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HomeMy WebLinkAboutUnalaska Municipal Power Sales Agreements file 10-91 - 12-1991ie WOHLF EST;"RRASETSINGER,JOHNSON &BREcHT.PETER ARGETSINGER JULIUS J.BRECHT CYNTHIA L.CARTLEOGE ROBERT M,JOHNSON Le eeBARBARAE.KISSHER THOMAS F,KLINKNER ANOREW Mm,LEGO BRAOLEY E,MEYEN - JAMES A,SARAFIN KENNETH E.VASSAR ERIC €.WOHLFORTH: TO:©& FROM: DATE: SUBJECT:AlaskaEnergy Ai#noOur:Fiié No.3670.2014 -.&PROFESSIONAL CORPORATION "ATTORNEYS AT Law (Naet WEST BETH AVENUE,SUITE GOO "ANEHORAGE,ALASKA 99801 MEMORANSOUM "'Distrieition List: ThomasF.Klinkner: December 2,1991 s i. _TELEPHONE (907)276-6401-TELECOPY (907)276-5093 « a e OF COUNSEL,eke,a "ROGER Ge"CONNOR. ority /Unalaska Geothermal Pr.oject - rea"4 Enolosédis:a-revised-draft ef the Power Sales 'Agreement.betweentheAlast®a Energy.Authority arid the City of Unalaska,reflecting the discussion.of 7theagreementatourmeetingonNovember21.Aiso-enclosed is a copy;ofthe ©revised draft blacklined to shaw:changes 'from the-draft last distributed.:;Your fee CETa attention és directed:particu'ari#éo (i)the revised provision on inclusionin AnnualProjectCostsofamauntsrequiredtorestoretheCapitalReserveFund,appearing*and (ii)the reworked Section 5,concerning the Purchaser's-|would "appreciate any«<eqraments-that:you:may havéo = at Section'4(a){3},payment obligation. concerning this draft: AFFO1B45 ey DISTRIBUTION LIST ALASKA ENERGY AUTHORITY POWER REVENUE BONDS,SERIES 1992 (Unalaska Geothermal Project) 3610.2014 December 2,1991 ISSUER Alaska Energy Authority P.O.Box 190869 701 East Tudor Road Anchorage,Alaska 99519-0869 Telephone (907)261-7262 Telecopy (907)561-8584 Charlie Bussell,Executive Director Brent Petrie,Director of Agency Operations Dick Emerman,Senior Economist BOND COUNSEL Wohlforth,Argetsinger,Johnson &Brecht 900 West 5th Avenue,Suite 600 Anchorage,Alaska 99501 Telephone (907)276-6401 Telecopy (907)276-5093 Eric Wohlforth,Esq. UNDERWRITER John Nuveen &Co.Incorporated 2740 Pacific First Centre 1420 Fifth Avenue Seattle,Washington 98101-2333 Telephone (206)587-0959 Telecopy (206)382-1589 Jim Seagraves UNDERWRITER'S COUNSEL Katten Muchin &Zavis 525 West Monroe Street,Suite 1600 Chicago,Illinois 60606-3693 Telephone (312)902-5418 Telecopy (312)902-1061 Lew Greenbaum,Esq. PROJECT ENGINEER OESI Power Corporation 610 East Glendale Sparks,Nevada 98431 Telephone (702)355-5666 Telecopy (702)355-5656 Daniel N.Schochet Vice President -Marketing Cliff Philips Vice President -Finance PROJECT ENGINEER'S COUNSEL Perkins-Coie 1029 West 3rd Avenue Suite 300 Anchorage,Alaska 99501 Telephone (907)279-8561 Telecopy (907)276-3108 Richard Johannsen,Esq. CITY OF UNALASKA P.O.Box 89 Unalaska,Alaska 99685 Telephone:(907)581-1251 Telecopy:(907)581-1417 Mark Earnest,City Manager Roe Sturgulewski,Director of Public Works R.W.BECK AND ASSOCIATES,INC. 2101 4th Avenue,Suite 600 Seattle,Washington 98121 Telephone:(206)441-7500 Telecopy:(206)441-4964 Mr.Ray Benish AEA/Unalaska Geothermal Project Distribution List -3610.2014 AFFO198F ITY'NSEL Hicks,Boyd,Chandler &Falconer 825 West 8th Avenue,Suite 200 Anchorage,Alaska 99501 Telephone (907)272-8401 Telecopy (907)274-3698 Brooks Chandler,Esq. Page 2 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 POWER SALES AGREEMENT Between ALASKA ENERGY AUTHORITY and CITY OF UNALASKA,ALASKA Dated as of 1991 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 TABLE OF CONTENTS Page Section 1-Definitions 2....eeeeeeeeens 2 Section 2 -Term of Agreement;Renewal............0.00 eee ee eee eee 5 Section 3 -Electric Service to be Furnished..............000 c eee eae 6 Section 4 -Annual Project Costs ...........0.eee ec eee ete eee 6 Section 5 -Payment Obligation.....20...0...ee ee ee ee ee eee 9 Section 6 -Obligations Under Indenture;Completion of Project............12 Section 7 -Default;Remedies ...2.2.....0..cee ee eee eee 13 Section 8 -Purchaser's System ..........0.0 cee ee ee eee eee eee 14 Section 9-Indenture...2....eeeeeteeeeeeees 15 Section 10 -Purchaser's Consent to Supplemental Indentures to Construct or Operate the Project ..2.....cece ee ee eee eee eee 16 Section 11 -Authority Responsibilities ........0.0...eee ee eee 16 Section 12 -Insurance ..2...eeeeeeeeeeee 17 Section 13 -Records ......ee eee ee tee eee nena 19 Section 14 -Inspection of Facilities ...0...0.0...ee ee eee eee 19 Section 15 -Covenants to Maintain Integrity of Agreement ...............20 Section 16 -Assignment ...........cc cece eee ee te tee teen eee 22 Section 17 -No Security Interest or Lien ....0.0...0.cee ee eee ee ee 23 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 TABLE OF CONTENTS (Continued) Page Section 18-Exhibits 22.....ce ee eee eee eens 23 Section +8 19 -Notices,Computation of Time and Holidays ..............23 Section 49 20 -Applicable Law...1...ce ee et eee 24 Section 26 21 -Availability of Information...2...2...ee ee ee eee 24 Section 24 22 -Severability 2....eeeeeeeeae 24 Section 22 23 -Remedies Cumulative ...2...0.0...eee eee ee es 25 Section 23 24 -Waiver Not Continuing .............02.0ceceeeeeeeeee 25 Section 24 25 -Covenant To Act In Good Faith ..........0.0.2.0 eee 25 Section 25 26 -No Third-Party Beneficiaries ..............0000 e eee ees 25 Section 26 27 -Section Headings .............cee ee ee eee eee 26 Section 2%28 -Multiple Copies ............ccc ee ee ee eee 26 Exhibit A -Indenture Exhibit B -Description of the Project Exhibit C -Description of Delivery Point Exhibit D -Form of Commercial Contract Exhibit E -Form of Certain Supplemental Indentures. AEA/Unalaska Geothermal!Project Table of Contents AFFO18ED Page ii DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 POWER SALES AGREEMENT THIS AGREEMENT dated as of ,19 ,is entered into by and between the Alaska Energy Authority (the "Authority"),and the City of Unalaska, Alaska ;(the "Purchaser'). WITNESSETH: The Authority recites,agrees,represents,and covenants as follows: (1)|The Authority is a public corporation of the State of Alaska duly created, organized,and existing pursuant to AS 44.83; (2)The Authority is authorized,and has taken all steps necessary pursuant to the Constitution and laws of the State of Alaska and the regulations and bylaws of the Authority,to enter into this Agreement and to comply fully with the terms hereof; (3)|The Authority desires to fulfill its legislatively established duty of providing residents of the State of Alaska with long-term,stable,and economic sources of power and an adequate,economic,and reliable long-term supply of power;and (4)The Authority's execution and performance of this Agreement will not conflict with,violate,or constitute an event of default under any other resolution, contract,agreement,bond,note,mortgage,or other obligation of the Authority,or with respect to any order,ruling,or decree of any court or regulatory agency to which the Authority is subject at the time the Authority executes this Agreement. The Purchaser recites,agrees,represents,and covenants as follows: (1)|The Purchaser is a duly organized and constituted municipal corporation under the Constitution and laws of the State of Alaska; (2)|The Purchaser is authorized,and has taken all steps necessary pursuant to the Constitution and laws of the State of Alaska and other applicable laws and regulations,and pursuant to its code of ordinances,to enter into this Agreement and to comply fully with the terms thereof; DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (3)|The Purchaser performs the functions of a utility and is a wholesale power customer eligible to purchase power produced from a project pursuant to AS 44.83;and (4)|The Purchaser's execution and performance of this Agreement will not conflict with,violate,or constitute an event of default under any other ordinance, resolution,contract,agreement,bond,note,mortgage,or other obligation of the Purchaser,or with respect to any order,ruling,or decree of any court or regulatory agency to which the Purchaser is subject at the time the Purchaser executes this Agreement. NOW,Fherefere THEREFORE,the parties agree as follows: Section 1 -Definitions.For the purposes of this Agreement,the following definitions apply: (a)"Act"or references to AS 44.83 mean Title 44,Chapter 83 of the Alaska Statutes (AS 44.83)as the same may be amended or supplemented from time to time. (b)"Agreement"means this Power Sales Agreement. (c)"Annual Payment Obligation”means the total amount payable by the Purchaser in or for a Fiscal Year pursuant to this Agreement. (d)"Annual Project Budget"means the budget for the Project as adopted or in effect for a particular Fiscal year and amended or supplemented from time to time. (e)"Annual Project Costs"shall have the meaning given it in Section 4 of this Agreement. (f)"Authority”means the Alaska Energy Authority as established by the Act and any subsequent successor agency thereto. (g)"Bonds"means bonds,notes,or other evidences of indebtedness (including refunding bonds)issued pursuant to the Indenture,the proceeds of which AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 2 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 are used to pay or reimburse Costs of Acquisition and Construction aad or Required Project Work. (nh)"Capability of the Project"means the entire capability of the Project to generate electric power at any and all times from the Date of Commercial Operation until the termination of this Agreement (or any renewal thereof),including periods when the Project may not be operating or inoperable or the operation thereof is curtailed,in each case in whole or in part,for any reason whatsoever. (i)"Consultant”means an independent individual or firm of nationwide and favorable reputation,having demonstrated expertise in the field or the matter or the item referred to it under various specific provisions of this Agreement,approved by the Authority,and acceptable to the Purchaser. (j)"Cost of Acquisition and Construction"means the Cost of Acquisition and Construction (as defined in Section of the Indenture)of the Project. (k)"Date of Commercial Operation"means the date,which occurs no earlier than (i),199_,and (ii)all Necessary Approvals have been obtained,on which engineers retained for this purpose by the Authority have reasonably declared that the Project is fully available to be operated at not less than megawatts (__MW),and its output can be scheduled on a commercial basis. (I)"Debt Service"means amounts that the Authority is required to set aside for the payment of principal of,premium,if any,sinking fund payments,and interest on the Bonds under the Indenture. (m)"Delivery Point"means ; as further identified and described in Exhibit. (n)"Fiscal Year"means that 12-month period starting on July 1 of a calendar year through and including June 30 of the succeeding calendar year.The initial Fiscal Year for purposes of this Agreement is that portion of the 12-month period starting on the Date of Commercial Operation through and including the following June 30. (0)="Indenture"means the indenture securing the Bonds in substantially the form attached hereto as Exhibit A. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 3 DRAFT December 2,1991 3610.2014 TFK/ct Rev.#24 v.#27 (p)"Necessary Approvals"means the approval or consent in writing of each governmental entity,regulatory body,or other person which approval is required in order for the Project to be constructed and operated in accordance with this Agreement.As of the date of execution of this Agreement,the Necessary Approvals include but are not limited to approvals necessary under the Act,approval of the Agreement by the governing body of the Purchaser and the Board of Directors of the Authority,and approval of necessary environmental permits by the Alaska Department of Environmental Conservation and the U.S.Environmental Protection Agency. Necessary approvals also include the availability,as determined by the Authority,of sufficient funds to complete the Project. (q)"Project"means the Unalaska Geothermal Project as described in Exhibit (r)"Prudent Utility Practice"means at a particular time any of the practices, methods ;and acts engaged in or approved by a significant portion of the electric utility industry at such time,or which,in the exercise of reasonable judgment in light of facts known at such time,could have been expected to accomplish the desired results at the lowest reasonable cost consistent with good business practices, reliability,safety and reasonable expedition.Prudent Utility Practice is not required to be the optimum practice,method or act to the exclusion of all others,but rather to be a spectrum of possible practices,methods,or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability,safety and expedition.Prudent Utility Practice includes due regard for manufacturers'warranties and the requirements of governmental agencies of competent jurisdiction and shall apply not only to functional parts of a Project,but also to appropriate structures,landscaping,painting,signs,lighting and other facilities. (s)"Purchaser"means the City of Unalaska,Alaska. (t)"Purchaser's System"means the Purchaser's electric utility system for the distribution,transmission and generation of electrical power and which is owned and operated by the Purchaser. (u)"Renewal and Contingency Reserve Fund"means the Renewal and Contingency Reserve Fund established pursuant to Section of the Indenture. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 4 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (v)"Required Project Work"means repairs,maintenance,renewals, replacements ;or improvements required by federal or state law,a licensing or regulatory agency with jurisdiction over the Project,or this Agreement,or otherwise necessary to keep the Project in good and efficient operating condition,consistent with: (1)|sound economics for the Project and the Purchaser;and (2)national standards for the industry. $3 "Trustee"means the Trustee acting under the Indenture or that Trustee's successor or successors and any other corporation which may,at any time,be substituted in that Trustee's place under the Indenture. Capitalized Ferms terms used in this Agreement which are not defined herein have the definition given in the Indenture. Section 2 -Term of Agreement:Renewal. (a)Effectiveness.This Agreement shall become effective on the first datewhenthisAgreementhasbeensignedbythePurchaserandtheAuthorityandhas been approved by their respective governing bodies. (6)Commencement of Payment Obligations.The payment obligations of the Purchaser,as set forth in Section 5 of this Agreement,shall commence on the Date of Commercial Operation. (c)Termination.This Agreement shall terminate on the Jater of (i)the date thirty (30)years after the Date of Commercial Operation,_and (ii)the date when no Bonds are outstandingand all payment obligations under this Agreement have been satisfied or provided for;provided that if the Date of Commercial Operation does not occur before January 1,1996,then this Agreement shall terminate on January 1,1996. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 5 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (d)Renewal.The Purchaser may renew this Agreement on the same terms and conditions as provided herein for successive additional (__)year terms (such additional terms totalling not more than the lesser of (_) years and the remaining useful life of the Project),upon written notice to the Authority not less than six months prior to the end of the term of this Agreement or the last renewal thereof. Section 3 -Electric Service to be Furnished. (a)Sale and Purchase.The Authority hereby sells,and the Purchaser hereby purchases,the Capability of the Project (together with associated energy)and the Purchaser agrees to pay the Purchaser's Annual Prejeet-Gests Payment Obligation therefor in accordance with this Agreement. (b)Available Power.The Authority shall at all times,except when prevented by a cause or event not within the control of the Authority,make power available to the Purchaser from the Project in an amount equal to the amount the Purchaser may schedule from the Project within the limitations imposed by available Capability of the Project. (c)Required Project Work.The Authority shall perform or cause to be performed all Required Project Work provided that funds are legally available to the Authority for this purpose.The costs of Required Project Work shall be included in Annual Project Costs in the manner set forth in Section 4(a)(4)of this Agreement.The Authority shall give reasonable notification to the Purchaser prior to performing or causing to be performed any Required Project Work. Section 4 -Annual Project Costs. (a)Annual Project Costs Defined.Annual Project Costs mean all of the costs resulting from the ownership,operation and maintenance of,and renewals and replacements to,the Project properly incurred or paid during each Fiscal Year, including: AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 6 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (1)|amounts required to be set aside by the Authority for the payment of Debt Service on Bonds issued to pay the Cost of Acquisition and Construc- tion; (2)|amounts required to be set aside for the payment of Debt Service on other Bonds and debt service on other obligations approved in accordance with this Agreement; (3)|amounts required to restore the fuads Funds established under the Indenture to the levels required by the Indenture to be maintained therein, exceptthatameunts provided that Annual Project Costs shall include the restoration of amounts withdrawn from the Capital Reserve Fund under Section 5(b)(2)of this Agreement only to the extent of the least of the following amounts:(A)the sum of all such withdrawals reduced by the sum of all amounts appropriated by the State legislature to restore such withdrawals during the Fiscal Year and each preceding Fiscal Year,(B the amount required to restore amounts drawn from-such funds under SectiontheCapitalReserveFundtotheCapitalReserveRequirementunderthe Indenture,and (C)the sum of one-of the original amount of each such withdrawal that has not yet been fully restored; (4)|amounts which may be required to pay for Required Project Work to the extent that such costs are not covered by insurance or Bond proceeds or by the Renewal and Contingency Reserve Fund; (5)other amounts determined by the Authority to be necessary or appropriate to supplement and to be paid into the fuads Funds established under the Indenture; (6)all other costs of producing and delivering Project power including,without limitation,fluid fees (but excluding depreciation),not accounted for by the payments out of funds and reserves specified in the foregoing sections and properly chargeable to the Project under the Uniform System of Accounts,less any credits against said costs by reason of revenues from sources other than the direct sale of power to the Purchaser,and also less any credits for interest earned during construction and available for Project AEA/Unalaska Geothermal Project Power Saies Agreement AFFO18ED Page 7 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 purposes;provided,that income from interest earned on reserve funds shall be used at least annually to accumulate and maintain said reserve funds in the amounts required under the Indenture or in such greater amounts as may be determined by the Authority,or to reduce Annual Project Costs.Such other costs shall include: (A)Project operating and maintenance costs; (B)costs of Project:telated insurance 7 Bet payments "<Fbeineurredpremiums,and amounts required to maintain.or restore a self insurance fund,butpayments of proceeds of an insurance policy or from a self insurance fund shall not be included in Annual Project Costs;and (C)Project-specific administrative and general expenses of the Authority,such as costs of safety inspections and investigations. (b)Proceeds ofa Taking.Any payment received by the Authority as a result of a taking of the whole or any portion of the capacity,facilities,or output of the Project by any state or federal government agency shall be used by the Authority to: (1)|reduce Annual Project Costs;or (2)retire Bonds. (c)Annual Project Budget:Estimate of Power Sales. (1)Notless than thity{(39}ninety (90)days before the beginning of each Fiscal Year,the Authority shall adopt and deliver to the Purchaser the Annual Project Budget for that Fiscal Year.The Annual Project Budget shall contain an estimate of all Annual Project Costs as defined in subsection (a)of this Section 4.(2}-Net The Annual Project Budget shall set forth in reasonable detail the estimated Revenues and Annual Project Costs for the Fiscal Year,the estimated amount to be deposited during such Fiscal Year in each Fund and Account established under the Indenture,and the amounts estimated to be expended from each Fund and Account AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 8 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 established under the Indenture.The Annual Project Budget also shall set forth such detail with respect to Revenues,Annual Project Costs and other expenditures and such deposits,as shall be necessary to comply with this Agreement,and may set forth such additional material as the Authority may determine.The Authority may amend the Annual Project Budget as necessary or prudent for the remainder of the Fiscal Year to reflect unanticipated changes in Revenues,Annual Project Costs or other requirements,or if there are at any time during such Fiscal Year extraordinary receipts orpayments of unusual costs.The Authority shall file an amended Annual Project Budget with the Purchaser not less than thirty (30)days before its effective date. (2)Not less than ninety (90)days before the beginning of each Fiscal Year,the Purchaser shall estimate its power sales for the Fiscal Year, and notify the Authority if it estimates the amount of such sales to be less than 88__million kilowatt hours (kWh)due to a reduction in demand. Section 5 -Payment Obligation. (a)The Purchaser shall make all payments required hereunder in the amounts and at the times required by this Agreement notwithstanding a suspension or reduction in the amount of power supplied by the Project.Such payments shall not be subject to any reduction,by offset or otherwise.The parties intend and interpret the foregoing two sentences to mean that the obligation to make such payments shall be absolute and unconditional and unaffected by any interruption,interference,or curtailment |in whole or inn part of power supplied by the Project,but thatthe-Purchaser the Purchaser retains the ri hts and remedies rovided in Section 7(c)_of thi Agreement in the event of a default by the Authority under this Agreement. Rraject Budget(b)Amount of Annual|Payment Obligation. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 9 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (1)Except as provided _in_paragraphs (2)and (3)of this subsection (b),the Purchaser's Annual Payment Obligation for a Fiscal Year shall be equal to Annual Project Costs for that Fiscal Year--previded thatif. (2)If the Purchaser has estimated,as provided in Section 4(c)(2)of this Agreement,that the amount of its power sales for the Fiscal Year will be less than 88__million kilowatt hours (kWh)due to a reduction in demand,and the ratio obtained by dividing 88__million kWh by the amount of such estimated sales exceeds 1.,the amount that the Purchaser otherwise would be required to pay under this subsection (b)shall be divided by said ratio. {d}If payments by the Purchaser are adjusted as provided in subseetion-(b}-eHhis Seetion-S this paragraph (2),and do not result in sufficient revenue from the Purchaser during a Fiscal Year to pay all Annual Project Costs,the Authority shall draw upon reserve funds,to the extent available,to provide for the deficiency. (3)The Purchaser's _Annual Payment Obligation shall be subject to adjustment for overpayment or underpayment in the preceding Fiscal Year,as provided in Section 5(c)(2) of this Agreement. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 10 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 ({c)Payment of Annual Payment Obligation. (1)=Onor before the fifteenth day of each month during a Fiscal Year,the Purchaser shall pay a portion of the Puchaser's Annual Payment Obligation to the Authority as follows: (A)Except as provided in Section 5(c)(1)(B)of this Agree- ment,such amount shall be equal to one twelfth of the amount of Annual Project Costs stated in the Annual Project Budget then in effect for that Fiscal Year. (B)Ifthe Purchaser's Annual Payment Obligation for the Fiscal_year is adjusted as provided in Section 5(b)(2)of this Agreement,such _amount shall be equal to one twelfth of the amount_of Annual Project Costs stated in the Annual Project Budget then in effect for that Fiscal Year,divided by the ratio determined for that Fiscal Year under Section 5(b)(2)of this Agreement. (2)Within days after the end of each Fiscal Year,the Authority shall determine actual Annual Project Costs for the Fiscal year,and notify the Purchaser of the amount of actual Annual Project Costs.If the Purchaser's Annual Payment Obligation for the Fiscal Year was adjusted as provided in Section 5(b)(2)of this Agreement,within _days after theendoftheFiscalYear,the Purchaser shall determine its actual power sales for the Fiscal Year,and notify the Authority of the amount of its actual power sales,and,if actual power sales exceeded the sales estimated by the Purchaser under Section 4(c)(2)of this Agreement,the Purchaser's Annual Payment Obligation shall be redetermined_under Section 5(b)(2)of this Agreement using actual annual power sales.If the Purchaser's Annual Payment Obligation exceeds the amounts paid by the Purchaser during the Fiscal Year under Section 5(c)(1)of this Agreement, the excess _shall be included in the Purchaser's Annual Payment Qbligation for the next Fiscal Year.If the amounts paid by the Purchaser during the Fiscal Year under Section 5(c¢)(1)of this Agreement exceed the Purchaser's Annual Payment Obligation,the excess shall be applied to AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 11 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 reduce the Purchaser's Annual Payment Obligation for the next Fiscal Year. tion 6 -Obligations Under Indenture:Completion of Project. (a)Assignment or Payment to Trustee.The parties recognize and agree: (1)that the Authority may assign its rights to receive payments under this Agreement as security for the payment of the Bonds to the Trustee under the Indenture for the benefit of the holders of the Bonds;and (2)that the Authority may direct that amounts payable to it under this Agreement to be paid directly to the Trustee. (6)Project Funding.The Authority shall use its best efforts to issue Bonds in an amount sufficient to pay the Cost of Acquisition and Construction. (c)Covenants of the Authority.The Authority covenants that it will not cause rates for Project power to increase by reason of any covenant or agreement contained in any bond resolution,eevernant-eragreement centainedin_any trust indenture or trust agreement entered into by the Authority in connection with a power project other than the Project,nor on account of any inadequacy in its actual or projected aggregate revenues,other than revenues from the Project,nor will the Authority include in Annual Project Costs debt service payable on debt incurred for any purpose except in respect of the Project as provided herein. (d)Project Completion and Operation.The Authority agrees to use its best efforts to complete the Project expeditiously and in accordance with sound engineer- ing practice and with the provisions of the Indenture.The Authority shall also use its best efforts consistent with Prudent Utility Practice to construct and complete,and to operate and maintain the Project (or to arrange for such operation and maintenance) to provide power at the lowest reasonable cost to the Purchaser in a manner that is compatible with the Purchaser's System and consistent with the Act,the Indenture, and this Agreement. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 12 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 Section 7 -Default:Remedies. (a)Default.Each of the following events constitutes an event of default under this Agreement: (1)failure by the Purchaser to perform any payment obligation under this Agreement;and (2)failure by either party to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Agreement,other than as described in Section 7(a)(1)of this Agreement,for a period of 30 _thirty (30)days after receipt of written notice from the other party,specifying such failure and requesting that it be remedied. (b)Remedies. (1)|Uponthe occurrence of an event of default under this Agreement, the aggrieved party may bring any suit,action,or proceeding at law or in equity,including mandamus,injunction,and action for specific performance,as may be necessary or appropriate to enforce any covenant,agreement,or obligation of this Agreement against the defaulting party. (2)|Upon the occurrence of an event of default under Section 7(a)(1) of this Agreement,the Authority,in addition to its other remedies under this Agreement,shalt-be-entiled-as-oHightie may seek the appointment of a receiver for all or any part of the Purchaser's System,and the Authority and any receiver So appointed shall have such rights and powers and be subject to such limitations and restrictions as are prescribed by the laws of the State of Alaska;_provided that exercise of the Authority's remedies under this paragraph shall be subject to Section 17 of this Agreement. (3)If the Purchaser has for any reason suspended or reduced,or has failed to make or has been prevented from making,payments required under this Agreement,the Authority,in addition to its other remedies under this Agreement,may terminate or suspend the delivery of power to the Purchaser. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 13 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (c)Performance in the Event of a Dispute.The Purchaser shall continue to make payments required under this Agreement in the event of any dispute under this Agreement or in the event of any dispute under the Indenture,and this obligation of continued payment pending resolution of disputes shall be immediately enforceable by the Authority or the Trustee upon application to any court of competent jurisdiction. No payment obligation of the Purchaser under this Agreement is subject to offset. Failure on the part of the Authority in any instance or under any circumstance to observe or fully perform any obligation assumed by or imposed upon it by this Agreement shall not relieve the Purchaser from making any payment to the Authority or fully performingany other obligation required of it under this Agreement,but the Purchaser may have and pursue any and all other remedies provided by law for compelling performance by the Authority of said obligation assumed by or imposed upon the Authority. tion 8 -Purchaser'tem. (a)Character of Expense.The amounts payable under this Agreement are operating expenses of the Purchaser's System and are valid and binding obligations of the Purchaser,payable only from the gross revenues of the Purchaser's System, and not payable from any other revenues or assets of the Purchaser including,but not limited to,revenues generated through exercise of powers of taxation,revenues of any of the Purchaser's enterprise funds (other than the enterprise fund for the Purchaser's System),revenues or assets of the Purchaser's general fund,or revenues or assets derived from grant funds received from any source other than grant funds specifically designated for payment of Purchaser's Annual Payment Obligation. (b)Purchaser's Rate Covenants.In order to afford,permit,and make timely payments as specified in this Agreement,the Purchaser agrees that it will establish, charge,and collect rates,fees,and charges with respect to the Purchaser's System in accordance with applicable law to provide revenues sufficient to meet its obligations under this Agreement and sufficient to pay,together with any other funds or moneys available therefor,any and all other amounts payable from or which constitute or may constitute a charge and lien upon such revenues including,but not limited to,amounts sufficient to meet obligations to service debt incurred by the Purchaser to finance the Purchaser's System. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO1SED Page 14 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (c)Operation and Maintenance of Purchaser's System.The Purchaser covenants and agrees that it will operate and maintain its System in good repair, working order and condition,and in accordance with Prudent Utility Practice. (d)Limitation on Certain Contracts.The Purchaser covenants and agrees not to enter voluntarily into any other contract or agreement to take or pay for power, under which the Purchaser's obligation to make payments from the revenues of the Purchaser's System is on a parity with or superior to its payment obligations under this Agreement,except that the Purchaser may enter into such a contract or agreement: (1)of a duration not exceeding two years,and under which the Purchaser's obligation to make payments from the revenues of the Purchaser's System is on a parity with its payment obligations under this Agreement; (2)|withacommercial customer in the form annexed hereto as Exhibit C;or (3)under which the Purchaser's obligation to make payments from the revenues of the Purchaser's System is on a parity with its payment obligations under this Agreement,if a written opinion from a Consultant is rendered that (i)the contract or agreement is reasonably expected to contribute to the conduct of the business of the Purchaser's System in an efficient and economical manner consistent with Prudent Utility Practice;and (ii)the contract or agreement will not impair the ability of the Purchaser to raise revenues sufficient to meet its obligations under this Agreement. Section 9 -Indenture. (a)Amendment or Supplementation of Indenture.Except as provided in Section 10 of this Agreement,the Authority will not amend or supplement the Indenture in any manner,or adopt a new Indenture in connection with the refunding of the Bonds,which would materially adversely affect the ability of the Purchaser to fulfill the terms of this Agreement or impose any increased burden or obligation, financial or otherwise,on the Purchaser,without the consent of the Purchaser. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO1aED Page 15 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (b)Information.The Authority shall provide the Purchaser with a copy of any report,certificate,letter,or other communication which the Authority is required to furnish to the Trustee under the Indenture or that the Trustee furnishes to the Authority. Section 10 -_Purchaser's Consent to Supplemental Indentures to Construct_or Operate the Project.The Purchaser hereby consents to the adoption by the Authority of supplemental Indentures as necessary to comply with the Authority's obligation to finance and construct the Project and to provide for its continued operation pursuant to Section 6(d)of this Agreement and to use its best efforts to complete the Project expeditiously and to provide for its continued operation and in accordance with sound engineering practices and with the provisions of the Indenture.The Authority shall consult with the Purchaser regarding the provisions to be included in such supplemen- tal adenture Indentures,and shall use its reasonable best efforts.to comply with the requests of the Purchaser with respect thereto.Unless otherwise approved in accordance with Section 9(a)of this Agreement,such supplemental Indentures shall: (a)Provide that the total amounts required for the payment of Debt Service when due shall be,on an annual basis,as nearly equal as practicable;and (b)be substantially in the form attached hereto as Exhibit B E,except to the extent that the Authority finds that modifications are necessary to sell the Bonds on a tax-exempt basis. Section 11 -Authority Responsibilities.