SOLAR ENERGY PURCHASE POWER AGREEMENT

Power Purchase Agreement

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EL PASO ELECTRIC COMPANY | NEW MEXICO SUNTOWER, LLC

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Title: SOLAR ENERGY PURCHASE POWER AGREEMENT
Governing Law: New Mexico Date: 8/6/2009
Industry: Electric Utilities Sector: Utilities

EXHIBIT 10.07

SOLAR ENERGY PURCHASE POWER AGREEMENT

BETWEEN

NEW MEXICO SUNTOWER, LLC AND

EL PASO ELECTRIC COMPANY

OCTOBER 17, 2008

****=Confidential treatment has been requested for the redacted portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as ****. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

SOLAR ENERGY PURCHASE POWER AGREEMENT

BETWEEN

NEW MEXICO SUNTOWER, LLC AND

EL PASO ELECTRIC COMPANY

OCTOBER 17, 2008

TABLE OF CONTENTS


ARTICLE 1 -	RULES OF CONSTRUCTION, INTERPRETATION, AND DEFINITIONS	1
1.1	Rules of Construction	1
1.2	Interpretation with Interconnection Agreement	2
1.3	Interpretation of Arrangements for Electric Supply to the Facility	2
1.4	Definitions	3

ARTICLE 2 -	TERM	14
2.1	Term	14

ARTICLE 3 -	FACILITY DESCRIPTION	14
3.1	Summary Description	14
3.2	General Design and Operation of the Facility	14
3.3	Environmental Compliance	15

ARTICLE 4 -	PRE-COMMERCIAL OPERATION	15
4.1	Construction of the Facility	15
4.2	Monitoring and Inspection	15
4.3	Construction Milestones	16
4.4	Extension of Construction Milestones	16
4.5	Progress Reports	16
4.6	Commissioning Tests	16
4.7	Site Report	17
4.8	Facility Contracts	17
4.9	Conditions to Commercial Operation	17
4.10	Test Energy	18

ARTICLE 5 -	DELIVERY AND METERING	19
5.1	Delivery Arrangements	19
5.2	Metering	19
5.3	Adjustment for Inaccurate Meters	20

ARTICLE 6 -	EPE CONDITIONS PRECEDENT	21
6.1	EPE Conditions Precedent	21


ARTICLE 7 -	SALE AND PURCHASE OF SOLAR ENERGY	21
7.1	Sale and Purchase	21
7.2	Committed Solar Energy	22
7.3	Title and Risk of Loss	22
7.4	Temporary Disconnection of the Facility	22

ARTICLE 8 -	ENERGY PAYMENT CALCULATIONS	22
8.1	Energy Payments	22
8.2	Non-Solar Energy	22
8.3	Curtailed Energy Payment Rate	23
8.4	Payment Support Requirement	23
8.5	Survival on Termination	23

ARTICLE 9 -	BILLING AND PAYMENT	24
9.1	Seller’s Invoices	24
9.2	EPE’s Invoices	24
9.3	Payments	24
9.4	Billing Disputes	24
9.5	Statement Errors	25
9.6	Set-Off and Payment Adjustments	25
9.7	Survival on Termination	25

ARTICLE 10 -	RENEWABLE ENERGY CERTIFICATES AND LIMITED SALE OF ENVIRONMENTAL ATTRIBUTES	25
10.1	Compliance with New Mexico Renewable Energy Act	25
10.2	Monthly RECs	25
10.3	Seller’s Failure to Provide Solar RECs	25
10.4	Limited Sale of Environmental Attributes	27
10.5	Administrative Compliance Cost Obligations	28

ARTICLE 11 -	SECURITY FOR PERFORMANCE	28
11.1	Security Fund	28

ARTICLE 12 -	DEFAULT AND REMEDIES	31
12.1	Construction Events of Default	31
12.2	Operational Events of Default	32
12.3	Seller’s Abandonment of Construction or Operation of the Facility	32
12.4	EPE Events of Default	33
12.5	Actual Damages	33
12.6	No Incidental, Consequential, or Indirect Damages	33
12.7	Duty to Mitigate	34
12.8	Dispute Resolution	34
12.9	Mediation	34
12.10	Other Dispute Processes	34
12.11	Cost of Dispute Resolution	35
12.12	Operation by EPE Following a Construction Event of Default, an Operational Event of Default, or Seller’s Abandonment of Construction or Operation of the Facility	35

iii


12.13	Specific Performance	36
12.14	Remedies Cumulative	37
12.15	Payment of Amounts Due to EPE	37

ARTICLE 13 -	FACILITY OPERATION AND CONTRACT ADMINISTRATION	37
13.1	Facility Operation	37
13.2	Operating Committee and Operating Procedures	37
13.3	Scheduling	38
13.4	Forced Outages	38
13.5	Scheduled Maintenance	38
13.6	Additional Maintenance Outages	39
13.7	Access to and Inspection of Facility	40
13.8	Operating Parameters	40
13.9	Operating Records	40
13.10	Operating Log	40
13.11	Availability Reporting	41
13.12	Examination and Retention of Records	41
13.13	Facility Development Records and Data Submissions	41

ARTICLE 14 -	FORCE MAJEURE	42
14.1	Definition of a Force Majeure Event	42
14.2	Applicability of Force Majeure	43
14.3	Effect of Seller’s Force Majeure	43
14.4	Effect of EPE’s Force Majeure	46
14.5	Limitations on Effect of Force Majeure	47

ARTICLE 15 -	REPRESENTATIONS, WARRANTIES AND COVENANTS	48
15.1	Seller’s Representations, Warranties and Covenants	48
15.2	EPE’s Representations, Warranties and Covenants	49

ARTICLE 16 -	INSURANCE	50
16.1	Evidence of Insurance	50
16.2	Term and Modification of Insurance	51
16.3	Endorsements to Fire and All-Perils and Machinery Breakdown Policies	51
16.4	Insurance Reports	51

ARTICLE 17 -	INDEMNITY	51
17.1	Indemnification	51
17.2	Indemnification for Fines and Penalties	52
17.3	Notice of Claim, Loss or Proceeding	52
17.4	Defense of Claims	52
17.5	Subrogation	53

ARTICLE 18 -	ASSIGNMENT AND OTHER TRANSFER RESTRICTIONS	53
18.1	No Assignment Without Consent	53
18.2	Restriction on Transfers	54
18.3	Permitted Transfers	54
18.4	Collateral Assignment	54
18.5	Change of Control	54


18.6	Transfer without Consent is Null and Void	54
18.7	Prohibited Transfers	54
18.8	Reimbursement for EPE’s Costs from Transfers or Assignments	54

ARTICLE 19 -	MISCELLANEOUS	55
19.1	Waiver	55
19.2	Taxes	55
19.3	Monetary Penalties	56
19.4	Notices in Writing	56
19.5	Exhibit Changes	56
19.6	Other Changes	56
19.7	Disclaimer of Third Party Beneficiary Rights	56
19.8	Relationship of the Parties	57
19.9	Equal Employment Opportunity Compliance Certification	57
19.10	Survival of Obligations	57
19.11	Severability	57
19.12	Complete Agreement; Amendments	57
19.13	Binding Effect	58
19.14	Headings	58
19.15	Counterparts	58
19.16	Governing Law	58
19.17	Confidentiality	58
19.18	Compliance with Applicable Law	60
19.19	Press Releases and Media Contact	60
19.20	Due Authority	60


EXHIBIT A		CONSTRUCTION MILESTONES
EXHIBIT B		FACILITY DESCRIPTION AND SITE MAPS
EXHIBIT C		NOTICE ADDRESSES
EXHIBIT D		INSURANCE COVERAGE
EXHIBIT E		SELLER’S REQUIRED GOVERNMENTAL AUTHORITY PERMITS, CONSENTS, APPROVALS, LICENSES AND AUTHORIZATIONS TO BE OBTAINED
EXHIBIT F		COMMITTED SOLAR ENERGY AND SOLAR ENERGY PAYMENT RATES
EXHIBIT G		SELLER’S FORMAT FOR RENEWABLE ENERGY CERTIFICATES

SOLAR ENERGY PURCHASE POWER AGREEMENT

BETWEEN

NEW MEXICO SUNTOWER, LLC

AND

EL PASO ELECTRIC COMPANY

This Solar Energy Purchase Power Agreement (including all exhibits attached hereto, this “ Agreement ”) is made this 17th day of October, 2008, (the “Execution Date”) by and between New Mexico SunTower, LLC (“ Seller ”), a Delaware corporation with a principal place of business at 130 W. Union Street, Pasadena, CA 91103, and El Paso Electric Company (“ EPE ”), a Texas corporation with headquarters in El Paso, Texas (EPE and Seller each being sometimes referred to in this Agreement as a “ Party ” or, collectively, as the “ Parties ”).

