MEMBERSHIP INTEREST PURCHASE AGREEMENT

Exhibit 10.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

dated as of January 1, 2009

by and between

RENEGY HOLDINGS, INC.,
a Delaware corporation

and

AZ BIOMASS LLC,
a Delaware limited liability company

with respect to certain

Class A membership interests of

Snowflake White Mountain Power, LLC,
an Arizona limited liability company

TABLE OF CONTENTS

EXHIBITS

SCHEDULES

MEMBERSHIP INTEREST PURCHASE AGREEMENT

     This MEMBERSHIP INTEREST PURCHASE AGREEMENT dated as of January 1, 2009 is made and entered into by and between Renegy Holdings, Inc., a Delaware corporation (“ Seller ”), and AZ Biomass LLC, a Delaware limited liability company (“ Purchaser ”), (Purchaser and Seller being sometimes hereinafter referred to individually as a “ Party ” and collectively as the “ Parties ”). Capitalized terms used herein without definition shall have the same meanings set forth in Section 1.01 .

     WHEREAS, Seller owns, beneficially and of record, all of the authorized and outstanding membership interests (the “ Membership Interests ”) of Snowflake White Mountain Power, LLC, an Arizona limited liability company (the “ Project Company ”); and

     WHEREAS, the Project Company has developed and owns a 24 MW biomass electric generation station located adjacent to a paper mill near Snowflake, Arizona (the “ Project ”); and

     WHEREAS, Seller desires to sell, and Purchaser desires to purchase, all of the authorized “ Class A Membership Interests ” (as such term is defined in the LLC Agreement) (the “ Purchased Interests ”) on the terms and subject to the conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1
INTERPRETATION

     1.01. Definitions; Defined Terms . As used in this Agreement, the following defined terms have the meanings indicated below:

     “ Actions or Proceedings ” means any action, suit, proceeding, arbitration or Governmental or Regulatory Authority investigation.

     “ Affiliate ” means any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by Contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning fifty percent (50%) or more of the voting or equity securities of another Person shall be deemed to control that Person.

     “ After-Tax Basis ” means, with respect to any payment received or deemed to have been received by any Person, the amount of such payment (the “ Base Payment ”) supplemented by a further payment (the “ Additional Payment ”) to that Person so that the sum of the Base Payment plus the Additional Payment shall, after deduction of the amount of all Federal, state and local income Taxes required to be paid by such Person in respect of the receipt or accrual of the Base Payment and the Additional Payment (taking into account the net present value of any reduction

in such income Taxes resulting from Tax benefits realized by the recipient as a result of the payment or the event giving rise to the payment), be equal to the amount required to be received. Such calculations shall be made on the basis of the highest generally applicable Federal, state and local income tax rates applicable to a corporation for all relevant periods, and shall take into account the deductibility of state and local income taxes for Federal income tax purposes.

     “ Agreement ” means this Membership Interest Purchase Agreement and all exhibits hereto and the certificates delivered in accordance with Sections 7.03 and 8.03 , as any of the same shall be amended from time to time.

     “ Assets and Properties ” means all assets, properties rights and interests of any Person of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person or that such Person has a contractual right to use.

     “ Assignment of Interests ” means the Assignment of Interests substantially in the form of Exhibit B .

     “ Base Amount ” has the meaning set forth in Section 2.02(b) .

     “ Base Case Projections ” means the estimated financial projections with respect to the Project and the Project Company attached hereto as Schedule 3.26 .

     “ Books and Records ” means all files, documents, instruments, papers, books and records relating to the business of the Project Company, including financial statements, Tax Returns and related work papers and letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute books, stock certificates and books, stock transfer ledgers, Contracts, Licenses, customer lists, computer files and programs, retrieval programs, operating data and plans and environmental studies and plans.

     “ Business Day ” means a day other than Saturday, Sunday or any day on which banks located in the State of Arizona are authorized or obligated to close.

     “ Claim Notice ” means written notification pursuant to Section 11.02(a) of a Third Party Claim as to which indemnity under Section 11.01 is sought by an Indemnified Party, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party’s claim against the Indemnifying Party under Section 11.01 , together with the amount or, if not then reasonably determinable, the estimated amount, determined in good faith, of the Loss arising from such Third Party Claim.

     “ Class A Foreclosure Event ” has the meaning set forth in Section 2.02(c) .

     “ Closing ” has the meaning set forth in Section 2.03(a) .

     “ Closing Date ” has the meaning set forth in Section 2.03(a) .

     “ CoBank Credit Agreement ” has the meaning set forth in Section 3.28 .