{In addition to responsibilities set forth elsewhere in this Agreement,the Authority shall take the following actions,subject to the provisions of federal and state law,and the requirements of licensing and regulatory agencies: (a)Arrange for the operation and maintenance of the Project and the scheduling,production,and dispatch of Project power. (6)Evaluate and select among alternative methods (if any)of carrying out and funding (including through issuance of Bonds)Required Project Work. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 16 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (c)Adopt maintenance schedules for the Project that do not interfere unreasonably with the operations of the Purchaser. (d)|Consider the need for and approve any additional amount to be added to the Renewal and Contingency Reserve Fund over and above the Renewal and Contingency Reserve Requirement provided under the Indenture. (e)lf and when no Bonds are outstanding under the Indenture,and the Indenture is therefore no longer effective,the Authority shall provide for the establishment of such accounts and the taking of such actions as may be necessary to manage the Project. Section 12 -Insurance. (a)The Authority shall keep and maintain the Project at all times insured against such risks and in such amounts,with such deductible provisions,or provide for a source of self insurance,as is customary in connection with the operation of facilities of a type and size comparable to the Project and as may reasonably and economically be obtained or secured.The determination of what is "customary"and what may be "reasonably and economically obtained or secured"within the meaning of the prior sentence shall be made by an independent insurance consultant employed by the Authority or by the State division of risk management.Without limiting the foregoing,but only if required under the preceding sentences,the Authority shall carry and maintain,or cause to be carried and maintained,and pay or cause to be paid timely the premiums for,the following insurance with respect to the Project and the Authority: (1)Insurance coverage for buildings,works,plants and facilities comprising the Project for all risks of direct physical loss,at all times in an amount not less than an amount necessary giving regard to co-insurance provisions to pay and retire and redeem all the Outstanding Bonds. (2)General public liability insurance (other than as set forth in subsection (c)of this Section)in minimum amounts per occurrence,for annual aggregate claims,and with a deductible amount,to the same extent that other AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 17 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 entities comparable to the Authority and owning or operating facilities of the a size and type comparable to the Project carry such insurance. (3)|Comprehensive automobile liability insurance. (4)|Workers'compensation insurance or self-insurance as required by the laws of the State of Alaska. (b)Each insurance policy required by this Section (1)shall be issued or written by a financially responsible insurer (or insurers),or by an insurance fund established by the United States of America or State of Alaska or an agency or instrumentality thereof,(2)shall be in such form and with such provisions (including, without limitation and where applicable,loss payable clauses payable to the Trustee, waiver of subrogation clauses,provisions relieving the insurer of liability to the extent of minor claims and the designation of the named assureds)as are generally considered standard provisions for the type of insurance involved,and (3)shall prohibit cancellation or substantial modification by the insurer without at least thirty (30)days'prior written notice to the Trustee and the Authority.Without limiting the generality of the foregoing,all insurance policies,and other arrangements to the extent feasible,carried pursuant to this Section 12 shall name the Trustee,the Authority and the Purchaser as parties insured thereunder as the respective interest of each of such parties may appear,and loss thereunder shall be made payable and shall be applied as provided in the Indenture. (c)|The Authority covenants to review each year the insurance carried by the Authority with respect to the Authority and the Project and,to the extent feasible and economically prudent,will carry insurance insuring against the risks and hazards specified in this Section to the same extent that other entities comparable to the Authority and owning or operating facilities of the a size and type comparable to the Project,and taking into account any special!circumstances of the Project,carry such insurance.in the event that the Authority determines that the insurance required by this Section is not available to the Authority at reasonable cost,and,in any case, every two years ;from and after January 1,1993,the Authority shall employ an independent insurance consultant or the State division of risk management (the "consultant")for the purpose of reviewing the insurance coverage of,and the insur- ance required for,the Authority and the Project and making recommendations respecting the types,amounts and provisions of insurance that should be carried with AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 18 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 respect to the Authority and the Project and their operation,maintenance and adminis- tration.A signed copy of the report of the consultant shall be filed with the Trustee and copies thereof shall be sent to the Authority,and the insurance requirements specified hereunder,including any and all of the dollar amounts set forth in this Section,shall be deemed modified or superseded as necessary to conform with the recommendations contained in said report. (d)The Authority may establish a fund to provide self-insurance against the risks and hazards relating to the properties of the Project and the interests of the Authority and the Bondholders as described in this Section,and,in connection therewith,may specify and determine the matters and things set forth in paragraph (c) of this Section. (e)Insurance maintained pursuant to this Section may be part of one or more master policies maintained by the State of Alaska so long as the form of such policy and the coverage is the same as if a separate policy was in effect. Section 13 -Records.In addition to meter records,the parties shall keep log sheets and other records as may be needed for the purposes of this Agreement. Section 14 -Inspection of Facilities.For purposes of this Agreement,each party may, but shall not be obligated to,inspect any other party's facilities relating to the Project at any time upon reasonable notice,but such inspection or failure to inspect shall not render the inspecting party,its officers,agents or employees,liable or responsible for any injury,loss,damage,or accident resulting from defects in such electric installation, or for violation of this Agreement. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 19 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 Section 15 -Covenants to Maintain Integrity of Agreement. (a)Compliance with Law.The Purchaser will take all necessary steps to comply with applicable federal and state laws and regulations,licenses,and permits relating to the use and operation of the Purchaser's System.The Authority will take all necessary steps to comply with applicable federal and state laws and regulations, and to obtain and thereafter comply with all applicable licenses and permits relating to the use and operation of the Project. (b)Sales,Mergers,and Assignments of the Purchaser's System.The Purchaser shall not abandon,sell,mortgage,lease,or otherwise dispose of the Purchaser's System or any assets of that System (including by sale to or merger with any other utility),or assign this Agreement or any interest thereunder to any assignee or successor in interest,unless: (1)such disposal or assignment accords with the terms of each of the Purchaser's covenants or agreements with the holders of the Purchaser's bonds,notes,or other evidences of indebtedness relating to the abandonment, sale,mortgage,lease or other disposition of property of the Purchaser's System;and (2)such disposal or assignment is: (A)-consented to in writing by the Authority which consent shall not be unreasonably withheld;or (B)limited to assets that the Purchaser determines to be surplus to the needs of the Purchaser's System,but the depreciated value of assets so disposed of or assigned in any given year shall not exceed five percent of the depreciated value of the assets of the Purchaser's System prior to the disposal or assignment;or (C)evaluated by a Consultant and that Consultant certifies that,taking into account the other obligations of the Purchaser or of the assignee or successor in interest (as the case may be),the Purchaser or the assignee or successor in interest will have: AEA/Unalaska Geothermal Project Power Sales Agreement AFFOI8ED Page 20 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 (i)substantially the same or greater ability to produce sufficient revenues to meet its payment obligations under this Agreement as would the Purchaser absent the transaction;and (ii)the ability to perform all obligations under this Agreement. Any assignee of this Agreement must assume in writing all of the Purchaser's obligations hereunder,must pay amy amounts due and owing from the Purchaser hereunder,and must provide the Authority with an opinion of counsel that this Agreement is enforceable against the assignee. (c)Sales,Mergers and Assignments of the Project.The Authority shall not abandon,sell,mortgage,lease,or otherwise dispose of the Authority's interest in the Project or any assets of the Project (including by sale to or merger with any other utility),or assign this Agreement or any interest thereunder to any assignee or successor in interest,unless: (1)such disposal or assignment is required under the terms of the Indenture or a supplemental indenture;or (2)such disposal or assignment is:(A)consented to in writing by the Purchaser which consent shall not be unreasonably withheld;or (B)limited to assets that the Authority determines to be surplus to the needs of the Project, but the depreciated value of assets so disposed of or assigned in any given year shall not exceed five percent of the depreciated value of the assets of the Project prior to the disposal or assignment;or (C)evaluated by a Consultant and the Consultant certifies that,taking into account the other obligations of the Authority or of the assignee or successor in interest (as the case may be),the Authority or the assignee or successor in interest will have:(i) substantially the same or greater ability to meet its obligations under this Agreement as would the Authority absent the transaction;and (ii)the ability to perform all obligations under this Agreement. (d)Status of Bonds.The parties will not take any action,including entry into power sales agreements,which would cause the interest on any Bond which is AEA/Unalaska Geothermal Project Power Sales Agreement AFFOIBED Page 21 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 originally issued on a tax-exempt basis to become taxable under the Internal Revenue Code of 1986,as the same may be amended from time to time. Section 16 -Assignment. (a)Assignment Generally.This Agreement shall inure to the benefit of,and shall be binding upon the respective successors and assigns of the parties to this Agreement;provided,that this Agreement or any interest herein may be transferred or assigned (1)by the Purchaser only in accordance with the provisions of Sections 15(b)and 16(b)of this Agreement,and (2)by the Authority only in accordance with the provisions of Sections 6(a)of this Agreement or the provisions of Sections 15(c) and 16(b)of this Agreement. (b)Assignments to Secured Lenders.A party may assign this Agreement, together with all of its rights and obligations thereunder: (1)to or in trust for any secured lenders of such party for the purpose of securing obligations for borrowed money;or (2)pursuant to the exercise by any such secured lender of any of the rights,powers,or privileges provided for by the mortgages or other security instruments of such party for borrowed money;provided,that no such assignment shall in any way relieve such party of any obligations hereunder. No such secured lender shall,as a result of such assignment or the subse- quent exercise of its rights with respect to this Agreement under any mortgage, deed of trust,or other security instrument,be construed to have assumed,or otherwise to have become personally liable for,the assignor's obligations hereunder,but such secured lender's ability to exercise the rights of its assignor hereunder shall be subject to performance of the assignor's corresponding obligations under this Agreement.In the event any such secured lender exercises any of its rights,powers,or privileges with respect to this Agreement under said mortgages or other security agreements,such secured lender may thereafter assign this Agreement,together with all the rights and obligations thereunder,to any entity authorized and able to perform the obligations underthisAgreement-which-entityshallsucceedte-allthe rights and-assume-ai-_the-ebligations-of-_the-borrewer-assigner of the AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 22 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 borrower-assignor under this Agreement,which entity shall succeed to all the rights and assume all the obligations of the borrower-assignor under this Agreement. Prior to the exercise by any secured lender of any rights or remedies under any mortgages or security agreements with respect to this Agreement,such secured lender shall give the parties hereto reasonable notice that it intends to exercise such rights or remedies. (c)|The Purchaser's agreement to resell power from the Project shall not bedeemedatransferorassignmentofthisAgreement,but neither shall any such resale of Project power relieve the Purchaser of any payment obligation under this Agreement. ection 17 -No Security Interest or Lien.This Agreement shall neither give the Authority a security interest or lien on the Purchaser's System nor require the Purchaser to sell the Purchaser's System (or any component thereof)in order to meet any obligation of the Purchaser under this Agreement. Section 18 -Exhibits.The following exhibits are incorporated by reference into this Agreement: (a)Exhibit "A"is the Indenture; (b)Exhibit "B"is the Description of the Project; (c)Exhibit "C"is the Description of the Delivery Point; (d)Exhibit "D"is the Form of Commercial Contract; (e)Exhibit "E"is the Form of Certain Supplemental Indentures. Section +8 19 -Notices,Computation of Time and Holidays.Any notice required by this Agreement to be given to any party shall be effective when it is received by such AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 23 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 party,and in computing any period of time from such notice,such period shall commence at 12:01 p.m.prevailing time at the place of receipt on the date of receiptofsuchnotice.Whenever this Agreement calls for notice to or notification by any party,the same (unless otherwise specifically provided)shall be in writing directed to the Authority's executive director or the Purchaser's city manager.If the date for making any payment or performing any act is a day on which banking institutions are closed in the place where payment is to be made or a legal holiday,payment may be made or the act performed on the next succeeding day which is neither a legal holiday nor a day when banking institutions are closed in such place. Section +9 20 -Applicable Law.The laws of the State of Alaska (including without limitation the equal opportunity laws set forth in AS 18.80.220,as the same may be amended from time to time)shall govern the interpretation and application of this Agreement and the actions of the parties hereunder. Section 29 21 -Availability of Information.The parties shall make available to each other,for inspection and copying during business hours,all books,records,plans, and other information relating to any calculation or determination to be made pursuant to this Agreement. Section 24 22 -Severability. (a)Severability Generally.If any section,paragraph,clause,or provision of this Agreement or any agreement referred to in this Agreement shall be finally adjudicated by a court of competent jurisdiction to be invalid or unenforceable,the remainder of this Agreement shall be unaffected by such adjudication and all the remaining provisions of this Agreement shall remain in full force and effect as if such section,paragraph,clause,or provision or any part thereof so adjudicated to be invalid had not been included herein. (b)Correction and Substitution.If any section,paragraph,clause,or provision of this Agreement or any agreement referred to in this Agreement shall be finally adjudicated by a court of competent jurisdiction to be invalid or unenforceable, then and in such event,the parties agree that they shall exercise their best efforts to AEA/Unalaska Geothermal Project Power Saijes Agreement AFFO18ED Page 24 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 correct such invalidation and substitute appropriate agreements and contractual arrangements to achieve the intent of this Agreement. Section 22 23 -Remedies Cumulative.No remedy conferred upon or reserved to the parties hereto is intended to be exclusive of any other remedy or remedies available hereunder or now or hereafter existing by law,in equity,by statute,or otherwise,but each and every such remedy shall be cumulative and shall be in addition to every other such remedy. Section 23 24 -Waiver Not Continuing.Any waiver at any time by either party to this Agreement of its rights with respect to any default of the other party hereto,or with respect to any other matter arising in connection with this Agreement,shall not be considered a waiver with respect to any subsequent default,right,or matter. Section 24 25 -Covenant To Act In Good Faith.In order to permit this Agreement to be fully effective throughout its term in accordance with the original intent of the parties,each party agrees that it shall at all times act in good faith in performing its obligations and in exercising its rights under this Agreement. Section 25 26 -No Third-Party Beneficiaries.Notwithstanding that the operation of this Agreement may and is intended to confer benefits on third parties who are notsignatoriestothisAgreement,this Agreement shall be enforceable only in accordance with its provisions expressly governing enforcement.In promising performance to one another under this Agreement,the parties intend to create binding legal obligations to and rights of enforcement in: (a)one another;and (b)|such assignees or successors in interest of the parties as may enjoy arighttoenforcethisAgreementbyvirtueofprovisionsofthisAgreementthatexpresslycreatesucharightinsuchassigneesorsuccessorsininterest.By entering into this Agreement,the parties expressly do not intend to create any obligation or promise any AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 25 DRAFT December 2,1991 3610.2014 TFK/cf Rev.#24 v.#27 performance to any other third party,nor have the parties created for any other third party any right to enforce this Agreement. Section 26 27 -Section Headings.The section headings in this Agreement are for convenience only,and do not purport to,and shall not be deemed to,define,limit,or extend the scope or intent of the section to which they pertain. Section 27 28 -Multiple Copies.This Agreement shall be executed in several counter- parts,each of which shall be an original,but both of which shall constitute one and the same instrument. IN WITNESS WHEREOF,the parties have caused this Agreement to be executed the day and year first above written. ALASKA ENERGY AUTHORITY By NAME AND TITLE CITY OF UNALASKA,ALASKA By NAME AND TITLE AEA/Unalaska Geothermal Project Power Sales Agreement AFFO18ED Page 26 OCW)OtewOmerenims ANVC OUNUEN Flues itdyT 6 9 OAM 5 3U72705083 AK ENERGY AUTHORITY:@ 1 WOHLFORTH,ARGETSINGER,JOHNSON &BRECHT A Professional Comporation Attorneys at Law $00 West Sth Avenue,Suite 600 Anchorage,Alaska 989501 FA IL FILE NO.:3610.2014 DATE:October 31,1991 yPLEASEDELIVERTHEFOLLOWINGPAGESTO: NAME:MR.BRENT PETRIE /Director of Agency Operations $ FIRM:Alaska Energy Authority 7 .f° CITY:Anchorage c TELEPHONE NUMBER:(907)261-7262 FAX NUMBER:(907)561-8584 h ” FROM:Thomas F.Klinkner,Esq.. TOTAL NUMBER OF PAGES INCLUDING THIS PAGE:8 > COMMENTS: 2 7 3B N S ORIGINAL DOCUMENT TO FOLLOW VIA:N/A Ra EETTrrrrrrrTriri iti TrrLi Te TL Tie ELECT TTL TTT TI TTTiT iyIfyoucdonotreceiveallpages,please call back as soon as possible:>OPERATOR Colleen M.Fetz AT (907)276-6401.Our telecopier number is (907)276-5093. RRR WRK RR KERR UKKEEEERKEHEREREEREERRERKERRERRRARRRERRRARARRRARKKRRRARA KE < o5 The Information contained in this transmission is privileged and confidertial.lt is intended only for the use of the >reciplentnamed above.Authorization to review,discuss,disseminate,or copy the foliowing pages /s strictly limited to the named recipient and the recipient's employees or agents. SENT BYIWORLTORTM ARGETSINGER +10-31-81 +9°19AM 9072765093%AK ENERGY AUTHCRITY:#2 HICKS,BOYD,CHANDLER &FALCONER,ee areATTORNEYSATLAWitneoeLoe14? Suite 200 HEYA 7 $285 WEST EIGHTH AVENUE 7 onANCHORAGE,ALASKA 9950)T 3H,TELEPHONE!(907)272-8401 OC;2 0 199] Te_ecoricr:(907)274-3694 Wohiforti Arceisinger desnean 2%Frecht October 28,1991 BY FAX:276-5093 Thomas F.Klinkner,Esq.Wohlforth,Argetsinger,Johnson &Brecht 900 West 5th Avenue,Suite 600Anchorage,AK 99502 Re:AEA-City Power Sales Agreement Dear Tom: The City requests that the following language be added to the current draft of this Agreement: 1.Section 2(a)Effectiveness.This Agreement shallbecomeeffectiveonthefirstdatewhentheAgreementhasbeen signed by the Purchaser and the Authority and the Purchaser andtheAuthorityhaveobtainedallnecessaryapprevalsofthisAgreementfromtheirrespectivegoverningbodies. 2.Ad@ the following subsection (c)to Section 2: (c)Termination.This Agreement shall terminate thirty (30)yearsaftertheDateofCommercial Operation provided,that if theDateofCommercialOperationdoes not occur before January 1,1996,then this Agreement shall terminate on January 1,1396. 3.Add the following phrase to Section 4(a)(3): except amounts required to restoreanydebtservicereserveobligationoftheAuthorityshallnotbeconsideredAnnualProjectCostsforpurposesofcalculatingthepaymentobligationofPurchaserpursuanttoSection5ofthisAgreement. 4.Rewrite Section 4(c)to read as follows: QENE OYewCrmercUmim anGeosNGem F1UTSI-81 +OF 1GAM : Thomas F,Klinkner,Esq. October 28,1991 Page 2 (c)ReductionofAnnualProjectCoats.(1)Prior te the beginning of each Fiscal Year,the AuthoritywillprepareanAnnualProject Budget for that year.The Annual Project Budget shall contain all Annual Project Costs as defined in subparagraph (a)above.It shall further specify the estimated unitcostofpowerfromtheProject derived from dividing the Annual Project Coats by 88 millionkilowatt-hours of energy.A copyoftheproposedAnnualProjectBudgetshallbegiventoPurchaser at least 90 days prior to theeffectivedateoftheAnnual Project Budget.If the PurchasernotifiestheAuthorityatleast30dayspriortotheeffectivedateof an Annual Project Budget that it expects to sell less than 88 million kilowatt-hours in the succeeding Fiscal Year because of a reduction in demand,the Authority shall reduce the Annual PaymentObligationofthePurchaserfor that Fiscal Year in an amount equaltothedifferencebetween838 million kilowatt-hours and the amount of kilowatt-hours the Purchaser has notified the Authority it expects to sellmultipliedbytheestimated unit cost of power from the Project.If,due to the limitation set forth in the preceding sentence,the Annual Payment Obligation of thePurchaserdoesnotresultin sufficient revenue from the Purchaser to pay all Annual ProjectCosts,the Authority shall draw upon reserve funds to the extent available, 9072765093%AK ENERGY AUTHORITY:#3 5.Add the following language at the beginning ofSection5:3: Subject to the requirements imposedbySection4(c)above, SENT BY:WORLFORTH ARGETSINGER :10-31-81 +9:19AM |9072765033 AK ENERGY AUTHCRITY:#4 Thomas F.Klinkner,Esq. October 28,1991 Page 3 6.Delete the second sentence of Section 5 which is redundant in light of the language contained in the first sentence. 7.Add the following phrase to the last sentence of Saction 5: However,the parties do not intendandinterprettheforegoingtwo sentences to constitute a waiver of any right or remedy of Purchaser intheeventofanydefaultinthe performance of this Agreement bytheAuthorityexcepttherighttounilaterallyoffsetorreducepaymentsrequired. 8.Eliminate Section 7(b)and the associated languageofparagraph7(c)(1)and 7(d). 9.Delete paragraph 7(¢c)(2).This provision is ofdubiouslegality.The concern expressed at our last meeting(that the City would refuse to raise rates as required by theAgreement)can be addressed through the remedy of specificenforcement,If AEA insists on including this provision or somemodifiedversionofitintheAgreement,then the City willundertakethelegalresearchnecessarytodeterminethalegalityoftheprovision.In the event some version of paragraph 7(c)(2)renains in the Agreement,it seems only fair that the City begivenareciprocalremedy(i.e.,the right to the appointment ofareceiverfortheProjectintheeventofadefaultbytheAuthority.) 10,Add the following phrase in lieu of the word"taxes"!in Section &(a): other revenues or assets of the Purchaser or the Purchaser's Systemincluding,but not limited to, revenues generated through exercise of powers of taxation,revenues of any of Purchaser's enterprise funds(other than the enterprise fund forthePurchaser's System),revenues or assets of the Purchaser's general fund,or revenues or assets derived from grant funds received from any source (other than grantfundsspecificallydesignatedfor payment of Purchaser's AnnualPaymentObligation). SENT DiewOMerunim anubioduen siutaltyl +Be ZUAM ft Thomas F.Klinkner,Eaq. October 28,1991 Page 4 11. 12. 8(c): Rewrite Section 8(b)to read as follows: (>)Purchaser'sRateCovenants.In order to afford,permit,andmaketimelypaymentsasspecifiedinthisAgreement,the Purchaseragreesthatitwillestablish charge and collect rates,fees,andchargeswithrespecttothePurchaser's System in accordancewithapplicablelawtoprovide revenues sufficient to meat its obligations under this Agreementandsufficienttopay,any and all other operating expenses of the Purchaser's System payable from gross revenues of the Purchaser'sSystemincluding,but not limited to,amounts sufficient to meet obligations to service debtincurredbythePurchaserto finance the Purchaser's Systemprovided,however,that in no eventshallPurchaserberequiredtoraiserates,fees and charges with respect to Purchaser's System inexcessofthetariffrates applicable to Purchaser's Systen inexistenceasoftheeffectivedate of this Agreement,plus anadjustmentequaltothecumulativeincreaseintheAnchorageConsumer Price Index-Urban (CPIU)asregularlypublishedbytheU.S. Bureau of Labor Statistics from the effective date of this Agreament plus percent.If,due tothelinitationssetforthinthe preceding sentence,there are notsufficientgrossrevenuesfromthe Purchaser's System to pay allAnnualProjectCosts,the Authority shall draw upon reserve funds totheextentavailable. Insert the following language as a new Section No Security Interest or Lien.ThisAgreementshallneithergivatheAuthorityasecurityinterestorlienonPurchaser's System nor 90727650934 AK ENERGY AUTHCRITY:#§ SENT BY WOMLFORTM ARGETSINGER 1710-31-91 +9:20AM ;90727650934 AK ENERGY AUTHORITY:#6 Thomas F.Klinkner,Esq. October 28,1991 Page 5 require Purchaser to sell Purchaser's Syatem (or any component thereof)in order to meet any cbligation of Purchaser under this Agreement. 13.Rewrite Section 15(a)to read as follows: CompliancevithLaw.The PurchaserandtheAuthoritywilltakeall necessary steps to comply with allapplicablefederalandstatelawsandregulations,licenses,andpermitsrelatingtotheuseand operation of the Project and Purchaser's Systen. 14.Insert a Section 15(c)(or rewrite Section 15(b))in order to make the obligations regarding sale,merger andassignmentmutualasfollows: (Cc)Sales,Mergers andAgsignments.The Authority shall not abandon,sell,mortgage,lease,or otherwise dispose of theAuthority's interest in the ProjectoranyassetsoftheProject(including by sale to or nergerwithanyotherutility),or assignthisAgreementoranyinterest thereunder to any assignee orsuccessorininterest,unless! (1)such disposal orassignmentaccordswith the terms of each of the Authority's covenants or agreements with the holders of the Authority's bonds,notes,or other evidences of indebtedness relating to theabandonment,sale,mortgage,lease or other disposition of property of the Project;and(2)such disposal orassignmentis:(A)consentedtoinwritingbythePurchaserwhichconsentshallnotbe unreasonably withheld;or (B)limited to assets that the Authority determines to be surplus to the needs of the Project,but the depreciated SENT BY:wCHLFORTH ARGETSINGER 1 10-31-91 5 9:27AM ; Thomas F.Klinkner,Esq. October 28,1991 Page 6 15. 16(a). 16. value of assets so disposed oforassignedinanygivenyearshallnotexceedfivepercentofthedepreciatedvalueof the assets of the Projectpriortothedisposalorassignment;or (C)evaluated by a Consultant and thatConsultantcertifiesthat,taking into account the otherobligationsoftheAuthority or of the assignee orsuccessorininterest (as thecasemaybe),the Authority ortheassigneeorsuccessorininterestwillhave: (i)substantially the same orgreaterabilitytomeetitsobligationsunderthis Agreement as would the Authority absent the transaction;and (ii)the ability to perform all obligations under this Agreement. Any assignee of this Agreement mustassumeinwritingallofthe Authority's obligations hereunder, must pay any any amounts due andowingfromtheAuthorityhereunder,and must provide the Purchaser withanopinionofcounselthatthis Agreement is enforceable againsttheassignee. Delete the phrase "by the Purchaser"from Section Add a new Section 17 to read as follows: Either party shall be excused fordelayorfailuretoperformitsobligationsunderthisAgreement inwholeorinpart,when and to the extent that such failure or delayisoccasionedbyfire,flood,wind,lightening or other acts of theelements,explosions,act of God,act of the public eneny,orinterferenceofcivilormilitary authorities,mobs,labordifficulties,sabotage,malicious 9072765093%AK ENERGY AUTHORITY:#7 DeNl GYtWOMLrUMIhyARGEISINGER i 40-91-91 +OS21AM ;90727650934 AK ENERGY AUTHORITY:#8 Thomas F.Klinkner,Esq. October 28,1991 Page 7 mischief,usurpation of power,depletion of wells,freezing oraccidentstowells,permanent Closing of Purchaser's System ortheProjectorothercasualtyor Gauge beyond the reasonable control of the parties. Although I understand this clause may not be palatabletobondpurchasers,I believe it is a useful exercise to proposesothatallpartiesareexplicitlyawareoftheinherentriskstheyarebeingaskedtoassumeundertheAgreenent. The City also expects integration of the monthlypaymentlanguagecurrentlycontainedinSection11toSection 5andspecificexclusionfromAnnualProjectCostsofsumspaidfromanyself-insurance fund. Very truly yours, HICKS,BOYD,CHANDLER &FALCONER »2Q_CO2BrooksW.Chandler BWC/sme cc:Polly Prchal Roe Sturgulewski 16:16 o¢t 30,1952 ID:wWoeLPORTH ET AL.TEL NG:9Q7-275-6421 B43 PAGE:1/733 WOHLFORTH,ARGETSINGER,JOHNSON &BRECHTAP-Oleaniorat GopormtianAttorneysatLaw 900 West Sth Avenue,Sutte 600 } Anchorage,Alaska 99501 : IM A * DATE:Wednesday,Oct 30,1991 4:02 p.m (AST) FILE NO.:3670.2014 PLEASE DELIVER THE FOLLOWING PAGES TO: NAME:Charlie Mr.Bussell OF:Distribution List FAX NUMBER:561-8584 FROM:Thomas F.Klinkner,Esq. TOTAL NUMBER OF PAGES INCLUDING THIS PAGE:31 COMMENTS: WHKeWeHe We heWe te ee Hee eH Ve We He ee We ee We eee HH We He ee Wee We He ee ee We We Ye ie ee We We ee We ie Se ie We We ee ee ee ee We ok ee If you do not receive all pages,please call back as soon as possibile:(907)276-6401. Our FAX number Is (907)276-5093, RABRHAHEHARARARARHARARKEHRRARRARREREHRAAARHARARAAHAERARARRWRARRANRARARAWRRARHARARRAA RRA The information contained in this transmission is privileged and confidential.it is intended only for the use of the recipient named above.Authorization to review,discuss,disseminate, distribute or copy the following pages /s strictly ilmited to the named recipient,and the recipient's employees or agents. Ce:eadWc£m Je/oejop-f/SD)Ano/Ya 16:17 OCT 3@,1991 ID?WOHLFORTH ET AL.TEL NO!937-276-6421 #2543 PAGE:2733 WOHLFORTH,ARGETSINGER,JOHNSON &BRECHT A P-oteasieral Coporetian Attorneys at Law 900 West 5th Avenue,Sulte 600 Anchoraga,Alaska 99501 MEMORANDUM TO:Distribution List FROM:Thomas F.Klinkner DATE:October 30,1991 SUBJECT:Alaska Energy Authority/Unalaska Geothermal Project Our File No.3610.2014 Enclosed is a revised draft of the Power Sales Agreement between the Alaska Energy Authority and tne City of Unalaska,blacklined to show changes from the draft last distributed.This draft incorporates comments from the meeting on October 24,1991,and a portion of extensive written comments supplied by counsel for the City.|will provide each of you with a copy of the City's written comments by separate facsimile transmission. loeie UCr obs Log.4s Wortr Uri ET AL.TEL MNO:307-276-6431 #2543 PAGE:3°33 ISTRIBUTION LIST ALASKA ENERGY AUTHORITY POWER REVENUE BONDS,SERIES 1992 (Unalaska Geothermal Project) 3610.2014 October 25,1991 ISSUER UNDERWRITERS COUNSEL Alaska Energy Authority Kattan Muchin &Zavis P.O.Box 190869 525 West Monroe Street,Suite 1600 701 East Tudor Road Anchorage,Alaska 99519-0869 Telephone (907)261-7262 Telecopy (907)561-8584 Charlie Bussell,Executive Director Brent Petrie,Director of Agency Operations Dick Emarman,Senior Economist BOND COUNSEL Wohiforth,Argetsinger,Johnson &Brecht 800 West 5th Avenue,Sulte 600 Anchorage,Alaska 998C1 Telephone (907)276-6401 Telacopy (807)276-5083 Eric Wonhlforth,Esq. UNDERWRITER John Nuveen &Co.Incorporated 2740 Pactflo Firet Centre 1420 Fifth Avenue Seattle,Washington 98101-2333 Telephone (206)§87-0959 Telacopy (208)382-1589 Jim Seagraves Chicago,Illinols 60606-3693 Telaphone (312)902-5418 Telecopy (312)902-1061 Lawis Greenbaum,Esq. PROJECT ENGINEER OES!Power Corporation 610 East Glendale Sparks,Nevada 94831 Telephone (702)355-5666 Telacopy (702)355-5656 Daniel N.Schochet Vice President -Marketing Cilft Philips Vice President -Finance PROJECT ENGINEER'S COUNSEL Perking-Cale 1029 West ard Avenue Sulte 300 Anchorage,Alaska 99501 Telephone (907)279-8561 Talacopy (907)276-3108 Richard Johannsen,Esq. 16:18 OCT 3Q,1991 ID!WOHLFORTH ET AL.TEL NC!987-276 6421 #2543 PAGE!4/33 CITY OF UNALASKA ITY'NSE P.O.Box 89 Unalaska,Alaska 99685 Hicks,Boyd,Chandler &Falconer Telephone:(907)681-1251 825 West 8th Avenue,Sulte 200 Telacopy:(907)581-1417 Anchorags,Alaska 99501 Telephone (907)272-8401 Polly Prokal,City Manager Telecopy (907)274-3698 Roe Sturgulewsx!,Director of Public Works Breoks Chandler,Esq. 2101 4th Avenue,Suite 600 Saattle,Washington $8121 Telephone:(206)441-7500 Telecopy:(206)441-4964 Mr.Ray Benish AEA/Unalaska Geothermal!Project Dietibution Liet -3610.2014 AFRO:aBF Page d 16:18 OCT 3@-1991 ID:WOHLFORTH ET AL.TEL NO:967-276-6421 #2543 PAGE:5/733 DRAFT October 30,1991 8610.2014 TFK/ct Rev.