WHEREAS, Seller desires to develop, design, construct, own or lease and operate a solar electric generating facility with a Designed Maximum Output of approximately 92 MW (the “ Facility ,” as more fully described and defined below); and

WHEREAS, Seller intends to locate the Facility at the Site (as defined below) and to interconnect the Facility with the Transmission Provider (as defined below) as provided for in a separate Interconnection Agreement; and

WHEREAS, Seller desires to sell and deliver to EPE at the Point of Delivery (as defined below) the Solar Energy (as defined below) produced by the Facility, and EPE desires to buy the same from Seller; and

WHEREAS, Seller desires to provide EPE with the Solar Energy, which will be documented by solar Renewable Energy Certificates, and it is the intention of the Parties that all solar Renewable Energy Certificates documenting and associated with the Solar Energy provided shall be transferred to and owned by EPE at no additional cost; and

NOW THEREFORE, in consideration of the mutual covenants herein contained, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:

ARTICLE 1 - RULES OF CONSTRUCTION, INTERPRETATION, AND

DEFINITIONS

1.1 Rules of Construction . Capitalized terms defined in this Article 1 shall have the meanings set forth herein whenever the terms appear in this Agreement, whether in the singular or the plural or in the present or past tense. Words not otherwise defined herein that have well known and generally accepted technical or trade meanings are used herein in accordance with such recognized meanings. In addition, the following rules of construction shall apply:

(A) References to “Articles,” “Sections,” or “Exhibits” shall be to articles, sections, or exhibits of this Agreement.

(B) The Exhibits attached hereto are incorporated in and are intended to be a part of this Agreement; provided, that , in the event of a conflict between the terms of any Exhibit and the terms of this Agreement, the terms of this Agreement shall control.

(C) This Agreement was negotiated and prepared by both Parties with the advice and participation of counsel. The Parties have agreed to the wording of this Agreement, and none of the provisions hereof shall be construed against one Party on the ground that such Party is the author of this Agreement or any part hereof.

(D) The Parties shall act in a commercially reasonable manner and in accordance with the principles of good faith and fair dealing in the performance of this Agreement. Unless expressly provided otherwise in this Agreement, where this Agreement requires the consent, approval, or similar action by a Party, such consent or approval shall not be unreasonably withheld, conditioned or delayed. Wherever this Agreement gives a Party a right to determine, require, specify or take similar action with respect to a matter, such determination, requirement, specification or similar action shall be commercially reasonable.

(E) Use of the words “include” or “including” or similar words shall be interpreted as “include without limitation” or “including, without limitation.”

(F) Use of the words “tax” or “taxes” shall be interpreted to include taxes, fees, surcharges, and the like.

1.2 Interpretation with Interconnection Agreement . Each Party represents that it conducts its operations in a manner intended to comply with FERC Order No. 2004, “Standards of Conduct for Transmission Providers,” requiring the separation of its transmission and merchant functions. Moreover, the Parties acknowledge that EPE’s transmission function offers transmission service on its system in a manner intended to comply with FERC policies and requirements relating to the provision of open-access transmission service. The Parties recognize that Seller will enter into a separate Interconnection Agreement with the Transmission Provider.

(A) The Parties acknowledge and agree that the Interconnection Agreement shall be a separate and free-standing contract and that the terms of this Agreement are not binding upon the Transmission Provider. However, to avoid confusion between the two agreements, this Agreement may define certain terms by referencing their definition in the Interconnection Agreement.

(B) Notwithstanding any other provision in this Agreement, nothing in the Interconnection Agreement shall alter or modify Seller’s or EPE’s rights, duties and obligations under this Agreement. This Agreement shall not be construed to create any rights between Seller and the Transmission Provider.

(C) Seller expressly recognizes that, for purposes of this Agreement, the Transmission Provider shall be deemed to be a separate entity and separate contracting party whether or not the Interconnection Agreement is entered into with EPE or an Affiliate of EPE, if any.

1.3 Interpretation of Arrangements for Electric Supply to the Facility . The Parties recognize that this Agreement does not provide for the supply of any retail electric service by EPE to Seller or to the Facility, and Seller must enter into separate arrangements for the supply of retail electric services to the Facility.

(A) The Parties acknowledge and agree that the arrangements for the supply of electric services to the Facility shall be separate and free-standing arrangements and that the terms of this Agreement are not binding upon the supplier of such electric services.

(B) Notwithstanding any other provision in this Agreement, nothing in the arrangements for the supply of retail electric services to the Facility shall alter or modify Seller’s or EPE’s rights, duties and obligations under this Agreement. This Agreement shall not be construed to create any rights between Seller and the supplier of such retail electric services.

(C) Seller expressly recognizes that, for purposes of this Agreement, the supplier of retail electric services to the Facility shall be deemed to be a separate entity and a separate contracting party whether or not the arrangement for the supply of retail electric services to the Facility is entered into with EPE or an Affiliate of EPE, if any.

1.4 Definitions . Unless defined elsewhere herein, capitalized terms used in this Agreement will have the following scope and meaning:

1.4.1 “ Abandonment ” means (i) the relinquishment of all possession and control of the Facility by Seller, other than a transfer or sale permitted under this Agreement, or (ii) if prior to the Commercial Operation Date, the cessation of the design, construction, testing and inspection of the Facility for ninety (90) consecutive Days by Seller, or Seller’s contractors, unless such relinquishment or cessation is (x) pursuant to Section 4.4(i) or 4.4(ii), (y) at EPE’s express request, or (z) caused by or attributable to a Force Majeure Event.

1.4.2 “ Account ” has the meaning set forth in Section 11.1(C)(2) of this Agreement.

1.4.3 “ Additional Consents ” means the approvals, consents, authorizations or other requirements not listed in the definition of Governmental Approvals in this Agreement that are required from any Government Authority with respect to the Facility.

1.4.4 “ Additional Maintenance Outages ” has the meaning assigned to it in Section 13.6 hereof.

1.4.5 “ Affiliate ” of any named person or entity means any other person or entity that controls, is under the control of, or is under common control with, the named entity. The term “control” (including the terms “controls,” “under the control of” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management of the policies of a person or entity, whether through ownership interest, by contract or otherwise.

1.4.6 “ Agreement Approval ” has the meaning set forth in Section 6.1 of this Agreement.

1.4.7 “ Agreement Approval Date ” means the date that, following full execution of this Agreement, the NMPRC issues a final order approving EPE’s 2008

Procurement Plan and all periods for appeal of a final NMPRC order as described in Section 6.1 of this Agreement have expired under NMPRC requirements.

1.4.8 “ Applicable Law ” means all applicable laws, statutes, treaties, codes, ordinances, regulations, certificates, orders, licenses and permits of any Governmental Authority, now in effect or hereafter enacted, amendments to any of the foregoing, interpretations of any of the foregoing by a Governmental Authority having jurisdiction, and all applicable judicial, administrative, arbitration and regulatory decrees, judgments, injunctions, writs, orders, awards or like actions (including those relating to human health, safety, the natural environment, or otherwise).

1.4.9 “ As-Available Solar Energy ” means Solar Energy that Seller is obligated to deliver and sell and that EPE is obligated to purchase and receive whenever such energy is capable of being generated by the Facility.

1.4.10 “ Back-Up Metering ” means redundant Electric Metering Devices installed by either Party pursuant to Section 5.2(B) of this Agreement.

1.4.11 “ Business Day ” means any calendar day that is not a Saturday, a Sunday, or a NERC recognized holiday.

1.4.12 “ CAMD ” has the meaning set forth in Section 10.4(B) of this Agreement.

1.4.13 “ Close of the Business Day ” means 5:00 PM prevailing time in El Paso, Texas, on a Business Day.

1.4.14 “ Commercial Operation ” means the period beginning on the Commercial Operation Date and continuing through the Term of this Agreement.

1.4.15 “ Commercial Operation Date ” means the date designated by Seller to begin delivering Solar Energy to EPE pursuant to the terms of this Agreement, which shall take effect no sooner than thirty (30) Days after Seller provides notification to EPE, pursuant to Section 4.9 of this Agreement, that all of the Conditions specified in Section 4.9 have occurred or otherwise been satisfied.

1.4.16 “ Commercial Operation Milestone ” means the Construction Milestone for the Commercial Operation Date as specified in Exhibit A to this Agreement.

1.4.17 “ Commercial Operation Year ” means any twelve (12) consecutive month period during the Term of this Agreement, commencing with the first day of the Month following the Commercial Operation Date or any of its anniversaries.

1.4.18 “ Commissioning ” means, with respect to the Facility, the commencement of the period during which the Facility has begun Commissioning Testing and ending when the Facility has been approved for the production of Solar Energy and authorized to commence delivery of Solar Energy.

1.4.19 “ Commissioning Tests ” or “ Commissioning Testing ” has the meaning assigned to it in Section 4.6 of this Agreement.

1.4.20 “ Committed Solar Energy ” has the meaning set forth in Section 7.2 of this Agreement.

1.4.21 “ Compliance Obligations ” has the meaning ascribed to it in Section 4.9(E) of this Agreement.

