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ARTICLE 11
LIMITATIONS OF LIABILITY

Section 11.1 - Limitations Of Liability.

(a) Consequential Damages. Notwithstanding any provision in this Agreement to
the contrary, Operator and Owner each agree not to assert against the other any claim,
demand or suit for consequential, incidental, indirect or special damages arising from any
aspect of the performance or nonperformance of the other party or any third-party
engaged by such other party under this Agreement, and each party hereto waives any
such claim, demand or suit against the other in connection with this Agreement.

(b) Personal Liability Limited. Operator and Owner each understand and agree
that there shall be absolutely no personal liability on the part of any of the members,
partners, officers, employees, directors, agents, or authorized representatives of Owner or
Operator for the payment of any amounts due hereunder, or performance of any
obligations hereunder. Operator shall look solely to the assets of Owner for the
satisfaction of each and every remedy of Operator in the event of any breach by Owner.
Owner shall look solely to the assets of Operator for the satisfaction of each and every
remedy of Owner in the event of any breach by Operator.

(c) Survival. The parties further agree that the waivers and disclaimers of liability,
indemnities, releases from liability, and limitations on liability expressed in this
Agreement shall survive termination or expiration of this Agreement, and shall apply at
all times (unless otherwise expressly indicated), regardless of fault, negligence, strict
liability, or breach of warranty of the party indemnified, released or whose liabilities are
limited, and shall extend to the members, partners, principals, officers, employees,
controlling persons, executives, directors, agents, authorized representatives, and
affiliates of such party.

(d) Exclusivity. The provisions of this Agreement constitute Operator's and
Owner's exclusive liability, respectively, to each other, and Operator's and Owner's
exclusive remedy, respectively, with respect to the Services to be performed hereunder
and Owner hereby releases Operator performing Services hereunder, and Operator hereby
releases Owner performing its obligations hereunder, from any further liability.

ARTICLE 12
TITLE, DOCUMENTS AND DATA

Section 12.1 - Materials And Equipment. Title to all materials, equipment, tools,
supplies, consumables, spare parts and other items purchased or obtained by Operator on
a Reimbursable Cost basis hereunder shall pass immediately to and vest in Owner upon
the passage of title from the vendor or supplier thereof, provided, however, that such
transfer of title shall in no way affect Operator's obligations as set forth in this
Agreement.

Section 12.2 - Documents. All materials and documents prepared or developed by
Operator, its employees, representatives or contractors in connection with the Project or
performance of the Services, including all manuals, data, drawings, plans, specifications,
reports and accounts, shall become Owner's property when prepared, and Operator, its

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agents, employees, representatives, or contractors shall not use such materials and
documents for any purpose other than performance of the Services, without Owner's prior
written approval. All such materials and documents, together with any materials and
documents furnished to Operator, its agents, employees, representatives, or contractors by
Owner, shall be delivered to Owner upon expiration or termination of this Agreement and
before final payment is made to Operator.

Section 12.3 - Review By Owner. All materials and documents referred to in
Section 12.2 hereof shall be available for review by Owner (including its agents or
advisors) at all reasonable times during development and promptly upon completion. All
such materials and documents required to be submitted for approval by Owner shall be
prepared and processed in accordance with this Agreement. However, Owner's approval
of materials and documents submitted by Operator shall not relieve Operator of its
responsibility for the correctness thereof or of its obligation to meet all requirements of
this Agreement.

Section 12.4 - Proprietary Information. Where materials or documents prepared
or developed by Operator or its agents, employees, representatives or contractors contain
proprietary information, systems, techniques, or know-how acquired from third parties by
Operator or others acting on its behalf, such persons or entities shall retain all rights to
use or dispose of such information, provided, however, that Owner shall have the right to
the same to the extent necessary for operation or maintenance of the Project and to
disclosure pursuant to Law.

ARTICLE 13
RESOLUTION OF DISPUTES

Section 13.1 - Resolution Through Discussions. If any dispute or difference of
any kind (a “Dispute") arises between Owner and Operator in connection with, or arising
out of, this Agreement, the Owner and Operator shall attempt to settle such Dispute in the
first instance through discussions. The designated representatives of Owner and Operator
shall promptly confer and exert their best efforts in good faith to reach a reasonable and
equitable resolution of such Dispute.

Section 13.2 — Choice of Law and Forum.

(a) This Agreement is executed and intended to be performed in Nashua, New
Hampshire and the laws of New Hampshire shall govern its construction, interpretation
and effect.