#19 Vv.#24 POWER SALES AGREEMENT Between ALASKA ENERGY AUTHORITY and CITY OF UNALASKA,ALASKA Dated as of 1991 16:18 OCT 3@,1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6401 #2543 PAGE:6/33 DRAFT October 30,1991 3610.2014 TFK/cf Rev.#19 v.#24 TABLE OF CONTENT Page Section 1-Definitions 2...ekeeeeeees 2 Section 2 -Term of Agreement;Renewal ...........0.cee eee 6 Section 3 -Electric Service to be Furnished.2...0...eeeee 8 Section 4 -Annual Project Costs ow eee 7 Section 5 -Payment Obligation.........Cee eee eee etter eeeee veer G Section 6 -Obligations Under Indenture;Compietion of Project........0.05 14 Section 7 -Default;-Bispute-Reselution:Remedies ........0.0...eee 12 Section 8 -Purchaser's System 1...ce eeeeee 13 Section 9 -Indenture 2...eeeeens 15 Section 10 -Purchaser's Consent to Supplemental Indentures to Construct or Operate the Project...0...cece ee ene eee 15 Section 11 -Authority Responsibilities 2...ee eee eee 16 Section 12 -INSurANC®2.eeeeeeeeee 17 Section 139 -RECOdS coi eee eee tee eee eee eee reve 19 Section 14 -Inspection of Facilities .........000e reece ence eees evens 19 Section 15 -Covenants to Maintain Integrity of Agreement ...............19 Section 16-Assignment ......0...eeeeeeeens 22 Section 17 -No Security Interest or Lien «0...ee eee 23 lead vol ot loot LD!WORLFORTH ET AL.TEL NO:987-276-6431 ORAFT October 30,1991 3610.2014 TFK/ef Rev.#19 v.#24 TABLE OF CONTENTS (Continued) Section 18-Exhibits 2.0...eeeeens Section 18 -Notices,Compxtation of Time and Holidays ......... Section 19 -Applicable Law «weceeeeene Section 20 -Availability of Information .......cece eeenenee as Section 21 -Severability...cccteees beeen eee Section 22 -Remecies Cumulative ..0.0...ceeeeeewes Section 23 -Waiver Not Continuing...0...0...eeeeens Section 24 -Covenant To Act In Good Faith ..............000. Section 25 -No Third-Party Beneficiaries ....0.0......0...eae ee Section 26 -Section HeadingS 2...cc cece eee ees cease Section 27 -Multiple Copies...et et ee eee eee cae Exhibit A -Indenture Exhibit B -Description of the Project Exhibit C -Fers-ot-Germmerciet+-Gontract DescriptionofDeliveryPointExhibitD-Form of Commercial ContractExhibitE-Form of Certain Supplemental Indentures. AEA/Unaiaska Geothermal Project Table of Coments AFFO'OED #2543 PAGE:7/33 Page ii 16:19 UcT sd 1991 ID:WUmLFORTH ET AL.TEL NO:907-276-6421 #2543 PAGE:8/33 DRAFT October 30,1991 3610.2014 TFK/cef Rev.#19 v.#24 POWER SALES AGREEMENT THIS AGREEMENT dated as of ,198 ,s entered into by and between the Alaska Energy Authority (the "Authority")and the City of Unalaska, Alaska,(the "Purchaser'), WITNESSETH: Tne Authority recites,agrees,represents,and covenants as follows: (1)|The Authority is a public corporation of the State of Alaska duly created,organized,and existing pursuant to AS 44.83; (2)The Authority is authorized,and has taken all steps necessary pursuant to the Constitution and laws of the State of Alaska and the regulations and bylaws of the Authority,to enter into this Agreement and to comply fully with the terms hereof; (8)The Authority desires to fulfill its jegislatively established duty of providing residents of the State of Alaska with long-term,stable,and economic sources of power and an adequate,economic,and reliable long-term supply of power;and (4)|The Authority's execution and performance of this Agreement will notconflictwith,violate,or constitute an event of default under any other resolution, contract,agreement,bond,note,mortgage,or other obligation of the Authority,or with respect to any order,ruling,or decree of any court or regulatory agency to which the Authority is subject at the time the Authority executes this Agreement. Tne Purchaser recites,agrees,represents,and covenants as follows: (1)The Purchaser is a duly organized and constituted municipal corporation under the Constitution and laws of the State of Alaska; (2)The Purchaser is authorized,and has taken all steps necessary pursuant to the Constitution and laws of the State of Alaska and other applicable laws and regulations,and pursuant to its code of ordinances,to enter into this Agreement and to comply fully with the terms thereof; 16:19 OCT 3@ 1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6481 S43 PAGE:9733 DRAFT October 30,1991 3610.2014 TFK/cf Rev.#19 v.#24 (3)The Purchaser performs the functions of a utility and is a wholesale power customer eligible to purchase power produced from a project pursuant to AS 44,83;and (4)|The Purchaser's execution and performance of this Agreement will notconflictwith,violate,or constitute an event of defau't under any other ordinance, resolution,contract,agreement,bond,note,mortgage,or cther obligation of the Purchaser,or with respect to any order,ruling,or decree of any court or regulatory agency to which the Purchaser is subject at the time the Purchaser executes this Agreement. NOW,Therefore,the parties agree as follows: Section1-Definitions.For the purposes of this Agreement,the following definitions apply: (a) "Act'or references to AS 44.83 mean Title 44,Chapter 83 of the Alaska Statutes (AS 44.83)as the same may be amended or supplemented from time to time. (6)"Agreement"means this Power Sales Agreement. (c)"Annual Payment Obligation"means the total amount payable by the Purchaser in or for a Fiscal Year pursuant to this Agreement. (d)"Annual Project Budget”means the budget for the Project as adopted or in effect for a particular Fiscal year and amended or supplemented from time to time. (e)"Annual Project Costs"shall have the meaning given it In Section 4 of thisAgreement.oie ) (f)"Authority"means the Alaska Energy Authority as established by the Act and any subsequent successor agency thereto. (g)"Bonds"means bonds,notes,or other evidences of indebtedness (including refunding bonds)issued pursuant to the Indenture,the proceeds of which AEA/Unaiagka Geothermal Project Power Safes Agreement AFFO'OED Page 2 16:20 OCT 30,1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6421 #2543 PAGE:128/33 DRAFT October 30,1991 8610.2014 TFK/cf Rev.#19 v.#24 are used to pay or reimburse Costs of Acquisition and Construction and Required Project Work. (nh)"Capability of the Project"means the entire capability of the Project to generate electric power at any and all times from the Date of Commercial Operation until the termination of this Agreement (or any renewal thereof),including periods when the Project may not be operating cr inoperable or the operation thereof Is curtailed,in each case in whole or in part,for any reason whatsoever. (i)"Consultant"means an independent individual or firm of nationwide and favorable reputation,having demonstrated expertise In the field or the matter or the item referred to it under various specific provisions of this Agreement,approved by the Authority,and acceptable to the Purchaser. (|)"Cost of Acquisition and Construction"means the Cast of Acquisition and Construction (as defined in Section of the Indenture)of the Project. (k)"Date of Commercial Operation"means the date,which occurs ater no Necessary Approvals have been obtained,on wnich engineers retained for this purpose by the Authority have reasonably declared that the Project is fully available to be operated at not less than megawatts (_MW),and its output can be scheduled on a commercialbasis. (I)"Debt Service"means amounts that the Authority is required to set aside for the payment of principal of,premium,if any,sinking fund payments,and interest on the Bonds under the Indenture. (m) {n)="Fiscal Year"means that 12-month period starting on July 1 of a calendaryearthroughancincludingJune30ofthesucceedingcalendaryear.The Initial Fiscal Year for purposes of this Agreement is that portion of the 12-month period starting on the Date of Commercial Operation through and including the following June 30. AEA/Unaiasna Geothermal Project Power Sales Agreernent AFFO'859 Page 3 16:20 OCT 3Q@,1991 ID:WOHLFORTH ET AL.TEL NO:907-276-6481 #2543 PAGE:11/33 DRAFT October 30,1991 9610.2014 TFK/ct Rev.#19 v.#24 £4}(9)"Indenture"means the indenture securing the Bonds in substantially the form attached hereto as Exhibit A. {e}--Purehaser-meansthe-Cix-otnalseka-vdaskar(p)_"Necessary Approvals"means the approval or consent In writing of each governmental!entity,reguiatory body,or other person which approval is required In order fortheProjecttobeconstructedandoperatedInaccordancewit{id e tion of thi r n | Department.ot Environmental Conservation and the US.Environmental! tection N roval !ine!h ilabili In thor!sufficient f | {p}(q)"Project"means the Unalaska Geothermal Project as described in Exhibit fe}(r)"Prudent Utility Practice"means at a particular time any of the practices,methods,and acts engaged in or approved by a significant portion of the electric utilityindustryatsuchtime,or which,in the exercise of reasonable judgment in light of facts known at such time,could have been expected to accomplish the desired results at the lowest reasonable cost consistent with good business practices,reliability,safaty and reasonable expedition.Prucent Utility Practice is not required to be the optimum practice,method or act to the exclusion cf all others,out rather to be a spectrum of possible practices,methads,or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability,safety and expedition.Prudent Utility Practice includes due regard for manufacturers'warranties and the requirements of governmental agencies of competent jurisdiction and shail apply not only to functional parts of a Project,but also to appropriate structures, landscaping,painting,signs,lighting and other facilities. (s)°r means th Unalaska,Alask (t){4 "Purchaser's System"means the Purchaser's electric utility system for the cistribution,transmission and generation of electrical power and which is owned and operated by the Purchaser, AEA/Unaiaska Geothermal Project Power Salee Agreement AFFO\@ED Page 4 16:21 OCT 3@-1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6421 #2543 PAGE:12/733 DRAFT October 30,1991 3610.2014 TFK/ct Rev.#19 v.#24 @(u)"Renewal and Contingency Reserve Func"means the Renewal and Contingen- cy Reserve Fund established pursuant to Section of the Indenture, (v)"Required Project Work"means repairs,maintenance,renewals, replacements,or improvements required by federal or state law,a licensing or regulatory agency with jurisdiction over the Project,or this Agreement,or otherwise necessary to keep the Project in good and efficient operating condition,consistent with: (1)sound economics for the Project and the Purchaser;and (2)national standards for the industry. (w)"Revenue Fund"means the Revenue Fund established pursuant to Section _--soof the Incenture. (x)"Trustee"means the Trustee acting under the Indenture or that Trustee's successor of successors and any other corporation which may,atany time,besubstitutedinthatTrustee's place under the Indenture.- 4 Capitalized Terms used in this Agreement which are not defined herein have the definition given in the Incenture. AEA/Unaiaska Geothermal Project Power Salve Agreement AFFO"GED Page § 16:22 OCT 3@,1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6421 #2543 PAGE:13/33 DRAFT October 30,1991 8610.2014 TFK/ct Rev.#19 v.#24 (a)Effectiveness.This Agreement shail take-oteetimmnediatelyy become effective on the first date when this Agreement has been signed by thePurchaser_and the Authority and has been approved by thelr respectivegoverningbodies. (6)CommencementofPaymentObligations.The payment obligations ofthePurchaser,as set forth in Section 5 of this Agreement,-te-payAnnval ProjectGecis-as--defined-in-Seeten+_etisisAgreement,shall commence on the Date of Commercial Operation. (¢)mination.This Agreement shall terminate thi fs after the Date of Commercial Operation,provided that if the Date of Commercial atio es occur before Janu t |shall ferminateonJanuary1,1996, (d)Henewal,The Purchaser may renew this Agreement on the same terms and conditions as provided herein for successive additional(__)year terms (auch additional terms totalling not more thanthrotnhmaininLifthePr the term of thi ment or thelast renewal ther i -Electri i rnish (a)Sale sndPurchase.The Authority hereby sells,and the Purchaserherebypurchases,the Capability of the Project (together with associated energy)fremthe-Prefeet and the Purchaser agrees to pay the Annual Project Costs therefor in accordance with this Agreement. (b)Available Power.Tne Authority shall at all times,except when prevented by a cause or event not within the control of the Authority,make power available to tne Purchaser from the Project in an amount equal to the amount the Purchaser may schedule from the Project within the limitations imposed by available Capability of the Project. AEA/Unaiaska Geothermal Project Power Salee Agreement AFFO'OED Page 6 16:22 OCT 3G,1931 ID:WORLFORTH ET AL.TEL NC:907-276-6421 #2543 PAGE:14/733 DRAFT October 30,1991 9610.2014 TFK/ct Rev.#19 v.#24 (c)Required Project Work.The Authority shall perform or cause to be performed all Required Projact Work provided that funds are legally available to the Authority for this purpose.The costs of Required Project Work shall be included in Annual Project Costs in the manner set forth in Section 4(a)(4)of this Agreement.The Authority shall give reasonable notification to the Purchaser prior to performing or causing to be performed any Required Project Work. (a)Annual Project Costs Defined.Annual Project Costs mean all of thecostsresultingfromtheownership,operation and maintenance cf,and renewals and replacements to,the Project properly incurred or paid during each Fiscal Year, including: (1)amounts required to be set aside by the Authority for the payment cf Debt Service on Bonds issued to pay the Cost of Acquisition and Construc- tion; (2)amounts required to be set aside for the payment of Debt Service on other Bonds and debt service on other obligations approved in accordance with this Agreement; (3)amounts required to restore the funds established under the Indenture to the levels required by the Indenture to be maintained therein, except ana amounts required fo restore amounts drawn from such funds (4)amounts which may be required to pay for Required Project Work to the extent that such costs are not covered by insurance or Bond proceeds or by the Renewal and Contingency Reserve Fund; (5)other amounts determined by the Authority to be necessary or appropriate to supplement and to be paid into the Furde funds established under the Indenture; AEA/Unalaska Geothermal Project Power Safes Agreement AFFO OED Page 7 16:23 OCT 3@-1931 IDi WOHLFORTH ET AL.TEL NO:967-276-6491 S43 PAGE: DRAFT October 30,1991 3610.2014 TFK/cf Rev.#19 v.#24 (6)all other costs of producing and delivering Project power including,without limitation,fiuid fees and-eests-et-we-maintenanee-(out excluding depreciation),not accounted for by the payments out of funds and reserves specified in the foregoing sections and properly chargeable to the Project under the Uniform Systam of Accounts,less any credits against said costs by reason of revenues from sources other than the direct sale of power to the Purchaser,and also less any credits for interest earned during construction and available for Project purposes;provided,that income from interest earned on reserve funds shall be used at least annually to accumulate and maintain said reserve funds in the amounts required under the Indenture or in such greater amounts as may be cetermined by the Authority,or to reduce Annual Project Costs.Such other costs shail include: (A)pretest Prolact operating and maintenance costs iA (B)costs of Project-related insurance,but payments ofproceedsofanInsurancepolicyorfromaselfInsurancefundshall!al ;and (C)Prolect-specific administrative and general expenses of the Authority,such as costs of safety inspections and investigations. (b)ProceedsofaTaking.Any payment received by the Authority as a resultofatakingofthewholeoranyportionofthecapacity,facilities,or output of the Project by any state or federal government agency shail be used by the Authority to: (1)reduce Annual Project Costs;or (2)-_-retire Bonds. (c) (1)Prer-te Not less than thirty (30)days before the beginning ofeachFiscalYear,the Authority wi+-prepare-an Purchaserthe Annual Project Budget for that year Fiscal Year.The Annual AEA/Unalaska Geothermal Project Power Safes Agreement AFFO'BED Page 8 15/33 16:23 OCT 3@,1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6431 #2343 PAGE:16/33 DRAFT October 30,1991 3610.2014 TFK/cf Rev.#19 v.#24 Project Budget shal containan eattimateLot éall Annual Project Costs §as defined (a)The Purchaser shall pay-AnAetPrejeet-Gesia-ard-ether _make all payments required hereunder in the amounts and at the times required by this Agreement notwithstanding =|suspension or reduction ih-tnG--arROURT_OFpeweramountofpowersuppliedbytheProject,Such payments shall not be subject to anyreduction,by offset or ctherwise.The parties intend and interpret the foregoing two sentences to mean that the obligaticn to make such payments shall be absolute and unconditional and unaffected by any interruption,interference,or curtailment in whoie AEA/Unaiaska Geothermal Project Power Safes Agreement AFFO'GED Page 9 16:24 OCT 3@-1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6421 #25343 PAGE:17/33 DRAFT October 30,1991 3610.2014 TFK/cf Rev.#19 v.#24 cr in part cf power supplied by the Project,but that the Purchaser does not waiveanyrightorremedyintheeventofanydefaultIntheperformanceofthisAgreemeneAuthority,except the rightto offset orre u ents. (b)or before the fifteenth day of each month dur!ls a reh hal he Authori m h due t a reduction In demand and the ratl 0btaine Iding 8 mill he amount of timat les ex n iat the Purchaser otherwise would be required to | shall be divided by said ratio, (c)Within ____days of the end of each Fiscal Year,the Authority shaildetermingactualAnnualProjectCostsfortheFiscalyear,and notify theSrpersoftheamountofactualAnnualProjectCosts.If actual Annual ProjectheamountoftheAnnualtB1,one-he ex haser A al Year to all Annual 8 uthorit Wi ul ve paid if its en under subsection b ls Sectio adb adjusted on the basis of such actual power sales. AEA/Unaiaska Geothermal Project Power Safes Agreement AFFO"8ED Page 10 16:24 OCT 3@,1991 ID:WOHLFORTH ET AL.TEL NO:907-275-6431 #2543 PAGE:18/33 DRAFT October 30,1991 3610.2014 TFK/cf Rev.#19 Vv.#24 (a)AssignmentorPayrrenttoTrustee.The parties recognize and agree: (1)that the Authority may assign its rights to receive payments under this Agreement as security for the payment of the Bonds to the Trustes under the Indenture for the benefit of the holders of the Bonds;and (2)that the Autnority may direct that amounts payable to it under this Agreement to be paid directly to the Trustee. (ob) Pro'ect Funding.The Authority shall use its best efforts to issue BondsinanamountsufficienttopaytheCostofAcquisitionandConstruction. (c)CovenantsoftheAuthority.The Authority covenants that it will not cause rates for Project power to increase by reason of any bond resolution,covenant,or agreement contained in any trust indenture or trust agreement entered into by the Authority in connection with a power project other than the Project,nor on account of any inadequacy in its actual or projectec aggregate revenues,other than revenues from the Project,nor will the Authority include in Annual Project Costs debt service payable on cebt incurred for any purpose except in respect of the Project as provided herein. (dq) Pro'ectCompletionendOperation.The Authority agrees to use its besteffortstocompletetheProjectexpeditiouslyandinaccardancewithsoundengineer- Ing practice and with the provisions of the Indenture.The Authority shall also use its best efforts consistent with Prucent Utility Practice to construct and complete,and to cperate and maintain the Project (or to arrange for such operation and maintenance) to provide power at the lowest reasonable cost to the Purchaser in a manner that Is compatible with the Purchaser's System and consistent with the Act,the Indenture, and this Agreement. AEA/Unaiaska Geothermal Project Power Sa/es AgreementAFFO:8ED Page 11 16:25 OCT 3@-1991 ID!WOHLFORTH ET AL.TEL NO:937-276-6481 ¥2543 PAGE:19733 DRAFT October 30,1991 3610.2014 TFK/cf Rev.#19 v.#24 (a)Default,Each of the following events constitutes an event of default under this Agreement:. (1)failure by the Purchaser to perform any payment obligation under this Agreement;and (2)failure by either party to odserve and perform any covenant, condition or agreement on its part to be observed or performed under this Agreement,other than as described in Section 7(a)(1)of this Agreement,for a period of 30 days after receipt of written notice from the other party, specifying such failuré and requesting that it be remedied. 4810s eh ORO Hts(b)Atbitation-tpes-the-witern-demancde: f=AS avn Ste ry rr A Arh ata Wie 2 ers ave ove Py ty pe pe OSsMO"CR Oe 6 1)i 08 ee 2 802©A EU 0 A O82 0k 2 IT RIL SSeS N24 4 OO se eee on errr tts eA".om-TOR ATSC?CR 2 Tk ek 988 NO em oe ee =Vata BAF Aye =SA Uri Bia AAA yy ValeWATAROAWA720TSa8aa1kTks"OU ee)"¢=am=5-"amt Tt the aggrieved party may7 bring any suit,action,or proceeding #at law or inequity,including mandamus,injunction,and action for specific performance,as may be necessary or appropriate to enforce any covenant,agreement,or obligation of this Agreement against the defaulting party. (2)Upon the occurrence of an event of default under Section 7(a)(1) of this Agreement,the Authority,in addition to its other remedies under this AEA/Unaiaska Geothermal Project Power Salee Agreement AFFO'GED Page 12 16:25 OCT 3@-1991 ID:WOHLFORTH ET AL.TEL NO!307-276-6401 #2543 PAGE:20-33 DRAFT October 30,1991 8610.2014 TFK/ct Rev.#19 v.#24 Agreement,shall be entitled as of right to the appaintment cf a recsiver for all or any part of the Purchaser's Systern,and the Authority and any receiver so appointed shall have such rights and powers and be subject to such limitations anc restrictions as are prescribed by the laws of the State of Alaska. (3)'If the Purchaser has for any reason suspended or reduced,or has failed to make or has been prevented from making,payments required under this Agreement,the Authority,in addition to its other remedies under this Agreement,may terminate or suspend the delivery of power to the Purchaser. {d}(¢)Performance in the Event of Wrhere-a-dispute-undertris continuetc make payments requ red under this,Agreement in the event of any dispute under this Agreement or in the event of any dispute under the Indenture,and this cdligation of continued payment pending resolution of disputes shall be immediately enforceable by the Authority or the Trustee upon application to any court of competent Jurisdiction.No payment cdligation of the Purchaser under this Agreement is subject to offset. ion 8 -Pur r't (a)CharacterofExpense.The amounts payable under this Agreament areoperatingexpensesofthePurchaser's System bythe-RureRaser and are valid and binding obligations of the Purchaser,payable only from the gross revenues of the Purchaser's System a8 2-056 ot purctasee cove power,and not payable from anytaxesnassetstherrevenuesGeneratedthravghexerciseofpowersoftaxation:revenues of anv of,8 n r_th t AEA/Unaiaska Geothermal Project Power Safee AgreementAFFO'OED Page 13 16:26 OCT 3@-1991 ID:WOHLFORTH ET AL.TEL NO:907-276-6401 #0343 PAGE:21/33 DRAFT October 30,1991 8610.2014 TFK/ct Rev.#19 v.#24 (6)Purchaser's Rate Covenants.In order to afford,permit,and make timely payments as specified in this Agreement,the Purchaser agrees that it will establish, charge,and collect rates,tees,and charges with respect to the Purchaser's System in accordance with applicable law to provide revenues sufficient to meet its obligations under this Agreement and sufficient to pay,together with any other funds or moneys availadle therefor,any and all other amounts payable from or which constitute or may constitute a charge and lien upon such revenues including,but not limited to,amounts sufficient to meet obligations to service debt incurred by the Purchaser to finance the Purchaser's System. (c)ration an intenance of Pur r .The Purchaser covenants and agrees that i will operate and maintain its System in good repair, working ¢rcer and condition,and in accordance with Prudent Utility Practice. (dq)LimitationonCertainContracts.The Purchaser covenants and agrees not to enter voluntarily into any other contract or agreement to take or pay for power, under which the Purchaser's obligation to make payments from the revenues of the Purchaser's System is on a parity with or superior to its payment obligations under this Agreement,except that the Purchaser may enter into such a contract or agreement: (1)of a duration not exceeding two years,and under which the Purchaser's obligation to make payments from the revenues of the Purchaser's System is on a parity with its payment obligations under this Agreement; (2)with acommercial customer in the form annexed hereto as Exhibit C:or (3)under which the Purchaser's obligation to make payments from the revenues of the Purchaser's System is on a parity with Its payment obligations under this Agreemert,if a written opinion from a Consultant is rendered that (i)the contract or agreement is reasonably expected to contribute to the conduct of the business of the Purchaser's System in an efficiant and economical manner consistent with Prudent Utility Practice;and (li)the contract or agreament will not impair the ability of the Purchaser to raise revenues sufficient to mest its obligations under this Agreement. AEA/Unalasha Geothermal Project Power Sa/ee Agreement AFFO'85D Page 14 16:27 OCT 3@-1991 ID:WORLFORTH ET AL.TEL NO:907-276-6421 #0543 PAGE:22/733 DRAFT October 30,1991 8610.2014 TFK/c# Rev.#19 v.#24 Section 9 -Indenture. (a)AmendmentorSupplemenretionofindenture.Except as provided inSection10ofthisAgreement,the Authority will mot amend or supplement the Indenturein any manner,or adopt a new Indenture in connection with the refunding of the Bonds,which would materially adversely affect the ability of the Purchaser to fulfill the terms of tnis Agreement or impose any increased burden or obligation, financial or otherwise,on the Purchaser,without the consent of the Purchaser. fe)Information.The Authority shall provide the Purchaser with a copy cf any report,certificate,letter,or other communication which the Author'ty is required to furnish to the Trustee under the Indenture or that the Trustee furnishes to the Authority. ign 10 -rchaser'nsen lemental In ri nstr r OperatetheProject.The Purchaser hereby consents to the adoption by the AuthorityofsupplementalIndenturesasnecessarytocomplywiththeAuthority's obligation to finance and construct the Project and to provide for its continued operation pursuant to Section 6(d)of this Agreement and to use its best efforts to complete the Project expeditiously and to provide for its continued operation and in accordance with sound engineering practices and with the provisions of the Indenture.The Authority shall consult with the Purchaser regarding the provisions to be included in such supplemen- tal Indenture,and shall use its reasonable best efforts to comply with the requests of the Purchaser with respect thereto.Uniess otherwise approved in accordance with Section 9(a)of this Agreement,such supplemental Indentures shall: (a)Provide that the total amounts required for the payment of Debt Service when due shall be,on an annual basis,ag nearly equal as practicable;and (b)be substantially in the form attached hereto as Exhibit D,except to the extent that the Authority finds that modifications are necessary to sell the Bonds on a@ tax-exempt basis, AEA/Unaiaska Geothermal Project Power Salee Agreement AFFO'#59 Page 15 a 16:27 OCT 30,1991 ID:WOHLFORTH ET AL.TEL NO:907-275-6401 #0543 PAGE:23/33 DRAFT October 30,1991 3610.2014 TFK/ct Rev.#19 v.#24 Section 11 -Authority Responsibilities.Fhe In addition to responsibilities set forthelsewhereInthisAgreement,the Authority shall take the following actions,subjecttotheprovisionscffederalandstatelaw,and the requiraments of licensing and regulatory agencies: (a)Arrange for the operation and maintenance of the Project and the scheduling,production,and dispatch of Project power. fe}Evaluate and select among alternative methods (if any)of carrying out and funding (Including through issuance of Bonds)Required Project Work. {8(c¢)Adopt maintenance schedules for the Project that do not interfere unreasonably with the operations of the Purchaser. AEA/Unalaska Geothermal Project Power Salve Agreement AFFO'8E9 Page 16 16:28 OCT 3@-1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6401 #2543 PAGE:24°33 DRAFT October 30,1991 8610.2014 TFK/ct Rev.#19 v.#24 {g}(d)Consider the need for and approve any additional amount to be added to the Renewal and Contingency Reserve Fund over and above the Renewal and Contingency Reserve Requirement provided under the Indenture. f*}(e)If and when no Bonds are outstanding under the Indenture,and the Indenture is therefore no longer effective,the Authority shall provide for the estadlishment of such accounts and the taking of such actions as may be necessary to manage the Project. Section 12 -Insurance. (a)The Authority shail keep and maintain the Project at all times insured against such risks and in such amounts,with such deductible provisions,or provide for a source of self insurance,as is customary in connection with the operation of facilities of a type and size comparable to the Project and as may reasonably and economically be cbtained or secured.The determination of what is "customary"and what may be "reasonably and economically obtained or secured'within the meaning of the prior sentence sha'l be made by an independent insurance consultant employed by the Authority or by the State division of risk management.Without limiting the foregoing,but only if required under the preceding sentences,the Authority shall carry and maintain,or cause to be carried and maintained,and pay or cause to be paid timely the premiums for,the following insurance with respect to the Project and the Authority: (1)Insurance coverage for buildings,works,plants and facilities comprising the Project for all risks of diract physical loss,at all times in an amount not less than an amount necessary giving regard to co-insurance provisions to pay and retire and redeem all the Outstanding Bonds. (2)General public liability insurance (cther than as set forth in subsection (c)of this Section)in minimum amounts per occurrence,for annual aggregate claims,and with a deductible amount,to the same extent that other entities comparable to the Authority and owning or operating facilities of the size and type comparable to the Project carry such insurance. (3)Comprehensive automobile liability insurance. AEA/Unalaska Geothermal Project Power Sa/ee Agreement AFFO!OED Page 17 16:28 OCT 3@,1991 [D:WOHLFORTH ET AL.TEL NO:987-276-6491 #2543 PAGE:25/33 DRAFT October 30,1991 9610.2014 TFK/ct Rev.#19 v.#24 (4)Workers'compensation insurance or self-insurance as required by the laws of the State of Alaska. (6)Each insurance policy required by this Section (1)shall be issued or written by a financially responsible insurer (or insurers),or by an Insurance fund established by the United States of America or State of Alaska or an agency or instrumentality thereof,(2)sha'l be in sucn form and with such provisions (inclucing, without limitation and where applicable,loss payable clauses payable to the Trustee, waiver of subrogation clauses,provisions relieving the insurer of liability to the extent of minor claims and the cesignation of the named assureds)as are generally considered standard provisions for the type cf insurance invalved,and (3)shall prohibit cancellation or substantial modification by the insurer without at least thirty days'prior written notice to the Trustee and the Authority.Without limiting the generality of the foregoing,all insurance po.icies,and other arrangernents to the extent feasible,carried pursuant to this Section 12 shall name the Trustee,the Authority and the Purchaser as parties insured thereunder as the respective interest of each of such parties may appear,and loss thereunder shall be made payable and shall be applied as provided in the Indenture. (c)The Authority covenants to review each year the insurance carried by the Authority with respect to the Authority and the Project and,to the extent feasible and sconomically prudent,will carry insurance insuring against the risks and hazards specified in this Section to the same extent that other entities comparable to the Authority and owning or operating facilities of the size and tyoe comparable to the Project,and taking Into account any special circumstances of the Project,carry such insurance.In the event that the Authority determines that the insurance required by this Section is not available to the Authority at reasonable cost,and,in any case, every two years,from and after January 1,1993,the Authority shall employ an Independent insurance consultant or the State division of risk management (the "consultant')for the purpose of reviewing the insurance coverage of,and the insur- ance required for,the Authority and the Project and making recommendations respecting the types,amourts and provisions of insurance that should be carried with respect to the Authority and the Project and their operation,maintenance and adminis tration.A signed copy of the report of the consultant shail be filed with the Trustee and copies thereof shall be sent to the Authority,and the insurance requirements specified hereunder,including any and all of the dollar amounts set forth in this AEA/Unaiaeka Geothermal Project PowerSaleeAgreementAFFO'059 Page '8 16:29 OCT 30,1991 ID:WOHLFORTH ET AL.TEL NO:907-276-6401 #2543 PAGE:26/33 DRAFT October 30,1991 8610.2014 TFK/cf Rev.#19 v.#24 Section,shall be deemed modified or supersedec as necessary to conform with the recommendations contained in said report. (dq)The Authority may establish a fund to provide sef-insurarce against the risks and hazards relating to the properties of the Project and the interests cf the Authority and the Bondholders as described in this Section,and,in connection therewith,may specify and determine the matters and things set forth in paragraph (c) of this Section. (8)Insurance maintained pursuant to this Section may be pert of one or more master policies maintained by the State of Alaska so long as the form of such policy and the coverage is the same as if a separate poicy was in effect. (f)=The Authority shall on or before January 1 of each year,commencingJanuary1,1993,submit to the Trustee a certificate verifying that all minimum insurance coverages required by this Indenture are in full force and effect as of the date of such Authority certificate. Section13-Records.In addition to meter records,the parties shall keep log sheetsandotherrecorcsasmaybeneededforthepurposesofthisAgreement. Section 14 -InspectionofFacilities.For purooses of this Agreement,each party may,but shall not be obligated to,inspect any other party's facilities relating to the Project at any time upon reasonable notice,but such inspection or failure to inspect shall not render the inspecting party,its officers,agents or employees,liable or responsible for any injury,loss,damage,or accident resulting from defects in such electric installation, or for violation of this Agreement. i :n Maintain Integr r (a)CompliancewithLaw.The Purchaser will take all necessary steps tocomplywithapplicablefederalandstatelawsandregulations,licenses,and permitsrelatingtotheuseandoperationofthePurchaser's System._TIhe Authority will take t t mply wit licabl r AEA/Unalaske Geothermal Project Power Saiee Agreement AFFO'SED Page 19 16:29 OCT 3@-1991 ID:WOHLFORTH ET AL.TEL NO:3@7-275-6421 #2543 PAGE:27/33 DRAFT October 30,1991 8610.2014 TFK/ct Rev.