1.4.22 “ Conditions ” has the meaning set forth in Section 4.9 of this Agreement.

1.4.23 “ Confidential Information ” has the meaning set forth in Section 19.17(D) of this Agreement.

1.4.24 “ Construction Event(s) of Default ” has the meaning set forth in Section 12.1 of this Agreement.

1.4.25 “ Construction Milestone(s) ” means the date(s) set forth in Exhibit A to this Agreement by which Seller agrees to achieve the corresponding result(s) specified for such date(s), including, but not limited to, the Commercial Operation Milestone.

1.4.26 “ Curtailed Energy ” has the meaning set forth in Section 8.3(A)(2) of this Agreement.

1.4.27 “ Day ” means a calendar day.

1.4.28 “ Delivery Excuse ” means an event solely due to actions or omissions by EPE that prevents or delays delivery of Solar Energy hereunder.

1.4.29 “ Designed Maximum Output ” means the maximum output of the Facility in kW as designated by Seller.

1.4.30 “ Disclosing Party ” has the meaning set forth in Section 19.17(A) of this Agreement.

1.4.31 “ Dispute ” has the meaning assigned to it in Section 12.8 of this Agreement.

1.4.32 “ Dispute Notice ” has the meaning assigned to it in Section 12.8 of this Agreement.

1.4.33 “ Electric Metering Device(s) ” means metering equipment, and data processing equipment used to measure, record, or transmit data relating to the Solar Energy output from the Facility and that are specified in the Interconnection Agreement. Electric Metering Devices include the metering current transformers (“CTs”) and the metering voltage transformers (“VTs”).

1.4.34 “ Emergency Condition ” means a condition or situation that presents an imminent physical threat of danger to life, health or property, or could reasonably be expected, in the opinion of the Interconnection Provider, to cause a significant disruption to the Interconnection Provider’s system or otherwise be required in accordance with the requirements of the NMPRC or any system condition not consistent with Good Utility Practices.

1.4.35 “ Environmental Attributes ” has the meaning assigned to it in Section 10.4(B) of this Agreement.

1.4.36 “ Environmental Contamination ” means the introduction or presence of Hazardous Materials at such levels, quantities or location, or of such form or character, as to constitute a violation of federal, state or local laws or regulations, and present a material risk under federal, state or local laws and regulations that the Site will not be available or usable for the purposes contemplated by this Agreement.

1.4.37 “ EPC Contract ” means the Construction Contract entered into between Seller and the Contractor in relation to construction of the Facility.

1.4.38 “ EPC Contractor ” means the Contractor as identified to EPE once selected by Seller.

1.4.39 “ EPE Event(s) of Default ” has the meaning set forth in Section 12.4 of this Agreement.

1.4.40 “ EPE Procurement Plan ” has the meaning set forth in Section 6.1 of this Agreement.

1.4.41 “ EPE System Operations Center ” or “EPE SOC” means EPE’s organization responsible for dispatch of generating units, including the Facility.

1.4.42 “ Event of Default ” has the meaning set forth in Section 12.5 of this Agreement.

1.4.43 “ Execution Date ” has the meaning set forth in the first paragraph of this Agreement.

1.4.44 “ Expected Solar Energy ” means the number of kilowatt hours (kWh) of Solar Energy that Seller expects the Facility to generate for delivery to the Point of Delivery and sale to EPE during each Commercial Operation Year. The Expected Solar Energy level shall be the value calculated in accordance with the following formula:

Expected Solar Energy level, in kWh = ****

Where:

****

1.4.45 “ Facility ” means Seller’s electric generating facility and Seller’s Interconnection Facilities, as identified and described in Article 3 and Exhibit B to this Agreement, including, but not limited to, all of the following, the purpose of which is to produce electricity from Solar Energy and deliver such electricity to the Point of Delivery: the Site, Seller’s equipment, buildings, all of Seller’s generation facilities, including generators, step up transformers, output breakers, Seller’s facilities necessary to connect to the Point of Interconnection, protective and associated equipment, improvements, and other tangible assets or contract rights reasonably necessary for the construction, operation, and maintenance of the electric generating facility that produces the Solar Energy subject to this Agreement. The address of the Facility is as described in Exhibit B. A scaled map that identifies the Site, the location of the Facility at the Site, the location of the Point of Interconnection and the location of the important ancillary facilities and Interconnection Facilities, is included in Exhibit B to this Agreement.

1.4.46 “ Facility Debt ” means the obligations of Seller to any lender pursuant to the Financing Documents, including without limitation, principal of, premium and interest on indebtedness, fees, expenses or penalties, amounts due upon acceleration, payment or restructuring, swap or interest rate hedging breakage costs and any claims or interest due with respect to any of the foregoing.

1.4.47 “ Facility Lender ” means, collectively, any lender(s) providing any Facility Debt and any successor(s) or assigns thereto.

1.4.48 “ FERC ” means the Federal Energy Regulatory Commission or any successor agency.

1.4.49 “ Financing Documents ” means the loan and credit agreements, notes, bonds, indentures, security agreements, lease financing agreements, mortgages, deeds of trust, interest rate exchanges, swap agreements and other documents relating to the development, bridge, construction or permanent debt or equity financing for the Facility, including any credit enhancement, credit support, working capital financing, or refinancing documents, and any and all amendments, modifications, or supplements to the foregoing that may be entered into from time to time at the discretion of Seller subject to any required approvals, whether in this Agreement, or otherwise, in connection with development, construction, ownership, leasing, operation or maintenance of the Facility.

1.4.50 “ Firm Transmission Service ” means, as applicable, firm or network transmission service from the Point of Delivery provided by the Transmission Provider in accordance with its Open Access Transmission Tariff.

1.4.51 “ Force Majeure Event ” has the meaning set forth in Article 14 of this Agreement.

1.4.52 “ Forced Outage ” means a reduction of, or cessation in the delivery of, or inability to deliver, Solar Energy that is not the result of (i) a Scheduled Maintenance Outage, (ii) a Force Majeure Event, (iii) a Delivery Excuse, or (iv) an Emergency Condition.

1.4.53 “ Good Utility Practice(s) ” means any of the practices, methods and acts engaged in or approved by a significant portion of the electric industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be practices, methods, or acts generally accepted in the region. With respect to the Facility, Good Utility Practice(s) includes, without limitation, reasonable steps to ensure that: (i) equipment, materials, resources, and supplies, including spare parts inventories, are available to meet the Facility’s needs; (ii) sufficient operating personnel are available at all times and are adequately experienced and trained and licensed as necessary to operate the Facility properly, efficiently, and in coordination with EPE and are capable of responding to reasonably foreseeable emergency conditions whether caused by events on or off the Site; (iii) preventive, routine, and non-routine maintenance and repairs are performed on a basis that ensures reliable, long-term and safe operation, and are performed by knowledgeable, trained, and experienced personnel utilizing proper equipment and tools; (iv) appropriate monitoring and testing are performed to ensure equipment is functioning as designed; (v) equipment is not operated in a reckless manner, in violation of manufacturer’s guidelines or in a manner unsafe to workers, the general public, or the interconnected system or contrary to environmental laws, permits or regulations or without regard to defined limitations such as flood conditions, safety inspection requirements, operating voltage, current, volt-ampere reactive loading, frequency, rotational speed, polarity, synchronization, and control system limits; (vi) equipment and components meet or exceed the standard of durability that is generally used for electric generation operations in the region and will function properly over the full range of ambient temperature and weather conditions reasonably expected to occur at the Site and under both normal and emergency conditions; and (vii) equipment, components, and processes are appropriately permitted with any local, state, or federal Governmental Authority and are operated and maintained in accordance with applicable permit and regulatory requirements.

1.4.54 “ Governmental Approval ” means any authorization, consent, permission, approval, license, ruling, permit, exemption, variance, order, judgment, instruction, condition, direction, directive, decree, declaration of or regulation by any Governmental Authority relating to the construction, development, ownership,

occupation, start-up, testing, operation or maintenance of the Facility or to the execution, delivery or performance of this Agreement or the procurement pursuant to this Agreement of Solar Energy and solar Renewable Energy Certificates for inclusion in EPE’s renewable energy portfolio pursuant to the New Mexico Renewable Energy Act and recovery of the related costs, and shall also mean, where and as applicable and the context so dictates, any and all authorization, consent, permission, approval, license, ruling, permit, exemption, variance, order, judgment, instruction, condition, direction, directive, decree, declaration of or regulation with regard to any Compliance Obligations.

1.4.55 “ Governmental Authority ” means any federal, state, local or other governmental regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, or other governmental authority having jurisdiction over the Parties, their respective facilities, or the respective services they provide, and exercising or entitled to exercise any administrative, executive, police, or taxing authority or power.

1.4.56 “ Guaranty ” shall have the meaning set forth in Section 11.1(C)(3) of this Agreement.

