Payee Information:

	Bank Name: HSBC Bank Canada
Bank Address: 885 West Georgia St.
Vancouver, BC V6C 3G1
Canada 
Bank No: 016
Transit no.: 10270
Swift Code: HKBCCATT
Account Name: Pattern Renewable Holdings Canada ULC
Account Type: Business Checking Account
Account Number: 270-215956-001
Currency: Canadian Dollar 

	II.    Signing Date Deliverables

	Seller’s Signing Date Deliverables:

	Not applicable

	Purchaser’s Signing Date Deliverables:
	Not applicable

	III.    Closing

	Scheduled Closing Date:

	As soon as reasonably practicable after the date hereof (and subject to deferral, in Purchaser’s sole discretion).

	Closing Location:

	At the offices of Purchaser, 1088 Sansome St., San Francisco, CA  94111

	Outside Closing Date:

	December 31, 2019 

	IV.    Closing Deliverables & Conditions Precedent to Closing

	Additional Closing Deliverables of Seller:
	In addition to the closing deliverables set forth in Section 1.5(a) of the Agreement, Seller shall deliver, or cause to be delivered, to Purchaser the additional closing deliverables set forth in Appendix B-1.

	Additional Closing Deliverables of Purchaser:
	In addition to the closing deliverables set forth in Section 1.5(b) of the Agreement, Purchaser shall deliver, or cause to be delivered, to Seller the additional closing deliverables set forth in Appendix B-2.

	Additional Conditions Precedent to Each Party’s Obligations to Close:
	In addition to the conditions precedent set forth in Section 5.1 of the Agreement, the obligation of Purchaser and Seller to Close is subject to the additional conditions precedent set forth in Appendix B-3.

	Additional Conditions Precedent to Purchaser’s Obligations to Close:
	In addition to the conditions precedent set forth in Section 5.2 of the Agreement, the obligation of Purchaser to Close is subject to the additional conditions precedent set forth in Appendix B-4.

	Additional Conditions Precedent to Seller’s Obligations to Close:
	In addition to the conditions precedent set forth in Section 5.3 of the Agreement, the obligation of Seller to Close is subject to the additional conditions precedent set forth in Appendix B-5.

	V.    Additional Termination Rights

App. B - 3

	
			
	By Either Party: 

	Not applicable

	By Purchaser:

	Not applicable

	By Seller:

	Not applicable

	VI.    Indemnification Provisions

	Additional Seller Indemnity Obligations:

	Not applicable

	Additional Purchaser Indemnity Obligations:

	Not applicable

	Survival Period:

	Until the date that is 12 months after the Closing, except for the representations and warranties in (x) Sections 2.1, 2.2, 2.3, 2.5, 2.6 and 2.9, and Sections 3.1, 3.2, 3.3, 3.5 and 3.11 which shall survive until the expiration of the applicable statute of limitations (including extensions thereof) (the “Survival Period”).

	Limitation on Liability:
	“Basket Amount”:  

	1.00% of the Purchase Price

	“Seller’s Maximum Liability”:   
	11.00% of Purchase Price

	“Purchaser’s Maximum Liability”:

	11.00% of the Purchase Price

	Additional Refund or Reimbursement Obligations: 

	By Purchaser or Purchaser Indemnified Party: 
1.    None

By Seller or Seller Indemnified Party: 
1.    None

	VII.    Additional Transaction Terms

	“Additional Permitted Liens”:
	1.    As may arise from the EPC Issues

	Required Governmental Approvals:
	1.    By Closing, the Competition Act Approval shall have been obtained.

	Persons with Knowledge:
	Seller’s Persons with Knowledge: Frank Davis, Daniel Elkort, Leasa Lennox, David Janssen and Alex Hoffer  

Purchaser’s Persons with Knowledge: Esben Pedersen, Christian Hackett, Michael Lyon, Kevin Devlin and Nelson Shim

	Additional Assignment Rights: 

	Assignment Rights of Seller:  None

Assignment Rights of Purchaser:  None

	Governing Law:
	New York

App. B - 4

	
			
	Notice Information:
	To Seller:

	c/o Pattern Renewables LP
1088 Sansome St. 
San Francisco, CA  94111
Attention: General Counsel
Phone: 415-283-4000
Fax: 415-362-7900

	To Purchaser:

	1088 Sansome St. 
San Francisco, CA  94111
Attention: General Counsel
Phone: 415-283-4000
Fax: 415-362-7900

App. B - 5

APPENDIX B-1:
ADDITIONAL CLOSING DELIVERABLES OF SELLER
None.