#19 v.#24 regulations,and to obtaln and thereafter comply with all applicable licenses andpermitsrelatingtotheuseandoperationoftheProject, (0)Sales.Mergers.and Assignmerts of the Purchaser's System.ThePurchasershallnotabandon,sell,mortgage,lease,or otherwise dispose of the Purchaser's System or any assets of that System (including by sale to or merger with any other utility),or assign this Agreement or any interest thereunder to any assignee or successor in interest,unless: (1)|such disposal or assignment accords with the terms of each ofthePurchaser's covenants or agreements with the holders of the Purchaser's bonds,notes,or other evidences of indebtedness relating to the abandonment, sale,mortgage,lease or other disposition of property of the Purchaser's System;and (2)such disposal or assignment is: (A)consented to in writing by the Authority which consent shall not be unreasonably withheld;or (B)limited to assets that the Purchaser determines to be surplus to the needs of the Purchaser's System,but the depreciated value of assets so disposed of or assigned in any given year shall not exceed five percent of the depreciated value of the assets of the Purchaser's System prior to the disposal or assignment;or (C)evaluated by a Consultant and that Consultant certifies that,taking into account the other ob'igations cf the Purchaser or of the assignee or successor in interest (as the case may be),the Purchaser or the assignee or successor in interest will have: (i)substantially the same or greater ability to produce sufficient revenues to meet its payment obligations under this Agreement as would tne Purchaser absent the transaction;and (ii)the ability to perform all obligations under this Agreement. AEA/Unaliaaka Geothermal Project Power Safee Agreement AFFO'853 Page 20 16:30 OCT 3@-1991 ID:WOHKLFORTH ET AL.TEL NO:907-276-6431 #2543 PAGE:28°33 DRAFT October 30,1991 9610.2014 TFK/cf Rev.#19 v.#24 Any assignee of this Agreement must assume in writing all of the Purchaser's obligations hereunder,must pay amy amounts due and owing from the Purchaser hereunder,and must provide the Authority with an opinion of counsel that this Agreement is enforceadle against the assignee. (c)Sales,Mergers and Assignments of the Project.The Authority shall interest in the Pr ran tg Of the Project (ineludin le to or r d assignee or successor er l (1)such disposal or assignment is required under the terms of the nt lemental indenture:or 2)such disposal or assignment is:(A)consent writing 6 the Purchaser which consent shall not be unreasonably withheld:or (B) limi ssets that the Authority determinesto b urplus to th eed he Pr th reciat [t i val th ts of the Proj rior to t i lor assignment: !ns of the Autho he assl I ifi tantially the sam r ili j obligations under this Agreement as would the Authority absent thetransaction:and (ii)th ility_t rfor l|_obligation thi Agreement, (d)StatusofBonds,The parties will not take any action,including entry into power sales agreements,which would cause the interest on any Bond which is criginally issued on a tax-exempt basis to become taxable under the Internal Revenue Code of 1986,as the same may be amended from time to time. AEA/Unaiaaka Geothermal Project Power Saiee AgreementAFFO'OED Page 21 16:31 OCT 30-1991 ID:WOHLFORTH ET AL.TEL NO:387-276-6421 #0543 PAGE:29/33 DRAFT October 30,1991 $610.2014 TFK/ct Rev.#19 v.#24 Section16 -Ass'anment. (a)Assignment Generally.This Agreement shail inure to the benefit of,and shail be binding upon the respective successors and assigns of the parties to this Agreement;provided,that this Agreement or any interest herein may be transferred or assigned (1)by the Purchaser only in accordance with the provisions of Sections SETI.and 16(b)of this Agreement. (>)AssignmentstoSecuredLanders.A party may assign this Agreement,together with all of its rights and obligations thereunder: (1)to or in trust for any secured lenders of such party for the purpose of securing obligations for borrowed money;or (2)pursuant to the exercise by any such secured lender of any of therights,powers,or privileges provided for by the mortgages or cther security instruments of such party for borrowed money;provided,that no such assignment shail In any way relieve such party of any obligations hereunder. No such secured lender shall,as a result of such assignment or the subse- Quent exercise of its rights with respect to this Agreement under any mortgage, deed of trust,or other security instrument,be construed to have assumed,or otherwise to have become personally liable for,the assignor's obligations hereunder,but such secured lender's ability to exercise the rights of its assignor hereunder shall ba subject to performance of the assignor's corresponding obligations under this Agreement.In the event any such secured lender exercises any of its rights,powers,or privileges with respect to this Agreement under said mortgages or other security agreements,such secured lender may thereafter assign this Agreement,together with all the rights and obligations thereunder,to any entity authorized and able to perform the obligations under this Agreement,which entity shall succeed to all the rights and assume all the obligations of the borrower-assigner under this Agreement. Prior to the exercise by any secured lender of any rights or remedies under any mortgages or security agreements with respect to this Agreement,such secured AEA/Unalaska Geothermal Project Power Salee Agreement AFFO!952 Page 22 16:31 OCT 30,1991 ID:WOHLFORTH ET AL.TEL NO:907-276-6422 #0543 PAGE:38/33 DRAFT October 30,1991 8610.2014 TFK/cf Rev.#19 v.#24 lender shall give the parties hereto reasorab'e notice that it intends to exercise such rights or remecies. (c)The Purchaser's agreement to reseil power from the Project shall not bedeemedatransferorassignmentofthisAgreement,but neither shall any such resaiaofProjectpowerrelievethePurchaserofanypaymentobligationunderthis Agreement. Section 17 -No Security Interest or Lien.This Agreement shail neither give the A ri rity interestorlien on the Purchaser't r ire th Purchaser to sell the Purchaser's System (or any component thereof)In order {n ligati the Purchaser thi Section18-Exhibits.The following exhibits are incorporated by reference into this Agreement: (a)Exhibit "A"is the Indenture; (b)Exhibit "B"is the Description of the Project; (c)Exnibit "C"is the Ferm-otGemmercia+-Gentract DescriptionoftheDeliveryPoint: (d)Exhibit "D"is the Form of Commercial Contract: {@)Exhibit"E"is the Form of Certain Supplemental Indentures. Section 18 -Notices.Computation of Time and Holidays.Any notice required by thisAgreementtobegiventoanypartyshallbeeffectivewhenitisreceivedbysuch party,and In computing any period of time from such notice,such period shall commence at 12:01 p.m.prevailing time at the piace of receipt on the date of receipt of such notice.Whenever this Agreement calls for notice to or notification by any party,the same (unless otherwise specifically provided)shall be in writing directed to the Authority's executive director or the Purchaser's city manager.If the date for AEA/Unaiaska Geothermal Project Power Safee Agreement AFFO'8E3 Page 23 16:32 OCT 30,1991 ID:WOHLFORTH ET AL.TEL NO:907-276-6421 #2543 PAGE:31733 DRAFT October 30,1994 3610.2014 TFK/cf Rev.#19 v.#24 making any payment or performing any act is a day on which banking institutions are closed in the place where payment is to be made or a legal holiday,payment may be made or the act performed on the next succeeding day which is neither a legal holiday nor a day when banking institutions are closed in such piace. Section 19 -Applicable Law.The laws of the State of Alaska (including without limitation the equal opportunity laws set 'forth in AS 18.80.220,as the same may be amended from time to time)shal!govern the interpretation and application of this Agreement and the actions of the parties hereunder. lon 20 -Availabili Information.The parties shall make availabletoeach other,for inspection and copying during business hours,all books,records,plans,and other information relating to any calculation or determination to be made pursuant to this Agreement. ign 21 -rability. (a)Severability Generally.if any section,paragraph,clause,or provision ofthisAgreementoranyagreementreferredtointhisAgreementshallbefinally adjudicated by a court of competent jurisdiction to be invalid or unenforceable,the remainder of this Agreement shall be unaffected by such adjudication and all the remaining provisions of this Agreement shall remain in full force and effect as if such section,paragraph,clause,or provision or any part thereof so adjudicated to be invalid had not been included herein. (>)CorrectionandSudstitution.If any section,paragraph,clause,orprovisionofthisAgreementoranyagreementreferredtointhisAgreementshallbe finally adjudicated by a court of competent jurisdiction to be invalid or unenforceable, then and in such event,the parties agree that they shall exercise their best efforts to correct such invalidation and substitute appropriate agreements and contractual arrangements to achieve the intent of this Agreement. AEA/Unaiaska Geothermal Project Power Sales Agreement AFFO'@52 Page 24 ae 16:32 OCT 3@-1992 ID:WOKLFORTH ET AL.TEL NO:907-276-6401 #2543 PAGE:32/33 DRAFT October 30,1991 8610.2014 TFK/ct Rev.#19 v.#24 Section 22 -Remedies Cumulative.No remedy conferred upon or reserved to the parties hereto is intended to be exclusive of any other remedy or remedies available hereunder or now or hereafter existing by law,in equity,by statute,or otherwise,but each and every such remedy shall be cumulative and shall be in addition to every other such remedy. lon 23 -Waiver Not Continuing.Any waiver at any time by either party to this Agreement of its rights with respect to any default of the cther party hereto,or with respect to any other matter arising in connection with this Agreement,shall not be considered a waiver with respect to any subsequent default,right,or matter. ion 24 -nant To Act In ith.In order to permit this Agreement to be fully effective throughout Its term in accordance with the original intent of the parties, each party agrees that it shall at all times act in good faith in performing its obligations and in exercising its rights uncer this Agreement. Section 25 -No Third-Party Beneficiaries.Notwithstanding that the operation of this Agreement may and is intended to confer benefits on third parties who are not signatories to this Agreement,this Agreement shall be enforceable only in accordance with its provisions expressly governing enforcement.In prom'sing performance to one another under this Agreement,the parties intend to create binding legal obligations to and rights of enforcement in: (a)one another;and (0)such assignees or successors in interest of the parties as may enjoy a right to enforce this Agreement by virtue of provisions of this Agreement that expresslycreatesucharightinsuchassigneesorsuccessorsininterest.By entering into thisAgreement,the parties expressly do not intend to create any obligation or promise any performance to any other third party,nor have the parties created for any other third party any right to enforce this Agreement. AEA/Unalaska Geothermal Project Power Sales Agreement AFFO"8GD Page 25 16:33 OCT 30,1991 ID:WOHLFORTH ET AL.TEL NO:987-276-6481 #2543 PAGE:32/33 DRAFT October 30,1991 8610.2014 TFK/cf Rev.#19 v.#24 ion 26 -Section Headings.The section headings in this Agreement are for convenience only,and do not purport to,and shail not be deemed to,define,limit,or extend the scope or intent of the section to which they pertain. :ipl ies.Th's Agreement shall be executed in several counter- Parts,each of which shall be an original,but both of which shail constitute one and the same instrument. IN WITNESS WHEREOF,the parties have caused this Agreement to be executed the day and year first above written. ALASKA ENERGY AUTHORITY By NAME AND TITLE CITY OF UNALASKA,ALASKA By NAME AND TITLE AEA/Unaiaeka Geothermal ProjectPowerSafesAgreementAFFO'#ED Page 26 {pent WOHLFORTH,ARGETSINGER,JOHNSON &BRECHT A PROFESSIONAL CORPORATIONPETERARGETSINGER TELEPHONE (907)276-640! JULIUS J.BRECHT ATTORNEYS AT LAW TELECOPY 7)27 3 CYNTHIA L.CARTLEDGE (907)276-509 ROBERT M.JOHNSON 900 WEST 5TH AVENUE,SUITE 600BARBARAE.KISSNER THOMAS F.KLINKNER ANCHORAGE,ALASKA 9950).OF COUNSEL ANOREW M.LEBO ROGER G.CONNOR BRADLEY E.MEYEN JAMES A,SARAFIN . KENNETH E,VASSAR ERIC E,WOHLFORTH MEMORANDUM RECEIVED OCT 30 1991 TO:Distribution List ALASKA ENERGY AUTHORITY FROM:Thomas F.Klinkner DATE:October 29,1991 SUBJECT:Alaska Energy Authority/Unalaska Geothermal Project Our File No.3610.2014 Enclosed is a first draft of the Indenture for this financing.To expedite your review of the draft |have sent it to you without incorporating comments from Eric Wohlforth,who is in Seattle this week.I'll forward changed pages reflecting Eric's comments as soon as |receive them.Len”op”tTJayL2/0]AFFOIBE2 DISTRIBUTION LIST ALASKA ENERGY AUTHORITY POWER REVENUE BONDS,SERIES 1992 (Unalaska Geothermal Project): 3610.2014 October 25,1991 ISSUER Alaska Energy Authority P.O.Box 190869 701 East Tudor Road Anchorage,Alaska 99519-0869 Telephone (907)261-7262 Telecopy (907)561-8584 Charlie Bussell,Executive Director Brent Petrie,Director of Agency Operations Dick Emerman,Senior Economist BOND COUNSEL Wohlforth,Argetsinger,Johnson &Brecht 900 West 5th Avenue,Suite 600 Anchorage,Alaska 99501 Telephone (907)276-6401 Telecopy (907)276-5093 Eric Wohlforth,Esq. UNDERWRITER John Nuveen &Co.Incorporated 2740 Pacific First Centre 1420 Fifth Avenue Seattle,Washington 98101-2333 Telephone (206)587-0959 Telecopy (206)382-1589 Jim Seagraves UNDERWRITER'S COUNSEL Katten Muchin &Zavis 525 West Monroe Street,Suite 1600 Chicago,Illinois 60606-3693 Telephone (312)902-5418 Telecopy (312)902-1061 Lew Greenbaum,Esq. PROJECT ENGINEER OES!Power Corporation 610 East Glendale Sparks,Nevada 98431 Telephone (702)355-5666 Telecopy (702)355-5656 Daniel N.Schochet Vice President -Marketing Cliff Philips Vice President -Finance PROJECT ENGINEER'S COUNSEL Perkins-Coie 1029 West 3rd Avenue Suite 300 Anchorage,Alaska 99501 Telephone (907)279-8561 Telecopy (907)276-3108 Richard Johannsen,Esq. CITY OF UNALASKA P.O.Box 89 Unalaska,Alaska 99685 Telephone:(907)581-1251 Telecopy:(907)581-1417 Polly Prchal,City Manager Roe Sturgulewski,Director of Public Works R.W.BECK AND ASSOCIATES,INC. 2101 4th Avenue,Suite 600 Seattle,Washington 98121 Telephone:(206)441-7500 Telecopy:(206)441-4964 Mr.Ray Benish AEA/Unalaska Geothermal Project Distribution List -3610.2014 AFFOI9eF CITY'S COUNSEL Hicks,Boyd,Chandler &Falconer 825 West 8th Avenue,Suite 200 Anchorage,Alaska 99501 Telephone (907)272-840T Telecopy (907)274-3698 Brooks Chandler,Esq. LERESCHE &CO. 4270 Glacier Hy. Juneau,Alaska 99801 Telephone:(907)586-8338 Telecopy:(907)586-8338 Mr.Robert LeResche Page 2 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 TRUST INDENTURE by and between ALASKA ENERGY AUTHORITY AND as Trustee Dated as of __,1992 ALASKA ENERGY AUTHORITY POWER REVENUE BONDS,SERIES 1992 (Unalaska Geothermal Project) DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 TABLE OF CONTENTS . Page RECITALS ..0...cc cc ce ee te ce ee eee ne eee eee e ee nnee 1 GRANTING CLAUSE FIRST ..........0.0 cc eee eee eee eee eee eee eees 2 GRANTING CLAUSE SECOND ...........00 cee cece eee ee eee eee eens 2 GRANTING CLAUSE THIRD ............cece cee ee tee nett eee ees 2 GRANTING CLAUSE FOURTH ............0.00 eee eee reece eee nee 3 ARTICLE | DEFINITIONS AND INTERPRETATION Section 101 -Definitions ..2.0.....2c ce ee ee ee ee teens 4 Section 102 -Interpretation ...2.2......ce ee ee ec et eee tenes 16 Section 103 -Successors and ASSIQNS ........2..cee eee eee eee eens 17 Section 104 -Parties Interested Herein .........0...cc eee eee eee eee 17 Section 105 -Obligation of Bonds ....2.......cee ee cee ee eee 17 ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 -Authorization of Bonds........0...ce ec ee ee ee eee 18 Section 202 -General Provisions for Issuance of Bonds .................19 Section 203 -Project Issue...ee ee ee ee ee tenes 21 Section 204 -Additional Bonds .........0...cc eee tt ee ee eee eee 22 Section 205 -Refunding Bonds ...........-cece ee eee ee eee tenes 22 ARTICLE Ill GENERAL TERMS AND PROVISIONS OF BONDS Section 301 -Medium of Payment;Form and Date;Letters and Numbers ....24 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 TABLE OF CONTENTS . (Continued) Page Section 302 -Legends .........ee cee ne eee eet eees 24 Section 303 -Execution and Authentication ...............2.eee eee eee 25 Section 304 -Exchange of Bonds ............ce eee ec ee ee eee ees 25 Section 305 -Negotiability,Transfer and Registry;Bond Depository ........26 |Section 306 -Regulations With Respect to Exchanges and Transfers .......28 Section 307 -Bonds Mutilated,Destroyed,Stolen or Lost................28 Section 308 -Temporary BondsS ............0c cece ee eee eee nes 29 ARTICLE IV REDEMPTION OF BONDS Section 401 -Privilege of Redemption and Redemption Price .............30 Section 402 -Redemption at the Election or Direction of the Authority .......30 Section 403 -Redemption Otherwise Than at the Authority's Election.or Direction 2...ee ee ee ee eee eee eee en eee 30 Section 404 -Selection of Bonds to be Redeemed .....................31 Section 405 -Notice of Redemption ..........2...eee ee ee eee eee ee ee 31 Section 406 -Payment of Redeemed Bonds ...............eee e reece 31 AEA/Unalaska Geothermal Project Table of Contents AFFOIABA Page ii DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 TABLE OF CONTENTS ; (Continued) ARTICLE V ESTABLISHMENT OF FUNDS AND APPLICATION THEREOF Page Section 501 -Pledge of Revenues and Other Funds ................2008-32 Section 502 -Establishment of Funds and Accounts ...................33 Section 503 -Construction Fund ........2.cece eee eee eee eens 34 Section 504 -Revenues and Revenue Fund............0.cece eee wees 39 Section 505 -Operating Fund ...........2.cee eee eee ee eee rene 39 Section 506 -Payments Into Certain Funds .............2.2 cece wees 40 Section 507 -Debt Service Fund ............cece eee ee eee eens 41 Section 508 -Capital Reserve Fund ...........2...ce eee eee ee eens 43 Section 509 -Renewal and Contingency Reserve Fund .................44 Section 510 -Excess Investment Earnings Fund .............02eeeeaee 44 Section 511 -Cancellation and Destruction of Bonds .................+.45 ARTICLE VI DEPOSITORIES OF MONEYS,SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 601 -Depositories ..1...2...cc eee eee ee ene 45 Section 602 -Deposits ..1...ee eee ee et eee teenies 46 AEA/Unalaska Geothermal Project Table of Contents AFFOIABS Page iii DRAFT October 28,1991 3610.2014 TFK/ct Rev.#4 TABLE OF CONTENTS . (Continued) Page Section 603 -Investment of Certain Funds ..............202 e eee eens 47 Section 604 -Valuation and Sale of Investments ...............0--2008-47 ARTICLE VII PARTICULAR COVENANTS OF THE AUTHORITY Section 701 -Payment of Bonds ...........2...ee ee ee eee ee eee 48 Section 702 -Extension of Payment of Bonds.............202eeeeeeee 48 Section 703 -Offices for Servicing BondS ............002 eee eee eee 49 Section 704 -Further Assurance........--2.2.eee eee eee eee een 49 Section 705 -Power to Issue Bonds and Pledge Revenues and Other Funds.1...2.2...cece ee eee eee tee eee eee eee eee eee ees 49 Section 706 -Power to Fix and Collect Rates,Fees and Charges...........50 Section 707 -Creation of Liens;Sale and Lease of Property ..............50 Section 708 -Consulting Engineer...1...2...ccc ee ee eee ee eens 51 Section 709 -Annual Budget............ce cee ec ee ee ee te eee 51 Section 710 -Limitations on Operating Expenses and Other Costs..........52 Section 711 -Acquisition and Construction of the Project and Its Operation and Maintenance .........0.cee ee ee ee et eee eee eee ees 52 Section 712 -Rates,Fees and Charges............0.cece eee eee ceeee 53 AEA/Unalaska Geothermal Project Table of Contents AFFOIAB4 Page iv DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 ) TABLE OF CONTENTS ; (Continued) Page Section 713 -Power Sales Agreement...........0.2.0 eee eee ee eee eee 54 Section 714 -Insurance.2...1.ee ee eee ene tees 55 Section 715 -Reconstruction;Application of Insurance Proceeds...........57 Section 716 -Maintenance of Capital Reserve Fund.................02-58 Section 717 -Accounts and Reports...........22 eee eee eee eee ees 59 Section 718 -Tax Covenants.....2...2...eee eee eee eee been eens 61 Section 719 -Payment of Taxes and Charges ..............--..-2+2+05-61 Section 720 -Pledge of the State 2.2...eee ee ee 62 Section 721 -Waiver of Laws ......2...cece eee ee ee ee eee 62 Section 722 -General.2...ee ee ee ee eee tee eens 62 ARTICLE VIII REMEDIES OF BONDOWNERS Section 801 -Events of Default....2.2...eceeeeeeee 63 Section 802 -Account and Examination of Records After Default...........64 Section 803 -Application of Revenues and Other Moneys After Default ......64 Section 804 -Appointment of Receiver.....2.0....eee ee ee ee eee 66 Section 805 -Proceedings Brought by Trustee ...............00 e eee 66 Table ofComaAFFO1ABA Page v DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 TABLE OF CONTENTS . (Continued) Page Section 806 -Restriction on Bondowner's Action ..........0...c eee ene 67 Section 807 -Remedies Not Exclusive.........2...cc eee eee eee ee eee 68 Section 808 -Effect of Waiver and Other Circumstances.................68 Section 809 -Notice of Default.2.2....Lc eee ee ee eee ees 68 ARTICLE IX CONCERNING THE FIDUCIARIES Section 901 -Trustee;Appointment and Acceptance of Duties ............68 Section 902 -Paying Agents;Appointment and Acceptance of Duties .......69 Section 903 -Responsibilities of Fiduciaries .............2.eee ee ee ees 69 Section 904 -Evidence on Which Fiduciaries May Act ..............0.48-70 Section 905 -Compensation ...........cc cece ewe ee ee cece eens 70 Section 906 -Certain Permitted Acts .............ce eee ee eee ee ees 71 Section 907 -Resignation of Trustee.2.2....ccc eee eee eee 71 Section 908 -Removal of Trustee.......-..2...eee eee eee eee nes 71 Section 909 -Appointment of Successor Trustee;Financial Qualifications of Trustee and Successor Trustee....2....ee ceceeeeeeee 71 Section 910 -Transfer of Rights and Property to Successor Trustee.........72 Section 911 -Merger or Consolidation ..........ccc eee eee ee 73 Tabe ofCononsAFFOIAB4 Page vi DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 TABLE OF CONTENTS . (Continued) Page Section 912 -Adoption of Authentication..............2.eee ee ee ene 73 Section 913 -Resignation or Removal of Paying Agent and Appointment of SUCCESSOP.2...ce eee ee eee eee eee eee eens 74 ARTICLE X SUPPLEMENTAL INDENTURES Section 1001 -Supplemental Indentures Effective Upon Execution by the TruSteG,2...ee eee ee ee eet eee eens 74 Section 1002 -Supplemental Indentures Effective Upon Consent of Trustee...75 Section 1003 -Supplemental Indentures Effective With Consent of Bond- OWNETS.6 ee ee eee eee eee tenes 76 Section 1004 -General Provisions ..........0...ee eee eee eee eee 76 ARTICLE XI AMENDMENTS Section 1101 -Malling......ceeeeeeeeeenes 77 Section 1102 -Powers of Amendment............0.cece eee eee eens 78 Section 1103 -Consent of Bondowners ............cee ee ee eee eens 78 Section 1104 -Modifications by Unanimous Consent....................80 Section 1105 -Exclusion of Bonds............cee cc ee eee ee ees 80 Section 1106 -Notation on Bonds.........2...2.eee eee ee eee 81 AEA/Unalaska Geothermal Project Table of Contents AFFOIABS Page vii DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 TABLE OF CONTENTS . (Continued) ARTICLE XIl MISCELLANEOUS Page Section 1201 -Defeasance...1.0...ee ee eee ees 81 Section 1202 -Evidence of Signatures of Bondowners and Ownership of S10)9 0 83 Section 1203 -Moneys Held for Particular Bonds...............002000-84 Section 1204 -Preservation and Inspection of Documents................84 Section 1205 -No Recourse on the Bonds.........----ceeececeeeeees 84 Section 1206 -Severability of Invalid Provisions................2.00000008 85 Section 1207 -Holidays...................bee eee ee ee ee eee eee 85 Section 1208 -Notices...2...eee ee eee eee t eens 85 ARTICLE Xill BOND FORM Section 1301 -Form of Bonds and Trustee's Certificate of Authentication.....85 AEA/Unalaska Geothermal Project Table of Contents AFFOVAB4 Page viii DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 TRUST INDENTURE THIS TRUST INDENTURE (the "Indenture"),made and entered into between the ALASKA ENERGY AUTHORITY (the "Authority”),a public corporation of the State of Alaska in the Department of Commerce and Economic Development but with separate and independent corporate existence duly organized and existing under the Constitution and laws of the State of Alaska,and (the "Trustee"),anational banking association duly organized and existing and authorized to accept and execute trusts of the character herein set out under and by virtue of the laws of the United States of America,with its principal corporate trust office located in ,as Trustee; WHEREAS,the Authority has duly entered into a Power Sales Agreement (the "Power Sales Agreement")dated __,1992,with the City of Unalaska,Alaska,(the "City")specifying terms and conditions for the financing, construction and operation and maintenance of,and for the sale of power generated from,the Project (hereinafter defined)and specifying other matters pertaining to the Project and the use of the proceeds of the Alaska Energy Authority Power Revenue Bonds,Series 1992 (Unalaska Geothermal Project)(the "Bonds");and WHEREAS,the execution and delivery of the Power Sales Agreement and this Indenture were authorized by a resolution of the Authority duly adopted and approved; and WHEREAS,it has been determined that the estimated amount necessary to finance the Project will require the issuance,sale,and delivery of the Bonds in the aggregate principal amount of not to exceed $as hereinafter provided; and WHEREAS,the Trustee has agreed to accept the trusts herein created upon the terms herein set forth;and WHEREAS,all things necessary to make the Bonds,when issued as provided in this Indenture,the valid,binding,and legal special obligations of the Authority according to the import thereof and to constitute this Indenture a valid assignment of the amounts pledged to the payment of the principal and premium,if any,of and interest on the Bonds have been done and performed,and the creation,execution, DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 and delivery of this Indenture and the execution and issuance of the Bonds,subject to the terms hereof,in all respects have been duly authorized; NOW,THEREFORE,the Authority,in consideration of the premises and the acceptance by the Trustee of the trusts hereby created,and for other good and valuable consideration,the receipt of which is hereby acknowledged,and in order to secure the payment of the principal and premium,if any,of and interest on the Bonds according to their tenor and effect,and to secure the performance and observance by the Authority of all of the covenants and obligations expressed or implied herein and in the Bonds,does hereby irrevocably grant,alienate,bargain,sell,convey, transfer,assign,and pledge unto the Trustee (to the extent of its legal capacity to hold the same for the purposes hereof)and the successors in trust and assigns of the Trustee,forever: GRANTING CLAUSE FIRST All rights,title,and interest of the Authority in,to,and under the Power Sales Agreement (except under Section ___thereof and the Authority's right to receive notices thereunder)and all extensions and renewals of the terms thereof,if any,and to do any and all other things which the Authority is or may become entitled to do under the Power Sales Agreement;provided,however,that the assignment made pursuant to this clause shall not impair or diminish any obligation of the Authority under the Power Sales Agreement or alter the rights,duties,and obligations of the Trustee under the remaining terms of this Indenture; GRANTING CLAUSE SECOND All revenues and receipts payable under or with respect to the Power Sales Agreement; GRANTING CLAUSE THIRD All rights,title,and interest of the Authority in and to all monies and securities from time to time held by the Trustee under the terms of this Indenture (except amounts held in the Excess Investment Earnings Fund),including,without limitation, the Revenues;and AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 2 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 GRANTING CLAUSE FOURTH Any and all property,rights,and interests of every kind or description which, from time to time hereafter,may be sold,transferred,conveyed,assigned,pledged, mortgaged,or delivered to the Trustee as additional security hereunder. TO HAVE AND TO HOLD all and singular the Trust Estate (as hereinafter defined),whether now owned or hereafter acquired,irrevocably unto the Trustee and its successors in trust and assigns forever; IN TRUST,NEVERTHELESS,upon the terms and trusts herein set forth for the equal and ratable benefit,security,and protection of all present and future Owners (hereinafter defined)of the Bonds issued under and secured by this Indenture,without privilege,priority,or distinction as to lien or otherwise of the Bonds over any of the other Bonds; PROVIDED,HOWEVER,that if the principal and premium,if any,of the Bonds and the interest due or to become due thereon are paid at the times and in the manner mentioned in the Bonds according to the true intent and meaning thereof and the parties hereto shall well and truly keep,perform,and observe all of the covenants and conditions pursuant to the terms of this Indenture to be kept,performed,and observed by them and there shall be paid to the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof,then this Indenture and the rights hereby granted shall cease and terminate;otherwise this Indenture is to be and remain in full force and effect. THIS INDENTURE FURTHER WITNESSTH,and it is expressly declared,that all Bonds issued and secured hereunder are to be issued,authenticated,and delivered, and all said property,rights,and interests,including,without limitation,the amounts hereby assigned,are to be dealt with and disposed of under,upon,and subject to the terms,conditions,stipulations,covenants,agreements,trusts,uses,and purposes hereinafter expressed and that the Authority has agreed and covenanted,and hereby does agree and covenant,with the Trustee and with the Owners form time to time of the Bonds,or any part thereof,as follows: AEA/Unalaska Geothermal Project Trust indentureAFFO1AB4 Page 3 ex DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 ARTICLE | DEFINITIONS AND INTERPRETATION Section 101 -Definitions.The following terms shall,for all purposes of this Indenture, have the following meanings: "Accountant's Certificate"means a certificate signed by a firm of independent certified public accountants of recognized national standing,selected by the Authority, which may be the firm of accountants which regularly audits the books of the Authority. "Act"means Title 44,Chapter 83 of the Alaska Statutes (AS 44.83)as the same may be amended or supplemented from time to time. "Additional Bonds"mean Bonds authenticated and delivered pursuant to Section 204. "Aggregate Debt Service"for any period means,as of any date of calculation, the sum of the amounts of Debt Service for such period with respect to all Series. "Annual Budget"means the annual budget,as amended or supplemented, adopted or in effect for a particular Fiscal Year as provided in Section 709. "Annual Project Costs”shall have the meaning ascribed thereto in the Power Sales Agreement.. "Authority”means the Alaska Energy Authority organized and existing under the Act. "Authorized Officer of the Authority”means the Chairman of the Board of Directors,Vice Chairman of the Board of Directors,Executive Director,Secretary or Treasurer or any officer or employee of the Authority authorized to perform specific acts or duties by resolution duly adopted by the Board of Directors.Whenever chief financial officer is used in this Indenture it shall mean a person designated as such by the Executive Director. "Board of Directors*means the Board of Directors of the Authority. AEA/Unalaska Geothermal Project Trsst indenture AFFO1AB4 Page 4 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 "Bond"or "Bonds"means any bond or bonds,note or notes,or evidence of indebtedness or evidences of indebtedness,as the case may be,authenticated and delivered under and pursuant to,and entitled to the benefit and security of,this Indenture. "Bond Depository”means a Bondowner acting as a central securities depository as provided in Section 305. "Bond Registrar”means the Trustee or any other bank or trust company organized under the laws of any state of the United States of America or any national banking association appointed by the Authority to perform the duties of Bond Regis- trar enumerated in Section 703. "Bond Year"means each period of 12 calendar months ending on each "Capital Reserve Fund"means the Capital Reserve Fund established in Section 502. "Capital Reserve Requirement"means (i)an amount equal to the lesser of Maximum Aggregate Debt Service or ten per cent of the proceeds of Bonds;or (ii) such other lesser amount as is required in order to maintain the tax-exempt status of the Bonds. "Code"means the Internal Revenue Code of 1986,as amended. "Construction Engineer"means an independent engineer or engineering firm or corporation having a nationwide and favorable reputation and demonstrated experience in the field of construction engineering and construction management at the time retained by the Authority to perform the acts and carry out the duties provided for such Construction Engineer in this Indenture. "Construction Fund"means the Construction Fund established in Section 502. "Consulting Engineer”means an independent engineer or engineering firm or corporation having a nationwide and favorable reputation and demonstrated experience in the field of consulting engineering for power systems at the time retained AEA/Unalaska Geothermal Project Trust indenture AFFOTAB4 Page 5 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 by the Authority pursuant to Section 708 to perform the acts and carry out the duties provided for such Consulting Engineer in this Indenture. st_of Acquisition an onstruction”means all costs and expenses of planning,designing,acquiring,constructing,installing and financing the Project or Required Project Work,placing the Project or Required Project Work in operation,and obtaining governmental approvals,certificates,permits and licenses with respect thereto,heretofore or hereafter paid or incurred by or on behalf of the Authority.Such costs shall include amounts required to be paid to any other party which are applied or are to be applied under agreement to the payment of items of Cost of Acquisition and Construction.The Cost of Acquisition and Construction shall include,but shall not be limited to: (a)Costs of preliminary investigation and development,the performance or acquisition of feasibility and planning studies,the securing of regulatory approvals,as