1.4.57 “ Hazardous Materials ” means any substance, material, gas, or particulate matter that is regulated by any Governmental Authority as an environmental pollutant or dangerous to public health, public welfare, or the natural environment including, without limitation, protection of non-human forms of life, land, water, groundwater, and air, including, without limitation, any material or substance that is: (i) defined as “toxic,” “polluting,” “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “solid waste” or “restricted hazardous waste” under any provision of local, state, or federal law; (ii) petroleum, including any fraction, derivative or additive; (iii) asbestos; (iv) polychlorinated biphenyls; (v) radioactive material; (vi) designated as a “hazardous substance” pursuant to the Clean Water Act, 33 U.S.C. §1251 et seq. (33 U.S.C. §1251); (vii) defined as a “hazardous waste” pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6901); (viii) defined as a “hazardous substance” pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq. (42 U.S.C. §9601); (ix) defined as a “chemical substance” under the Toxic Substances Control Act, 15 U.S.C. §2601 et seq. (15 U.S.C. §2601); or (x) defined as a pesticide under the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §136 et seq. (7 U.S.C. §136).

1.4.58 “ Indemnified Party ” has the meaning set forth in Section 17.1 of this Agreement.

1.4.59 “ Indemnifying Party ” has the meaning set forth in Section 17.1 of this Agreement.

1.4.60 “ Interconnection Agreement ” means the separate agreement between Seller and the Transmission Provider, as such agreement may be amended from time to time, for interconnection of the Facility to the Transmission System.

1.4.61 “ Interconnection Facilities ” has the same meaning as that same term is defined in the Interconnection Agreement.

1.4.62 “ Interest Rate ” has the meaning assigned to it in Section 5.3(C) of this Agreement.

1.4.63 “ Interests ” has the meaning set forth in Section 18.2 of this Agreement.

1.4.64 “ Interim Period ” means a period of less than three hundred sixty-five Days during which time EPE, upon Seller’s Construction Event of Default, Operational Event of Default or Abandonment of Construction or Operation of the Facility, shall have the right but not the obligation to possess, assume control of, and operate the Facility in accordance with Seller’s rights, obligations and interest under this Agreement.

1.4.65 “ Issuer ” has the meaning set forth in Section 11.1(C) of this Agreement.

1.4.66 “ kW ” means kilowatt.

1.4.67 “ kWh ” means kilowatt hour.

1.4.68 “ Letter of Credit ” shall have the meaning set forth in Section 11.1(C)(1) of this Agreement.

1.4.69 “ Month ” means a calendar month.

1.4.70 “ Mountain Prevailing Time ” or “MPT” means the time in effect in the Mountain Time Zone of the United States of America, whether Mountain Standard Time or Mountain Daylight Saving Time.

1.4.71 “ MW ” means megawatt or one thousand kW.

1.4.72 “ MWh ” means megawatt hours.

1.4.73 “ NERC ” means the North American Electric Reliability Council or any successor organization.

1.4.74 “ NMPRC ” means the New Mexico Public Regulation Commission and any predecessor or successor organization.

1.4.75 “ Non-Conforming Order ” has the meaning set forth in Section 6.1 of this Agreement.

1.4.76 “ Non-Scheduled Maintenance Period ” has the meaning set forth in Section 13.5(A) of this Agreement.

1.4.77 “ Operating Committee ” means one representative each from EPE and Seller pursuant to Section 13.2(A) of this Agreement.

1.4.78 “ Operating Procedures ” means those procedures developed pursuant to Section 13.2(B) of this Agreement.

1.4.79 “ Operation and Maintenance Agreement ” means that certain operation and maintenance agreement between Seller and the Operation and Maintenance Contractor with respect to the Facility, if applicable.

1.4.80 “ Operation and Maintenance Contractor ” means an operation and maintenance contractor as identified to EPE, if used by Seller.

1.4.81 “ Operational Events of Default ” has the meaning set forth in Section 12.2 of this Agreement.

1.4.82 “ Parent ” has the meaning set forth in Section 18.2 of this Agreement.

1.4.83 “ Party Representative ” or “ Parties’ Representatives ” has the meaning set forth in Section 12.8 of this Agreement.

1.4.84 “ Permitted Transfer ” has the meaning set forth in Section 18.3 of this Agreement.

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

1.4.86 “ Point of Delivery ” means the point at which electricity generated by Seller’s Facility is delivered to EPE, adjusted for any applicable metering losses. In general, the Point of Interconnection shall be the same as the Point of Delivery. Any differences between the Point of Interconnection and Point of Delivery shall be identified in Exhibit B to this Agreement.

1.4.87 “ Point of Interconnection ” has the same meaning as that same term is defined in the Interconnection Agreement.

1.4.88 “ Project Contracts ” means this Agreement, the EPC Contract, the Interconnection Agreement, and the Operation and Maintenance Agreement.

1.4.89 “ Projected Schedule ” has the meaning assigned to it in Section 13.3(A) of this Agreement.

1.4.90 “ Rate Schedule No. 16 Rate ” means the time-of-use energy rates in EPE’s twenty-sixth revised Rate No. 16, or its successor, as filed with the NMPRC that are in effect at the time.

1.4.91 “ Receiving Party ” has the meaning set forth in Section 19.17(A) of this Agreement.

1.4.92 “ Renewable Energy Certificate(s) ” or “ REC(s) ” means a certificate(s) that complies in all respects with the New Mexico Renewable Energy Act, the NMPRC’s

Renewable Rule 572, and any applicable NMPRC Final Orders, each in effect as of the Execution Date, which documents that the energy delivered under this Agreement is Solar Energy as defined by the New Mexico Renewable Energy Act and is provided with the associated energy from Seller at no additional cost to EPE, except as set forth in Section 10.1 of this Agreement. RECs are the documentation required by the NMPRC to document that the associated energy is, in fact, Solar Energy. Compliance with EPE’s Renewable Portfolio Standard under the New Mexico Renewable Energy Act is documented by solar RECs.

1.4.93 “ Replacement Energy Costs ” means those damages suffered by EPE as a direct result of Seller’s failure to perform its obligations under this Agreement, including (i) all incremental costs suffered by EPE to replace the Solar Energy or the RECs that Seller fails to deliver to EPE under this Agreement with alternative Solar Energy that meets the requirements of the NMPRC, (ii) any replacement solar capacity necessary to make up for any shortfall in the capacity to be provided under this Agreement (to comply with the NMPRC’s Renewable Energy Standard) which shortfall was caused by Seller or the Facility, (iii) costs and penalties imposed by the NMPRC, or by any other Governmental Authority, paid or required to be paid by EPE as a result of Seller’s failure to perform under this Agreement and absence of fault or responsibility of EPE, and (iv) EPE’s expenses including reasonable attorneys’ fees suffered as a result of Seller’s failure to perform under this Agreement.

1.4.94 “ Representative ” has the meaning set forth in Section 19.17(B) of this Agreement.

1.4.95 “ Required Commercial Operation Date ” is July 31, 2011, except as otherwise provided in this Agreement.

1.4.96 “ Restoration ” and “ Restoration Schedule ” have the meanings set forth in Section 14.3(E)(2) of this Agreement.

1.4.97 “ Restoration Report ” has the meaning set forth in Section 14.3(E) of this Agreement.

1.4.98 “ Revised Commercial Operation Milestone ” means a date specified by Seller pursuant to Section 12.1(F) of this Agreement.

1.4.99 “ Scheduled Maintenance Outage ” means a time period during which the Facility is shut down or its output reduced to undergo scheduled maintenance in accordance with this Agreement, or as otherwise agreed by Seller and EPE.

1.4.100 “ Security Fund ” has the meaning set forth in Section 11.1 of this Agreement.

1.4.101 “ Seller’s Interconnection Facilities ” means the facilities owned and operated by the Seller as identified in the Interconnection Agreement. Arrangements for the installation and operation of the Seller’s Interconnection Facilities shall be governed by the Interconnection Agreement.

1.4.102 “ Site ” means real estate on which the Facility will be constructed and located, including any interests, easements, water rights, and access rights reasonably necessary for the construction, operation and maintenance of the Facility. The Site is more specifically described in Exhibit B to this Agreement.

1.4.103 “ Solar Energy ” means the net electrical energy generated in MWh using solar generation technologies and delivered to EPE at nominal voltage to the Point of Delivery as measured by Electric Metering Devices installed pursuant to Section 5.2 of this Agreement. Solar Energy should be of a power quality of 60 cycle, three-phase alternating current that is compliant with the Interconnection Agreement.

1.4.104 “ Solar Energy Payment Rate ” means the rate paid for Solar Energy by EPE to Seller as specified in Exhibit F to this Agreement.

1.4.105 “ Tariff ” has the same meaning as that same term is defined in the Interconnection Agreement.

1.4.106 “ Tax Credits ” means investment tax credits under Section 48 of the Internal Revenue Code as in effect on the Execution Date or any successor or other provision providing for a federal tax credit determined by reference to renewable electric energy produced from Solar Energy resources, or any federal, state or local investment tax credit or federal, state or local production tax credit determined by reference to renewable electric energy produced from Solar Energy resources in effect in the state of New Mexico.