App. B-1 - 1

APPENDIX B-2:
ADDITIONAL CLOSING DELIVERABLES OF PURCHASER

1.    A counterpart signature page and acknowledgement to the Limited Partnership Agreement in respect of the Project Company dated November 4, 2014 between Pattern Henvey Inlet LP Holdings LP (as legal successor to Pattern Renewable Holdings Canada ULC), Nigig Power Corporation and GP2, executed by Pattern Canada Finance Company ULC.

2.    A counterpart signature page and acknowledgement to the Unanimous Shareholder Agreement in respect of GP2 dated November 4, 2014 between Pattern Henvey Inlet LP Holdings LP (as legal successor to Pattern Renewable Holdings Canada ULC), Nigig Power Corporation and GP2, executed by Pattern Canada Finance Company ULC.

3.    A counterpart signature page and acknowledgement to the Amended and Restated Limited Partnership Agreement in respect of the Property Company dated December 14, 2017 between Pattern Renewable Holdings Canada ULC, Henvey Inlet First Nation and GP3, executed by Pattern Canada Finance Company ULC.

4.    A counterpart signature page and acknowledgement to the Unanimous Shareholder Agreement in respect of GP3 dated December 14, 2017 between Pattern Renewable Holdings Canada ULC, Henvey Inlet First Nation and GP3, executed by Pattern Canada Finance Company ULC.

App. B-2 - 1

APPENDIX B-3:
ADDITIONAL CONDITIONS PRECEDENT TO 
EACH PARTY’S OBLIGATIONS TO CLOSE

		
	1.
	Receipt of all necessary Required Governmental Approvals set forth on Part VII of Appendix B. 

App. B-3 - 1

APPENDIX B-4:
ADDITIONAL CONDITIONS PRECEDENT TO 
PURCHASER’S OBLIGATIONS TO CLOSE

		
	1.
	Absence of material amendments or defaults under any Loan Document or Material Project Document (each as defined in the Credit Agreement in effect as of the date of this Agreement), other than defaults under the EPC construction contracts with CER, Powertel, their subcontractors or their sureties relating to the EPC Issues.

		
	2.
	Receipt of all necessary third party and governmental approvals.

App. B-4 - 1

APPENDIX B-5:
ADDITIONAL CONDITIONS PRECEDENT TO 
SELLER’S OBLIGATIONS TO CLOSE

None.

App. B-5 - 1

APPENDIX C:  ACQUIRED INTERESTS; NPC LOANS; OWNERSHIP STRUCTURE; 
AND WIND PROJECT INFORMATION

	
		
	HENVEY INLET WIND TRANSACTION

	I.    Acquired Interests, NPC Loans & Ownership Structure

	Project Company:

	Henvey Inlet Wind LP

	Property Company:
	HIW Property Holdings LP

	Purchaser:
	Pattern Canada Finance Company ULC

	Acquired Interests: 

	49.99% limited partner interest in each of the Project Company and the Property Company.

100% of the issued and outstanding shares of GP1 (which shall own 50% of the issued and outstanding shares of GP2, which in turn shall own a 0.02% general partner interest in the Project Company) and 50% of the issued and outstanding shares of GP3.

	NPC Loans:

	All of the Seller’s or Seller’s Affiliates rights, title and interests in:

1.    a grid promissory note issued by Nigig Power Corporation in favour of Pattern Henvey Inlet LP Holdings LP on September 25, 2018, as amended from time to time; and

2.    a grid promissory note issued by Nigig Power Corporation in favour of GP1 on September 25, 2018, as amended from time to time.

	Subsidiary Transferor:
	Pattern Henvey Inlet LP Holdings 2 LP (in respect of Project Company and GP1)

Pattern Renewable Holdings Canada ULC (in respect of Property Company and GP3)

App. C - 1

	
		