well as costs for land and land rights,water and water rights,engineering,contractors' fees,labor,materials,equipment,utility services and supplies,accounting,legal and financing fees and expenses. (b)|Working capital and reserves in such amounts as shall be required during construction of the Project or Required Project Work and to place the Project or Required Project Work in operation and such additional amounts of working capital and reserves as are required by this Indenture; (c)'Interest accruing in whole or in part on Bonds prior to and during construction and for such additional period as the Authority may reasonably determine to be necessary for the placing of the Project or Required Project Work or any facility thereof in operation in accordance with the provisions of this Indenture; (d)Amounts,if any,required by this Indenture or a Supplemental Indenture to be paid from the proceeds of Bonds issued to finance the Cost of Acquisition and Construction into any Funds or Accounts established pursuant to this Indenture; (e)The payment of principal,premium,if any,and interest when due (whether at the maturity of principal or at the due date of interest or upon redemption) on any bond anticipation note or other note or evidence of indebtedness issued in anticipation of Bonds for the purpose of financing the Cost of Acquisition and Construction of the Project or Required Project Work; AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 6 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (f)Training and testing costs incurred by the Authority which are properly allocable to acquisition and construction; (g)All costs of insurance applicable to the period of construction; (h)The cost of restoring and repairing in accordance with Prudent Utility Practice all public or private property damaged or destroyed in the construction of the Project or Required Project Work,or the amount required by law to be paid by the Authority as adequate compensation for such damages,or amounts required by law or Prudent Utility Practice to be paid with respect to the restoration,relocation, removal,reconstruction or duplication of property made necessary or caused by the construction and installation of such Project or Required Project Work to the extent such costs are not otherwise paid out of the proceeds of insurance; (i)Legally required or permitted federal,state and local taxes and payments in lieu of taxes applicable to the period of construction; (j)All other costs incurred by or on behalf of the Authority and properly allocable to the acquisition and construction of the Project or Required Project Work; and (k)Costs of Issuance. "Costs_of Issuance"means any item of expense payable or reimbursable, directly or indirectly,by the Authority and related to the authorization,offering,sale, issuance and delivery of Bonds,including,but not limited to,printing costs,costs of preparation and reproduction of documents,filing and recording fees,initial fees and charges of any Fiduciary,legal fees and disbursements,fees and disbursements of the Consulting Engineer,fees and disbursements of other consultants and profession- als,costs of credit ratings,fees and charges for preparation,execution,transportation and safekeeping of Bonds,application fees and premiums on municipal bond insurance,credit facility charges and costs and expenses relating to the refunding of Bonds or other obligations issued to finance or refinance the Project or Required Project Work,including,but not limited to,the refunding of any obligations of the Authority outstanding as of the date of this Indenture,the proceeds of which were applied to pay the Cost of Acquisition and Construction of the Project. AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 7 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 "Counsel's Opinion"or "Opinion of Counsel"means an opinion of counsel of nationwide recognized standing in the field of municipal bonds,selected by the Authority and not objected to by the Trustee in writing within 5 days after written notice of selection. "Date of Commercial Operation"shall have the meaning ascribed thereto in the Power Sales Agreement. "Debt Service"for any period shall mean,as of any date of calculation and with respect to any Series,an amount equal to the sum of (a)interest accruing during such period on Bonds of such Series,except to the extent that such interest is to be paid from deposits in the Interest Account in the Debt Service Fund made from Bond proceeds and (b)that portion of each Principal Installment for such Series which would accrue during such period if such Principal Installment were deemed to accrue daily in equal amounts from the next preceding Principal Installment due date for such Series (or,if there shall be no such preceding Principal Installment due date,from a date one year preceding the due date of such Principal Installment or from the date of issuance of the Bonds of such Series,whichever date is later).Such interest and Principal Installments for such Series shall be calculated on the assumption that no Bonds of such Series Outstanding at the date of calculation will cease to be Outstanding except by reason of the payment of each Principal Installment on the due date thereof.For purposes of this definition (x)interest and Principal Installments with respect to interest accreting on compound interest or zero coupon or like interest paying Bonds shall be deemed to accrue in the 12 months immediately prior to the final maturity of such Bonds;and (y)the Authority may determine that interest will accrue on variable rate Bonds at a rate equal to the actual rate during a prior period. "Debt Service Fund"means the Debt Service Fund established in Section 502. "Depository"means any bank or trust company organized under the laws of any state of the United States of America or any national banking association,selected by the Authority and approved in writing by the Trustee as a depository of moneys and securities held under the provisions of this Indenture,and may include the Trustee;provided that if the Trustee shall fail to so approve,it shall deliver to the Authority a statement of its reasons for such failure. "Event of Default"shall have the meaning given to such term in Section 801. AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 8 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 "Excess Investment Earnings”mean that amount determined by the Authority to be required to be rebated to the United States Government pursuant to the Code. "Excess Investment Earnings Fund"means the Excess Investment Earnings Fund established in Section 502. "Federal Obligation”means any direct obligation of,or any obligation the full and timely payment of principal of and interest on which is guaranteed by,the United States of America. "Fiduciary”or "Fiduciaries"means the Trustee,the Bond Registrar,the Paying Agents,or any or all of them,as may be appropriate. "Eiscal Year"means the 12-month period commencing on July 1 of each year and including June 30 of the succeeding calendar year. "Fund"or "Funds"means,as the case may be,each or all of the Funds established in Section 502. "Interest Account”means the Interest Account in the Debt Service Fund established in Section 502. "Investment Securities"means and include any of the following securities,if and to the extent the same are at the time legal for investment of the Authority's funds: (a)|Federal Obligations. (6)Obligations of the Government National Mortgage Association,the Federal National Mortgage Association to the extent that such obligations are guaran- teed by the Government National Mortgage Association,the Federal Financing Bank, the Federal Intermediate Credit Banks,Federal Banks for Cooperatives,Federal Land Banks,Federal Home Loan Banks,Farmers Home Administration and Federal Home Loan Mortgage Association. (c)|Newhousing authority bonds issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States of America;or project notes issued by public agencies or municipalities AEA/Unalaska Geothermal Project Trust indenture AFFOVAB4 Page 9 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 and fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America. (d)Direct and general obligations of any state of the United States of America,to the payment of the principal of and interest on which the full faith and credit of such state is pledged,provided that at the time of their purchase under this Indenture such obligations are rated not less than Aa or AA or their equivalents by Moody's Investors Service,Inc.and Standard &Poor's Corporation,or their successors. (e)Certificates of deposit,whether negotiable or nonnegotiable,issued by any bank or trust company organized under the laws of any state of the United States of America or any national banking association (including any Fiduciary),provided that such certificates of deposit shall be purchased directly from such a bank,trust company or national banking association and shall be either (1)continuously and fully insured by the Federal Deposit Insurance Corporation,or (2)continuously and fully secured by Qualified Collateral,which shall have a market value (exclusive of accrued interest)at all times at least equal to 100 percent of the principal amount of such certificates of deposit and shall be lodged with the trust department of the Trustee or with a Federal Reserve Bank or branch,as custodian,by the bank,trust company or national banking association issuing each such certificate of deposit required to be so secured. (f)Repurchase agreements with banks which are members of the Federal Reserve System or with government bond dealers recognized as primary dealers by the Federal Reserve Bank of New York that are secured by Federal Obligations or the obligations referred to in paragraph (b)(herein called "Other Obligations"),having a current market value at least equal to 100 percent of the amount of the repurchase agreement,marked to market weekly,and which Federal Obligations or Other Obligations shall have been deposited in trust by such bank or dealer with the trust department of the Trustee or with a Federal Reserve Bank or branch,or with another third party custodian approved by the Trustee,by such bank or dealer and by the Authority,as collateral security for such repurchase agreements. (g)|Commercial paper rated either A-1 or P-1,or corporate bonds or notes, in each case issued by a United States corporation,rated in one of the two highest rating categories by Standard &Poor's Corporation and Moody's Investors Service Inc. AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 10 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (nh)Investment agreements with any corporation,including banking or financial institutions,the corporate debt of which is rated,at the time of investment, "Aa”or better by Moody's Investors Service,Inc.and "AA"or better by Standard & Poor's Corporation or secured in the same manner as repurchase agreements in paragraph (f). (i)Guaranteed investment contracts or similar funding agreements issued by insurance companies,the corporate debt of which,at the time of investment,is rated "Aa”or better by Moody's Investors Service,Inc.and "AA"or better by Standard &Poor's Corporation,or Bests and the contract is pari passu with senior debt,or the contract is rated in one of the two highest rating categories by Standard &Poor's Corporation and Moody's investors Service,Inc.or Bests. (j)Units of a taxable government money market fund consisting of obligations guaranteed by the full faith and credit of the United States of America and repurchase agreements secured as provided in paragraph (f). "Maximum Aggregate Debt Service"means,as of any date of calculation,the greatest amount of Aggregate Debt Service payable in any unexpired Bond Year. "Operating Expenses"means (a)the Authority's operation,maintenance, administrative and general expenses of the Project,and shall include,without limiting the generality of the foregoing,costs of investigations,insurance,ordinary repairs of the Project which do not entail the acquisition and installation of a unit of property (as generally prescribed by the Federal Energy Regulatory Commission),fuel costs,rents, engineering expenses,legal and financial advisory expenses,refunds for overpayments by Purchasers,salaries and required Project employee costs,any taxes or payments in lieu of taxes pursuant to the Act or otherwise pursuant to law,(b)any other current expenses or obligations required to be paid by the Authority under the provisions of this Indenture or by law,all to the extent properly allocable to the Project, or required to be incurred under or in connection with the performance of the Power Sales Agreement,and (c)the fees and expenses of the Fiduciaries.Operating Expenses includes all the items listed in Section of the Power Sales Agreement under the definition of Annual Project Costs except the items listed under Section .Operating Expenses shall not include any costs or expenses for new construction or any allowance for depreciation. "Operating Fund"means the Operating Fund established in Section 502. AEA/Unalaska Geothermal Project Trust Indenture AFFOTABA Page 11 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 "Operating Reserve Account"means the Operating Reserve Account established in Section 502. "Operating Reserve Account Requirement"means zero until the Date of Commercial Operation and thereafter shall mean an amount equal to 20 percent of the Operating Expense component of the Annual Budget as calculated annually,or such other amount as may be determined pursuant to the Power Sales Agreement. "Outstanding”,when used with reference to Bonds,shall mean,as of any date, Bonds theretofore or thereupon being authenticated and delivered under this Indenture except: (a)|Bonds canceled by the Trustee at or prior to such date. (6)Bonds (or portions of Bonds)for the payment or redemption of which moneys equal to the principal amount or Redemption Price thereof,as the case may be,with interest to the date of maturity or redemption date,shall be held in trust under this Indenture and set aside for such payment or redemption (whether at or prior to the maturity or redemption date),provided that if such Bonds (or portions of Bonds) are to be redeemed,notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Trustee shall have been made for the giving of such notice. (c)Bonds in lieu of or in substitution for which other Bonds shall have been authenticated and delivered pursuant to Article Ill or Section 406 or Section 1106. (d)|Bonds deemed to have been paid as provided in subsection 2 of Section 1201. "Owner"or "Bondowner"means any person who shall be the registered owner of any Bond or Bonds. "Paying Agent”means any bank or trust company organized under the laws of any state of the United States of America or any national banking association designated by the Authority as paying agent for the Bonds of any Series,and its successor or successors hereafter appointed in the manner provided in this Indenture. AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 12 DRAFT October 28,1991 3610.2014 , TFK/cf Rev.#4 "Power Sales Agreement"means the Power Sales Agreement for the purchase and sale of Project capacity (together with associated energy)dated as of , 1992,between the Authority and the Purchaser as the same may be amended. "Principal Account"means the Principal Account in the Debt Service Fund established in Section 502. "Principal Installment"means,as of any date of calculation and with respect to any Series,so long as any Bonds thereof are Outstanding,(a)the principal amount of Bonds of such Series due on a certain future date for which no Sinking Fund Installments have been established,or (b)the unsatisfied balance of any Sinking Fund Installments due on a certain future date for Bonds of such Series,plus the amount of the sinking fund redemption premiums,if any,which would be applicable upon redemption of such Bonds on such future date in a principal amount equal to said unsatisfied balance of such Sinking Fund Installments,or (c)if such future dates co- incide as to different Bonds of such Series,the sum of such principal amount of Bonds and of such unsatisfied balance of Sinking Fund Installments due on such future date plus such applicable redemption premiums,if any. "Project"means the Unalaska Geothermal Project,as the same is described on Exhibit to the Power Sales Agreement. "Project Capacity"means the amount of electric capacity capable of being produced by the Project (including capacity attributable to Required Project Work)at any and all times from the Date of Commercial Operation until the termination of the Power Sales Agreement (or any renewal or replacement thereof)under the operating conditions that exist during such times,including periods when the Project may be not operating or inoperable or the operation thereof is suspended,interrupted,interfered with,reduced,or curtailed,in each case in whole or in part for any reason whatsoev- er,after corrections for station and Project use,and depletions required under any federal license for the Project. "Prudent Utility Practice"means at a particular time any of the practices, methods and acts,engaged in or approved bya significant portion of the electric utility industry at such time,or which,in the exercise of reasonable judgment in the light of the facts known at such time,could have been expected to accomplish the desired result at the lowest reasonable cost consistent with good business practices,reliability, safety and reasonable expedition.Prudent Utility Practice is not required to be the AEA/Unalaska Geothermal Project Trast indenture AFFOVABS Page 13 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 optimum practice,method or act to the exclusion of all others,but rather to be a spectrum of possible practices,methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition.Prudent Utility Practice includes due regard for manufacturers' warranties and requirements of governmental agencies of competent jurisdiction and shall apply not only to functional parts of the Project,but also to appropriate structures,landscaping,painting,signs,lighting and other facilities.In evaluating whether any matter conforms to Prudent Utility Practice,there shall be taken into account (a)the nature of the Authority and Purchaser under the laws of the State of Alaska and their statutory duties and responsibilities and (b)the objective of integrating the Project with the generating resources of the Purchaser,including resources available under contract,to achieve optimum utilization of the resources and efficient and economical operation of the Purchaser's electrical system.For purposes of this Indenture,"national standards for the industry”shall mean Prudent Utility Practice. "Purchaser”means the entity defined as Purchaser in the Power Sales Agreement. "Qualified Collateral"means: (a)|Obligations described under items (a),(b)and (c)of the definition of Investment Securities. (6)Direct and general obligations of any state of the United States of America which are rated not less than AA or Aa or their equivalents by Standard & Poor's Corporation and Moody's Investors Service,Inc.,respectively,or their successors. "Redemption Price"means,with respect to any Bond,the principal amount thereof plus the applicable premium,if any,payable upon redemption thereof pursuant to such Bond or this Indenture. "Refunding Bonds"mean all Bonds,whether issued in one or more Series, authenticated and delivered on original issuance pursuant to Section 205,and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to Article Il!or Section 406 or Section 1106. AEA/Unalaska Geothermal Project Trust indenture AFFO1ABA Page 14 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 . "Renewal and Contingency Reserve Fund”means the Renewal and Contingen- cy Reserve Fund established in Section 502. "Renewal and Contingency Reserve Requirement"means zero until the Date of Commercial Operation and thereafter shall mean an amount equal to $ "Required Project Work"shall have the meaning ascribed to it in the Power Sales Agreement. "Indenture”means this Indenture as from time to time amended or supplement- ed by Supplemental Indentures in accordance with the terms hereof. "Revenue Fund"means the Revenue Fund established in Section 502. "Revenues"means (a)all revenues,income,rents and receipts,derived or to be derived by the Authority from,or attributable to the ownership and operation of,the Project,including all revenues attributable to the Project or to payment of the costs thereof including,without limitation,all revenues received or to be received by the Authority under the Power Sales Agreement or under any other contract for the sale of power,energy,transmission or other service from the Project or any part thereof or any contractual arrangement with respect to the use of the Project or any portion thereof or the services,output or capacity thereof;and (b)interest received or to be received on any moneys or securities (other than in the Construction Fund or in the Excess Investment Earnings Fund)held pursuant to this Indenture and required to be paid into the Revenue Fund. "series"means all of the Bonds authenticated and delivered on original issuance and identified pursuant to this Indenture or a Supplemental Indenture authorizing such Bonds as a separate Series of Bonds,and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to Article tll or Section 406 or Section 1106,regardless of variations in maturity,interest rate,Sinking Fund Installments,or other provisions. "Sinking Fund Installment"means,as of any particular date of determination and with respect to the Outstanding Bonds of any Series,the amount required by a Supplemental Indenture to be paid in any event by the Authority on a single future date for the retirement of Bonds of such Series which mature after said future date, AEA/Unalaska Geothermal Project Trust Indenture AFFO1ABA Page 15 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 but does not include any amount payable by the Authority by reason only of the maturity of a Bond. "Supplemental Indenture”means any indenture supplemental to or amendatory of this Indenture,entered into by the Authority and the Trustee in accordance with Article X. "Trust Estate"means the property conveyed to the Trustee pursuant to the Granting Clauses of this Indenture including,without limitation,the Revenues and all amounts held in any Fund or Account under this Indenture except amounts held in the Excess Investment Earnings Fund. "Trustee”means the trustee appointed pursuant to Article IX,and its successor or successors and any other corporation or association which may at any time be substituted in its place pursuant to this Indenture. Section 102 -Interpretation.In this Indenture,unless the context otherwise requires: (a)The terms "hereby,""hereof,""hereto,""hereunder,”"herein”and any similar terms used herein refer to this Indenture,and the term "hereafter"shall mean after,and the term "heretofore”shall mean before,the date of adoption of this Indenture. (b)|Words of the masculine gender shall mean and include correlative wordsofthefeminineandneutergendersandwordsimportingthesingularnumbershall mean and include the plural number and vice versa. (c)|Words importing persons shall include firms,associations,partnerships(including limited partnerships),trusts,corporations and other legal entities,including public bodies,as well as natural persons. (d)|Words importing the redemption or redeeming of a Bond or the callingofaBondforredemptiondonotincludeorconnotethepaymentofsuchBondatits stated maturity or the purchase of such Bond. (e)Any percentage of Bonds,for purposes of this Indenture,shall be computed on the basis of the unpaid principal amount of Bonds Outstanding at the time the computation is made or is required to be made hereunder. AEA/Unalaska Geothermal Project Trust indenture AFFO1ABA Page 16 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (f)Any headings preceding the text of the several Articles and Sections of this Indenture,and any table of contents or marginal notes appended to copieshereof,shall be solely for convenience of reference and shall not constitute a part of this Indenture,nor shall they affect its meaning,construction or effect. (g)Articles and Sections mentioned by number only are the respective Articles and Sections of this Indenture so numbered. (h)The term "principal”when used in connection with compound interest or zero coupon or like paying Bonds shall mean the initial principal amount of such Bonds as at their date of issuance plus interest accreted thereon to the date of calculation. Section 103 -Successors and Assigns.Whenever in this Indenture the Authority is named or referred to,it shall and shall be deemed to include its successors and assigns whether so expressed or not.All of the covenants,stipulations,obligations and agreements by or on behalf of,and other provisions for the benefit of,the Authority contained in this Indenture shall bind and inure to the benefit of such successors and assigns and shall bind and inure to the benefit of any officer,board, commission,authority,agent or instrumentality to whom or to which there shall be transferred by or in accordance with law any right,power or duty of the Authority or of its successors or assigns,the possession of which is necessary or appropriate in order to comply with any such covenants,stipulations,obligations,agreements or other provisions of this Indenture. Section 104 -Parties Interested Herein.Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon,or to give to,any person or corporation,other than the Authority,the Fiduciaries,the owners of Bonds any right, remedy or claim under or by reason of this Indenture or any covenant,condition or stipulation thereof.All the covenants,stipulations,promises and agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Authority,the Fiduciaries and the owners of the Bonds. section 105 -Obligation of Bonds.The Bonds are not and never shall become general obligations of the Authority,but are special obligations payable by the Authority solely and only from the Revenues which include revenues and receipts received under the Power Sales Agreement,which amounts,together with any other security provided herein,are hereby specifically pledged to such purposes in the AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 17 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 manner and to the extent provided herein.The Bonds and the premium,if any,and interest thereon shall not constitute a debt or an indebtedness of the State or the Authority,or a loan of the faith or credit or the taxing power of the State or the Authority,within the meaning of any constitutional or statutory provision whatsoever. The Bonds shall not be payable from the general revenues of the Authority,or in any event shall the Bonds be payable out of any funds or properties other than those of the Authority specifically referred to in this Section.A pledge of the Trust Estate,to the extent set forth in the Granting Clauses hereof,and of all monies and securities held or set aside or to be held or set aside by the Trustee under this Indenture (except for amounts held in the Excess Investment Earnings Fund)is hereby made, and the same are hereby pledged,to secure the payment of the principal and premium,if any,of,and interest on,the Bonds subject only to the provisions of this -Indenture requiring or permitting the payment,setting apart,or appropriation thereof for or to the purposes and on the terms,conditions,priorities,and order set forth in or provided under this Indenture.This pledge shall be valid and binding from and after the date of issuance of any Bonds hereunder,and the amounts so pledged and then or thereafter received by the Authority and deposited in the Funds maintained under the Indenture shall immediately be subject to the lien of such pledge without any further physical delivery or further act.The lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort,contract,or otherwise against the Authority,irrespective of whether such parties have notice thereof. ARTICLE Il AUTHORIZATION AND ISSUANCE OF BONDS Section 201 -Authorization of Bonds. (a)The Indenture provides for the issuance of Bonds of the Authority to be designated as "Power Revenue Bonds"for the purpose of providing funds for the financing or refinancing of the Project and Required Project Work.The aggregate principal amount of the Bonds which may be executed,authenticated and delivered under this Indenture is not limited except as may hereafter be provided in this Indenture,or as may be limited by the Power Sales Agreement or by law. (6)|The Bonds may,if and when authorized pursuant to one or more Supplemental Indentures,be issued in one or more Series,and the designation thereof,in addition to the name "Power Revenue Bonds",shall include such further AEA/Unalaska Geothermal Project Trust Indenture AFFO1AB4 Page 18 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 appropriate particular designation added to or incorporated in such title for the Bonds of any particular Series may be determined by Supplemental Indenture.Each Bond shall bear upon its face the designation so determined for the Series to which it be- longs. (c)Nothing contained in this Indenture shall be deemed to preclude or restrict the consolidation into a single Series of Bonds for purposes of sale and issuance pursuant to a Supplemental Indenture of any Bonds authorized pursuant to such Supplemental Indenture to be issued pursuant to any of the provisions of Sections 203,204 and 205;provided that each of the tests,conditions and other requirements contained in Sections 203,204 and 205 as applicable shall be met and complied with.Except as otherwise provided in this subsection or in such Supplemen- tal Indenture,such a consolidated Series shall be treated as a single Series for all purposes of this Indenture. Section 202 -General Provisions for Issuance of Bonds. (a)All (but not less than all)the Bonds of each Series shall be executed by the Authority for issuance under this Indenture and delivered to the Trustee and thereupon shall be authenticated by the Trustee and by it delivered to the Authority or upon its order,but only upon the receipt by the Trustee of: (1)|A Counsel's Opinion to the effect that (A)the Authority has the right and power under the Act as amended to the date of such Opinion to enter into this Indenture,and this Indenture has been duly and lawfully executed and delivered by the Authority,is in full force and effect and is valid and binding upon the Authority in accordance with its terms,and no other authorization for this Indenture is required;(B)the Authority has the right and power under the Act as so amended to enter into the Power Sales Agreement and the Power Sales Agreement is valid and binding upon the Authority in accordance with its terms,and no other authorization for the Power Sales Agreement is required; (3)this Indenture creates the valid pledge and assignment which it purports to create of the Revenues,moneys,securities and funds held or set aside under this Indenture subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and the conditions set forth in this Indenture;and (4)the Bonds of such Series are valid and binding special obligations of the Authority for the payment of which the Trust Estate, including without limitation the Revenues,is pledged as provided in this AEA/Unalaska Geothermal Project Trust indenture AFFOIABS Page 19 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Indenture,and entitled to the benefits of this Indenture and of the Act as amended to the date of such Opinion,and such Bonds have been duly and validly authorized and issued in accordance with law,including the Act as amended to the date of such Opinion,and in accordance with this Indenture; provided,that such Opinion may take exception for limitations imposed by or resulting from bankruptcy,insolvency,moratorium,reorganization or other laws affecting creditors'rights generally. (2)|Awritten order as to authentication and delivery of such Bonds, signed by an Authorized Officer of the Authority; (3)|A-copy of the Supplemental Indenture authorizing such Bonds, executed by an Authorized Officer of the Authority,which shall,to the extent necessary and not already fixed by this Indenture,among other provisions, specify:(1)the authorized principal amount,designation and Series of such Bonds;(2)the purposes for which such Series of Bonds is being issued,which shall be (i)the purpose specified in Section 203,(ii)one of the purposes specified in Section 204,or (iii)the refunding of Bonds as provided in Section 205;(iv)the date,and the maturity date or dates,of the Bonds of such Series; (v)the interest rate or rates or the maximum rate of interest of the Bonds of such Series or the method of calculating the interest rate,which interest rate may be determinable at one or more specified times or periodically by reference to an index or other reference point,or may be an interest accreting or compound interest,zero coupon or like method of interest rate or yield calculation,and the interest payment dates therefor,provided that the interest rate shall be identical for all such Bonds of like maturity;(vi)the denominations of,and the manner of dating,numbering and lettering,the Bonds of such Series;(vil)the Paying Agent or Paying Agents and the place or places of payment of the principal and Redemption Price,if any,of,and interest on,the Bonds of such Series;(viii)the Redemption Price or Prices,if any,and subject to Article IV,the redemption terms for the Bonds of such Series;(ix)the amount and due date of each Sinking Fund Installment,if any,for Bonds of like maturity of such Series;(x)if so determined by the Authority,provisions for the sale of the Bonds of such Series;(xi)the amount (or the method of determining the amount),if any,to be deposited from the proceeds of such Series of Bonds in the Debt Service Fund and provisions for the application thereof to the payment of all or a portion of the interest on such Series of Bonds or any other Series of Bonds;(xii)whether the Series of Bonds is to be issued pursuant to AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 20 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 paragraphs 3 -8 of Section 305;(xiii)the amount to be deposited from the pro- ceeds of such Series of Bonds in the account in the Construction Fund established for the Project or the undertaking of Required Project Work for which such Bonds are authorized to be issued;and (xiv)such other matters as shall be necessary or appropriate so as to comply with the provisions of this Indenture or to provide for the issuance and delivery of the Bonds. (4)Except in the case of Refunding Bonds,a certificate of an Authorized Officer of the Authority stating that the Authority is not in default in the performance of any of the covenants,conditions,agreements or provisions contained in this Indenture; (5)Such further documents as are required by the provisions of Section 203,204 or 205 or Article X or any Supplemental Indenture adopted pursuant to Article X. (b)After the original issuance of Bonds of any Series,no Bonds of such Series shall be issued except in lieu of or in substitution for other Bonds of such Series pursuant to Article Ill or Section 406 or Section 1106. Section 203 -Project Issue. (a)|There is hereby authorized an issue of Bonds under this Indenture which shall be designated "Power Revenue Bonds"and which shall be issued pursuant to one or more Supplemental Indentures establishing the terms of the Series from time to time,for the purpose of paying all or a portion of the Cost of Acquisition and Construction of the Project. (b)The proceeds of each Series of Power Revenue Bonds,including accrued interest shall be paid to the Trustee and deposited by the Trustee,as follows: (1)|The amount,if any,necessary so that the amount in the Renewal and Contingency Reserve Fund is equal to the Renewal and Contingency Reserve Fund Requirement,shall be deposited in the Renewal and Contingency Reserve Fund. AEA/Unalaska Geothermal Project Trast Indenture AFFOIAB4 Page 21 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (2)|The amount,if any,necessary so that the amount in the Capital Reserve Fund is equal to the Capital Reserve Fund Requirement shall be deposited in the Capital Reserve Fund. (3)The amount,if any,necessary so that the amount in the Operating Reserve Account is equal to the Operating Reserve Requirement,or such greater amount as the Authority directs,shall be transferred to the Authority and deposited in the Operating Reserve Account. (4)After any further deposits directed by Supplemental Indenture,the balance of the proceeds shall be deposited into the Construction Fund. Section 204 -Additional Bonds. (a)|One or more Series of Additional Bonds may be authenticated and delivered upon original issuance for the purpose of paying all or a portion of the Cost of Acquisition and Construction of any Required Project Work,upon compliance with the terms and conditions set forth in Section 202,and upon receipt by the Trustee of a written opinion of the Consulting Engineer that neither the issuance of the Additional Bonds nor the payment of the Cost of Acquisition and Construction of the Required Project Work will impair the ability of the Authority to pay Debt Service through collection of Revenues under the Power Sales Agreement. (b)The proceeds,including accrued interest,of the Additional Bonds of each Series shall be applied simultaneously with the delivery of such Bonds,as provided in the Supplemental Indenture authorizing such Series. Section 205 -Refunding Bonds. (a)One or more Series of Refunding Bonds may be authenticated and delivered upon original issuance to refund any Outstanding Bond or Bonds.Refund- ing Bonds shall be issued in a principal amount sufficient,together with other moneys available therefor,to accomplish such refunding and to make the deposits in the Funds and Accounts under this Indenture required by the provisions of the Supplemental Indenture authorizing such Bonds. AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 22 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (b)Refunding Bonds of each Series shall be authenticated and delivered by the Trustee only upon receipt by the Trustee (in addition to the documents required by Section 202)of: (1)Irrevocable instructions to the Trustee,satisfactory to it,to give due notice of redemption,on a redemption date or dates specified in such instructions,of any of the refunded Bonds to be redeemed. (2)Irrevocable instructions to the Trustee,satisfactory to it,to give due notice provided for in Section 1201 to the Owners of the Bonds being refunded. (3) Ejther (A)moneys (including moneys withdrawn and deposited pursuant to subsection (d)of Section 507)in an amount sufficient to effect payment at the applicable Redemption Price of the refunded Bonds to be redeemed and of the principal amount of the refunded Bonds not to be redeemed,together with accrued interest on such Bonds to the redemption date or maturity date,as the case may be,which moneys shall be held by the Trustee in a separate account irrevocably in trust for and assigned to the respective Owners of the Bonds to be refunded,or (B)Federal Obligations in such principal amounts,of such maturities,bearing such interest,and otherwise having such terms and qualifications,and any moneys,as shail be necessary to comply with the provisions of subsection (b)of Section 1201,which Federal Obligations and moneys shall be held in trust by the Trustee and used only as provided in said subsection (b). 