(b) For any judicial proceeding arising from or related to any Dispute, each of
the parties irrevocably consents and agrees that any legal action or proceedings with
respect to this Agreement shall be brought in a court of competent jurisdiction in New
Hampshire, and that, by execution of this Agreement, each party (i) accepts the exclusive
jurisdiction of the aforesaid court, (ii) irrevocably agrees to be bound by any final
judgment (after any and all appeals) of any such court, (iii) irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter have to the
laying of venue of any suit, action, or proceedings with respect to this Agreement brought

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in any such court, and further irrevocably waives, to the fullest extent permitted by law,
any claim that any such suit, action, or proceeding brought in any such court has been
brought in any inconvenient forum, (iv) agrees that service of process in any such action
may be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its notice address set
forth herein, or at such other address of which the other party hereto shall have been
notified and (v) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law.

(c) Should any Dispute result in a judicial proceeding, each of the parties
knowingly, voluntarily, and intentionally waives any right it may have to a trial by jury in
respect of any such proceeding. Furthermore, each of the parties waives any right to
consolidate any action in which a jury trial has been waived with any other action in
which a jury trial cannot be or has not been waived.

Section 13.3 - Continued Performance. During the pendency of any Dispute,
Operator and Owner shall continue to perform their obligations under this Agreement.

ARTICLE 14
MISCELLANEOUS PROVISIONS

Section 14.1 - Assignment. Neither this Agreement nor any interest herein may be
assigned by either party without the prior written authorization of the other party. Any
assignee must agree in writing to be bound by the terms and conditions of this
Agreement.

Section 14.2 - Access to Project.

(a) Owner. Owner and its respective agents and representatives shall have access
at all times to the Project and any documents, materials and records and accounts relating
to Project operations for purposes of inspection and review. Upon the request of Owner,
or its respective agents and representatives, Operator shall make available to such persons
or entities and provide them with access to any operating data and all operating logs.

(b) Cooperation. During any such inspection or review of the Project, each of
Owner, and its respective agents and representatives shall use its reasonable commercial
efforts to cause authorized visitors to comply with Operator's safety and security
procedures and to conduct such inspection and review in a manner which causes minimal
interference with Operator's activities. Operator agrees to cooperate fully with Owner
and its agents and representatives in providing requested information and documentation
for the support of any financial or legal transactions associated with the Project.

Section 14.3 - Force Majeure. If either Owner or Operator is rendered wholly or
partially unable to perform its obligations under this Agreement (other than payment
obligations) due to a Force Majeure Event, the party affected by such Force Majeure
Event shall be excused from whatever performance is impaired by such Force Majeure
Event, provided that the affected party promptly, upon learning of such Force Majeure
Event and ascertaining that it will affect its performance hereunder, (1) promptly gives
notice to the other party stating the nature of the Force Majeure Event, its anticipated

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duration, and any action being taken to avoid or minimize its effect and (ii) uses its
reasonable commercial efforts to remedy its inability to perform. The suspension of
performance shall be of no greater scope and no longer duration than that which is
necessary. No obligations of either party which arose before the occurrence causing the
suspension of performance and which could and should have been fully performed before
such occurrence shall be excused as a result of such occurrence. The burden of proof
shall be on the party asserting excuse from performance due to a Force Majeure Event.

Section 14.5 - Amendments. No amendments or modifications of this Agreement
shall be valid unless evidenced in writing and signed by duly authorized representatives
of both parties.

Section 14.6 - Survival. Notwithstanding any provisions herein to the contrary,
the obligations set forth in Articles 7, 10, and 13, and the limitations of liabilities set forth
in Article 11, shall survive in full force despite the expiration or termination of this
Agreement.

Section 14.7 - No Waiver. It is understood and agreed that any delay, waiver or
omission by Owner or Operator with respect to enforcement of required performance by
the other under this Agreement shall not be construed to be a waiver by Owner or
Operator of any subsequent breach or default of the same or other required performance
on the part of Owner or Operator.