     “ Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

     “ Company Controlled Group ” has the meaning set forth in Section 3.15 .

     “ Contested Taxes ” has the meaning set forth in Section 9.01(b) .

     “ Contingent Events ” means each of (i) the issuance by FERC of the FERC Approval and (ii) the occurrence of Term-Conversion (as such term is defined in the CoBank Credit Agreement), together with confirmation from CoBank ACB to Purchaser that Term Conversion has occurred.

     “ Contingent Events Date ” means the date upon which the later of the two Contingent Events occurs.

     “ Contingent Events Deadline ” means February 28, 2009.

     “ Contract ” means any agreement, lease, license, evidence of Indebtedness, mortgage, indenture, security agreement or other contract relating to the Project entered into by the Project Company or by which the Project Company or any of its Assets or Properties is bound.

     “ Debt Repayment Period ” has the meaning set forth in Section 2.05(b) .

     “ Deposit Account ” means that certain interest bearing deposit account which is identified in the Deposit Account Control Agreement and which is maintained by Seller at a branch or office of the Depository Bank.

     “ Deposit Account Control Agreement ” means that certain Blocked Deposit Account Control Agreement substantially in the form of Exhibit I hereto , dated as of the Closing Date, among Seller, Purchaser and Depository Bank governing the control and release of the funds in the Deposit Account.

     “ Depository Bank ” means US Bank National Association, Denver, Colorado.

     “ Dispute Period ” means the period ending sixty (60) days following delivery by an Indemnifying Party of either a Claim Notice or an Indemnity Notice.

     “ Environment ” means air, land (including soil and any surface or subsurface strata), and surface water or groundwater, or any combination or part thereof.

     “ Environmental Claim ” means any request for information by any Governmental or Regulatory Authority or any claim by any Governmental or Regulatory Authority for enforcement, cleanup, removal, response, remedial or other actions, costs or damages pursuant to any common law cause of action or applicable Environmental Requirement, or any claim brought or made by any other Person alleging any liability under or violation of or noncompliance with any Environmental Requirement or seeking damages, contribution, indemnification, costs, recovery, compensation, injunctive or other relief resulting from the

presence of Hazardous Materials at, or under or from any real property currently owned or leased by the Project Company.

     “ Environmental Requirement ” means each and every Law or Order regulating or otherwise relating in any way to (i) the protection of the Environment, (ii) the Release or threatened Release of Hazardous Material into the Environment, or (iii) the generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of Hazardous Material.

     “ Equity Option ” means any security, right, subscription, warrant, option, “ phantom ” stock right, commitment, conversion right, right of exchange, right of first refusal or other Contract that gives a Person the right to (i) purchase or otherwise receive or be issued any equity interest of a Person or any security of any kind convertible into or exchangeable or exercisable for any equity interest of such Person or (ii) receive or exercise any benefits or rights similar to any rights enjoyed by or accruing to the holder of equity interests of a Person, including any rights to participate in the equity or income of such Person or to participate in or direct the election of any directors, managers or officers of such Person or the manner in which any equity interests of such Person are voted.

     “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

     “ FERC ” means the Federal Energy Regulatory Commission.

     “ FERC Approval ” means an order issued by FERC granting all authorizations requested by Seller, Project Company and Purchaser under the FPA 203 Application.

     “ Financial Statements ” means the financial statements of the Project Company delivered to Purchaser pursuant to Section 3.09 .

     “ FPA 203 Application ” means that certain Joint Application for Authorization of Proposed Transaction under Section 203 of the Federal Power Act, and Request for Expedited Consideration, Waiver of Certain Filing Requirements, and Confidential Treatment, Docket No. EC09-31-000, filed with FERC on December 18, 2008, by Seller, Project Company and Purchaser.

     “ GAAP ” means United States generally accepted accounting principles, consistently applied throughout the specified period and in the immediately prior comparable period.

     “ Governmental Approval ” means any authorization, approval, consent, License, exception, variance, Order, franchise, lease, ruling, permit, tariff, certification, exemption, filing, notice to, declarations of, or registration by or with any Governmental or Regulatory Authority.

     “ Governmental or Regulatory Authority ” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States or any state, county, city or other political subdivision.

     “ Hazardous Material ” means any substance: (i) the Release or threatened Release of which into the Environment requires, characterization, mitigation, removal, or remediation

pursuant to any Environmental Requirement; (ii) without limitation, any “ hazardous substance, ” “ toxic substance, ” “ hazardous waste, ” “ toxic waste, ” “ pollutant, ” or “ contaminant, ” as such terms are defined under applicable Environmental Requirements; or (iii) without limitation, which is or contains polychlorinated biphenyls (PCBs), asbestos, urea-formaldehyde foam insulation (UFFI), radioactive materials, or petroleum hydrocarbons or other petroleum products.