3.The proceeds,including accrued interest,of the Refunding Bonds of each Series shall be applied simultaneously with the delivery of such Bonds for the purposes of making deposits in such Funds and Accounts under this Indenture as shall be provided by the Supplemental Indenture authorizing such Series of Refunding Bonds and shall be applied to the refunding purposes thereof in the manner provided in said Supplemental!Indenture. 4.The Supplemental Indenture authorizing a Series of Refunding Bonds may establish such funds and accounts in addition to the Funds and Accounts established herein as are necessary to provide for such refunding. AEA/Unalaska Geothermal Project Trust indenture AFFO1ABA Page 23 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 . ARTICLE Ill GENERAL TERMS AND PROVISIONS OF BONDS Section 301 -Medium of Payment:Form and Date:Letters and Numbers. (a)|The Bonds shall be payable,with respect to interest,principal and Redemption Price,in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. (b)|The Bonds of each Series shall be negotiable instruments issued in the form of fully registered Bonds.If and to the extent it is hereafter judicially determined or determined by enactment of law that coupon bonds may be issued with interest -exempt from federal income taxation or if the Authority determines to issue Bonds the interest on which is not exempt from federal income taxation,the Authority may provide for the issuance,execution,authorization,exchange and other details of coupon bonds by Supplemental Indenture. (c)Each Bond shall be lettered and numbered as provided in this Indenture or the Supplemental Indenture authorizing the Series of which such Bond is a part and so as to be distinguished from every other Bond. (d)Bonds of each Series shall be dated as provided in the Supplemental Indenture authorizing such Series. (e)|The principal and Redemption Price of the Bonds shall be payable upon presentation and surrender at the principal corporate trust office of any Paying Agent or as may be provided by Supplemental Indenture.Interest on Bonds shall be paid by the Trustee by check or draft mailed by first class mail to the registered Owners of record as of the 15th day of the month preceding each interest payment date at the addresses of such Owners appearing on the registration books maintained by the Authority for such purpose at the principal corporate trust office of the Bond Registrar or as may be provided by Supplemental Indenture. Section 302 -Legends.The Bonds of each Series may contain or have endorsed thereon such provisions,specifications and descriptive words not inconsistent with the provisions of this Indenture as may be necessary or desirable to comply with custom, the rules of any securities exchange or commission or brokerage board,or otherwise, as may be determined by the Authority prior to the authentication and delivery thereof. AEA/Unalaska Geothermal Project Trust indenture AFFOIABS Page 24 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 'Section 303 -Execution and Authentication. (a)|The Bonds shall be executed in the name of the Authority by the manual or facsimile signature of its Chairman or its Vice Chairman,and its corporate seal (or a facsimile thereof)shall be impressed,imprinted,engraved or otherwise reproduced thereon and attested by the manual or facsimile signature of the Secretary or an Assistant Secretary of the Authority,or in such other manner as may be required or permitted by law.In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer before the Bonds so signed and sealed shall have been authenticated and delivered by the Trustee,such Bonds may,nevertheless,be authenticated and delivered as herein provided,and may be issued as if the persons who signed or sealed such Bonds had not ceased to hold such offices.Any Bond of a Series may be signed and sealed on behalf of the Authority by such persons as at the time of the execution of such Bond shall be duly authorized to hold the proper office in the Authority,although at the date borne by the Bonds of such Series such person may not have been so authorized or have held such Office. (6)The Bonds of each Series shall bear thereon a certificate of authentica- tion,in the form set forth in Section 1301 and any Supplemental Indenture authorizing such Bonds,executed manually by the Trustee.Only such Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under this Indenture and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee.Such certificate of the Trustee upon any Bond executed on behalf of the Authority shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under this Indenture and that the Owner thereof is entitled to the benefits of this Indenture. Section 304 -Exchange of Bonds.Bonds,upon surrender thereof at the principal corporate trust office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar,duly executed by the registered Owner or his duly authorized attorney,may,at the option of the registered Owner thereof,and upon payment by such registered Owner of any charges which the Bond Registrar may make as provided in Section 306,be exchanged for an equal aggregate principal amount of Bonds of the same Series and maturity of any other authorized denomina- tions. AEA/Unalaska Geothermal Project Trust Indenture AFFO1ABA Page 25 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 ion -Negotiability,TransferandRegistry;Bond D iton (a)Bonds shall be transferable only upon the books of the Authority,which shall be kept for such purposes at the principal corporate trust office of the Bond Registrar,by the registered Owner thereof in person or by his attorney duly authorized in writing,upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the registered Owner or his duly authorized attorney.Upon transfer of any such Bond,the Authority shall issue in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and Series and maturity as the surrendered Bond. (b)|The Authority and each Fiduciary may deem and treat the person in whose name any Bond shall be registered upon the books of the Authority as the absolute Owner of such Bond,whether such Bond shall be overdue or not,for the purpose of receiving payment of,or on account of,the principal and Redemption Price,if any,of and interest on such Bond and for all other purposes,and all such payments so made to any such registered Owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid,and neither the Authority nor any Fiduciary shall be affected by any notice to the contrary.The Authority agrees to indemnify and save each Fiduciary harmless from and against any and all loss,cost,charge,expense,judgment or liability incurred by it,acting in good faith and without negligence under this Indenture, in so treating such registered Owner. (c)|ASupplemental Indenture may provide that (1)the Bonds may be initially issued in the form of a separate single authenticated fully registered bond in the amount of each separate stated maturity of the Bonds and (2)upon initial issuance, the ownership of such Bond may be registered in the registry books kept by the Trustee in the name of the nominee of a Bond Depository or in the name of the Bond Depository.With respect to Bonds registered in the registry books kept by the Trustee in the name of a nominee of a Bond Depository or in the name of the Bond Depository,the Authority and the Trustee shall have no responsibility or obligation with respect to (3)the accuracy of the records of the Bond Depository,its nominee or any participant with respect to any ownership interest in the Bonds,(4)the delivery to any participant,any beneficial owner or any other person,other than the nominee or Bond Depository,of any notice with respect to the Bonds,including any notice of redemption,or (5)the payment to any participant,any beneficial owner or any other person,other than the nominee or Bond Depository,of any amounts with respect to AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 26 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 the principal of or premium,if any,or interest on the Bonds.The Authority and the Trustee may treat as and deem the nominee or Bond Depository to be the absolute owner of each Bond for the purpose of payment of the principal of or premium,if any, and interest on such Bond,for the purpose of giving notices of redemption and other matters with respect to such Bond,for the purpose of registering transfers with respect to such Bond,and for all other purposes whatsoever.The Trustee shall pay all principal of or premium,if any,and interest on the Bonds only to or upon the order of the nominee or Bond Depository,and all such payments shall be valid and effective to fully satisfy and discharge the Authority's obligation with respect to the principal of and premium,if any,and interest on the Bonds to the extent of the sum or Sums so paid.No person other than the nominee or Bond Depository shall receive an authenticated Bond evidencing the obligation of the Authority to make payments of principal and premium,if any,and interest pursuant to this Indenture.Upon delivery by the nominee or Bond Depository to the Trustee of written notice to the effect that the Bond Depository has determined to substitute a new nominee in place of the existing nominee,the Trustee shall issue a new registered bond to the new nominee in exchange for each bond surrendered which was registered in the name of the old nominee to such new nominee of the Bond Depository. (d)|Upon receipt by the Authority and the Trustee of written notice from the Bond Depository to the effect that the Bond Depository is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of the Bond Depository hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms,then the Bonds shall no longer be restricted to being registered in the registry books of the Authority kept by the Trustee in the name of the nominee of the Bond Depository,but may be registered in whatever name or names the beneficial owners transferring or exchanging Bonds shall designate,in accordance with the provisions of this Indenture. (e)'In the event the Authority determines that it is in the best interests of the beneficial owners that they be able to obtain Bond certificates,the Authority may notify the Bond Depository and the Trustee,whereupon the nominee or Bond Depository will notify the participants,of the availability through the nominee or Bond Depository of Bond certificates.In such event,the Trustee shall issue,transfer and exchange Bond certificates as requested to the Bond Depository and any other Bondowners in appropriate amounts,and whenever the Bond Depository requests the Authority and the Trustee to do so,the Trustee and the Authority will cooperate with the Bond Depository by taking appropriate action after reasonable written notice (1)to make AEA/Unalaska Geothermal Project Trast indenture AFFO1ABA Page 27 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 available one or more separate certificates evidencing the Bonds fo any nominee or participant having Bonds credited to its Bond Depository account or (2)to arrange for another securities depository to maintain custody of certificates evidencing the Bonds. (f)So long as any Bond is registered in the name of a nominee of the Bond Depository,all payments with respect to the principal of and premium,if any,and interest on such Bond and all notices with respect to such Bond shall be made and given,respectively,to the nominee or Bond Depository. (g)In connection with any notice or other communication to be provided to Bondowners pursuant to this Indenture by the Authority or the Trustee with respect to any consent or other action to be taken by Bondowners,the Authority or the Trustee,as the case may be,shall establish a record date for such consent or other action and give the nominee or Bond Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. (h)|Asused in this section "participant"means any person or other entity for whom the Bond Depository holds Bonds under this section. Section 306 -Regulations With Respect to Exchanges and Transfers.In all cases in which the privilege of exchanging or transferring Bonds is exercised,the Authority shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of this Indenture.All Bonds surrendered in any such exchange or transfer shall forthwith be delivered to the Trustee and canceled by the Trustee.For every such exchange or transfer of Bonds,whether temporary or definitive,the Authority or the Bond Registrar may make a charge sufficient to reimburse it for any tax,fee or other governmental charge required to be paid with respect to such exchange or transfer.Neither the Authority nor the Bond Registrar shall be required (a)to transfer or exchange Bonds of a Series which could be redeemed for a period of 15 days next preceding any selection of such Bonds to be so redeemed or thereafter until after the first mailing of any notice of redemption;or (b)to transfer or exchange any Bonds called for redemption. Section 307 -Bonds Mutilated,Destroyed,Stolen or Lost.If any Bond becomes mutilated or is lost,stolen or destroyed,the Authority may execute and the Trustee shall authenticate and deliver a new Bond of like date of issue,maturity date,principal amount and interest rate per annum as the Bond so mutilated,lost,stolen or destroyed,provided that (a)in the case of such mutilated Bond,such Bond is first AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 28 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 surrendered to the Trustee,(b)in the case of any such lost,stolen or destroyed Bond there is first furnished evidence of such loss,theft or destruction satisfactory to the Authority and Trustee together with indemnity satisfactory to the Authority and Trustee, (c)all other reasonable requirements of the Authority are complied with,and (d) expenses in connection with such transaction are paid by the Owner.Any Bonds surrendered for exchange shall be canceled.Any such new Bonds issued pursuant to this Section in substitution for Bonds alleged to be destroyed,stolen or lost shall constitute original additional contractual obligations on the part of the Authority, whether or not the Bonds so alleged to be destroyed,stolen or lost be at any time enforceable by anyone,and shall be equally secured by and entitled to equal and proportionate benefits with all other Bonds issued under this Indenture in any moneys or securities held by the Authority or any Fiduciary for the benefit of the Bondowners. Section 308 -Temporary Bonds. (a)-Until the definitive Bonds of any Series are prepared,the Authority may execute,in the same manner as is provided in Section 303,and upon the request of the Authority,the Trustee shall authenticate and deliver,in lieu of definitive Bonds,but subject to the same provisions,limitations and conditions as the definitive Bonds except as to the denomination thereof,one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued,in denominations authorized by the Authority,and with such omissions, insertions and variations as may be appropriate to temporary Bonds.The Authority at its own expense shall prepare and execute,and,upon surrender of such temporary Bonds for exchange and the cancellation of such surrendered temporary Bonds,the Trustee shall authenticate and without charge to the Owner thereof deliver in exchange therefor,definitive Bonds,if any,of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered.Until so exchanged,the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds authenticated and issued pursuant to this Indenture. (b)If the Authority shall authorize the issuance of temporary Bonds in more than one denomination,the Owner of any temporary Bond or Bonds may,at his option,surrender the same to the Trustee in exchange for another temporary Bond or Bonds of like aggregate principal amount and Series and maturity of any other authorized denomination or denominations,and thereupon the Authority shall execute and the Trustee shall authenticate and,in exchange for the temporary Bond or Bonds so surrendered and upon payment of the taxes,fees and charges provided for in AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 29 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Section 306,shall deliver a temporary Bond or Bonds of like aggregate principal amount,Series and maturity in such other authorized denomination or denominations as shall be requested by such Owner. (c)All temporary Bonds surrendered in exchange either for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith canceled by the Trustee. ARTICLE IV REDEMPTION OF BONDS 'Section 401 -Privilege of Redemption and Redemption Price.Bonds of a Series subject to redemption prior to maturity pursuant to this Indenture or a Supplemental Indenture shall be redeemable,upon notice as provided in this Article IV,at such times,at such Redemption Prices and upon such terms in addition to the terms contained in this Article IV as may be specified in this Indenture or in the Supplemental Indenture authorizing such Series. Section 402 -Redemption at the Election or Direction of the Authority.In the case of any redemption of Bonds at the election or direction of the Authority,the Authority shall give written notice to the Trustee of its election or direction so to redeem,of the redemption date,of the Series,and of the principal amounts of the Bonds of each maturity of such Series to be redeemed (which Series,maturities and principal amounts thereof to be redeemed shall be determined by the Authority in its sole discretion,subject to any limitations with respect thereto contained in this Indenture and the Supplemental Indenture with respect to such Series).Such notice shall be given at least 45 days prior to the redemption date or such shorter period as shall be acceptable to the Trustee.In the event notice of redemption shall have been given as in Section 405 provided,there shall be paid prior to the redemption date to the appropriate Paying Agents an amount in cash which,in addition to other moneys,if any,available therefor held by such Paying Agents,will be sufficient to redeem on the redemption date at the Redemption Price thereof,plus interest accrued and unpaid to the redemption date,all of the Bonds to be redeemed.The Authority shall promptly notify the Trustee in writing of all such payments by it to a Paying Agent. ection 403 -Redemption Otherwise Than at the Authority's Election or Direction. Whenever by the terms of this Indenture the Trustee is required or authorized to AEA/Unalaska Geothermal Project Trust indenture AFFO1ABA Page 30 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 redeem Bonds otherwise than at the election or direction of the Authority,the Trustee shall select the Bonds to be redeemed,give the notice of redemption and pay out of moneys available therefor the Redemption Price thereof,plus interest accrued and unpaid to the redemption date,to the appropriate Paying Agents in accordance with the terms of this Article IV and,to the extent applicable,Section 507. Section 404 -Selection of Bonds to be Redeemed.If less than all of the Bonds of like maturity of any Series shall be called for prior redemption,the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by the Trustee in such manner as the Trustee in its discretion may deem fair and appropriate. Section 405 -Notice of Redemption.When the Trustee shall receive notice from the Authority of its election or direction to redeem Bonds pursuant to Section 402,and when redemption of Bonds is authorized or required pursuant to Section 403,the Trustee shall give notice,in the name of the Authority,of the redemption of such Bonds,which notice shall specify the Series and maturities of the Bonds to be redeemed,the redemption date and the place or places where amounts due upon such redemption will be payable and,if less than all of the Bonds of any like Series and maturity are to be redeemed,the letters and numbers or other distinguishing marks of such Bonds so to be redeemed,and,in the case of Bonds to be redeemed in part only,such notice shall also specify the respective portions of the principal amount thereof to be redeemed.Such notice shall further state that on such date there shall become due and payable upon each Bond to be redeemed the Redemp- tion Price thereof,or the Redemption Price of the specified portions of the principal thereof in the case of Bonds to be redeemed in part only,together with interest accrued to the redemption date,and that from and after such date interest thereon shall cease to accrue and be payable.Such notice shall be given by mailing such notice,first class mail,postage prepaid,not less than 30 or more than 60 days before the redemption date,to the registered Owners of any Bonds or portions of Bonds which are to be redeemed,at their last addresses,if any,appearing upon the registry books. Section 406 -Payment of Redeemed Bonds.Notice having been given in the manner provided in Section 405,the Bonds or portions thereof so called for redemption shall become due and payable on the redemption date so designated at the Redemption Price,plus interest accrued and unpaid to the redemption date,and,upon presenta- tion and surrender thereof at the office specified in such notice,such Bonds,or portions thereof,shall be paid at the Redemption Price,plus interest accrued and AEA/Unalaska Geothermal Project Tnsst indenture AFFO1AB4 Page 31 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 . unpaid to the redemption date.If there shall be selected for redemption less than all of a Bond,the Authority shall execute and the Trustee shall authenticate and the Paying Agent shall deliver,upon the surrender of such Bond,without charge to the Owner thereof,for the unredeemed balance of the principal amount of the Bond so surrendered,at the option of the Owner thereof,Bonds of like Series and maturity in any of the authorized denominations.lf,on the redemption date,moneys for the redemption of all the Bonds or portions thereof of any like Series and maturity to be redeemed,together with interest to the redemption date,shall be held by the Paying Agents so as to be available therefor on said date and if notice of redemption shall have been mailed as aforesaid (and notwithstanding any defect therein or the lack of actual receipt thereof by any Bondowner),then,from and after the redemption date interest on the Bonds or portions thereof of such Series and maturity so called for redemption shall cease to accrue and become payable.If said moneys shall not be so available on the redemption date,such Bonds or portions thereof shall continue to bear interest until paid at the same rate as they would have borne had they not been called for redemption. ARTICLE V ESTABLISHMENT OF FUNDS AND APPLICATION THEREOF Section 501 -Pledge of Revenues and Other Funds. (a)A pledge of the Revenues,and of all moneys,securities and funds, except the Excess Investment Earnings Fund,held or set aside or to be held or set aside by the Authority or any Fiduciary under this Indenture,is hereby made,and the same are hereby pledged and assigned to secure the payment of the principal and Redemption Price of and interest on the Bonds and any Sinking Fund Installments for the retirement thereof,subject only to the provisions of this Indenture permitting the payment,setting apart or appropriation thereof for or to the purposes and on the terms,conditions,priorities and order set forth in or provided under this Indenture. This pledge shall be valid and binding from the time when it is made;the Revenues so pledged and then or thereafter received by the Authority shall immediately be subject to the lien of such pledge without any physical delivery or further act;and the lien of such pledge and the obligation to perform the contractual provisions hereby made shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Authority,irrespective of whether such parties have notice thereof. AEA/Unalaska Geothermal Project Trust Indenture AFFO1AB4 Page 32 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (b)|The Bonds shall be direct and general obligations of the Authority for the payment of which the full faith and credit of the Authority are pledged and neither the State of Alaska nor any political subdivision (other than the Authority)nor the Purchaser shall be obligated to pay the principal or Redemption Price thereof or interest thereon and neither the faith and credit nor the taxing power of the State of Alaska or any political subdivision thereof (other than the Authority)or of the Purchaser is pledged to the payment of the principal or Redemption Price of,or interest on,the Bonds.The Authority may not pledge the full faith and credit of the State of Alaska or any political subdivision thereof,except the Authority,to the payment of the Bonds and the issuance of the Bonds by the Authority may not directly or indirectly or contingently obligate the State of Alaska or a political subdivision of the State of Alaska to apply money from,or levy or pledge any form of taxation whatever to the payment of the Bonds.Nothing contained in this Section shall be construed to affect any obligation of the Purchaser under the Power Sales Agreement. (c)Nothing contained in this Indenture shall be construed to prevent the Authority from acquiring,constructing or financing through the issuance of its bonds, notes or other evidences of indebtedness any facilities which do not constitute a part of the Project for the purposes of this Indenture or from securing such bonds,notes or other evidences of indebtedness by a mortgage of the facilities so financed or by a pledge of,or other security interest in,the revenues therefrom or any lease or other agreement with respect thereto or any revenues derived from such lease or other agreement;provided that such bonds,notes or other evidences of indebtedness shall not be payable out of or secured by the Revenues or any Fund held under this Indenture and neither the cost of such facilities nor any expenditure in connection therewith or with the financing thereof shall be payable from the Revenues or from any such Fund. Section 502 -Establishment of Funds and Accounts. (a)The following Funds and Accounts,each to be held by the Trustee,are hereby established: (1)|Construction Fund, (2)Debt Service Fund,which shall consist of an Interest Account and a Principal Account, AEA/Unalaska Geothermal Project Trust indenture AFFOTABS Page 33 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (3)|Capital Reserve Fund, (4)|Renewal and Contingency Reserve Fund,and (5)Excess Investment Earnings Fund. (b)The following funds,each to be held by the Authority,are hereby established: (1)|Revenue Fund,and (2)|Operating Fund,which shall include therein an Operating Reserve Account. Section 503 -Construction Fund. (a)There shall be paid into the Construction Fund the amounts required to be so paid by the provisions of this Indenture and any Supplemental Indenture,and there may be paid into the Construction Fund,at the option of the Authority,any moneys received for or in connection with the Project by the Authority from any other source,unless required to be otherwise applied as provided by this Indenture. Amounts in the Construction Fund shall be applied to the Cost of Acquisition and Construction in the manner provided in this Section 503,and until so applied are pledged for the security of and the payment to Bondowners of the principal or Redemption Price of and interest on the Bonds and shall at all times be subject to the lien of such pledge. (6)There shall be established within the Construction Fund separate accounts for the Project and for each undertaking of Required Project Work for which Bonds are authorized to be issued. (c)|The proceeds of insurance,including the proceeds of any self-insurance fund,maintained pursuant to this Indenture against physical loss of or damage to the Project or Required Project Work,or of contractor's performance bonds or other assurances of completion with respect thereto,pertaining to the period of construction thereof,shall be paid into the appropriate separate account in the Construction Fund. AEA/Unalaska Geothermal Project Trsst indenture AFFOtAB4 Page 34 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (d)The Trustee shall,during and upon completion of the Project or Required Project Work,make payments from the Construction Fund in the amounts,at the times,in the manner and on the other terms and conditions set forth in this paragraph and in paragraph 5 of this Section 503.Before any such payment shall be made,the Authority shall file with the Trustee: (1)Its requisition therefor,stating in respect of each payment to be made (i)the name of the person,firm or corporation to whom payment is due, (ii)the amount to be paid,and (iii)in reasonable detail the purpose for which the obligation was incurred. (2)Its certificate signed by the chief financial officer of the Authority attached to the requisition certifying (i)that obligations in the stated amounts have been properly incurred by the Authority in or for the construction or acquisition of the Project or Required Project Work,and that each item thereof is a proper charge against the Construction Fund and is a proper Cost of Construction and Acquisition of the Project or Required Project Work and has not been paid,(ii)that there has not been filed with or served upon the Authori- ty notice of any lien,right to lien,or attachment upon,or claim affecting the right to receive payment of,any of the moneys payable under such requisition to any of the persons,firms or corporations named in such requisition,or if any such lien,attachment or claim has been filed with or served upon the Authority, that such lien,attachment or claim has been released or discharged in the amount in which such lien,right to lien,attachment or claim is stated in said notice,or if no amount is so stated the amount stated by the Construction Engineer as his opinion of the amount thereof,and (iii)that such requisition contains no item representing payment on account of any retained percentages which the Authority is at the date of such certificate entitled to retain. Upon receipt of each such requisition and accompanying certificates,the Trustee shall pay each such obligation or,if so requested by the Authority,shall transfer from the Construction Fund to the credit of a special account in the name of the Authority an amount equal to the total of the amounts to be paid as set forth in such requisition but not more than the excess of such amounts over the amount stated of any lien,right to lien,attachment or claim referred to above in subparagraph (2),the amounts in such special account to be held solely for the payment of the obligations set forth in such requisition.In making such transfer,the Trustee may rely upon such requisition and accompanying Certificates. AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 35 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (e)If any requisition filed with the Trustee in accordance with paragraph (d) of this Section 503 contains any item for the payment of the cost and expense of acquisition of any lands,easements,or rights or interests in or relating to lands,there shall be attached to such requisition,before any transfer or payment with respect to such item shall be made,in addition to the certificates mentioned in said para- graph (d):(1)a certificate of an Authorized Officer to the effect that such lands, easements,rights or interests have been or are being acquired and are necessary