1.4.107 “ Term ” means the period of time during which this Agreement shall remain in full force and effect, and which is further defined in Article 2 of this Agreement.

1.4.108 “ Test Date ” means the date on which Seller shall commence Commissioning of the Facility and shall be the date falling no later than forty-five (45) Days prior to the Commercial Operation Date or such other date as Seller and EPE may agree in writing.

1.4.109 “ Test Energy ” means that Solar Energy produced by the Facility in order to perform testing of the Facility prior to Commercial Operation.

1.4.110 “ Transmission Owner ” has the same meaning as that same term is defined in the Interconnection Agreement.

1.4.111 “ Transmission Provider ” has the same meaning as that same term is defined in the Interconnection Agreement.

1.4.112 “ Transmission Provider’s Interconnection Facilities ” means the facilities owned and operated by the Transmission Provider as identified in the Interconnection Agreement. Arrangements for the installation and operation of the Transmission Provider’s Interconnection Facilities shall be governed by the Interconnection Agreement.

1.4.113 “ Transmission System ” has the same meaning as that same term is defined in the Interconnection Agreement.

1.4.114 “ WECC ” means the Western Electricity Coordinating Council, a NERC regional electric reliability council, or any successor organization.

1.4.115 “ Year ” means a calendar year consisting of 365 Days.

ARTICLE 2 - TERM

2.1 Term . This Agreement shall be in full force and effect from the date shown in the first paragraph hereof and shall remain in effect until the last Day of the twentieth (20 ^th ) Commercial Operation Year, subject to any early termination or extension provisions set forth herein.

ARTICLE 3 - FACILITY DESCRIPTION

3.1 Summary Description . Seller shall construct, own or lease, operate, and maintain the Facility, which shall consist of devices for generating electricity and associated equipment having a Designed Maximum Output of approximately 92 MW which shall qualify as Solar Energy and which shall be located in New Mexico. As of the Execution Date, there are two prospective sites for the Facility, which are identified in Exhibit B. Prior to the Financial Commitment Milestone, Seller shall revise Exhibit B and provide notice to EPE of Seller’s determination, made in its sole discretion, of its final selection of the site for the Facility, such selection to be made from the two sites shown in Exhibit B. Exhibit B to this Agreement provides a detailed description of the Facility, including identification of the major equipment and components that comprise the Facility. The Expected Solar Energy generated from the Facility shall be ****. Seller may, in its sole discretion, but upon notice to EPE no later than ninety (90) Days prior to the Commercial Operation Date, make a one-time adjustment to increase or decrease the Expected Solar Energy generated from the Facility, such adjustment not to exceed **** of the Expected Solar Energy. In order to make this adjustment, Seller must also provide a revised Exhibit B to this Agreement describing the Facility and Site, including any increase or decrease not to exceed **** of the Expected Solar Energy.

(A) Sale/Leaseback. Subject to and conditioned upon the prior written consent of EPE, which consent shall not be unreasonably withheld, Seller may sell the Facility to a third party and lease-back and operate the Facility in accordance with the terms of this Agreement, provided that , (i) a copy of the applicable section of any such sale/leaseback agreement is provided to EPE at least thirty (30) Days prior to its execution, and (ii) any such sale and lease-back of the Facility by Seller shall fully preserve EPE’s right to assume the position of the Seller if EPE would have the right to purchase or lease the Facility as provided in Sections 12.12(A) or 14.3 of this Agreement.

3.2 General Design and Operation of the Facility . Seller shall construct and operate the Facility according to Good Utility Practice(s) and the Interconnection Agreement. During Commercial Operation, Seller shall maintain the Facility according to Good Utility Practice(s)

and the Interconnection Agreement, and in accordance with manufacturers’ recommendations. In addition to the requirements of the Interconnection Agreement, the Facility shall at all times:

(A) have the required panel space and 125VDC battery supplied voltage to accommodate metering, generator telemetering equipment and communications equipment; and

(B) use communication circuits from the Facility to EPE’s SOC for the purpose of telemetering, supervisory control/data acquisition, and voice communications as required by EPE.

3.3 Environmental Compliance . Seller must obtain and pay for all applicable environmental permits from any Governmental Authority needed for construction, operation, maintenance, and decommissioning of the Facility, copies of which will be provided by Seller to EPE within ten (10) Business Days of the issuance of such permits. Seller shall promptly notify EPE of any and all violations and any and all investigations, actions, claims, suits, notices of violation, fines, penalties, orders, revocations, and other proceedings related to violations or alleged violations of environmental laws, including, but not limited to, permits issued thereunder, which are asserted against Seller or any of Seller’s personnel in connection with the Facility or their activities on, along, adjacent to or near the Site by any Governmental Authority. Seller will keep EPE informed on a regular basis of the progress made and resolution of such events.

ARTICLE 4 - PRE-COMMERCIAL OPERATION

4.1 Construction of the Facility .

(A) Seller shall use commercially reasonable efforts to obtain any land rights necessary for the Facility.

(B) Other than the rights and obligations of EPE specified in this Agreement and any documents ancillary hereto, neither this Agreement nor any such ancillary document shall be interpreted to create in favor of EPE, and EPE specifically disclaims, any present right, title or interest in any part of the Facility.

(C) In the event Seller should determine that the expected Commercial Operation Date is not feasible or is impossible to achieve, Seller shall promptly notify EPE and shall advise EPE of the new expected Commercial Operation Date; provided, however, such new expected Commercial Operation Date shall not exceed the Required Commercial Operation Date.

4.2 Monitoring and Inspection . EPE shall have the right to monitor the construction, start-up and testing of the Facility, and Seller shall comply with all reasonable requests of EPE with respect to the monitoring of these events. Seller shall cooperate in such physical inspections of the Facility as may be reasonably requested by EPE during and after completion of construction. EPE’s technical review and inspection of the Facility shall neither be construed as endorsing the design thereof nor as any warranty of safety, durability, or reliability of the Facility. Persons visiting the Facility on behalf of EPE shall comply with Seller’s applicable safety and health rules and requirements.

4.3 Construction Milestones . In order to achieve the Commercial Operation Date by the Commercial Operation Milestone, Seller agrees to meet the Construction Milestones set forth in Exhibit A to this Agreement.

4.4 Extension of Construction Milestones . After executing this Agreement and subject to Section 14.3(E)(5) herein, Seller may extend any Construction Milestone as a result of the occurrence of one or more Force Majeure Events; provided, however, that such extension for reasons of Force Majeure Events may not delay achievement of any Construction Milestone beyond December 31, 2011. Delays that are due to (i) failure of the EPE Procurement Plan to be approved or deemed approved by the NMPRC by December 30, 2008 or (ii) failure of the Transmission Provider for any reason to complete the construction of the Transmission Provider’s Interconnection Facilities, to the extent such delay causes a delay in the Construction Milestone, shall extend each Construction Milestone day-for-day and the December 31, 2011, limitation on extensions shall not apply. Changes in a Construction Milestone for any other reason are not allowed.

4.5 Progress Reports . Commencing upon the Agreement Approval Date, Seller shall submit to EPE, on the first Business Day of each calendar quarter until construction of the Facility begins, progress reports in a form reasonably satisfactory to EPE. Once construction of the Facility begins, Seller shall submit such Progress Reports to EPE on the first Business Day of each Month. These progress reports shall notify EPE of the current status of each Construction Milestone and an updated completion schedule for the Facility. Such Monthly reports shall provide a schedule showing items completed and to be completed and a best estimate time-frame within which Seller expects the EPC Contractor to complete such non-completed works. Seller shall, from time to time, upon reasonable advance request from EPE, meet with EPE to discuss the progress of the construction of the Facility. None of the foregoing shall be deemed to be in lieu of, or in substitution for, the general record and reporting obligations of Seller in accordance with Article 13 of this Agreement.

4.6 Commissioning Tests .

(A) Seller shall give EPE at least three (3) Months prior notice of the approximate Test Date and of the proposed tests scheduled relating to the Commissioning of the Facility (“Commissioning Tests”). Representatives of EPE shall have the right to be present at all such testing. Seller shall promptly notify EPE of any changes to the Test Date or the date of any Commissioning Tests relating to the Facility in order that EPE may arrange for its respective representatives to attend.

(B) The results of Commissioning Tests shall determine the Facility’s Designed Maximum Output in MW.

(C) Nothing herein shall prevent or limit Seller or EPE, upon their mutual written agreement to same, subject to any required Governmental Approval, from establishing a new Committed Solar Energy at any level that they mutually agree is appropriate and desirable under this Agreement.

(D) Solar Energy produced during any Commissioning Tests shall be delivered by Seller for EPE at the Point of Delivery, and EPE shall purchase such Solar Energy at the rate described in Section 8.1(A).