	Direct or Indirect Co-Owners of Project Company and Property Company:
	Immediately prior to the Closing:
1.    Pattern Henvey Inlet LP Holdings 2 LP will hold (a) a 99.98% interest in Pattern Henvey Inlet LP Holdings LP and (b) 100% of the issued and outstanding shares in GP1;
2.    GP1 will hold (a) 50% of the issued and outstanding shares in the capital of GP2 and (b) 0.02% interest in Pattern Henvey Inlet LP Holdings LP; 
3.    GP2 will hold a 0.02% general partnership interest in the Project Company; 
4.    Pattern Henvey Inlet LP Holdings LP will hold a 49.99% limited partnership interest in the Project Company (the balance of the limited partnership interests in the Project Company will be held by Nigig Power Corporation (49.99%)); 
5.    Pattern Renewable Holdings Canada ULC will hold (a) a 49.99% limited partnership interest in the Property Company (the balance of the limited partnership interests in the Property Company will be held by Henvey Inlet First Nation (49.99%); and (b) 50% of the issued and outstanding shares in GP3 (the balance of the issued and outstanding shares in GP3 will be held by Henvey Inlet First Nation (50%)); and
6.    GP3 will hold a 0.02% general partnership interest in the Property Company.
At Closing:
1.    Pattern Henvey Inlet LP Holdings LP will be dissolved so that (i) Pattern Henvey Inlet LP Holdings 2 LP will be the holder of 99.98% of the 49.99% limited partnership interest in the Project Company and 99.98% of the NPC Loan initially owed to Pattern Henvey Inlet LP Holdings LP and (ii) GP1 will be the holder of 0.02% of the 49.99% limited partnership interest in the Project Company and 0.02% of the NPC Loan initially owed to Pattern Henvey Inlet LP Holdings LP.
2.    Pattern Henvey Inlet LP Holdings 2 LP will then sell to the Purchaser 99.98% of the 49.99% limited partnership interest in the Project Company, 99.98% of the NPC Loan initially owed to Pattern Henvey Inlet LP Holdings LP as well as all of the shares of GP1.
3.    GP1 will be dissolved and the Purchaser assumes the assets and liabilities of GP1 including 0.02% of the 49.99% limited partnership interest in the Project Company, 0.02% of the NPC Loan initially owed to Pattern Henvey Inlet LP Holdings LP, the NPC Loan initially owed to GP1 and 50% of the shares of GP2. 
4.    Pattern Renewable Holdings Canada ULC will sell to the Purchaser the 49.99% limited partnership interest in the Property Company and 50% of the shares of GP3.
Consequently, immediately following the Closing, Purchaser will:

1.    directly hold a 49.99% limited partnership interest in the Project Company and a 49.99% limited partnership interest in the Property Company; 
2.    indirectly hold a 0.01% general partnership interest in the Project Company, through its 50% ownership of GP2; 
3.    directly hold 50% of the shares of GP3;
4.    indirectly hold a 0.01% general partnership interest in the Property Company, through its 50% ownership of GP3; and
5.    directly hold the NPC Loans.

This new ownership structure will be as it appears below:

App. C - 2

	
		
	 
	

	Affiliate(s) through which Seller Holds Interests in Project Company, Property Company and NPC Loans (the “Seller Affiliates”): 

	Pattern Henvey Inlet LP Holdings 2 LP 
Pattern Henvey Inlet LP Holdings LP
Pattern Renewable Holdings Canada ULC
GP1
GP2
GP3

	II.    Wind Project Information

	Wind Project:

	Expected nameplate capacity:  300 MW

Location: Georgian Bay, Ontario

Turbine type and manufacturer: Vestas 3.4MW 

Number of turbines: 87 

	Commercial Operation Date (or Expected Commercial Operation Date) of Wind Project:

	September 10, 2019

	Expected Date of Resolution of Radio Interference and Wind Project is fully operational

	September 10, 2019

	Permits & Governmental Approvals:

	Schedule 10.01(jj) (Material Permits) to the Credit Agreement is incorporated herein by reference.

App. C - 3

	
		
	Legal description of Wind Project site (i.e., real property description):
	Schedules 10.01(z)(1) (Easements), 10.01(z)(2) (Leases) and 10.01(z)(3) to the Credit Agreement are incorporated herein by reference.

App. C - 4

APPENDIX D:  DOCUMENTS & KEY COUNTERPARTIES

	
			
	HENVEY INLET WIND TRANSACTION

	I.    B.  Material Project Agreements

	Certain documents referenced in the Credit Agreement:
	Each Material Project Document (as defined in the Credit Agreement)

	Certain other documents:

	Nil.

	II.    Reports, Other Deliverables and Consultants

	Environmental Consultant:

	Arcadis Canada Inc.

	Environmental Reports:

	Phase One Environmental Site Assessment for the Site dated September 12, 2017
Phase II Environmental Site Assessment dated November 2, 2017

	Independent Engineer:

	DNV GL

	Independent Engineer’s Report:

	Independent Engineer Closing Report dated December 22, 2017, Document No.: 10058988-HOU-R-01, Version G

	Title Company:

	Chicago Title Insurance Company

	Title Policy:

	Owner’s Title Insurance Policy, dated December 22, 2017, Policy No. CL-602272-2C6C7

	Wind Consultant:

	DNV GL

	Wind Energy and Resource Assessment Report:

	Wind Consultant's Report dated November 21, 2017 entitled “Henvey Inlet Wind Farm – Energy Assessment of the Proposed Henvey Inlet Wind Farm”

	Insurance Consultant:
	Moore McNeil LLC

	Insurance Consultant’s Report: 

	Local Content Consultant’s Report dated December 15, 2016

	Local Content Consultant:
	PowerHub Inc.