Section 14.8 - Notices. All notices and other communications (collectively
"Notices") required or permitted under this Agreement shall be in writing and shall be
given to each party at its address set forth in this Section 14.8 or at such other address as
hereafter specified as provided in this Section 14.8. All Notices shall be (i) delivered
personally or (ii) sent by electronic mail registered or certified mail (return receipt
requested and postage prepaid), or (iii) sent by a nationally recognized overnight courier
service. Notices shall be deemed to be given (A) when transmitted if sent by electronic
mail(provided the transmittal is confirmed), or (B) upon receipt by the intended recipient
if given by any other means. Notices shall be sent to the following addresses:

To Operator:

By mail:

Essex Power Services, Inc.
c/o Essex Hydro Associates
55 Union St. 4" Floor
Boston, MA

By electronic mail:

Administrative or Legal issues: alocke@essexhydro.com

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Operations/Maintenance: dsherman@essexhydro.com
with a copy to: alocke@essexhydro.com

To Owner:
By mail:

City of Nashua

Attention: Deb ChisholmWaterways Manager
229 Main Street

Nashua, New Hampshire 03060

With a copy to:

City of Nashua

Office of Corporation Counsel
Attention: Celia K. Leonard, Esq.
229 Main Street

Nashua, New Hampshire 03060

By electronic mail:
ChisholmD@nashuanh.govleonardc@nashuanh. gov

Section 14.9 - Fines And Penalties. If during the term of this Agreement any
governmental or regulatory authority or agency assesses any fines or penalties against
Operator or Owner arising from Operator's failure to operate and maintain the Project in
accordance with applicable Laws without Owner's prior written consent, such fines and
penalties shall be the sole responsibility of Operator and shall not be deemed a
Reimbursable Cost.

Section 14.10 - Representations And Warranties. Each party represents and warrants to
the other party that:

(a) such party has the full power and authority to execute, deliver and perform this
Agreement and to carry out the transactions contemplated hereby;

(b) to the best of such party's knowledge, the execution, delivery and performance
by such party of this Agreement, does not and will not materially conflict with any legal,
contractual, or organizational requirement of such party; and

(c) there are no pending or threatened legal, administrative, or other proceedings
that if adversely determined, could reasonably be expected to have a material adverse
effect on such party's ability to perform its obligations under this Agreement.

Section 14.11- Counterparts. The parties may execute this Agreement in
counterparts, which shall, in the aggregate, when signed by both parties constitute one
instrument. Thereafter, each counterpart shall be deemed an original instrument as
against any party who has signed it.

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Section 14.12 - Partial Invalidity. If any term, provision, covenant or condition
of this Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the rest of this Agreement shall remain in full force and effect and in no
way be affected, impaired or invalidated.

Section 14.13 - Captions. Titles or captions of Sections contained in this
Agreement are inserted as a matter of convenience and for reference, and do not affect
the scope or meaning of this Agreement or the intent of any provision hereof.

Section 14.14 - Vendor's Warranties. For Owner's benefit, Operator shall obtain
from sellers of equipment, material, or services (other than the Services), warranties
against defects in materials and workmanship to the extent such warranties are reasonably
obtainable, and, to the extent of any such warranties actually obtained, Owner releases
Operator from any further liability arising in respect of such equipment, material or
services (other than the Services) to the extent such liability is covered by any such
warranty. Operator itself shall not be liable for any such warranties, or for any defects or
damage caused by such equipment, material or services (other than the Services). Upon
Owner's request, Operator agrees to take such steps as are necessary, short of litigation, to
enforce said warranties. Each such warranty shall be enforceable by Owner for Owner's
benefit or assignable by Operator to Owner without any further action or consent by or on
the part of any third party. Unless otherwise requested, Operator shall administer such
warranties and immediately notify Owner of any defects discovered or suspected that
may be covered by such warranties. When requested, Operator shall assign any such
warranty to Owner and assist Owner with the administration and enforcement of such
warranty, or, if such warranty is not assignable to Owner, assist Owner with the
administration and enforcement of such warranty.

Section 14.15 — Fiscal Contingency. All payments under this contract are
contingent upon the availability to the Owner of the necessary funds. This contract shall
terminate and the Owner’s obligations under it shall be extinguished at the end of any
fiscal year in which the Owner fails to appropriate monies for the ensuing fiscal year
sufficient for the performance of this contract.

Nothing in this contract shall be construed to provide Operator with a right of payment
over any other entity. Any funds obligated by the Owner under this contract that are not
paid to Operator shall automatically revert to the Owner’s discretionary control upon the
completion, termination, or cancellation of the agreement. The Owner shall not have any
obligation to re-award or to provide, in any manner, the unexpended funds to Operator,
except for those payments which are owed to the Operator for all Reimbursable Costs
incurred by Operator up to and including the date it is determined by the Owner that the
necessary funds are not available (the “Lack of Funding Date”). Further, the Operator
shall be paid unpaid Annual Administrative Fees to and including the Lack of Funding
date. Operator shall have no claim of any sort to the unexpended funds following the
Lack of Funding Date. I don’t have a problem with the intent of this para., but I think
poorly worded. It says that obligated funds will revert to the city, why if they’re

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obligated. Does it mean that our obligated funds can be used by the city to pay for other
city obligations?