     “ Holdback Amount ” means $300,000.

     “ Holdback Amount Release Date ” has the meaning set forth in Section 2.02(b) .

     “ Holdback Return Event ” has the meaning set forth in Section 2.02(b) .

     “ Indebtedness ” means all obligations of a Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business), (iv) under capital leases and (v) in the nature of guaranties of the obligations described in clauses (i) through (iv) above of any other Person.

     “ Indemnified Party ” means either a Seller Indemnified Party or a Purchaser Indemnified Party, as the context provides.

     “ Indemnifying Party ” means any Person against whom a claim for indemnification is being asserted under any provision of Article 11 .

     “ Indemnity Notice ” means written notification pursuant to Section 11.02(a)(i) of a claim for indemnity under Article 11 by an Indemnified Party, specifying the nature of and basis for such claim, together with the amount or, if not then reasonably determinable, the estimated amount, determined in good faith, of the Loss arising from such claim.

     “ Information ” has the meaning set forth in Section 13.05 .

     “ Intellectual Property ” has the meaning set forth in Section 3.19 .

     “ IRS ” means the United States Internal Revenue Service.

     “ Laws ” means all laws, statutes, treaties, rules, codes, ordinances, regulations, permits, official guidelines, certificates, orders, interpretations, licenses, leases and permits of any Governmental or Regulatory Authority, Governmental Approvals, and judgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or other judicial or quasi-judicial tribunal of competent jurisdiction and all requirements of law.

     “ Lender ” means (i) any and all bondholders, noteholders or lenders, directly or indirectly, holding an interest in obligations issued pursuant to any Project Debt Documents, (ii) the agent, trustee, collateral agent or depositary for any Person listed in clause (i) above, and (iii) the successors and permitted assigns of any of the foregoing.

     “ Liabilities ” means all Indebtedness, obligations and other liabilities of a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether due or to become due and including, without limitation, liabilities arising from an Action or Proceeding).

     “ Liens ” means any mortgage, deed of trust, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge, option, warrant, purchase right or option, right of first refusal (or similar covenant, right or easement), or other encumbrance or restriction of any kind, or any conditional sale Contract, title retention Contract or other Contract to give any of the foregoing.

     “ LLC Agreement ” means the Amended and Restated Limited Liability Company Agreement of the Project Company, dated as of January 1, 2009, as set forth in Schedule 1 hereto, and any and all amendments or variations thereto.

     “ Loss ” means any and all damages (including incidental and consequential damages incurred with respect to any claim by a third party but not by a Party except as expressly provided herein), fines, penalties, deficiencies, losses, interest, awards, judgments, expenses (including interest, court costs, reasonable fees of attorneys, accountants and other experts or other reasonable expenses of litigation or other proceedings or of any claim, default or assessment) and diminution of value, whether or not involving a third party claim, but excluding Taxes.

     “ Material Contracts ” has the meaning set forth in Section 3.24 .

     “ Membership Interests ” has the meaning set forth in the forepart of this Agreement.

     “ Order ” means any writ, judgment, decree, injunction or similar order of any Governmental or Regulatory Authority.

     “ Party ” or “ Parties ” has the meaning set forth in the forepart to this Agreement.

     “ Permit ” means all material agreements, issuances, orders, licenses, franchises, permits, certificates, orders, waivers, approvals and authorizations that are required to be obtained from any Governmental or Regulatory Authority, as of the date hereof and as of the Closing Date, necessary to own and operate the Project as currently owned and operated, including, without limitation, permits issued under applicable Environmental Requirements.

     “ Permitted Lien ” means (i) any Lien for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP on the Financial Statements; (ii) any statutory Lien arising in the ordinary course of business by operation of Law with respect to a Liability that is not yet due or delinquent; and (iii) Liens created pursuant to that certain Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of September 1, 2006, granted by Project Company for the benefit of CoBank, ACB and that certain Pledge Agreement, dated as of October 1, 2007, among Seller, Renegy, LLC, Renegy Trucking, LLC, Project Company and CoBank, ACB.

     “ Person ” means any natural person, corporation, limited liability company, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or Governmental or Regulatory Authority.

     “ Project ” has the meaning set forth in the forepart of this Agreement.

     “ Project Company ” has the meaning set forth in the forepart of this Agreement, and shall include any successor of the Project Company.