	Local Content Report:
	Local Content Report dated January 15, 2018

	Transmission Consultant:

	Not Applicable

App. D - 1

	
			
	Transmission Consultant’s Report:

	Not Applicable

	Cost Segregation Consultant:
	Not Applicable

	Cost Segregation Report:

	Not Applicable

	Accountant: 

	Not Applicable

	III.    Financing Arrangements

	Term Loan Agreement:

	Credit Agreement dated December 22, 2017 between Henvey Inlet Wind LP, as borrower, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as administrative agent, MUFG Union Bank, N.A., as collateral agent, and the financial institutions from time to time party thereto (as amended in accordance with its terms, the “Credit Agreement”)

	Other Financing Arrangements:

	1.    The documents listed in clauses (a) through (m) of the definition of “Loan Documents” in the Credit Agreement, in each case without any amendments thereto.

2.    The documents listed in clauses (a) through (l) of Section 13.01(1) of the Credit Agreement.

3.    1992 ISDA Master Agreement (Multicurrency—Cross Border) and related Schedule between Bayerische Landesbank, New York Branch and the GP2, in its capacity as general partner of the Borrower, dated as of December 22, 2017.

4.    1992 ISDA Master Agreement (Multicurrency—Cross Border) and related Schedule between CaixaBank, S.A. and the GP2, in its capacity as general partner of the Borrower, dated as of December 22, 2017.

5.    1992 ISDA Master Agreement (Multicurrency—Cross Border) and related Schedule between KfW IPEX-Bank GmbH and the GP2, in its capacity as general partner of the Borrower, dated as of December 22, 2017.

6.    1992 ISDA Master Agreement (Multicurrency—Cross Border) and related Schedule between Sumitomo Mitsui Banking Corporation, New York Branch and the GP2, in its capacity as general partner of the Borrower, dated as of December 22, 2017.

7.    1992 ISDA Master Agreement (Multicurrency—Cross Border) and related Schedule between The Bank of Tokyo-Mitsubishi UFJ, Ltd. and the GP2, in its capacity as general partner of the Borrower, dated as of December 22, 2017.

	Indirect Financing Arrangements:

	Loan Agreement dated December 22, 2017 (as amended in accordance with its terms, the “Loan Agreement”) together with the documents listed in Section 4.1 of the Loan Agreement.   

	Amendments to any document in this Part III of Appendix D

	None

App. D - 2

	
			
	IV.    Equity and Co-Ownership Arrangements & Key Counterparties

	Equity Capital Contribution Agreement (“ECCA”):

	Not Applicable

	Tax Equity Investors:

	Not Applicable

	Project Agreement:

	Limited Partnership Agreement of Henvey Inlet Wind LP dated November 4, 2014 (as amended in accordance with its terms, the “Project Agreement”)

App. D - 3

Schedule 2.4
Litigation
To the Knowledge of Seller, there is the following actual or threatened litigation: 

		
	1.
	Potential claims in connection with the 2018 forest fires at the Wind Project by various Persons, including but not limited to, Governmental Authorities and/or local property neighbours.

		
	2. 
	A claim was filed on August 30, 2019 by Coxswain Row Capital Corporation in the Ontario Superior Court of Justice in respect of the provision of alleged financial advisory or other services related to the Wind Project (Court File No. CV-19-00626612-OOCL) (the “Coxswain Claim”).  The named defendants are Nigig Power Corporation, Henvey Inlet First Nation, GP2, the Project Company and Pattern Renewable Holdings Canada ULC.  Each of Nigig Power Corporation and Henvey Inlet First Nation executed an indemnity agreement dated December 18, 2017 in favour of the Project Company in respect of losses related to certain matters which are the subject of the Coxswain Claim.

		
	3.
	Potential claims, cross-claims and counterclaims (whether by the Project Company or against the Project Company) in connection with cost overruns, defective or negligent workmanship, other acts or omissions, schedule delays, subcontractor payment claims or other matters relating to the EPC construction contracts with either or both of CER, Powertel and their respective subcontractors and sureties (collectively, the “EPC Issues”).  Without limiting the foregoing, formal claim(s) of default under the EPC construction contracts (and related claims) against CER and/or Powertel relating to the EPC Issues, and/or proceedings in respect of related performance bonds and/or lien claims, have been made, and may continue to be made between the date of this Agreement and Closing, as well as after Closing.

Schedule 2.4 - 1

Schedule 2.5
Seller Consents and Approvals
		
	1.
	Notice to Nigig Power Corporation and GP2 regarding permitted transfers under the limited partnership agreement of the Project Company dated November 4, 2014 between Pattern Henvey Inlet LP Holdings LP (as legal successor to Pattern Renewable Holdings Canada ULC), Nigig Power Corporation and GP2.