for the Project or Required Project Work;and (2)a Counsel's Opinion stating,in the opinion of the signer,that the Authority has authority to acquire such lands, easements,rights or interests,and that the Authority will have upon the payment of such item title in fee simple to,or perpetual easements for the purposes of the Authority over and through,such lands subject to no lien,charge or encumbrance -thereon or affecting the title thereto except such as will not under any circumstances cause the possession and use of the property by the Authority for its purposes to be disturbed,or,if such payment be a payment for an option to purchase or a quitclaim deed or a lease or a release or on a contract to purchase or be a payment to the United States of America or the State of Alaska or any political subdivision,or to a public utility,for the acquisition of a right or interest in lands less than a fee simple or a perpetual easement,or if such payment be a part payment for any such purpose, the written approval,by the signer of such Counsel's Opinion,of such payment as proper,and of the acquisition of such lesser right or interest as sufficient,for the purposes of the Authority.A requisition directing application of amounts in the Construction Fund to purchase or redeem bonds or notes issued to pay the Cost of Acquisition or Construction of the Project or any Required Project Work need only recite that fact and the principal amount of bonds or notes to be purchased or redeemed. (f)As soon as practicable after the date as of which the Construction Engineer shall determine that (1)the Project or Required Project Work conforms to the plans and specifications thereof as may be modified from time to time and is ready for normal continuous operation;(2)acquisition,construction and installation of the Project or Required Project Work has been completed in every material respect;and (iii)costs (including contingencies),as estimated by the Construction Engineer,of all work remaining to be done in order to complete such acquisition,construction and installation will not exceed 2 percent of the Cost of Acquisition and Construction of the Project or Required Project Work,the Authority shall cause the Construction Engineer to file a report to that effect with the Authority and the Trustee. AEA/Unalaska Geothermal Project Trust indenture AFFOIABS Page 36 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (g)|Assoon as practicable after the date referred to in paragraph (f)of this Section 503,or the Date of Commercial Operation of the Project or Required Project Work,whichever is the later,the Authority shall cause the Construction Engineer to file with the Authority and the Trustee a report setting forth,as of such later date,the following in reasonable detail with respect to the Project or Required Project Work: (1)the total Cost of Acquisition and Construction exclusive of claims of contractors and others which are the subject of actual or prospective dispute or controversy and exclusive of the cost (including contingencies),as estimated by the Construction Engineer,of the remaining work;(2)the portion of the total Cost of Construction and Acquisition specified pursuant to clause (1)of this paragraph which has been paid in full;(3)the portion of the total Cost of Acquisition and Construction specified pursuant to said clause (1)which remains to be paid,including all amounts which are not the subject of a dispute or controversy but are dependent upon the satisfaction of any agreements or conditions precedent to such payment;(4)the aggregated amount of the claims of contractors and others which are the subject of a dispute or controversy; (5)the cost (including contingencies),as estimated by the Construction Engineer and as approved by the Authority,of the remaining work;and (6)such amount,if any,as the Construction Engineer shall determine is necessary or desirable to be set aside in the Construction Fund for contingencies. (h)The Trustee shall at any time or from time to time after the filing with the Trustee of the report of the Construction Engineer as provided in paragraph (g)of this Section 503,withdraw from the Construction Fund the balance in the Construction Fund,or any part thereof,in the amounts,at the times,in the manner and on the other terms and conditions set forth in this paragraph.Before any such withdrawal shall be made,the Authority shall file with the Trustee: (1)Its requisition therefor,stating the amount of such withdrawal. (2)Accertificate of the chief financial officer of the Authority attached to the requisition certifying (i)that the Project or Required Project Work has been completed,and (ii)that a sum (which shall not be less that the amount stated in the report of the Construction Engineer filed with the Trustee pursuant to paragraph (g)of this Section 503)stated in the certificate is sufficient to pay, and is required to be reserved in the Construction Fund to pay,all items of Cost of Acquisition and Construction of the Project or Required Project Work then remaining unpaid,including the estimated amount of any such items the AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 37 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 amount of which is not finally determined and all claims against the Authority arising out of the Project or Required Project Work. (3)|ACounsel's Opinion stating,in the opinion of the signer,that the Authority has acquired title to all property constituting a part of the Project or Required Project Work and all property incidental thereto sufficient for the purposes of the Authority,free from all liens,charges,conditions or encum- brances except such as will not under any circumstances cause the possession and use of the property by the Authority for its purposes to be disturbed,and that,as to such parts of the Project or Required Project Work as constitute real property acquired,constructed or installed under a right or interest less than a fee simple or perpetual easement,the right or interest is sufficient for the purposes of the Authority,and that there are no uncanceled mechanics', laborers',contractors'or materialmen's liens on any such property or any funds of the Authority or on file in any public office where the same should be filed in order to be valid liens against any fund of the Authority or any part of such property or of the Project or Required Project Work,and that,in the opinion of the signer of such Counsel's Opinion,the time within which such liens can be filed has expired. Upon filing of such certificates and Counsel's Opinion,the balance in the separate account in the Construction Fund established therefor in excess of the amount,if any, stated in such certificate shall be transferred to the Capital Reserve Fund,if and to the extent necessary to make the amount of such Fund equal to the Capital Reserve Requirement and any balance shall be paid over or transferred to the Authority for deposit to the Revenue Fund and applied,if and to the extent a Counsel's Opinion states that such application is necessary to preserve the tax-exempt status of interest on the Bonds,to the retirement or Bonds by purchase or redemption.If subsequent to the filing of such certificate it shall be determined that any amounts specified in such certificate as being required for the payment of any remaining part of the Cost of Acquisition and Construction are no longer so required,such fact shall be evidenced by a certificate or certificates of an Authorized Officer of the Authority which shall be filed with the Trustee stating such fact and any amount shown therein as no longer being required shall be transferred to the Capital Reserve Fund,if and to the extent necessary to make the amount of such Fund equal to the Capital Reserve Requirement,and any balance shall be paid over or transferred to the Authority for deposit to the Revenue Fund and applied,if and to the extent a Counsel's Opinion states that such application is necessary to preserve the tax-exempt status of interest AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 38 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 on the Bonds,to the retirement of Bonds by purchase or redemption.[Any balance remaining in the Construction Fund after such retirement shall then be paid to '] (i)The Trustee shall during the construction of the Project or Required Project Work,pay from the appropriate separate account in the Construction Fund to the Authority,upon its requisitions therefor signed by an Authorized Officer of the Authority,at one time or from time to time,a sum or sums not more than $250,000, such sums to be used by the Authority as a revolving fund for the purpose of paying such items of the Cost of Acquisition and Construction thereof as cannot conveniently be paid as in this Section otherwise provided.So long as the amount in such revolving fund shall at any time be less than $250,000,such revolving fund shall be reimbursed by the Trustee from time to time for such expenses so paid,by payments from the Construction Fund upon requisitions and certificates signed by an Authorized Officer and filed with the Trustee specifying the payee and the amount and particular purpose of such payment from such revolving fund for which such reimbursement is required and certifying that each such amount so paid was necessary for the payment of an item of the Cost of Acquisition and Construction of the Project or Required Project Work and that such expense could not conveniently be paid except from such revolving fund.In making such reimbursement the Trustee may rely upon such requisitions and accompanying certificates. (j)Notwithstanding any of the other provisions of this Section,to the extent that other moneys are not available therefor,amounts in the Construction Fund shall be applied to the payment of principal of and interest on Bonds when due. Section 504 -Revenues and Revenue Fund.All Revenues shall be promptly deposited by the Authority and the Trustee,as the case may be,upon receipt thereof to the credit of the Revenue Fund. Section 505 -Operating Fund. (a)|As soon as practicable after deposit of Revenues in the Revenue Fund and in any case no later than the last business day of each month after the deposit, the Authority shall withdraw from the Revenue Fund and pay to the Operating Fund a sum which,together with any amount therein not set aside in the Operating Reserve Account or as a reserve for working capital,is equal to 1/12 (or such other fraction as may be appropriate if the period with respect to which such amount is withdrawn AEA/Unalaska Geothermal Project Trust indenture AFFOtAB4 Page 39 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 is other than monthly)of the total moneys appropriated for Operating Expenses in the Annual Budget for the then current Fiscal Year.If and to the extent provided in a Supplemental Indenture authorizing Bonds of a Series,amounts from the proceeds of such Bonds may be deposited in the Operating Fund and set aside therein as a reserve for working capital.The Authority shall establish an Operating Reserve Account within the Operating Fund.The Operating Reserve Account shall be established and maintained at all times in an amount not less than the Operating Reserve Account Requirement.Amounts in the Operating Reserve Account may be expended for Operating Expenses to the extent other amounts in the Operating Fund are not available. (6)|Amounts in the Operating Fund shall be paid out from time to time by the Authority for reasonable and necessary Operating Expenses. Section 506 -Payments Into Certain Funds. As soon as practicable after the deposit of Revenues into the Revenue Fund and after the payment has been made to the Operating Fund pursuant to Section 505, and with at least the frequency stated below,the Authority shall apply moneys from the Revenue Fund and deposit said amounts with the Trustee on the dates set forth below and the Trustee shall deposit said amounts in the following order in the amounts and in the Funds set forth below. (a)In the Debt Service Fund (1)semi-annually on 1 and 1,for credit to the Interest Account,unless the sum on deposit therein equals or exceeds the interest due on all Bonds on the next succeeding interest payment date,an amount equal to the interest due on such interest payment date less the interest to be paid on such interest payment date from Bond proceeds held in said Account for such purpose;provided,however,that for the purposes of computing the amount on deposit in said Account,there shall be excluded the amount,if any,set aside in said Account for the payment of interest due after the next succeeding interest payment date;(2)annually on 1,for credit to the Principal Account,unless the sum on deposit therein equals or exceeds all Principal Installments due on the next succeeding 1,an amount equal to one-half of such Principal Installments;and (3) annually on 1,for credit to the Principal Account,the amount,if any, necessary to cause the sum on deposit therein to equal all Principal Install- ments due on the next succeeding 1;provided that the Authority may AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 40 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 establish by Supplemental Indenture payments into the Debt Service Fund at different times and in different amounts as necessary for interest paid other than semi-annually and in fixed amounts. (b)Inthe Capital Reserve Fund,the amount,if any,required so that the balance in the Fund equals the Capital Reserve Requirement. (c)Semi-annually on 1 and 1,transfer to the Authority for deposit in the Operating Reserve Account,the amount,if any, required so that the balance in the Account equals the Operating Reserve Account Requirement. (d)In the Renewal and Contingency Reserve Fund,the amourt,if any,required so that the balance in the Fund,within a period no greater than four (4)years from the initial deposit and thereafter from the most recent withdrawal therefrom,shall equal the Renewal and Contingency Reserve Requirement or such larger amount as may be determined from time to time by the Authority to be included in the calculation of Annual Project Costs pursuant to Section 11(g)of the Power Sales Agreement. (e)Annually on a date or dates to be determined by Supplemental Indenture to the credit of the Excess Investment Earnings Fund in such amount as is necessary to cause the amount on deposit in the Excess Investment Earnings Fund (after a deposit therein,if any,from the Construction Fund)to be equal to the Authority's estimate of Excess Investment Earnings for the Bond Year. Section 507 -Debt Service Fund. (a)The Trustee shall pay out of the Debt Service Fund to the respective Paying Agents (1)out of the Interest Account,on or before each interest payment date for any of the Bonds the amount required for the interest payable on such date; (2)out of the Principal Account,on or before each Principal Installment due date,the amount required for the Principal Installment payable on such due date;and (3)out of the Interest Account,on or before any redemption date for the Bonds,the amount required for the payment of interest on the Bonds then to be redeemed.Such amounts shall be applied by the Paying Agents on and after the due dates thereof. AEA/Unalaska Geothermal Project Tnsst indenture AFFOIAB4 Page 41 DRAFT October 28,1991 3610.2014 TFK/ct Rev.#4 The Trustee shall also pay out of the Interest Account the accrued interest included in the purchase price of Bonds purchased for retirement. (6)Amounts accumulated in the Principal Account with respect to any Sinking Fund Installment (together with amounts accumulated in the Interest Account with respect to interest on the Bonds for which such Sinking Fund Installment was established)may,and if so directed by the Authority,shall,be applied by the Trustee, on or prior to the 60th day preceding the due date of such Sinking Fund Installment, to (1)the purchase of the Bonds of the Series and maturity for which such Sinking Fund Installment was established,or (2)the redemption at the applicable sinking fund Redemption Price of such Bonds.After the 60th day but on or prior to the 45th day preceding the due date of such Sinking Fund Installment,any amounts then on -deposit in the Principal Account may,and if so directed by the Authority,shall,be applied by the Trustee to the purchase of Bonds of the Series and maturity for which such Sinking Fund Installment was established in an amount not exceeding that necessary to complete the retirement of the unsatisfied balance of such Sinking Fund Installment.All purchases of any Bonds pursuant to this subsection (b)shall be made at prices not exceeding the applicable sinking fund Redemption Price of such Bonds plus accrued interest,and such purchases shall be made by the Trustee as directed by the Authority.The applicable sinking fund Redemption Price of any Bonds so purchased or redeemed shall be deemed to constitute part of the Principal Account, until such Sinking Fund Installment date,for the purpose of calculating the amount of such Account.As soon as practicable after the 45th day preceding the due date of any such Sinking Fund Installment,the Trustee shall proceed to call for redemption, by giving notice as provided in Section 405,on such due date Bonds of the Series and maturity for which such Sinking Fund Installment was established in such amount as shall be necessary to complete the retirement of the unsatisfied balance of such Sinking Fund Installment.The Trustee shall pay out of the Principal Account to the appropriate Paying Agents,on or before such redemption date,the amount required for the redemption of the Bonds so called for redemption,and such amount shall be applied by such Paying Agents to such redemption.All expenses in connection with the purchase or redemption of Bonds shall be paid from the Operating Fund. (c)The amount,if any,deposited in the Interest Account from the proceeds of each Series of Bonds shall be set aside in such Account and applied to the payment of interest on Bonds as provided in the Supplemental Indenture relating to the issuance of such Series of Bonds. AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 42 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (d)_Inthe event of the refunding of one or more Series of Bonds,the Trustee shall,upon the direction of the Authority,withdraw from the Debt Service Fund amounts accumulated therein with respect to Debt Service on the Bonds being refunded and deposit such amounts with itself as Trustee to be held for payment of the principal or Redemption Price,if applicable,and interest on the Series of Bonds being refunded;provided that such withdrawal shall not be made unless immediately thereafter the Series of Bonds being refunded shall be deemed to have been paid pursuant to subsection (b)of Section 1201. section 508 -Capital Reserve Fund. (a)_If five business days prior to any date on which a Principal Installment or interest is due the amount in the Debt Service Fund shall be less than the amount required to be in such Fund to pay said Principal Installment or interest,the Trustee shall apply amounts from the Capital Reserve Fund to the extent necessary to make good the deficiency. (b)|Whenever the moneys on deposit in the Capital Reserve Fund shall exceed the Capital Reserve Requirement,until the Date of Commercial Operation of the Project,such excess shall be deposited into the Construction Fund and thereafter such excess shall,on the request of the Authority,be transferred to the Authority for deposit in the Revenue Fund at least annually and shall be deemed "other available funds”within the meaning of Section 712 to be used for the payment of amounts required to be paid therein. (c)|Whenever the amount in the Capital Reserve Fund,together with the amount in the Debt Service Fund,is sufficient to pay in full all Outstanding Bonds in accordance with their terms (including principal or applicable sinking fund Redemption Price and interest thereon),the funds on deposit in the Capital Reserve Fund shall be transferred to the Debt Service Fund.Prior to said transfer,all investments held in the Debt Service Fund shall be liquidated to the extent necessary in order to provide for the timely payment of principal and interest (or Redemption Price)on Bonds. (d)Inthe event of the refunding of one or more Series of Bonds or one or more maturities within a Series of Bonds,the Trustee shall,upon the direction of the Authority,withdraw from the Capital Reserve Fund amounts accumulated therein with respect to the Bonds being refunded and deposit such amounts with itseif as Trustee to be held for the payment of the principal or Redemption Price,if applicable,and AEA/Unalaska Geothermal Project Trust indenture AFFOIABS Page 43 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 interest on the Series or maturities within a Series of Bonds being refunded;provided that such withdrawal shall not be made unless (1)immediately thereafter the Series or maturities within a Series of Bonds being refunded shall be deemed to have been paid pursuant to subsection (b)of Section 1201 and (2)the amount remaining in the Capital Reserve Fund after such withdrawal shall not be less than the Capital Reserve Requirement. Section 509 -Renewal and Contingency Reserve Fund. (a)|Amounts in the Renewal and Contingency Reserve Fund shall be applied to the costs of Required Project Work,the payment of extraordinary operation and maintenance costs,and contingencies,including payments with respect to the prevention or correction of any unusual loss or damage in connection with the Project or to prevent a loss of Revenues therefrom,all to the extent not provided for in the then current Annual Budget or by reserves in the Operating Fund or from the proceeds of Bonds pursuant to a requisition of the Authority. (b)|Nopayments shall be made from the Renewal and Contingency Reserve Fund if and to the extent that the proceeds of insurance,including the proceeds of any self-insurance fund,or other moneys recoverable as the result of damage,if any, are available to pay the costs otherwise payable from such Fund. (c)Any balance of moneys and securities in the Renewal and Contingency Reserve Fund in excess of an amount which,within a period no greater than four (4) years from the initial deposit and thereafter no greater than four (4)years from the most recent withdrawal therefrom,shall equal the Renewal and Contingency Reserve Requirement or such larger amount as may be determined from time to time by the Authority to be included in the calculation of Annual Project Costs pursuant to Section 11(g)of the Power Sales Agreement,shall be transferred to the Revenue Fund at least annually. Section 510 -Excess Investment Earnings Fund. (a)The Trustee shall establish within the Excess Investment Earnings Fund a separate account for each Series of Bonds.Within 30 days after the end of each Bond Year the Authority shall determine the Excess Investment Earnings with respect to each Series of Bonds for such Bond Year and the Trustee,at the direction of the Authority,shall transfer from the Construction Fund or the Authority shall transfer from AEA/Unalaska Geothermal Project Trsst Indenture AFFOIABS Page 44 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 . the Revenue Fund,such amount as shall be necessary to cause the amount held in such account to equal the Excess Investment Earnings for such Series of Bonds accrued as of the end of such Bond Year and not previously paid to the United States of America. (b)Moneys in the Excess Investment Earnings Fund shall be applied by the Trustee to pay rebate amounts due the United States,as provided in Section 148(f) of the Code and the applicable Income Tax Regulations.All moneys in the Excess Investment Earnings Fund shall be held by the Trustee free and clear of the lien of this Indenture.If at any time,the amount held in any account in the Excess Investment Earnings Fund exceeds the accrued and unpaid Excess Investment Earnings attributable to the Series of Bonds for which such account is maintained;then the Trustee,at the direction of the Authority,shall transfer such excess to the Authority for deposit to the Revenue Fund. (c)To the extent necessary,the Authority shall take all action required to Cause amounts equal to Excess Investment Earnings to be included as Operating Expenses and therefore as Annual Project Costs. Section 511 -Cancellation and Destruction of Bonds.All Bonds paid or redeemed, either at or before maturity,shall be delivered to the Trustee when such payment or redemption is made,and such Bonds,together with all Bonds purchased by the Trustee,shall thereupon be promptly canceled and destroyed. ARTICLE VI DEPOSITORIES OF MONEYS,SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS section 601 -Depositories. (a)All moneys held by the Trustee under the provisions of this Indenture shall be deposited with the Trustee and the Trustee shall,if directed by the Authority, deposit such moneys with one or more Depositories in trust for the Trustee.All moneys held by the Authority under this Indenture shall be deposited in one or more Depositories in trust for the Authority.All moneys deposited under the provisions of this Indenture with the Trustee or any Depository shall be held in trust and applied AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 45 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 only in accordance with the provisions of this Indenture,and each of the Funds established by this Indenture shall be a trust fund for the purposes thereof. (6)|Each Depository shall be a bank or trust company organized under the laws of any state of the United States of America or a national banking association and willing and able to accept the office on reasonable and customary terms and authorized by law to act in accordance with the provisions of this Indenture. Section 602 -Deposits. (a)All Revenues and other moneys held by any Depository under this Indenture may be placed on demand or time deposit,if and as directed by the Authority,provided that such deposits shall permit the moneys held to be available for use at the time when needed.The Authority shall not be liable for any loss or depreciation in value resulting from any investment made pursuant to this Indenture. Any such deposit may be made in the commercial banking department of any Fiduci- ary which may honor checks and drafts on such deposit with the same force and effect as if it were not such Fiduciary.All moneys held by any Fiduciary,as such,may be deposited by such Fiduciary in its banking department on demand or,if and to the extent directed by the Authority and acceptable to such Fiduciary,on time deposit, provided that such moneys on deposit be available for use at the time when needed. Such Fiduciary shall allow and credit on such moneys such interest,if any,as it customarily allows upon similar funds of similar size and under similar conditions or as required by law. (b)All moneys held under this Indenture by the Trustee or any Depository shall be (1)either (A)continuously and fully insured by the Federal Deposit Insurance Corporation,or (B)continuously and fully secured by lodging with the Trustee,any Federal Reserve Bank or branch,or another third party custodian approved by the Trustee and the Authority,Qualified Collateral having a market value (exclusive of accrued interest)not less than 100 percent of the amount of such moneys,or (2)held in such other manner as may then be required by applicable federal or State of Alaska laws and regulations and applicable state laws and regulations of the state in which the Trustee or such Depository (as the case may be)is located,regarding security for, or granting a preference in the case of,the deposit of trust funds;provided,however, that it shall not be necessary for the Fiduciaries to give security under this subsection (b)for the deposit of any moneys with them held in trust and set aside by them for the payment of the principal or Redemption Price of or interest on any Bonds,or for the AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 46 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Trustee or any Depository to give security for any moneys which shall be represented by obligations or certificates of deposit purchased as an investment of such moneys. (c)All moneys deposited with the Trustee and each Depository shall be credited to the particular Fund or Account to which such moneys belong. (d)The Trustee may,and upon the written request of the Authority shall, commingle any of the funds or accounts established pursuant to this Indenture into a separate fund or funds,provided,however,that all Funds or Accounts held by the Trustee hereunder shall be accounted for and credited to the correct Fund or Account notwithstanding such commingling. Section 603 -Investment of Certain Funds.Moneys held in any Fund or Account shall be invested and reinvested by the Trustee to the fullest extent practicable in Investment Securities which mature not later than such times as shall be necessary to provide moneys when needed for payments to be made from such Funds and Accounts in accordance with instructions received from any Authorized Officer of the Authority. Any amount in any Fund in excess of amounts required to be on deposit therein,shall be paid to the Authority for deposit to the Revenue Fund,provided,however,that any such amount shall be paid into the Construction Fund to the extent the amount is realized prior to the Date of Commercial Operation of the Project.Interest earned on any moneys or investments in a separate account in the Construction Fund shall be held in such account for the purposes thereof.Interest earned on amounts in the Interest Account shall be held in such Account for the purposes thereof. Nothing in this Indenture shall prevent any Investment Securities acquired as investments of funds held under this Indenture from being issued or held in book-entry form on the books of the Department of Treasury of the United States of America. Section 604 -Valuation and Sale of Investments.Obligations purchased as an investment of moneys in any Fund created under the provisions of this Indenture shall be deemed at all times to be part of such Fund and any profit realized from the liqui- dation of such investment shall be credited to such Fund and any loss resulting from the liquidation of such investment shall be charged to the respective Fund. AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 47 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 In computing the amount in any Fund created under the provisions of this Indenture for any purpose provided in this Indenture or Sec.44.83.110(e)of the Act,obligations purchased as an investment of moneys therein shall be valued at the market value thereof exclusive of accrued interest,or otherwise as may then be required by the Code.Such computations shall be determined not less frequently than quarterly in each year. Except as otherwise provided in this Indenture,the Trustee shall sell at the best price obtainable,or present for redemption,any obligation so purchased as an investment whenever it shall be requested in writing by an Authorized Officer of the Authority so to do or whenever it shall be necessary in order to provide moneys to meet any payment or transfer from any Fund held by it.The Trustee shall not be liable or "responsible for making any such investment in the manner provided above or for any loss resulting from any such investment. ARTICLE VII PARTICULAR COVENANTS OF THE AUTHORITY Section 701 -Payment of Bonds.The Authority shall duly and punctually pay or cause to be paid,the principal or Redemption Price,if any,of every Bond and the interest thereon,at the dates and places and in the manner mentioned in the Bonds according to the true intent and meaning thereof. Section 702 -Extension of Payment of Bonds.The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of claims for interest,by the purchase or funding of such Bonds or claims for interest or by any other arrangement,and in case the maturity of any of the Bonds or the time for payment of any such claims for interest shall be extended,such Bonds or claims for interest shall not be entitled,in case of any default under this Indenture,to the benefit of this Indenture or to any payment out of Revenues or Funds established by this Indenture,including the investments,if any,thereof,pledged under this Indenture or the moneys (except moneys held in trust for the payment of particular Bonds or claims for interest pursuant to this Indenture)held by the Fiduciaries,except subject to the prior payment of the principal of all Bonds Outstanding the maturity of which has not been extended and of such portion of the accrued interest on the Bonds as shall not be represented by such extended claims for interest.Nothing herein shall be deemed to limit the right of the Authority to issue AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 48 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Refunding Bonds and such issuance shall not be deemed to constitute an extension of maturity of Bonds. Section 703 -Offices for Servicing Bonds.The Authority shall at all times maintain one or more agencies as may be provided by Supplemental Indenture where Bonds may be presented for payment and shall at all times maintain one or more agencies where Bonds may be presented for registration,transfer for registration,transfer or exchange,and where notices,demands and other documents may be served upon the Authority in respect of the Bonds or of this Indenture.The Authority hereby appoints the Trustee as Bond Registrar to maintain an agency for the registration, transfer or exchange of Bonds,and for the service upon the Authority of such notices, demands and other documents and the Trustee shall continuously maintain or make arrangements to provide such services.The Authority hereby appoints the Paying Agent or Agents in such city as its respective agents to maintain such agencies for the payment or redemption of Bonds. Section 704 -Further Assurance.At any and all times the Authority shall,as far as it may be authorized by law,comply with any reasonable request of the Trustee to pass, make,do,execute,acknowledge and deliver,all and every such further resolutions, acts,deeds,conveyances,assignments,transfers and assurances as may be necessary or desirable for the better assuring,conveying,granting,pleading, assigning and confirming all and singular the rights,Revenues and other moneys, securities and funds hereby pledged or assigned,or intended so to be,or which the Authority may become bound to pledge or assign. Section 705 -Power to Issue Bonds and Pledge Revenues and Other Funds.The Authority is duly authorized under the Act and all other applicable laws to create and issue the Bonds and to adopt this Indenture and to pledge and assign the Revenues and other moneys,securities and funds purported to be subject to the lien of this Indenture in the manner and to the extent provided in this Indenture.Except to the extent otherwise provided in this Indenture,the Revenues,and other moneys, securities and funds so pledged are and will be free and clear of any pledge,lien, charge or encumbrance thereon or with respect thereto prior to,or of equal rank with, the pledge and assignment created by this Indenture,and all corporate or other action on the part of the Authority to that end has been and will be duly and validly taken. The Bonds and the provisions of this Indenture are and will be valid and legally en- forceable obligations of the Authority in accordance with