     “ Project Debt Documents ” means the CoBank Credit Agreement and all other credit agreements, reimbursement agreements, trust indentures, depositary agreements, mortgages, security agreements, leases, leveraged leases, synthetic leases, sale-leasebacks or other similar transactions or other documents under which development, construction or permanent financing has been obtained (including any credit enhancement, leveraged lease, synthetic lease or otherwise) to provide funds (in whole or in part) for the acquisition, development, construction or operation of all or any part of the Project or any refinancing of any thereof.

     “ Project Documents ” means the Project Debt Documents and all other Material Contracts.

     “ PUHCA ” has the meaning set forth in Section 3.17(a) .

     “ Purchase Price ” has the meaning set forth in Section 2.02 .

     “ Purchased Interests ” has the meaning set forth in the forepart of this Agreement.

     “ Purchaser ” has the meaning set forth in the forepart of this Agreement, and includes its successors and assigns.

     “ Purchaser Indemnified Parties ” means Purchaser and each of Purchaser’s Affiliates, members and direct and indirect beneficial owners, and each of their respective officers, directors, stockholders, members, managers, employees, representatives, agents, successors and assigns.

     “ Release ” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping or disposing into the Environment of any Hazardous Material.

     “ Representatives ” has the meaning set forth in Section 5.02 .

     “ Rescission Event ” has the meaning set forth in Section 12.03 .

     “ Security Agreement ” means that certain Security Agreement substantially in the form of Exhibit K hereto, dated as of the Closing Date, between Seller, as grantor, and Purchaser, as secured party.

     “ Seller ” has the meaning set forth in the forepart of this Agreement, and includes its successors and assigns.

     “ Seller Indemnified Parties ” means Seller and each of Seller’s Affiliates, members and direct and indirect beneficial owners, and each of their respective officers, directors, stockholders, members, managers, employees, representatives, agents, successors and assigns.

     “ Tax Credit ” means the renewable electricity production credit allowable pursuant to Section 45 of the Code.

     “ Tax Returns ” means any report, form, return, statement or other information (including any amendments) required to be supplied to a Governmental or Regulatory Authority by the Project Company with respect to Taxes, including information returns, any amendments thereof or schedule or attachment thereto, and any documents with respect to or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other information.

     “ Taxes ” means any income, gross or net receipts, property, sales, use, capital gain, transfer, excise, license, production, franchise, employment, social security, occupation, payroll, registration, governmental pension or insurance, withholding, royalty, severance, stamp or documentary, value added, or other tax, charge, assessment, duty, levy, compulsory loan, business or occupation (including any interest, additions to tax, or civil or criminal penalties thereon) of the United States or any state or local jurisdiction therein, or of any other nation or any jurisdiction therein.

     “ Transfer Taxes ” has the meaning set forth in Section 9.01(d) .

     1.02. Interpretation .

          (a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “ hereof, ” “ herein, ” “ hereby ” and derivative or similar words refer to this entire Agreement; (iv) the terms “ Article ” or “ Section ” refer to the specified Article or Section of this Agreement; (v) the words “ include ” and “ including ” are not words of limitation and shall be deemed to followed by the words “ without limitation; ” (vi) the use of the word “ or ” to connect two or more phrases shall be construed as inclusive of all such phrases (e.g., “ A or B ” means “ A or B, or both ”); and (vii) the phrase “ ordinary course of business ” refers to the business of the Project Company.

          (b) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.

          (c) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.

          (d) Unless the context otherwise requires, a reference to any Law includes any amendment, modification or successor thereto.

          (e) Any representation or warranty contained herein as to the enforceability of a Contract shall be subject to the effect of any bankruptcy, insolvency, reorganization, moratorium or other similar law affecting the enforcement of creditors’ rights generally and to

general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

          (f) In the event of a conflict between any of the terms of this Agreement and any exhibit, schedule or appendix hereto, the terms of this Agreement shall control.

          (g) The paragraph headings contained herein have been used solely for convenience, and are not intended to describe, interpret, define or limit the scope of this Agreement.

          (h) Conflicts or discrepancies, errors, or omissions in this Agreement or the various documents delivered in connection with this Agreement will not be strictly construed against the drafter of the contract language; rather, they shall be resolved by applying the most reasonable interpretation under the circumstances, giving full consideration to the intentions of the Parties at the time of contracting.

          (i) A reference to any agreement or document is to that agreement or document as amended, novated, supplemented or replaced from time to time.

          (j) Any reference herein to a time of day means New York City time.