(E) EPE shall have the right to require that Seller, not more than once in any twelve (12) Month period beginning with the Commercial Operation Date, re-demonstrate the Designed Maximum Output in MW of the Facility within sixty (60) Days of the demand; provided, however, that such demand shall be coordinated among EPE and Seller so that the sixty (60) Day period for re-demonstration avoids, if practical, previously notified periods of Scheduled Maintenance Outages and Additional Maintenance Outages pursuant to this Article 4.

4.7 Site Report . Seller shall conduct, at its sole expense, a Phase I environmental investigation of the Site and shall provide EPE, prior to the Financial Commitment Milestone, with a copy of the report summarizing such investigation, together with any data or information generated pursuant to such investigation. Seller shall provide to EPE confirmation from an environmental engineer that (i) the Site has been inspected for Environmental Contamination and (ii) a Phase I environmental assessment has been completed. Such report, or other written confirmation provided by Seller, shall include a confirmation that, based upon such investigation and to the best of Seller’s knowledge, no conditions involving Environmental Contamination exist at or under the Site that would prevent or materially delay construction and operation of the Facility at the Site.

4.8 Facility Contracts . Upon reasonable notice and request by EPE, Seller shall provide EPE with copies of (or, in the case of agreements and contracts subject to non-disclosure covenants or similar provisions, summaries of): (i) contracts for the manufacture, delivery and installation of the generator and step-up transformer; (ii) engineering, procurement and construction, or other general contractor agreements; (iii) applicable operating agreements; and (iv) the applicable electric Transmission Agreement and Interconnection Agreement. Upon request, Seller shall also provide EPE with reasonable evidence that it has or will have the capability to finance construction of the Facility. Seller shall provide sufficient information for EPE to be reasonably assured that Seller has contracted with financially responsible vendors as part of the Facility construction process.

4.9 Conditions to Commercial Operation . Seller will (i) notify EPE when the Facility has achieved all of the conditions set forth in this Section 4.9 (“Conditions”), (ii) provide evidence reasonably acceptable to EPE of the satisfaction or occurrence of such Conditions, and (iii) designate the Commercial Operation Date for the Facility to occur no sooner than thirty (30) Days from the date that Seller provides such notification to EPE (“Notification Date”). EPE must accept or challenge Seller’s declaration that all Conditions have been satisfied or occurred within thirty (30) Days of the Notification Date, and any Condition that EPE does not challenge within thirty (30) Days of the Notification Date will be deemed satisfied. The Parties shall attempt to resolve any dispute that may arise regarding the satisfaction or occurrence of any Condition(s) through direct discussion or mediation, as set forth below in Sections 12.8 and 12.9 of this Agreement. Review and approval of the Conditions may occur on an ongoing and incremental basis, pending resolution of any dispute, as such Conditions are satisfied or occur. All costs and expenses necessary to meet the Conditions shall be borne solely by Seller. The Conditions, which must be met after the Agreement Approval Date has occurred, are:

(A) Seller has satisfied all the requirements of the Interconnection Agreement and commenced interconnected parallel operation with the Transmission Provider;

(B) Seller has made all arrangements and executed all agreements required to deliver the Solar Energy from the Facility to the Point of Delivery in accordance with the provisions of this Agreement;

(C) Seller has provided EPE with copies of certificates of insurance evidencing that the coverage required by Article 16 of this Agreement has been obtained and submitted to EPE;

(D) Seller has submitted to EPE a certificate of an officer of Seller specifically familiar with the Facility stating, after due inquiry, that all permits, consents, licenses, approvals, and authorizations required to be obtained by Seller from any Governmental Authority to operate the Facility in compliance with applicable law and this Agreement have been obtained and are in full force and effect, and to the knowledge of that officer, Seller is in compliance with the terms and conditions of this Agreement in all material respects;

(E) As applicable, Seller has made all necessary governmental filings and applications for RECs and other accreditation or registration with the Western Renewable Energy Generation Information System (WREGIS). Additionally, Seller shall be in compliance with all applicable and required existing national and regional reliability standards, including standards set by WECC, NERC, FERC, and the NMPRC, or any successor agencies setting reliability standards for the operation of solar generation facilities in the location of the Facility. Prior to Commercial Operation Date, Seller shall register and provide documentation to EPE showing that it has registered with the appropriate Regional Reliability Organization (“RRO”) as a generator owner and has registered the generator operator to the extent required by NERC and the RRO. Except for FERC regulations, all of the foregoing requirements shall constitute the “Compliance Obligations” under this Agreement;

(F) An officer of Seller specifically familiar with the Facility has certified that the Designed Maximum Output of the entire Facility complies with the description of the Facility provided in Exhibit B to this Agreement on the date of certification, as such exhibit may be revised pursuant to Section 3.1 of this Agreement; and

(G) The Facility has achieved initial synchronization with the Transmission System and has demonstrated the reliability of its communications systems and communications with the EPE SOC.

None of the foregoing Conditions shall be deemed to be in lieu of, or in substitution for, the obligations of Seller in accordance with Section 13.13 of this Agreement.

4.10 Test Energy . Seller shall coordinate the production and delivery of Test Energy with EPE. EPE shall cooperate with Seller to facilitate Seller’s testing of the Facility necessary to satisfy the Conditions set forth in Section 4.9 above.

ARTICLE 5 - DELIVERY AND METERING

5.1 Delivery Arrangements .

(A) Seller shall be responsible for negotiating, entering into, and performing the Interconnection Agreement with the Transmission Provider and any other necessary entities for the design, installation and operation of the Interconnection Facilities.

(B) Seller shall request that the Transmission Provider design the Interconnection Facilities such that Seller’s Facility shall qualify as a Network Resource for EPE (as that term is defined in the Tariff) that uses firm or network transmission service.

(C) Within thirty (30) Days after the completion of any transmission studies by the Transmission Provider, Seller shall provide WECC, the Transmission Provider, and any applicable transmission owners with written permission to release such transmission study results to EPE. Alternatively, Seller may provide a copy of such study results to EPE.

(D) Seller shall be responsible for all interconnection, electric losses, and costs required to deliver the Solar Energy and Test Energy from the Facility to EPE up to the Point of Delivery.

(E) EPE shall be responsible for all electric losses, transmission and ancillary service arrangements and costs required to receive the Solar Energy at the Point of Delivery and to deliver such energy to points beyond the Point of Delivery.

5.2 Metering .

(A) All Electric Metering Devices used to measure the Solar Energy made available to EPE by Seller under this Agreement and to monitor and coordinate operation of the Facility shall be owned, installed, and maintained in accordance with the Interconnection Agreement at no cost to EPE under this Agreement. Such Electric Metering Devices shall be capable of measuring the energy output of the Facility on an hourly basis for all hours in a Month. Seller, at its own expense, shall inspect and test such Electric Metering Devices upon installation and at least annually thereafter. Upon request from EPE, Seller also shall perform additional inspections or tests of such Electric Metering Devices. Seller shall provide EPE with reasonable advance notice of, and permit a representative of EPE to witness and verify, all such inspections and tests, provided, however, that any such representative of EPE shall not unreasonably interfere with or disrupt Seller’s operation of the Facility and shall comply with all applicable safety standards as in effect and established by Seller from time to time. The actual expense of any EPE requested additional inspections or tests shall be borne by EPE, unless, upon such inspection or test, such Electric Metering Devices are found to register inaccurately by more than the allowable limits established in this Article 5, in which event the expense of the requested additional inspection or test shall be borne by Seller. If requested in writing, Seller shall provide copies of any inspection or test reports to EPE.

(B) Either EPE or Seller may elect to install and maintain, at its own expense, Back-up Metering devices in addition to the Electric Metering Devices, which installation and maintenance shall be performed in a manner acceptable to EPE. The installing Party, at its own

expense, shall inspect and test Back-Up Metering upon installation and at least annually thereafter. The installing Party shall provide the other Party with reasonable advance notice of, and permit a representative of such other Party to witness and verify, such inspections and tests, provided, however, that such other Party shall not unreasonably interfere with or disrupt the activities of the installing Party and shall comply with all applicable safety standards. Upon request, the installing Party shall perform additional inspections or tests of Back-Up Metering and shall permit a qualified representative of the other Party to inspect or witness the testing of Back-Up Metering; provided, however, that such other Party shall not unreasonably interfere with or disrupt the activities of the installing Party and shall comply with all applicable safety standards as in effect and established by the installing Party from time to time. The actual expense of any such requested additional inspection or testing shall be borne by the Party requesting the test, unless, upon such inspection or testing, Back-Up Metering is found to register inaccurately by more than the allowable limits established in this Article 5, in which event the expense of the requested additional inspection or testing shall be borne by the installing Party. If requested in writing, the installing Party shall provide copies of any inspection or testing reports to the requesting Party.

(C) If Electric Metering Devices or Back-Up Metering are not installed at the Point of Delivery, meters or meter readings shall be adjusted to reflect losses from the Electric Metering Devices or Back-Up Metering to the Point of Delivery.