		
	2.
	Notice to Nigig Power Corporation and GP2 regarding permitted transfers under the unanimous shareholder agreement of GP2 dated November 4, 2014 between Pattern Henvey Inlet LP Holdings LP (as legal successor to Pattern Renewable Holdings Canada ULC), Nigig Power Corporation and GP2.

		
	3.
	Notice to Henvey Inlet First Nation and GP3 regarding permitted transfers under the amended and restated limited partnership agreement of the Property Company dated December 14, 2017 between Pattern Renewable Holdings Canada ULC, Henvey Inlet First Nation and GP3.

		
	4.
	Notice to Nigig Power Corporation and GP2 regarding permitted transfers under the unanimous shareholder agreement of GP3 dated December 14, 2017 between Pattern Renewable Holdings Canada ULC, Henvey Inlet First Nation and GP3, executed by Pattern Canada Finance Company ULC.

		
	5.
	Notice to the Administrative Agent under the Credit Agreement of a Permitted Transfer (as defined therein).

    

Schedule 3.5
Purchaser Consents and Approvals
		
	1.
	Competition Act Approval.

Schedule 3.5 - 1

Schedule 4.1(a)
Seller’s Pre-Closing Covenants

		
	1.
	Seller will cause Project Company to use commercially reasonable efforts to achieve COD on or prior to the Outside Closing Date.

Schedule 4.1(a) - 1

Schedule 4.2(d)
Tax Allocation
	
		
	 
	Allocation $

	49.99% Limited Partnership Interest in HIW Property Holdings LP
	Book value

	50% Interest in HIW Property Holdings GP Inc.
	Book value

	NPC Loans
	Face value plus accrued interest

	49.99% Limited Partnership Interest in Henvey Inlet Wind LP
	Of the balance of the Purchase Price after deducting the first three above amounts, 99.98% of such amount

	0.01% General Partnership Interest in Henvey Inlet Wind LP

	Of the balance of the Purchase Price after deducting the first three above amounts, 0.02% of such amount

                                         

    
                                
            
        
    
        
 

 
        

Schedule 4.2(d) - 1

Schedule 6.4(b)
Control of Defense of Third Party Claims
Not applicable.

Schedule  - 1Exhibit

Exhibit 10.5

HENVEY INLET CONSENT AND ROFO AGREEMENT
THIS HENVEY INLET CONSENT AND ROFO AGREEMENT (the “Agreement”) is made as of October 1st, 2019,
B E T W E E N:
PUBLIC SECTOR PENSION INVESTMENT BOARD, an Entity having its registered office at 1250 Rene-Levesque Blvd. West, Suite 1400, Montreal, Quebec, H3B 5E9, Canada (hereinafter referred to as “PSP”),
– and –
PATTERN ENERGY GROUP INC., a Delaware corporation having its principal executive offices at 1088 Sansome St., San Francisco, California, 94111, United States (hereinafter referred to as “PEGI”).
WHEREAS PEGI and PSP are parties to that certain joint venture agreement dated as of June 16, 2017 (the “JVA”) pursuant to which they agreed to jointly own certain assets acquired through PEGI’s rights of first offer with Pattern Development 1.0 and Pattern Development 2.0 pursuant to the Purchase Rights Agreements;
AND WHEREAS pursuant to the applicable Purchase Rights Agreement, Pattern Development 1.0 desires to sell, and PEGI desires to purchase, all of Pattern Development 1.0’s direct and indirect Equity Interests in the Henvey Inlet Project (the “Henvey Transaction”); 
AND WHEREAS the Henvey Inlet Project is a Covered Subject Project Interest;
AND WHEREAS pursuant to Section 3.2(b) of the applicable Purchase Rights Agreement, the purchase and sale agreement in respect of the Henvey Transaction must be based on the form attached as Exhibit A to the Purchase Rights Agreement;
AND WHEREAS PEGI has advised PSP that the terms of the purchase and sale agreement for the Henvey Transaction will deviate materially from those contained in the prescribed form;
AND WHEREAS pursuant to Section 3.05 of the JVA, PEGI may not amend any Purchase Rights Agreements in any manner that is adverse in any respect to the PSP Co-Invest Rights without PSP’s prior written approval;
AND WHEREAS PSP is prepared to grant its approval for the Henvey Transaction subject to the terms and conditions of this Agreement;
NOW THEREFORE, THIS AGREEMENT WITNESSES that in consideration of the respective covenants and agreements of the parties contained herein and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), it is hereby agreed as follows:

 

