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EXHIBIT 10.44
AMENDMENT NO. 2 TO LEASE AGREEMENT
This Amendment No. 2 to Lease Agreement, dated as of August 2,
2007, is entered
into by ABITIBI CONSOLIDATED SALES CORPORATION, a Delaware
Corporation
("Landlord") and SNOWFLAKE WHITE MOUNTAIN POWER, LLC, an Arizona
limited
liability company ("Tenant").
RECITALS
A. Landlord and Tenant have entered into that certain Ground
Lease Agreement,
dated as of September 14, 2005 (as amended, amended and
restated, supplemented
or otherwise modified from time to time in accordance with the
terms thereof and
hereof, the "Lease"). Capitalized terms used herein but not
defined herein have
the meaning given in the Lease.
B. Landlord, COBANK, ACB ("Lender") and Tenant have entered into
that certain
Consent and Agreement, dated as of September 1, 2006 (the
"Consent"), pursuant
to which the Lease was amended as described in the Consent.
C. Landlord and Tenant have entered into that certain Large
Generator
Interconnection Agreement with ARIZONA PUBLIC SERVICE COMPANY
("APS"), an
Arizona corporation, effective as of November 1, 2006 (the
"Interconnection
Agreement"), which, among other purposes, enables Landlord and
Tenant to
interconnect the Power Facility to the transmission system of
APS. The
Interconnection Agreement was filed with the Federal Energy
Regulatory
Commission ("FERC") on December 1, 2006 and accepted by FERC by
letter order
dated January 9, 2007.
D. In support of Landlord's and Tenant's "exempt wholesale
generator" status
under the regulations and policies of FERC, the Parties wish to
establish and
confirm that Tenant shall possess, as hereinafter set forth, an
ownership
interest in the facilities to be used to deliver electricity
generated by the
Power Facility to the point of interconnection with the
transmission facilities
of APS. For purposes of the Lease, such facilities shall mean
the 13.8/69 KV
Substation at the Paper Mill and the 69 KV transmission line
emanating from the
Substation to the interset pole owned by APS.
E. Pursuant to Section 27 of the Lease, Landlord has granted to
Tenant easements
on, over, across or under the Abitibi Land to the extent
described in said
Section 27.
F. The Interconnection Agreement provides that it shall
terminate should the
Lease or its attached Operations Provisions be terminated or
otherwise cease to
be effective during the term of the Interconnection Agreement.
The Parties
desire to avoid a situation whereby a termination of the Lease
or Operations
Provisions would result in the Paper Mill not having access to
the offsite
transmission grid. Accordingly, the Parties desire to amend the
Lease and
Operations Provisions to provide that termination of the Lease
or Operations
Provisions shall not be effective until a replacement
interconnection agreement
is in place and effective.
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NOW THEREFORE, for good and valuable consideration, the receipt
and
adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT
1. Amendment of Lease. Landlord and Tenant agree that the Lease
shall be
amended as follows (with capitalized terms not otherwise defined
herein having
the meaning given in the Lease and section references referring
to sections of
the Lease):
(a) Section 2.2 of the Lease is amended to read as follows:
2.2 Early Termination. Tenant shall have the right to
terminate
this Lease by notice to Landlord if the Power Facility is no
longer able to
produce electricity for reasons outside Tenant's control (e.g.,
inability to
obtain biomass fuel at commercially reasonable prices and
changes in applicable
laws). A termination by Tenant of this Lease under this Section
2.2 shall only
be effective upon: (a) Tenant giving Landlord at least 90 days'
prior written
notice of such termination; (b) Tenant providing Landlord with
evidence
satisfactory to Landlord that all the Improvements (as defined
in Section 8
below) and the Real Property are free and clear of all liens
(except current
property taxes and assessments), including, without limitation,
any Leasehold
Lien and any Mortgage (as both terms are defined in Section 28.3
below); and (c)
Landlord providing notice to Tenant that a Replacement
Interconnection Agreement
is in place and effective, provided that once the time period
specified in the
notice under (a) has passed, and the requirements under (b) are
met, Tenant's
obligations to Landlord shall be limited to those that survive
the termination
of the Lease and the payment to Landlord of $1.00 per month.
(b) Section 4.2 of the Lease is amended to read as follows:
4.2 Substation Reimbursement. Within 30 days following the
completion of construction of the Power Facility and issuance of
the certificate
of occupancy for the Power Facility by the appropriate
governmental authorities
if such certificate is required, but in any event no later than
January 1, 2008,
Tenant shall make a one-time payment of $500,000 to Landlord as
Tenant's share
of the cost of constructing the "Substation". At the time such
payment is made,
Landlord shall deliver to Tenant a Bill of Sale conveying to
Tenant an undivided
20% ownership interest in the Substation and the 69 KV
transmission line
emanating from the Substation to the point of interconnection
with APS, which
shall be the interset pol
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