          (k) As used herein the phrase “ to Seller’s knowledge ” or “ to the best of Seller’s knowledge ” or any phrase of similar import means, with respect to any matter, the actual knowledge of any of Bob Worsley, Rob Zack, Hugh Smith or Eric Bombgardner.

ARTICLE 2
SALE OF MEMBERSHIP INTERESTS AND CLOSING

     2.01. Purchase and Sale . Upon the terms and subject to the conditions and in reliance upon the representations and warranties set forth in this Agreement, Seller shall sell, assign, transfer and convey, free and clear of any Liens (other than Permitted Liens or Liens created or suffered to exist by Purchaser), to Purchaser, and Purchaser shall purchase from Seller and accept the sale, assignment, transfer and conveyance of, all right, title and interest in and to the Purchased Interests at the Closing.

     2.02. Purchase Price . In consideration of the purchase and sale herein described, Purchaser shall transfer to the Deposit Account at the Closing, $12,300,000 in immediately available funds, which amount (subject to adjustment as herein provided, the “ Purchase Price ”) shall be subject to withdrawal as follows:

          (a) Within one Business Day following the Contingent Events Date, Seller shall be entitled to withdraw all amounts in the Deposit Account less the Holdback Amount and any amounts payable pursuant to Section 2.02(e) (the “ Base Amount ”) and Purchaser shall instruct the Depository Bank to immediately allow Seller to so withdraw the Base Amount from the Deposit Account within such time period; provided , that prior to the Contingent Events Date (i) the Purchaser has not timely elected to rescind this transaction pursuant to Section 12.03 and (ii) neither the Manager (as defined in the LLC Agreement) nor any of its Affiliates have taken

any action on behalf of the Project Company that would, in the absence of the Side Letter, require Purchaser’s consent (in which event Purchaser shall be entitled to receive from the Base Amount an amount equal to the diminution in value of the Class A Interest directly attributable to any such action taken by Manager or its Affiliates on behalf of the Project Company, and Seller shall receive the balance of the Base Amount).

          (b) Seller shall be entitled to immediately withdraw the Holdback Amount and all other amounts then remaining in the Deposit Account (and Purchaser shall so instruct the Depository Bank to allow Seller to so withdraw such amounts) upon the earlier of:

(in each such case of clauses (i) and (ii), the “ Holdback Amount Release Date ”), it being understood that if the conditions of clause (ii) above are not met as of the seventh anniversary of the Closing Date or upon the earlier occurrence of a Class A Foreclosure Event (each, a “ Holdback Return Event ”), whichever shall first occur, then Seller shall instruct the Depository Bank to immediately pay over the Holdback Amount and all other amounts then in the Deposit Account to Purchaser and such amounts shall be treated as an adjustment to the Purchase Price.

          (c) After the Base Amount has been released to Seller, the Depository Bank shall allow Seller to withdraw from the Deposit Account all accrued interest on the Holdback Amount on the last day of each calendar quarter, commencing March 31, 2009 and continuing until the Depository Bank has received notice from Seller and Purchaser of the occurrence of the Holdback Amount Release Date or from Purchaser and Seller of the occurrence of a Holdback Return Event, whichever shall first occur, and Purchaser shall so instruct the Depository Bank to allow Seller to so withdraw such amounts.

          (d) Purchaser agrees that notwithstanding any provision to the contrary set forth in the Deposit Account Control Agreement (and any related rights thereunder) it shall not withdraw (or take any action to withdraw) any portion of the funds in the Deposit Account unless and until it is specifically permitted to do so under the applicable provisions of Sections 2.02 and 12.03 hereof.

          (e) Seller and Purchaser shall instruct the Depository Bank to pay out of the Deposit Account immediately following the Contingent Events Date all amounts owed to (i) Meridian Investments, upon delivery by Meridian Investments to the Seller of a receipt and release of all claims against Purchaser, Seller and the Project Company therefor (in form and substance reasonably satisfactory to Purchaser), and (ii) such other Persons as Seller may direct.

     2.03. Closing.

          (a) The closing of the transactions described in Section 2.03 (the “ Closing ”) will take place, subject to the satisfaction of the conditions contained in Article 7 and Article 8 , at the offices of Greenberg Traurig, P.A., 5100 Town Center Circle, Suite 400, Boca Raton FL, or at such other place as the Parties mutually agree, at 10:00 A.M. local time, on January 2, 2009 or on such other date as the Parties mutually agree upon in writing (the “ Closing Date ”).