ARTICLE 1 
DEFINITIONS AND INTERPRETATION
Section 1.01.    Definitions.
Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings ascribed to them in the JVA. In addition, the following terms shall have the following meanings, respectively:
“Equity Interests” means all shares, capital stock, partnership or limited liability company interests, membership interests, units, participations, distribution rights or similar equity interests issued by any Person, however designated;  
“Henvey Inlet Project” means a 49.99% limited partner interest in Henvey Inlet Wind LP, a 50% interest in Henvey Inlet Wind GP Inc., a 49.99% limited partner interest in HIW Property Holdings LP, and a 50% interest in HIW Property Holdings GP Inc.  
“PEGI Entity” means PEGI and any Affiliate of PEGI; and
“Transfer” means any direct or indirect transfer, assignment, sale or other disposition, whether through the direct or indirect transfer, assignment, sale or other disposition of Equity Interests or assets, by merger or otherwise; provided, however, that such term shall not include: (a) transfers, assignments, sales or other dispositions from a PEGI Entity to another PEGI Entity; (b) grants of security interests in or mortgages or liens in favor of a bona fide third party lender in the business of providing debt financing; or (c) transfers of any Equity Interests in any Person which directly or through any other Person, owns or leases material assets (other than the Equity Interests in the Henvey Inlet Project) or has material investments or material rights unrelated to the Henvey Inlet Project (such Person a “Substantive Company”), provided that if interests in the Henvey Inlet Project constitute more than one-fourth (1/4) of the unlevered fair market value of a Person which directly or indirectly holds an Equity Interest in the Henvey Inlet Project, such Person is deemed not to be a Substantive Company, and provided further that PSP’s rights under this Agreement shall remain in full force and effect following the transfer of the Equity Interests in such Substantive Company and the transferee executes such acknowledgements as PSP may reasonably require in the circumstances. 
ARTICLE 2 
CONSENT TO HENVEY TRANSACTION
Subject to the terms and conditions of this Agreement, PSP hereby grants its approval to the Henvey Transaction and waives its PSP Co-Invest Rights with respect thereto. For the avoidance of doubt, PEGI agrees that the foregoing waiver by PSP does not constitute a Joint Acquisition Declination for purposes of the JVA. 
ARTICLE 3 
RIGHT OF FIRST OFFER
Section 3.01.    Right of First Offer for Henvey Inlet. 

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For the term set forth in Section 3.03, PEGI hereby grants PSP a right of first offer on any proposed Transfer by any PEGI Entity of all or any portion of such PEGI Entity’s ownership interest in the Henvey Inlet Project in accordance with Section 3.02. PEGI will take all actions necessary to cause such right of first offer to be exercisable in accordance with this Article 3, including by causing each PEGI Entity to take any actions necessary to facilitate and enforce such exercise and to consummate the transactions contemplated by this Article 3.
Section 3.02.    Procedures for Right of First Offer.
(a)    In the event that any PEGI Entity proposes to Transfer all or any portion of its ownership interest in the Henvey Inlet Project, PEGI shall give PSP written notice within a commercially reasonable amount of time (that is intended to be sufficiently early to permit the parties to exercise their rights set forth in this Section 3.02) setting forth the details of the proposed Transfer, including the interest to be Transferred (the “Subject Project Interest”), the information referred to in Section 3.01(g) of the JVA and any other material terms of the proposed Transfer reasonably known or anticipated by PEGI (a “Project Transfer Notice”). The Subject Project Interest to be Transferred shall in no event be less than thirty percent (30%) of the PEGI Entities’ direct and indirect Equity Interests in the Henvey Inlet Project and, if the Subject Project Interest to be Transferred is greater than thirty percent (30%) of the PEGI Entities’ direct and indirect Equity Interests in the Henvey Inlet Project, then PSP shall, at the time it delivers an Offer Price, elect whether the Subject Project Interest shall equal (x) the percentage of the Subject Project Interest that PEGI offered to PSP in the Project Transfer Notice or (y) thirty percent (30%) (and if PSP fails to make such election, then the Subject Project Interest shall equal the percentage offered by PEGI).
(b)    Within 20 calendar days after delivery of a Project Transfer Notice (the “Offer Period”), PSP shall either: (i) deliver a written offer to PEGI to purchase the Subject Project Interest setting forth PSP’s offer price (an “Offer Price”) and other material terms and conditions on which PSP proposes to purchase such Subject Project Interest (an “Offer”) or (ii) deliver a written notice to PEGI that PSP will not make an Offer in response to the Project Transfer Notice (a “Declination”). Unless an Offer is rejected pursuant to written notice from PEGI delivered to PSP within thirty (30) calendar days following the delivery of an Offer (the “Acceptance Period”), such Offer shall be deemed to have been accepted by PEGI, and PSP shall have the right to acquire the Subject Project Interest, and PEGI shall transfer the Subject Project Interest to PSP, on the terms set forth in such Offer, and subject to documentation reasonably agreed between the parties generally based on the Form Joint Acquisition PSA with such modifications as needed to reflect the then-current status of the project and PEGI’s role as seller. 
(c)    In the event that (i) PEGI rejects an Offer by delivering notice thereof to PSP before the expiration of the Acceptance Period, (ii) PSP fails to deliver either an Offer or a Declination or delivers a Declination, in each case before the expiration of the Offer Period, PEGI shall, subject to the restrictions in this Section 3.02(c), be entitled to Transfer the applicable Subject Project Interest to any Person; provided, however, that PEGI shall not provide any material information with respect to the applicable Subject Project Interest that was in existence at the date of the Transfer Notice to any actual or potential transferee of such Subject Project Interest that was not provided to PSP together with the Project Transfer Notice. In the event that PSP has previously delivered an Offer in respect of the Subject Project Interest which offer was rejected by PEGI, PEGI shall only be permitted to Transfer the Subject Project Interest to a party that is not PSP (A) if it consummates a Transfer to such third party prior to the 