Section 14.16 — Prohibited Interests. Operator shall not allow any officer or
employee of the Owner to have any indirect or direct interest in this contract or the
proceeds of this contract. Operator warrants that no officer or employee of the Owner
has any direct or indirect interest, whether contractual, noncontractual, financial or
otherwise, in this contract or in the business of Operator. If any such interest comes to
the attention of Operator at any time, a full and complete disclosure of the interest shall
be immediately made in writing to Owner. Operator also warrants that it presently has
no interest and that it will not acquire any interest, direct or indirect, which would
conflict in any manner or degree with the performance of services required to be
performed under this contract. Operator further warrants that no person having such an
interest shall be employed in the performance of this contract. If Owner determines that
a conflict exists and was not disclosed to the Owner, it may terminate the contract at will
or for cause in accordance with this Agreement.

In the event Operator (or any of its officers, partners, principals, or employees acting with
its authority) is convicted of a crime involving a public official arising out or in
connection with the procurement of work to be done or payments to be made under this
contract, Owner may terminate the contract at will or for cause in accordance with this
Agreement. Upon termination, Operator shall refund to the Owner any profits realized
under this contract, and Operator shall be liable to Owner for any costs incurred by the
Owner in completing the work described in this contract. At the discretion of Owner,
these sanctions shall also be applicable to any such conviction obtained after the
expiration or completion of the contract.

The rights and remedies of this section shall in no way be considered for be construed as

a waiver of any other rights or remedies available to Owner under this contract or at law.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement through their duly
authorized officers as of the date set forth in the preamble to this Agreement.

CITY OF NASHUA

By:
James W. Donchess, Mayor, Duly Authorized

ESSEX POWER SERVICES, INC.

By:
Andrew Locke, Treasurer, Duly Authorized

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APPENDIX A
SCOPE OF SERVICES

Operator shall perform each of the services listed in this appendix A in accordance with
the standards required under section 3.2 of the agreement.

1.

1. Administrative

General

Operator shall render such administrative services as required to conduct
administrative liaison between the Project and the City, to compile any and all
financial data required by the City, to provide all other services required by
federal, state and local regulatory bodies or agencies, to provide such personnel
services as necessary to administer operations of the Project and the sale of
Project energy, capacity and related environmental attributes and to provide such
other miscellaneous administrative services as the City shall require in the normal
course of operating the Project.

2. Specific Responsibilities:

II.

a)

b)

c)

d)

g)

h)

Provide annual budget estimating costs associated with running the
project.

Provide project information for City financial statements (if necessary).

Compile necessary financial and administrative data for FERC reporting
purposes.

With approval of the City, negotiate and sell the energy, capacity and
environmental attributes/RECs of the project.

Prepare or assist in the preparation of FERC and New Hampshire DES
required reports or filings for signature by the City and submission to the
applicable agency

Liaison with FERC and New Hampshire DES regarding all Project issues.

Monitor regulatory and state agencies to support on-going business
activities.

Provide monthly updates on the Project’s operational performance
including actual generation, revenues and 3rd Party Vendor costs billed
directly to EPSI to the City’s designated point of contact.

Operations and Maintenance

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1. General
Provide such supervisory, operating and maintenance services as required to
insure that the Jackson Mills and Mine Falls hydroelectric projects are properly
and reliably operated and maintained, that repairs are undertaken and completed
in a timely fashion, that the Projects are in compliance with all applicable laws,
regulations, policies, orders and agreements of or with any court or regulatory
agency of competent jurisdiction, and that output for the Project is maximized.

2. Specific Responsibilities:
a) Hire, train and schedule operators.

b) Determine periodic maintenance and capital requirements and
supervise their implementation when authorized.

c) Supervise repairs of a usual and customary nature.
d) Provide operating, maintenance and repair personnel.

e) Acquire necessary third party services and material for operating
maintenance and repair tasks.

f) Respond to any other event not in the ordinary course of business.
g) Support or provide planning, design or oversight, project
management of any capital or maintenance projects at the Project.
I. Other
1. General
EPSI will provide personnel to act as the City’s request to act as a consultant for
any work related to the replacement of the Jackson Mills turbine. Such work shall

include participation in project meetings, perspective on any work performed by
third parties and assistance in making project decisions.

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