          (b) At the Closing, Purchaser shall transfer to the Deposit Account that amount of the Purchase Price set forth in Section 2.02 . Simultaneously, Seller shall (i) deliver an executed Pledge Agreement covering the “ Class B Membership Interests ” (as such term is defined in the LLC Agreement) as security for Seller’s indemnification obligations arising under this Agreement, (ii) deliver an executed Security Agreement as security for Seller’s obligations to refund to Purchaser the Purchase Price, or any portion thereof, pursuant to Section 2.02(b) or Section 12.03 , and (iii) assign and transfer to Purchaser the Purchased Interests by delivering to Purchaser an executed Assignment of Interests with respect to the Purchased Interests. Purchaser acknowledges that the Class B Membership Interests pledged under the Pledge Agreement have previously been pledged to the Lender under the Project Debt Documents and that the pledge under the Pledge Agreement shall be subordinate, in all respects, to the pledge of the Class B Membership Interests set forth in the applicable Project Debt Document.

          (c) At the Closing, there shall also be delivered to Seller and Purchaser the opinions, certificates and other documents and instruments to be delivered on the Closing Date pursuant to Article 7 and Article 8 .

     2.04. Further Assurances; Post-Closing Cooperation.

          (a) Subject to the terms and conditions of this Agreement, from time to time after the Closing, each of the Parties shall execute and deliver such other documents and instruments, provide such materials and information and take such other actions as may reasonably be necessary, proper or advisable, to the extent permitted by Law, to fulfill its obligations under this Agreement and evidence the transfer of the Purchased Interests.

          (b) If, in order to properly prepare its Tax Returns, other documents or reports required to be filed with Governmental or Regulatory Authorities or its financial statements or to fulfill its obligations hereunder, it is necessary that a Party be furnished with additional information, documents or records relating to the business of the Project Company, and such information, documents or records are in the possession or control of the other Party, such other Party agrees to use commercially reasonable efforts to furnish or make available such information, documents or records (or copies thereof) at the recipient’s request, cost and expense.

          (c) Notwithstanding anything to the contrary contained in this Section 2.04 , if the Parties are in an adversarial relationship in litigation or arbitration, the furnishing of information, documents or records in accordance with any provision of this Section 2.04 will be subject to any applicable rules relating to discovery.

          (d) Any information obtained by Seller or the Project Company in accordance with this Section shall be held confidential by the recipient in accordance with Section 13.05 .

     2.05. Repurchase of Purchased Interests . Notwithstanding any provision to the contrary set forth herein or in the LLC Agreement, for the twelve-month period immediately following the expiration of the Preference Period (as such term is defined in the LLC Agreement) Seller shall have the right to repurchase all (but not less than all) of the Purchased Interests in accordance with the following procedure:

          (a) Seller shall give Purchaser written notice during such twelve-month period specifying that it wants to repurchase the Purchased Interests, which notice shall specify a date not less than 30 days from the date of such notice at which the closing of such repurchase shall occur (provided, that if an appraisal is conducted pursuant to Section 2.05(c) below, the closing of such repurchase shall occur on the fifth Business Day following receipt of the independent appraiser’s report, unless the Parties agree otherwise);

          (b) at the closing of such repurchase the Purchaser shall deliver to the Seller any certificate which may have been issued evidencing the Purchased Interests together with such other documents as the Seller may reasonably request in connection with such transaction and the Seller shall deliver to the Purchaser the price to be paid for such repurchase, which price (the “ Repurchase Price ”) shall be calculated as follows: (i) if the repurchase occurs on or prior to the end of the Debt Repayment Period (as such term is defined in the LLC Agreement) the Repurchase Price shall be the greater of (A) the then current fair market value for the Purchased Interests (as determined by any independent valuation expert selected jointly by the Parties, or, if the Parties cannot agree on such an expert, determined in accordance with the procedure set forth in Section 2.05(c) below) and (B) an amount such that the aggregate cumulative returns to Purchaser on an After-Tax Basis on the sum of (x) all capital contributions made by the Purchaser to the Project Company and (y) the Purchase Price, is equal to or greater than 20.52% per annum; provided, that the returns on an After-Tax Basis shall be determined based on the net after tax effect of all allocations of income, loss, deductions and credits (including Tax liability, as defined in the LLC Agreement) and all distributions made to the Purchaser at or prior to such determination and shall assume an effective tax rate of 35% and the full utilization by the Purchaser of all tax items allocated to it under the LLC Agreement or otherwise; and (ii) if the repurchase occurs after the end of the Debt Repayment Period, the Repurchase Price shall be the then-current fair market value of the Purchased Interests;