3

 

fifteen-month anniversary of date on which PEGI rejected the applicable offer (the “Offer Rejection Date”), (B) at a price greater than or equal to 110% of the applicable Offer Price; provided that if such party is a tax exempt Canadian Crown Corporation and as a result of such status the proceeds received by PEGI will be subject to incremental tax or tax withholding, for purposes of this clause (B) the price paid will be deemed decreased by the amount of such incremental tax or tax withholding, and (C) on other terms and conditions that are not materially less favorable to PEGI than the terms and conditions set forth in the applicable Offer. If PEGI does not consummate the Transfer within the fifteen-month period following the Offer Rejection Date, then PEGI shall notify PSP of that fact, and PSP shall have the option, but not the obligation, to purchase the applicable Subject Project Interest at a price equal to 96% of the applicable Offer Price on the terms and conditions set forth in the applicable Offer, in accordance with the procedures set forth in the following sentence. Within 30 calendar days after receipt of such notice from PEGI, PSP shall either: (i) deliver a written notice to PEGI exercising such option to purchase the applicable Subject Project Interest, in which case PEGI shall transfer the Subject Project Interest to PSP at a price equal to 96% of the applicable Offer Price and on the other terms and conditions set forth in the applicable Offer, subject to documentation reasonably agreed between the parties based on the Form Joint Acquisition PSA or (ii) deliver a written notice to PEGI that PSP will not exercise such option; provided, that if PSP does not exercise such option within thirty (30) calendar days of receiving such notice from PEGI, then PSP will be deemed to have declined the option.
Section 3.03.    Term of Right of First Offer.  
Section 3.01 and Section 3.02, including the obligations and rights of PEGI and PSP thereunder, shall survive until the earliest to occur of: (i) a Co-Investment Right Termination Event; and (ii) the date that is 30 months following the closing date of the Henvey Transaction; provided, however, that notwithstanding any termination or expiration of Section 3.01 and Section 3.02, if any Offer shall have been delivered prior to such termination or expiration, the obligations and rights of the parties with respect to the Subject Project Interest subject thereto shall survive until the applicable terms of Section 3.02 with respect thereto have been complied with and performed in full; and provided further, if PEGI and PSP mutually agree to terminate the JVA in accordance with the provisions of Section 5.09 of the JVA and no Project Transfer Notice has previously been delivered pursuant to Section 3.02(a), Section 3.01 and Section 3.02, including the obligations and rights of PEGI and PSP thereunder, shall continue in full force and effect.
Section 3.04.    PSP May Initiate PEGI Transfer.  
If (i) no Co-Investment Right Termination Event has occurred and (ii) no Project Transfer Notice has previously been delivered pursuant to Section 3.02(a), in each case prior to the second (2nd) anniversary of the closing date of the Henvey Transaction, then PSP may, during the 6-month period following such second (2nd) anniversary, by notice in writing to PEGI, require PEGI to deliver a Project Transfer Notice in accordance with Section 3.02(a).  Notwithstanding the preceding sentence, if PEGI and PSP mutually agree to terminate the JVA in accordance with the provisions of Section 5.09 of the JVA, this Section 3.04 shall terminate and be of no further force or effect.
Section 3.05.    Treatment as Co-Investment Amount.  