(D) If any Electric Metering Device, or Back-Up Metering, is found to be defective or inaccurate, it shall be adjusted, repaired, replaced and recalibrated, as necessary, as near as practicable to a condition of zero error by the Party owning such defective or inaccurate device and at that Party’s expense.

5.3 Adjustment for Inaccurate Meters . If any Electric Metering Device, or Back-Up Metering, fails to register, or if the measurement made by an Electric Metering Device, or Back-Up Metering, is found upon testing to be inaccurate by more than one percent (1.0%), an adjustment shall be made correcting all measurements by the inaccurate or defective Electric Metering Device, or Back-Up Metering, for both the amount of the inaccuracy and the period of the inaccuracy, in the following manner:

(A) In the event that the Electric Metering Device is found to be defective or inaccurate, the Parties shall use Back-up Metering, if installed, to determine the amount of such inaccuracy, provided, however, that Back-Up Metering has been tested and maintained in accordance with the provisions of this Article 5. In the event that either Party did not install Back-Up metering, or Back-Up Metering is also found to be inaccurate by more than one percent (1.0%), the Parties shall estimate the amount of the necessary adjustment on the basis of deliveries of Solar Energy from the Facility and to the Point of Delivery during periods of similar operating conditions when the Electric Metering Device was registering accurately. The adjustment shall be made for the period during which inaccurate measurements were made.

(B) In the event that the Parties cannot agree on the actual period during which the inaccurate measurements were made, the period during which the measurements are to be adjusted shall be the shorter of (i) the last one-half of the period from the last previous test of the Electric Metering Device to the test that found the Electric Metering Device to be defective or

inaccurate, or (ii) the one hundred eighty (180) Days immediately preceding the test that found the Electric Metering Device to be defective or inaccurate.

(C) To the extent that the adjustment period covers a period of deliveries for which payment has already been made by EPE, EPE shall use the corrected measurements as determined in accordance with this Article 5 to re-compute the amount due for the period of the inaccuracy and shall subtract the previous payments by EPE for this period from such re-computed amount. If the difference is a positive number, the difference shall be paid by EPE to Seller; if the difference is a negative number, that difference shall be paid by Seller to EPE. In either case, the owing Party, at its discretion, may offset such payments due the other Party against undisputed amounts owed by the other Party as specified in Section 9.3(A) of this Agreement. The owing Party shall provide the other Party with notice and supporting documentation of the amount due. Except for offsets to payments, which may be offset immediately, payment of such difference by the owing Party shall be made not later than thirty (30) Days after the owing Party receives notice and supporting documentation of the amount due. Interest shall be computed for any payments or offsets to payments made pursuant to this Section 5.3(C) at a rate equal to one-twelfth (1/12) of the prime rate published in the Wall Street Journal on the invoice due date (the “Interest Rate”).

ARTICLE 6 - EPE CONDITIONS PRECEDENT

6.1 EPE Conditions Precedent . This Agreement shall become effective upon execution by the Parties, provided that the 2008 Procurement Plan filed by EPE pursuant to the New Mexico Renewable Energy Act (the “EPE Procurement Plan”), which includes a request for approval to procure renewable energy, or capacity, or both, and RECs pursuant to this Agreement for use in meeting the renewable portfolio standard of the New Mexico Renewable Energy Act and to recover the cost of such procurement, is (i) approved without material change by the NMPRC by final NMPRC order, and (ii) all periods for appeal of the order have expired under NMPRC requirements (the “Agreement Approval”). The date for Agreement Approval is anticipated to be no later than December 30, 2008 (the “Agreement Approval Date”). Should the NMPRC issue an order approving the EPE Procurement Plan with conditions or modifications that materially change this Agreement, or rejecting this Agreement on the basis of reasons set forth in such order (in either case a “Non-Conforming Order”), the Parties agree to use good faith efforts to renegotiate this Agreement. If, within sixty (60) days of the issuance of a Non-Conforming Order, no agreement is reached, either Party may terminate this Agreement upon delivery of notice to the other Party, in which case the Parties shall have no further liability to each other under this Agreement.

ARTICLE 7 - SALE AND PURCHASE OF SOLAR ENERGY

7.1 Sale and Purchase . Beginning on the Commercial Operation Date, Seller shall generate from the Facility, deliver to the Point of Delivery, and sell to EPE, at the applicable prices set forth in Article 8 of this Agreement, all Solar Energy generated by the Facility. Except as otherwise expressly provided for herein, this Agreement shall not be construed to constitute a “take-or-pay” contract, and EPE shall have no obligation to pay for any energy that has not actually been generated by the Facility, measured by the Electric Metering Device(s), and delivered to EPE at the Point of Delivery. As provided in Article 10 of this Agreement,

Renewable Energy Certificates associated with the Solar Energy generated by the Facility shall be transferred to and owned by EPE at no additional cost.

7.2 Committed Solar Energy . Committed Solar Energy is set forth in Exhibit F to this Agreement and is the number of megawatt hours (MWh) of Solar Energy committed to be delivered by Seller to EPE in each Commercial Operation Year. The Committed Solar Energy level is ****, and takes into account all factors, including any expected Facility unavailability due to scheduled and forced outages as well as degradation of equipment at the Facility.

7.3 Title and Risk of Loss . As between the Parties, Seller shall be deemed to be in control of the Solar Energy output from the Facility up to and until delivery and receipt at the Point of Delivery, and EPE shall be deemed to be in control of such energy at and beyond delivery and receipt at the Point of Delivery. Title and risk of loss related to the Solar Energy shall transfer from Seller to EPE at the Point of Delivery.

7.4 Temporary Disconnection of the Facility . No payments shall be due Seller for curtailments of delivery of Solar Energy resulting from a temporary disconnection of the Facility by the Interconnection Provider pursuant to the Interconnection Agreement.

ARTICLE 8 - ENERGY PAYMENT CALCULATIONS

8.1 Energy Payments . Energy payments to Seller shall be calculated as follows for each Month:

(A) Prior to Commercial Operation . EPE shall pay Seller the Rate Schedule No. 16 Rate times the Test Energy delivered to EPE during the Month. If the Rate Schedule No. 16 Rate no longer exists, EPE shall pay for such Test Energy at its then-current avoided cost.

(B) During Commercial Operation . Provided that the cumulative deliveries in the Commercial Operation Year do not exceed ****, EPE shall pay Seller ****. For all Solar Energy delivered by Seller to EPE in a Commercial Operation Year that is in excess of ****.

8.2 Non-Solar Energy .

(A) Except as provided by Section 8.3 of this Agreement, EPE shall not be obligated to make any payment, regardless of reason or Force Majeure Event, affecting either Party, for energy that (i) does not qualify as Solar Energy; (ii) is not measured by the Electric Metering Device(s) installed pursuant to Section 5.2 of this Agreement, as such measurement may be adjusted pursuant to Section 5.3 of this Agreement; and (iii) is not delivered to EPE at the Point of Delivery.

(B) For energy that does not qualify as Solar Energy, EPE shall have the option, at its sole discretion, to purchase such non-Solar Energy from Seller and shall pay Seller EPE’s then-current avoided cost. If EPE declines to purchase such non-Solar Energy, then Seller may sell such non-Solar Energy to a third party.

8.3 Curtailed Energy Payment Rate .

(A) If delivery of Solar Energy is curtailed by EPE, then:

(1) Seller may sell the Solar Energy from the Facility to a third party;

(2) If Seller does not sell the Solar Energy to a third party, the Parties shall determine the quantity of Solar Energy that would have been generated by the Facility and delivered to the Point of Delivery had its generation not been so curtailed (“Curtailed Energy”), and EPE shall pay to Seller for such Curtailed Energy all amounts that Seller would have received from EPE under this Agreement had generation not been so curtailed;

(3) The rate to be paid by EPE to Seller for Curtailed Energy is ****. However, any Solar Energy sold by Seller to a third party pursuant to (1) above shall not count toward the calculation of the rate payment as set forth in this subsection (3) annual curtailment hour total.

(B) Notwithstanding anything in this Section 8.3 to the contrary, no payment shall be due to Seller from EPE under paragraph (A) above for curtailments of delivery of Solar Energy resulting from:

(1) an Emergency Condition, or Force Majeure Event,

(2) any action taken by the Interconnection Provider under the Interconnection Agreement,

(3) any curtailment of Firm Transmission Service by the applicable Transmission Provider, to provide transmission of Solar Energy from the Point of Delivery, or

(4) any notification from EPE’s SOC requiring Seller to curtail deliveries of Solar Energy if Seller has failed to obtain or maintain in full force and effect any Governmental Approval which has the effect of preventing delivery of Solar Energy pursuant to this Agreement.

8.4 Payment Support Requirement . Neither Party shall initiate any action before any Governmental Authority to deny recovery of payments under this Agreement. Each Party shall use commercially reasonable efforts to defend all terms and conditions of this Agreement consistent with Applicable Law.