          (c) if Purchaser disputes Seller’s calculation of the Repurchase Price pursuant to Section 2.05(b) above, it shall notify Seller of such fact and if the Parties are unable to agree upon a price constituting the “ Repurchase Price ” within 15 days after receipt of such notice then either Party may deliver notice (an “ Appraisal Notice ”) to the other Party that the Party elects to have the Repurchase Price determined by an independent appraiser. The Party making such election shall propose an independent appraiser in the Appraisal Notice. If the Parties are unable

to agree on an independent appraiser within 10 Business Days after delivery of the Appraisal Notice, then either Party may request the American Arbitration Association to designate the independent appraisal and furnish a written report thereof to each Party within 20 Business Days of such designation. The independent appraiser’s review shall be conducted in accordance with applicable Law and its determination of the Repurchase Price shall be final and binding on the Parties for all purposes. The fees and expenses of the independent appraiser shall be borne equally by the Parties;

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER

     As of the date hereof and as of the Closing Date, Seller hereby represents and warrants to Purchaser as follows:

     3.01. Existence . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller has full power and authority to execute and deliver this Agreement and all other agreements, instruments and documents to be executed and delivered hereunder or in connection herewith and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby including to own, hold, sell and transfer the Purchased Interests.

     3.02. Authority . The execution and delivery by Seller of this Agreement and all other agreements, instruments and documents to be executed and delivered by Seller hereunder or in connection herewith and the performance by Seller of its obligations hereunder and thereunder have been duly and validly authorized by all appropriate action in accordance with the organizational and governing documents of Seller and applicable Law. This Agreement and all other agreements, instruments and documents which have been executed and delivered by Seller hereunder or in connection herewith have been duly and validly executed and delivered by Seller and, assuming valid execution and delivery by Purchaser, constitute the legal, valid and binding obligations of Seller enforceable against Seller in accordance with their terms.

     3.03. Organization of the Project Company . The Project Company is a limited liability company validly existing and in good standing under the laws of the State of Arizona, and has full power and authority to conduct its business as and to the extent now conducted and as contemplated by this Agreement and the LLC Agreement and to own, use, lease and operate all of its Assets and Properties. The Project Company is in good standing under the laws of the State of Arizona. The Project Company is not in default of any of the terms or conditions of any of its governing documents, and Seller has complied with all requirements set forth in the LLC Agreement or required by Law to effect the transfer of the Purchased Interests.

     3.04. Membership Interests . Seller owns, beneficially and of record, and has good, valid and transferable title (free and clear of all Liens other than Permitted Liens) to one hundred percent (100%) of the Membership Interests of the Project Company, which Membership Interests constitute 100% of the authorized equity interests in the Project Company. The Membership Interests are duly authorized, validly issued, outstanding and fully paid and were issued in compliance with all applicable Laws and not in violation of the preemptive rights of

any Person. The Project Company has not issued any certificates or other instruments to evidence the Membership Interests. Except for this Agreement, the LLC Agreement and any Liens created in favor of Lenders under the Project Debt Documents, there are no outstanding Equity Options with respect to the Project Company or the Membership Interests, including without limitation, any obligation (contingent or otherwise) by the Project Company or Seller to purchase, redeem, or otherwise acquire any shares of capital stock or membership or other ownership interests, as the case may be, or to pay any dividend or make any distribution in respect thereof. There are no Membership Interests reserved for issuance for any purpose. The delivery of the Assignment of Interests in the manner provided in Section 2.03 will transfer to Purchaser good and valid title to the Purchased Interests, free and clear of all Liens, other than Liens created or suffered to exist by Purchaser or Liens created or existing under the Project Debt Documents.

     3.05. Subsidiaries; No Other Business . The Project Company does not own, of record or beneficially, or control, directly or indirectly, or have any commitment to purchase any capital stock, securities convertible into capital stock or other equity or ownership or proprietary interest in any Person, nor does the Project Company have any direct or indirect subsidiaries. The Project Company does not conduct, and has never conducted, (a) any business other than the development and ownership of the Project or (b) any operations other than those incidental to the development and ownership of the Project.

     3.06. No Conflicts . The execution and delivery by Seller of this Agreement and the performance by Seller of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

          (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the LLC Agreement or the organizational documents of Seller;

          (b) subject to obtaining any consents, approvals and actions, making any filings and giving any notices disclosed in Schedule 3.06 , conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to Seller (other than such conflicts, violations or breaches as would occur solely as a result of the identity or the legal or regulatory status of Purchaser or any of its Affiliates); or

          (c) except as disclosed in Schedule 3.06 , (i) conflict with or result in a violation or breach of, (ii) constitute (with or without notice or lapse of time or both) a default under, (iii) require Seller or the Project Company to obtain any consent, approval or action of, make any filing with or give any notice to any Person as a result or under the terms of, (iv) result in or give to any Person any right of termination, cancellation, acceleration or modification in or with respect to, or (v) result in the creation or imposition of any Lien upon Seller or the Project Company or any of their respective Assets and Properties under, any Material Contract or Permit to which Seller or the Project Company is a party or by which any of their respective Assets and Properties is bound.