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Notwithstanding the waiver and consent provided in Article 2 of this Agreement, any purchase proceeds paid by PSP to PEGI hereunder shall be included in the calculation of the aggregate Co-Investment Amount as defined in the JVA and as used in the determination of whether a Co-Investment Right Termination Event has occurred pursuant to Section 3.04(a)(i) of the JVA.  
ARTICLE 4 
MISCELLANEOUS
Section 4.01.    Amendments; Extension; Waiver.  
This Agreement may not be amended, altered or modified except by written instrument executed by both PEGI and PSP. The failure by either PEGI or PSP to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision nor in any way to affect the validity of this Agreement or any part hereof or the right of such party thereafter to enforce each and every such provision. No waiver of any breach of or non-compliance with this Agreement shall be held to be waiver of any other or subsequent breach of non-compliance. The observance of any provision of this Agreement may be waived in writing by the party that will lose the benefit of such provision as a result of such waiver. 
Section 4.02.    Rules of Construction.
The rules of construction set forth in Section 5.02 of the JVA shall apply mutatis mutandis to the interpretation of this Agreement.
Section 4.03.    Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  
(a)    This Agreement, the legal relations among the parties hereunder and the adjudication and the enforcement thereof, shall in all respects be governed by, and interpreted and construed in accordance with, the Laws (excluding conflict of laws rules and principles) of the State of New York applicable to agreements made and to be performed entirely within such State, including all matters of construction, validity and performance.
(b)    Each of the parties irrevocably submits to the exclusive jurisdiction of the Supreme Court of the State of New York, New York County, for any Proceeding arising out of this Agreement or any transaction contemplated hereby. To the extent that service of process by mail is permitted by Applicable Law, each party irrevocably consents to the service of process in any Proceeding in such courts by the mailing of such process by registered or certified mail, postage prepaid, at its address for notices provided for herein. Nothing herein shall affect the right of any Person to serve process in any other manner permitted by Law. Each of the parties irrevocably and unconditionally waives any objection to the laying of venue of any Proceeding arising out of this Agreement or the transactions contemplated hereby in the Supreme Court of the State of New York, New York County, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any Proceeding brought in any such court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER AGREEMENT ENTERED INTO IN CONNECTION THEREWITH AND FOR ANY COUNTERCLAIM WITH RESPECT THERETO.

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Section 4.04.    Entire Agreement.
This Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties, and there are no warranties, representations or other agreements between the parties hereto in connection with the subject matter hereof, except as specifically set forth herein.
Section 4.05.    Severability.
If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination shall not impair or affect the validity, legality or enforceability of the remaining provisions hereof and each provision is hereby declared to be separate, severable and distinct. To the extent that any provision is found to be invalid, illegal or unenforceable, the parties shall act in good faith to substitute for such provision, to the extent possible, a new provision with content and purpose as close as possible to the provision so determined to be invalid, illegal or unenforceable.
Section 4.06.    Notices.
Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in the manner described in Section 5.07 of the JVA provided that notices to PEGI shall be addressed as follows:
Pattern Energy Group Inc.
1088 Sansome Street
San Francisco, CA  94111

Attention:      General Counsel
Email:      generalcounsel@patternenergy.com    

Section 4.07.    Successors and Assigns.  
Except as otherwise provided herein, neither this Agreement nor any of the rights of any party hereunder may be assigned without the prior written consent of the other party. Either party may assign this Agreement or any of its rights hereunder to an Affiliate that holds or will hold, directly or indirectly, any interest in the Henvey Inlet Project, upon providing notice to the other party. Except as may otherwise be provided herein, all of the terms and provisions of this Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their respective heirs, executors, administrators, other personal Representatives, successors and permitted assigns.
Section 4.08.    Enforcement.  
The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that any breach of this Agreement would not be adequately compensated by monetary damages. Accordingly, the parties hereto acknowledge and agree that in the event of any breach or threatened breach of any of their respective covenants or obligations set forth in this Agreement, the non-breaching party be entitled to an injunction or 

6

 

injunctions to prevent or restrain breaches or threatened breaches of this Agreement by the other and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other under this Agreement.
Section 4.09.    Counterparts.  
This Agreement may be executed by facsimile or .pdf format scanned signatures and in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together, be deemed an original, and shall constitute one and the same instrument.

[The remainder of this page has been intentionally left blank.]

7

IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as of the day and year first above written.

	
		
	PATTERN ENERGY GROUP INC.

	By:
	/s/ Dyann Blaine

	 
	Name:   Dyann Blaine

	 
	Title:   Vice President

	
		
	PUBLIC SECTOR PENSION INVESTMENT BOARD

	By:
	/s/ Stephan Rupert

	 
	Name:   Stephan Rupert

	 
	Title:  Managing Director, Infrastructure Investments

	 
	 

	By:
	/s/ Michael Larkin

	 
	Name:   Michael Larkin

	 
	Title:   Director, Infrastructure Investments

	 
	 

[Signature Page - Henvey Inlet Consent and ROFO Agreement]

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