8.5 Survival on Termination . The provisions of this Article 8 shall survive the repudiation, termination or expiration of this Agreement for so long as may be necessary to give

effect to any outstanding payment obligations of the Parties due and payable prior to any such repudiation, termination or expiration.

ARTICLE 9 - BILLING AND PAYMENT

9.1 Seller’s Invoices . The monthly billing period shall be the Month. No later than five (5) Business Days after the end of each Month, Seller shall provide to EPE, by electronic means or first-class mail, an invoice showing the invoice date, the invoice due date and all billing parameters, rates, and any other data reasonably pertinent to the invoice, including information required by Section 10.2 of this Agreement, for the amount owed to Seller from EPE for Solar Energy provided by Seller and purchased by EPE pursuant to Section 8.1 of this Agreement during the previous Month billing period.

9.2 EPE’s Invoices . No later than five (5) Business Days after the end of a Month in which Seller owes payments to EPE under this Agreement, EPE shall provide the Seller, by electronic means or first-class mail, an invoice showing the invoice date, the invoice due date and all billing parameters, rates, and any other data reasonably pertinent to the invoice for any amount owed by Seller to EPE under this Agreement.

9.3 Payments . Unless otherwise specified herein, payments owed under this Agreement shall be due and payable by check or by electronic funds transfer, as designated by the invoicing Party, on or before the twentieth (20th) Business Day following the date of the billing invoice provided that such invoice was rendered within the five-day period set forth in Sections 9.1 and 9.2 of this Agreement and, if not so rendered, such payment shall be due on the 20 ^th Business Day of the following month. Remittances received by mail will be considered to have been paid when due if the postmark indicates the payment was mailed on or before the fifteenth (15th) Business Day following receipt of the invoice.

(A) EPE may offset any amounts that it owes Seller against any undisputed amounts that Seller owes EPE, including damages, interest payments, and other payments. Seller may include in its invoices and offset any amounts that it owes EPE against any undisputed amounts that EPE owes Seller for the purchase of Solar Energy under this Agreement, including damages, interest payments, and other payments. Any such offsets by either Party shall be clearly represented in the invoices described in Sections 9.1 or 9.2 of this Agreement.

(B) Undisputed and non-offset portions of amounts invoiced under Sections 9.1 or 9.2 of this Agreement not paid on or before the invoice due date shall be subject to the late payment interest charges calculated as set forth in this Section 9.3(B). The late payment interest charge rate per month shall be at the Interest Rate. The late payment interest charge shall equal this rate times the unpaid balance of undisputed and non-offset portions of amounts invoiced. The late payment interest charge shall be added and itemized in the next billing invoice of either EPE or Seller, whichever is appropriate.

9.4 Billing Disputes . Either Party may dispute invoiced amounts but shall pay to the other Party at least the undisputed portion of invoiced amounts on or before the invoice due date pending resolution of the dispute. Full payment of an invoice shall not waive a Party’s right to later dispute the invoice provided that notice of a disputed invoice is presented by the disputing Party to the other Party within twelve (12) months of an invoice due date, accompanied by an

explanation of the specifics of the dispute as well as a request for a refund or an additional payment, whichever is appropriate. When a billing dispute is resolved, EPE or Seller, as appropriate, shall invoice the other Party the amount agreed to by the Parties no later than fifteen (15) Business Days after the end of the Month in which the dispute is resolved. The amount owed shall include any late payment interest charges calculated from the original invoice due date in accordance with the provisions of Section 9.3(B) above. Either Seller or EPE may elect to offset amounts owed to the other Party pursuant to Section 9.3(A) above.

9.5 Statement Errors . If, within two (2) years of a Statement Date, either Party becomes aware of any error in any statement, such Party shall, immediately upon discovery of the error, notify in writing the other Party of such error and the other Party shall rectify such error (whether such error was in the form of an underpayment or overpayment) within thirty (30) Days of such notification. Provided that the other Party is satisfied (in its sole and reasonable discretion) that the aforementioned notification requirements have been complied with in good faith by the Party who has made the error, interest shall be payable in respect of any amount that was erroneously overpaid or underpaid at the Interest Rate.

9.6 Set-Off and Payment Adjustments . Except as otherwise expressly provided for in this Agreement, all payments between the Parties under this Agreement shall be made free of any restriction or condition and without deduction or withholding on account of any other amount, whether by way of set-off or otherwise. Payments to be made under this Agreement shall, for a period of not longer than two (2) years, remain subject to adjustment based on billing adjustments due to error or omission by either Party, provided that such adjustments have been agreed to between the Parties or resolved in accordance with the provisions of Section 12.8 hereof.

9.7 Survival on Termination . The provisions of this Article 9 shall survive the repudiation, termination or expiration of this Agreement for so long as may be necessary to give effect to any outstanding payment obligations of the Parties that became due and payable prior to any such repudiation, termination or expiration.

ARTICLE 10 - RENEWABLE ENERGY CERTIFICATES AND LIMITED SALE OF

ENVIRONMENTAL ATTRIBUTES

10.1 Compliance with New Mexico Renewable Energy Act . Seller must comply with the New Mexico Renewable Energy Act and provide associated solar RECs, in the format to be provided by EPE and in compliance with NMPRC Rule 572. Seller shall provide the solar RECs associated with the Solar Energy sold and delivered to EPE under this Agreement at no additional cost.

10.2 Monthly RECs . Seller shall provide solar RECs monthly using the format in Exhibit G to this Agreement and shall include the appropriate number of solar RECs associated with the Solar Energy purchased during the month in each monthly invoice.

10.3 Seller’s Failure to Provide Solar RECs . Except for Force Majeure Event(s) and any curtailments pursuant to Sections 7.4 or 8.3 of this Agreement, if Seller’s failure to provide the Committed Solar Energy causes EPE to need additional solar RECs to meet its obligations under NMPRC Renewable Rule 572, Seller shall first use commercially reasonable efforts to

obtain replacement solar RECs and deliver them to EPE for the quantity of solar RECs EPE notifies Seller that it requires up to the quantity of solar RECs associated with the Committed Solar Energy. EPE must notify Seller that it requires such replacement solar RECs within ninety (90) Days of Seller’s failure to provide the solar RECs associated with the Committed Solar Energy. Seller must deliver replacement solar RECs within thirty (30) Days of EPE’s notice to Seller of the required quantity of solar RECs. EPE will reimburse Seller for the actual cost of the replacement RECs. However, should the total of the actual cost of the replacement RECs that Seller purchases and the replacement energy that EPE actually purchased to replace the Solar Energy not provided by Seller, assuming that such replacement energy is an As Available energy product excluding RECs, exceed the price of energy sold to EPE under this Agreement per Exhibit F, such incremental costs may be deducted from the monies owed to Seller for the replacement RECs. Notwithstanding the actual cost of replacement solar RECs and the cost of replacement energy that EPE actually purchased, Seller’s minimum liability to EPE shall be **** and maximum liability to EPE shall be **** for each REC not delivered, such maximum liability to escalate at **** per year after the first ten (10) years of this Agreement.

(A) If such replacement solar RECs are not obtained and delivered by Seller to EPE, EPE may, at its discretion but no later than ninety (90) Days after Seller’s failure to provide the solar RECs associated with the Committed Solar Energy, attempt to obtain replacement solar RECs up to the quantity of solar RECs associated with the Committed Solar Energy. EPE will be responsible for the costs for these replacement RECs. However, should the total of the actual cost of the replacement RECs that EPE purchases and the replacement energy that EPE actually purchased to replace the Solar Energy not provided by Seller exceed the price of energy sold to EPE under this Agreement per Exhibit F, such incremental costs will be paid by Seller to EPE. EPE’s failure to obtain replacement solar RECs associated with the Committed Solar Energy does not relieve Seller of the obligation to obtain replacement solar RECs in an amount equal to the Committed Solar Energy. Notwithstanding the actual cost of replacement solar RECs and the cost of replacement energy that EPE actually purchased, Seller’s minimum liability to EPE shall be **** and maximum liability to EPE shall be **** for each REC not delivered, such maximum liability to escalate at **** per year after the first ten (10) years of this Agreement.

(B) If sufficient replacement solar RECs are unavailable, Seller shall pay EPE the cost of any NMPRC fines incurred by EPE as a result of EPE’s failure to meet its obligations under NMPRC Renewable Rule 572 caused by Seller’s failure to provide the Committed Solar Energy and associated solar RECs. EPE shall allocate any applicable fines to Seller and other sellers of Solar Energy with whom EPE has a contract and which failed to meet their obligations for delivery of RECs to EPE on a prorata basis based upon contract commitments and shortfalls.

(C) Seller shall not be responsible for paying EPE for its purchase of replacement solar RECs that are due to: (i) delays in the Commercial Operation Milestone caused by events described in Section 4.4(i) and (ii) of this Agreement, or (ii) a Force Majeure Event as described in Article 14 of this Agreement.

10.4 Limited Sale of Environmental Attributes .

(A) Effective from the Commercial Operation Date, EPE shall

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