     3.07. Governmental Approvals and Filings . Except as set forth in Schedule 3.07 , no Governmental Approval on the part of Seller or the Project Company is required by FERC, the Arizona Corporation Commission or any other Governmental or Regulatory Authority in

connection with the execution, delivery, compliance with, or performance of this Agreement or the consummation of the transactions contemplated hereby, except those as would be required solely as a result of the identity or the legal or regulatory status of Purchaser or any of its Affiliates.

     3.08. Membership Records . Seller has provided or made available to Purchaser, prior to the date of this Agreement, true and correct copies of all membership resolutions and other similar membership records of the Project Company.

     3.09. Financial Statements and Condition.

          (a) Seller has delivered to Purchaser true and complete copies of balance sheets of the Project Company as of September 30, 2008 and the related statement of operations, members’ equity and cash flows for the nine month period ended September 30, 2008 (collectively, the “ Financial Statements ”). The Financial Statements have been prepared in accordance with GAAP (other than the omission of any notes thereto), and show all liabilities, direct and contingent, of the Project Company required to be shown in accordance with GAAP (excluding any notes thereto). Since September 30, 2008 there has been no material adverse change in the financial condition, business or Assets and Properties of the Project Company, except as set forth in Schedule 3.09 . Without limiting the foregoing, the Project Company has not declared, paid or made any dividend or other distribution after the date of the Financial Statements provided to Purchaser prior to the execution of this Agreement.

          (b) The Financial Statements fairly present the financial condition and results of operations of the Project Company as of the respective dates thereof and for the respective periods covered thereby.

          (c) The Project Company has no outstanding Liabilities, whether accrued, absolute, contingent or otherwise, of the type customarily reflected on a balance sheet prepared in accordance with GAAP for an entity engaged in a business similar to that of the Project Company, other than as and to the extent set forth or reserved for in the balance sheet contained in the Financial Statements for the Project Company, or arising in the ordinary course of business consistent with past practices.

     3.10. Taxes .

          (a) The Project Company and Seller have filed or caused to be filed (on a timely basis since its inception) all state, local and federal Tax Returns required to be filed by the Project Company and Seller with the appropriate Governmental or Regulatory Authorities in all jurisdictions in which such Tax Returns are required to be filed. Such Tax Returns are correct in all respects, and the Project Company and Seller have paid, or made adequate provision on the Financial Statements for payment of, all Taxes, assessments and other charges due and payable by the Project Company or the Seller. All Taxes required to be withheld by the Project Company and Seller have been collected and withheld, and have been either paid to the respective Governmental or Regulatory Authorities, set aside in accounts for such purpose, or accrued, reserved against, and entered upon the books and records of the Project Company and Seller, as applicable.

          (b) There are no (i) Actions or Proceedings currently pending or, to Seller’s knowledge, threatened against the Project Company or Seller (to the extent relating to the Project Company or its business, or any of the Project Company’s Assets or Properties) by any Governmental or Regulatory Authority for the assessment or collection of Taxes; (ii) audits or other examinations of any Tax Return of the Project Company or Seller (to the extent relating to the Project Company or its business, or any of the Project Company’s Assets or Properties) that are in progress, and neither the Project Company nor Seller has been notified of any request for examination; or (iii) claims for assessment or collection of Taxes that have been asserted against the Project Company or Seller. There are no outstanding agreements or waivers extending the statutory period of limitations applicable to any Tax of the Project Company or Seller, and neither the Project Company nor Seller has requested any extensions of time within which to file any Tax Return. There are no Liens for unpaid or delinquent Taxes on any of the Purchased Interests or the Project Company’s Assets and Properties except for Liens for current Taxes not yet due and payable.

          (c) Neither the Project Company nor Seller is a “ foreign person ” within the meaning of Section 1445(f)(3) of the Code.

          (d) The Project Company is not a party to any Tax sharing, Tax indemnity, or similar agreements or arrangements that are currently enforceable against the Project Company.

          (e) The Project Company is a disregarded entity and the assets, liabilities and operations of the Project Company are treated as the assets, liabilities and operations of the Seller for federal and corresponding provisions of Arizona state Laws relating to income Taxes. The Project Company has not elected to be tr