their terms and the terms of the Act and this Indenture.The Authority shall at all times,to the extent permitted by AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 49 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 law,defend,preserve and protect the pledge and assignment of the Revenues and other moneys,securities and funds pledged under this Indenture and all the rights of the Bondowners under this Indenture against all claims and demands of all persons whomever. Section 706 -Power to Fix and Collect Rates.Fees and Charges.The Authority has, and will have as long as any Bonds are Outstanding,good right and lawful power to establish and collect rates and charges with respect to the use of the capability of the Project and the sale of the capacity,output or service thereof,subject to the terms of the Power Sales Agreement and other contracts relating thereto. Section 707 -Creation of Liens:Sale and Lease of Property. (a)The Authority shall not issue any bonds,notes or other evidences of indebtedness,other than the Bonds,secured by a pledge of or other lien or charge on the Revenues (including amounts which the Authority may thereafter be entitled to expend for Operating Expenses)and shall not create or cause to be created any lien or charge on such Revenues or on any amounts held by any Fiduciary under this Indenture;provided,however,that neither this Section nor any other provision of this Indenture shall prevent the Authority from issuing bonds or notes or other obligations for the purposes of the Authority payable out of,or secured by a pledge of,Revenues to be derived on and after such date as the pledge of the Revenues provided in this Indenture shall be discharged and satisfied as provided in Section 1201,or from issuing bonds or notes or other obligations for the purposes of the Authority which are secured by a pledge of amounts which is and shall be in all respects subordinate to the provisions of this Indenture and the lien and pledge created by this Indenture and shall not be accelerated in the event of default. (b)No part of the Project shall be sold,leased,mortgaged or otherwise disposed of,except as follows: (1)|The Authority may sell or exchange at any time and from time to time any property or facilities constituting part of the Project only in accordance with,and in a manner that will not impair the Authority's obligations under,the provisions of the Power Sales Agreement and if (A)it shall determine that such property or facilities are not useful in the operation of the Project,or (B)the proceeds of such sale are less than 2 percent of the prior Bond Year's Debt Service,or it shall file with the Trustee an opinion of the Consulting Engineer AEA/Unalaska Geothermal Project Trust Indenture AFFOIABA Page 50 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 stating that the fair market value of the property or facilities exchanged are less than 2 percent of the prior Bond Year's Debt Service or (C)if such proceeds or fair market value exceeds 2 percent of the prior Bond Year's Debt Service it shall file with the Trustee an opinion of the Consulting Engineer stating that the sale or exchange of such property or facilities will not impair the ability of the Authority to comply during the current or any future Fiscal Year with the provisions of Section 712.The proceeds of any such sale or exchange not used to acquire other property necessary or desirable for the safe or efficient operation of the Project shall forthwith be deposited in the Renewal and Contingency Fund. (2)Inaddition to the Power Sales Agreement,the Authority may lease or make contracts or grant licenses for the operation of,or make arrangements for the use of,or grant easements or other rights with respect to,any part of the Project,provided that any such lease,contract,license,arrangement, easement or right (A)does not impede the operation by the Authority or its agent of the Project and (B)does not in any manner impair or adversely affect the rights or security of the Bondowners under this Indenture,and (C)does not adversely affect the exemption from federal income taxation of the interest on the Bonds;and provided further,that if the depreciated cost of the property to be covered by any such lease,contract,license,arrangement,easement or other right is in excess of 2 percent of the prior Bond Year's Debt Service the Authority shall first file with the Trustee an opinion of the Consulting Engineer that such action of the Authority with respect thereto does not impair the ability of the Authority to comply during the current or any further Fiscal Year with the provisions of Section 712.Any payments received by the Authority under or in connection with any such lease,contract,license,arrangement,easement or right in respect of the Project or any part thereof shall constitute Revenues and shall be deposited in the Revenue Fund. Section 708 -Consulting Engineer.The Authority shall,for the purpose of performing and carrying out the duties imposed on the Consulting Engineer by this Indenture, employ an independent engineer or engineering firm or corporation having a nationwide and favorable reputation and demonstrated experience in the field of consulting engineering for power systems. Section 709 -Annual Budget.The Authority shall adopt an Annual Budget each Fiscal Year pursuant to Section 11(b)of the Power Sales Agreement and shall adopt and AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 51 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 have in effect,and file with the Trustee,said Annual Budget at least 90 days prior to such Fiscal Year.Each Annual Budget shall set forth in reasonable detail the estimated Revenues and Operating Expenses including Annual Project Costs for the Fiscal Year,and including provision for the estimated amount to be deposited during such Fiscal Year in each Fund and Account established under this Indenture and the requirements,if any,for the amounts estimated to be expended from each Fund and Account established under this Indenture.Such Annual Budget shall also set forth such detail with respect to such Revenues,Operating Expenses and other expendi- tures and such deposits,as shall be necessary or appropriate so as to comply with the Power Sales Agreement and the Authority may set forth such additional material as the Authority may determine.Such Annual Budget shall be revised as necessary or prudent during each Fiscal Year to reflect unanticipated changes in actual Revenues,Operating Expenses or other requirements,or if there are at any time during any such Fiscal Year extraordinary receipts or payments of unusual costs,if appropriate,there shall be filed with the Trustee an amended Annual Budget for the remainder of the then current Fiscal Year. Section 710 -Limitations on Operating Expenses and Other Costs.The Authority shall not incur Operating Expenses or other costs payable from the Renewal and Contingency Reserve Fund in any Fiscal Year in excess of the reasonable and neces- sary amount of such expenses or costs,respectively,and shall not expend any amount from the Operating Fund for Operating Expenses or from the Renewal and Contingency Reserve Fund for costs payable therefrom for such Fiscal Year in excess of the respective amounts provided therefor in the Annual Budget as then in effect. Nothing in this Section contained shall limit the amount which the Authority may expend for Operating Expenses or other costs payable from the Renewal and Contingency Reserve Fund in any Fiscal Year provided any amounts expended therefor in excess of such Annual Budget shall be received by the Authority from some source other than the Revenues,which source shall not be reimbursable out of Reve- nues. ection 711 -Acquisition an nstruction of the Proj nd _Its Operation and Maintenance. (a)|The Authority shall use its best efforts to acquire and construct the Project,or cause the same to be acquired and constructed,with due diligence and in a sound and economical manner. AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 52 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (b)|The Authority shall at all times use its best efforts to operate or cause the Project to be operated properly and in an efficient and economical manner, consistent with the Power Sales Agreement and Prudent Utility Practice,and shall use its best efforts to maintain,preserve,reconstruct and keep the same or cause the same to be so maintained,preserved,reconstructed and kept,with the appurtenances and every part and parcel thereof,in good repair,working order and good condition, and shall from time to time make,or use its best efforts to cause to be made,all necessary and proper repairs,replacements and renewals so that at all times the operation of the Project may be properly and advantageously conducted. (c)The Authority shall take all necessary steps to comply with applicable federal and state laws and regulations relating to the use and operation of the Project,morning the terms-of the Eederal Energy Regulatory Commi able -- to_the Project. Section 712 -Rates,Fees an harges. (a)|The Authority shall at all times after the date of Commercial Operation charge and collect,as a wholesale power rate,from the Purchaser pursuant to the Power Sales Agreement an amount equal to Annual Project Costs.The Authority, shall determine Annual Project Costs in such amounts as shall be required to provide Revenues at least sufficient in each Fiscal Year,together with other available funds, for the payment of the sum of: (1)|Operating Expenses during such Fiscal Year. (2)The amount,if any,to be paid during such Fiscal Year into the Operating Reserve Account which shall be the amount,if any,necessary to restore the Operating Reserve Account to the Operating Reserve Account Requirement. (3)An amount equal to the Aggregate Debt Service during such Fiscal Year. (4)The amount,if any,to be paid during such Fiscal Year into the Capital Reserve Fund,which shall be the amount,if any,necessary to restore the Capital Reserve Fund to the Capital Reserve Requirement subject to Section 716. AEA/Unalaska Geothermal Project Trsst indenture AFFOIABA Page 53 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (5)|The amount to be paid during such Fiscal Year into the Renewal and Contingency Reserve Fund which shall be the amount,if any,necessary to restore the Renewal and Contingency Reserve Fund over a period no greater than four years to the Renewal and Contingency Reserve Fund Requirement or such larger amount as may be determined from time to time by the Authority to be included in the calculation of Annual Project Costs pursuant to Section 11(g)of the Power Sales Agreement;and (6)All other charges or liens whatsoever required to be paid out of Revenues during such Fiscal Year. (6)The Authority will not furnish or supply,or cause to be furnished or supplied,any use,output,capacity or service of the Project,free of charge to any person,firm or corporation,public or private,and the Authority will enforce the payment of any and all amounts owing to the Authority pursuant to the Power Sales Agreement in accordance with its terms. (c)As required by AS 44.83.110,the Authority further will at all times maintain rates,fees or charges,and a contract entered into by it for the sale,trans- mission or distribution of power shall contain rates,fees or charges,sufficient (1)to pay the costs of operation and maintenance of the Project,and the principal of and interest on the Bonds as the same severally become due and payable,(2)to provide for debt service coverage as considered necessary by the Authority for the marketing of the Bonds and to provide for renewals,replacements and improvements of the Project,and (3)to maintain reserves required by the terms of this Indenture. ection 713 -Power Sales Aqreement. The Authority shall collect and forthwith deposit in the Revenue Fund all amounts payable to it pursuant to the Power Sales Agreement or payable to it pursuant to any other contracts for the use of the capability of the Project or the sale of the output,capacity or service of the Project or any part thereof.The Authority hereby pledges,assigns and transfers to the Trustee,acting on behalf of the Bondowners,all of its rights under the Power Sales Agreement or any other contracts for the use of the capability of the Project or the sale of the output,capacity or service of the Project or any part thereof and the Trustee shall enjoy and hold for the benefit of the Bondowners the rights and privileges so assigned,including,without limiting the foregoing,the rights of the Authority to receive payments thereunder.The Authority AEA/Unalaska Geothermal Project Trust indenture AFFO1ABA Page 54 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 shall enforce the provisions of the Power Sales Agreement and duly perform its covenants and agreements thereunder.The Authority will not consent or agree to or permit any termination,rescission of or amendment to or otherwise take any action under or in connection with the Power Sales Agreement which will in any manner materially impair or materially adversely affect the rights or security of the Bond- owners under this Indenture.A copy of the Power Sales Agreement certified by an Authorized Officer of the Authority shall be filed with the Trustee,and a copy of any such amendment certified by an Authorized Officer of the Authority shall be filed with the Trustee. Section 714 -Insurance. (a)|The Authority shall keep and maintain the Project at all times insured against such risks and in such amounts,with such deductible provisions,or provide for a source of self insurance,as is customary in connection with the operation of facilities of a type and size comparable to the Project and as may reasonably and economically be obtained or secured.The determination of what is "customary"and what may be "reasonably and economically obtained or secured”within the meaning of the prior sentence shall be made by an independent insurance consultant employed by the Authority or by the State division of risk management.Without limiting the foregoing,but only if required under the preceding sentences,the Authority shall carry and maintain,or cause to be carried and maintained,and pay or cause to be paid timely the premiums for,the following insurance with respect to the Project and the Authority: (1)Insurance coverage for buildings,works,plants and facilities comprising the Project for all risks of direct physical loss,at all times in an amount not less than an amount necessary giving regard to co-insurance provisions to pay and retire and redeem all the Outstanding Bonds. (2)General public liability insurance (other than as set forth in paragraph (3)of this subsection)in minimum amounts per occurrence,for annual aggregate claims,and with a deductible amount,to the same extent that other entities comparable to the Authority and owning or operating facilities of the size and type comparable to the Project carry such insurance. (3)|Comprehensive automobile liability insurance. AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 55 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (4)|Workers'compensation insurance or self-insurance as required by the laws of the State of Alaska. (b)Each insurance policy required by this Section (1)shall be issued or written by a financially responsible insurer (or insurers),or by an insurance fund established by the United States of America or State of Alaska or an agency or instrumentality thereof,(2)shall be in such form and with such provisions (including, without limitation and where applicable,loss payable clauses payable to the Trustee, waiver of subrogation clauses,provisions relieving the insurer of liability to the extent of minor claims and the designation of the named assureds)as are generally considered standard provisions for the type of insurance involved,and (3)shall prohibit cancellation or substantial modification by the insurer without at least thirty days'prior written notice to the Trustee and the Authority.Without limiting the generality of the foregoing,all insurance policies,and other arrangements to the extent feasible,carried pursuant to this Section 714 shall name the Trustee,the Authority and the Purchasers as parties insured thereunder as the respective interest of each of such parties may appear,and loss thereunder shall be made payable and shall be applied as provided in this Indenture. (c)|The Authority covenants to review each year the insurance carried by the Authority with respect to the Authority and the Project and,to the extent feasible and economically prudent,will carry insurance insuring against the risks and hazards specified in this Section to the same extent that other entities comparable to the Authority and owning or operating facilities of the size and type comparable to the Project,and taking into account any special circumstances of the Project,carry such insurance.In the event that the Authority determines that the insurance required by this Section is not available to the Authority at reasonable cost,and,in any case, every two years,from and after January 1,1993,the Authority shall employ an independent insurance consultant or the State division of risk management (the "consultant")for the purpose of reviewing the insurance coverage of,and the insur- ance required for,the Authority and the Project and making recommendations respecting the types,amounts and provisions of insurance that should be carried with respect to the Authority and the Project and their operation,maintenance and adminis- tration.A signed copy of the report of the consultant shall be filed with the Trustee and copies thereof shall be sent to the Authority,and the insurance requirements specified hereunder,including any and all of the dollar amounts set forth in this Section,shall be deemed modified or superseded as necessary to conform with the recommendations contained in said report. AEA/Unalaska Geothermal!Project Trast Indenture AFFO1ABA Page 56 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (d)The Authority may establish a fund to provide self-insurance against the risks and hazards relating to the properties of the Project and the interests of the Authority and the Bondowners as described in this Section,and,in connection therewith,may specify and determine the matters and things set forth in subsection (c)of this Section. (e)Insurance maintained pursuant to this Section may be part of one or more master policies maintained by the State of Alaska so long as the form of such policy and the coverage is the same as if a separate policy was in effect. (f)The Authority shall on or before January 1 of each year,commencing January 1,1993,submit to the Trustee a certificate verifying that all minimum insurance coverages required by this Indenture are in full force and effect as of the date of such Authority certificate. Section 715 -Reconstruction:Application of Insurance Proceeds. (a)If any useful portion of the Project shall be damaged or destroyed,the Authority shall,as expeditiously as possible,continuously and diligently prosecute or cause to be prosecuted the reconstruction or replacement thereof,or unless the Consulting Engineer in an opinion or report filed with the Trustee shail state that such reconstruction and replacement is not consistent with Prudent Utility Practice or is not in the interest of the Purchaser and the Bondowners.The proceeds of any insurance, including the proceeds of any self-insurance fund,paid on account of such damage or destruction shall be held by the Trustee in a special account in the Construction Fund and made available for,and to the extent necessary be applied to,the cost of such reconstruction or replacement.Pending such application,such proceeds may be invested at the direction of the Authority in Investment Securities which mature not later than such time as shall be necessary to provide moneys when needed to pay such costs of reconstruction or replacement.The proceeds of any insurance, including the proceeds of any self-insurance fund,not applied within 36 months after receipt thereof by the Authority to repairing or replacing damaged or destroyed property,or in respect to which notice in writing of intention to apply the same to the work of repairing or replacing the property damaged or destroyed shail not have been given to the Trustee by the Authority within such 36 months,or which the Authority shall at any time notify the Trustee are not to be so applied,in excess of $ shall be used to retire Bonds by purchase or redemption to the extent provided by the Supplemental Indenture authorizing the Bonds and the terms of the AEA/Unalaska Geothermal Project Trsst indenture AFFO1AB4 Page 57 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Bonds.Notwithstanding the foregoing,in the event that payments are made from the Renewal and Contingency Reserve Fund for any such repairing of property damaged or destroyed prior to the availability of insurance proceeds,including the proceeds of any self-insurance fund therefor,such proceeds when received by the Authority shall be deposited in the Renewal and Contingency Reserve Fund to the extent of such payments therefrom. (b)'If the proceeds of insurance,including the proceeds of any self- insurance fund,authorized by this Section to be applied to the reconstruction or replacement of any portion of the Project are insufficient for such purpose,the deficiency may be supplied out of moneys in the Renewal and Contingency Reserve Fund. Section 716 -Maintenance of Capital Reserve Fund. \or(a)The Authority has determined and does hereby determine that establishment of a Capital Reserve Fund will enhance the marketability of the Bonds.odTheAuthorityshallatalltimesmaintaintheCapitalReserveFundwiththeTrustee\\,\\created and established by Section 502 and do and perform or cause to be done and ? performed each and every act and thing with respect to the Capital Reserve Fund provided to be done or performed on behalf of the Authority or the Trustee under the terms and provisions of Article V hereof or of the Act. (b)Inorder better to secure the Bonds and to make them more marketable and to maintain in the Capital Reserve Fund an amount equal to the Capital Reserve Requirement,the Authority shall,in compliance with the provisions of the Act,cause the Chairman annually,on or before the second day of January of each year and whenever the Trustee transfers funds from the Capital Reserve Fund to pay Principal Installments or interest on the Bonds,to make and deliver to the Governor of the State and the Chairmen of the House and Senate Finance Committees of the Alaska State Legislature his certificate stating the amount,if any,required to restore the Capital Reserve Fund to the Capital Reserve Requirement and requesting such amount.A copy of such certificate shall be promptly delivered to the Trustee.Any such moneys received by the Authority from the State of Alaska in accordance with the provisions of the Act pursuant to any such certification shall be paid to the Trustee for deposit and credit to the Capital Reserve Fund. AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 58 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 'Section 717 -Accounts and Reports. (a)|The Authority shall keep or cause to be kept proper books of records made of its transactions relating to the Project and each Fund and Account established under this Indenture and relating to its costs and charges under the Power Sales Agreement and which,together with the Power Sales Agreement and all other books and papers of the Authority,including insurance policies,relating to the Project, shall at all times be subject to the inspection of the Trustee and the Owners of an aggregate of not less than 5 percent in principal amount of the Bonds then Outstanding or their representatives duly authorized in writing. (6)The Trustee shall advise the Authority promptly after the end of each month in its regular statements of the respective transactions during such month relating to each Fund and Account held by it under this Indenture.The Authority shall have the right upon reasonable notice and during reasonable business hours to audit the books and records of the Trustee with respect to the Funds and Accounts held by the Trustee under this Indenture. (c)|The Authority shall annually,within 120 days after the close of each Fiscal Year (the first such report to be filed with respect to the Fiscal Year commenc- ing July 1,1991),file with the Trustee,and otherwise as provided by law,a copy of an annual report for such Fiscal Year,accompanied by an Accountant's Certificate, relating to the Project and including the following statements in reasonable detail:a statement of assets and liabilities as of the end of such Fiscal Year,to the extent relating to the Project;a statement of Revenues and Operating Expenses for such Fiscal Year;and a summary with respect to each Fund and Account established under this Indenture of the receipts therein and disbursements therefrom during such Fiscal Year and the amount held therein at the end of such Fiscal Year.Such Accountant's Certificate shall state whether or not,to the knowledge of the signer,the Authority is in default with respect to any of the covenants,agreements or conditions on its part contained in this Indenture,and if so,the nature of such default. (d)The Authority shall file with the Trustee (1)forthwith upon becoming aware of any Event of Default or default in the performance by the Authority of any covenant, agreement or condition contained in this Indenture,a certificate signed by an Authorized Officer of the Authority and specifying such Event of Default or default and (2)within 120 days after the end of each Fiscal Year,commencing with the Fiscal Year ending June 30,1992,a certificate signed by an Authorized Officer of the Authority AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 59 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 stating that,to the best of his knowledge and belief,the Authority has kept,observed, performed and fulfilled each and every one of its covenants and obligations contained in this Indenture and there does not exist at the date of such certificate any default by the Authority under this Indenture or any Event of Default or other event which,with the lapse of time specified in Section 801,would become an Event of Default,or,if any such default or Event of Default or other event shall so exist,specifying the same and the nature and status thereof. (e)With respect to the Project and each item of Required Project Work for which a Construction Engineer is retained pursuant to paragraph (g)of Section 503, the Authority shall cause such Construction Engineer to (1)prepare and submit to the Authority such drawings,designs,plans,specifications,surveys and reports as are necessary for the proper acquisition and construction of the Project or Required Project Work,and approve and supervise any necessary modifications in the designs, plans and specifications thereof;(2)prepare and submit to the Authority quarterly reports of progress during the period of construction of the Project or Required Project Work,including data as to the date of expected completion and the comparison of estimated construction time and the Cost of Acquisition and Construction thereof with the estimates made prior to the issuance and sale of any Bonds,and an estimate of the amounts that will be needed from time to time to pay the Cost of Acquisition and Construction thereof and the estimated dates of such payments;(3)continuously supervise and inspect the acquisition and construction of the Project or Required Project Work in accordance with the usual accepted practices of such inspection and supervision;and (4)upon completion and testing as required by the specifications of the Project or Required Project Work,certify to the Authority to that effect and to the further effect that the Project (or,with respect to Required Project Work,the Project with such Required Project Work)is ready for normal continuous operation.The Authority shall cause a copy of every report of the Construction Engineer referred to in this paragraph to be filed with the Trustee. (f)The reports,requested statements and other documents required to be furnished to the Trustee pursuant to any provisions of this Indenture shall be available for the inspection of Bondowners at the office of the Trustee and shall be mailed to each Bondowner who shall file a written request therefor with the Authority.The Authority shall request that the Purchaser send a copy of its annual financial statement to the Authority and shall send a copy to each Bondowner which has requested it. The Authority may charge each Bondowner requesting such reports,statements and other documents a reasonable fee to cover reproduction,handling and postage. AEA/Unalaska Geothermal Project Trust indenture AFFOIAB4 Page 60 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Section 718 -Tax Covenants. (a)|The Authority shall at all times do and perform all acts and things necessary or desirable including,but not limited to,compliance with provisions of a letter of instructions from Bond Counsel,as the same may be revised from time to time,in order to assure that interest paid on the Bonds shall,for the purposes of federal income taxation,be excludable from the gross income of the recipients thereof and exempt from such taxation,except in the event that such recipient is a "substantial user"or "related person"within the meaning of Section 147(a)of the Code. (b)|The Authority shall not permit at any time or times any of the proceeds of the Bonds,Revenues or any other funds of the Authority to be used directly or indirectly to acquire any securities or obligations the acquisition of which would cause any Bond to be an "arbitrage bond"as defined in Section 148(a)and (e)of the Code. (c)The Authority shall not permit at any time or times any proceeds of any Bonds,Revenues or any other funds of the Authority to be used,directly or indirectly, in a manner which would result in the exclusion of any Bond from the treatment afforded by subsection (a)of Section 103 of the Code,as from time to time amended, except in the case of Bonds held by a person who,within the meaning of Section 147(a)of the said Code,is a "substantial user”or "related person”. (d)This Section shall not apply to any Series of Bonds the interest on which is determined by the Authority not to be exempt from taxation under Section 103 of the Code,provided,that no such Series of Bonds shall be issued unless a Counsel's Opinion is filed with the Trustee stating that the issuance of such Series will not cause the interest on a tax-exempt Bond previously issued to be subject to taxation under Sections 103 and 141-150 of the Code. (e)Notwithstanding any other provision of this Indenture to the contrary, upon the Authority's failure to observe,or refusal to comply with,the covenants in this Section 718,no person other than the Trustee or the Owners of Bonds of the specific Series affected shall be entitled to exercise any right or remedy provided to the above Owners under this Indenture on the basis of the Authority's failure to observe,or refusal to comply with,the covenant. Section 719 -Payment of Taxes and Charges.The Authority will from time to time duly pay and discharge,or cause to be paid and discharged,all taxes,assessments AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 61 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 and other governmental charges,or required payments in lieu thereof,lawfully imposed upon the properties of the Authority or upon the rights,Revenues,income, receipts and other moneys,securities and funds of the Authority when the same shall become due (including all rights,moneys and other property transferred,assigned or pledged under this Indenture),and all lawful claims for labor and material and supplies,except those taxes,assessments,charges or claims which the Authority shall in good faith contest by proper legal proceedings,if the Authority shall in all such cases have set aside on its books reserves deemed adequate with respect thereto. Section 720 -Pledge of the State.The State of Alaska pledges to and agrees with the Owners of the Bonds that the State will not limit or alter the rights and powers vested in the Authority by the Act to fulfill the terms of the contracts made by the Authority under this Indenture with the Owners of Bonds,or in any way impair the rights and remedies of the Owners of Bonds until the Bonds,together with the interest on them with interest on unpaid installments of interest,and all costs and expenses in connection with an action or proceeding by or on behalf of the Owners of the Bonds, are fully met and discharged.This pledge is included in this Indenture under the specific authority of 44.83.140 of the Act. Section 721 -Waiver of Laws.The Authority shall not at any time insist upon or plead in any manner whatsoever,or claim or take the benefit or advantage of,any stay or extension law now or at any time hereafter in force which may affect the covenants and agreements contained in this Indenture or in the Bonds,and all benefit or advantage of any such law is hereby expressly waived by the Authority. Section 722 -General. (a)The Authority shall do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Authority under the provisions of the Act and this Indenture. (b)|Upon the date of authentication and delivery of each Series of Bonds, all conditions,acts and things required by law and this Indenture to exist,to have happened and to have been performed precedent to and in the issuance of such Bonds shall exist,have happened and have been performed and the issue of such Bonds,together with all other indebtedness of the Authority,shall comply in all respects with the applicable laws of the State of Alaska including the debt and other limitations prescribed by the Constitution and laws of the State of Alaska. AEA/Unalaska Geothermal Project Trust Indenture AFFO1AB4 Page 62 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (c)The provisions of this Article are covenants and agreements by the Authority with the Trustee and the Bondowners. ARTICLE VIII REMEDIES OF BONDOWNERS Section 801 -Events of Default.The following shall constitute Events of Default: (a)If default shall be made in the due and punctual payment of the principal of or Redemption Price,if any,when and as the same shall become due on or with respect to any Bond,whether at maturity or upon call for redemption or otherwise; (b)'If default shall be made in the due and punctual payment of any installment of interest on any Bond or the unsatisfied balance of any Sinking Fund In- stallment therefor,when and as such interest installment or Sinking Fund Installment shall become due and payable. (c)if default shall be made by the Authority in the performance or observance of any other of the covenants,agreements or conditions on its part in this Indenture or in the Bonds contained,and such default shall continue for a period of 60 days after written notice thereof to the Authority by the Trustee or to the Authority and to the Trustee by the Owners of not less than 25 percent in principal amount of the Bonds Outstanding. (d)'If there shall occur the dissolution or liquidation of the Authority or the filing by the Authority of a voluntary petition in bankruptcy,or the commission by the Authority of any act of bankruptcy,or adjudication of the Authority as a bankrupt,or assignment by the Authority for the benefit of its creditors,or the entry by the Authority into an agreement of composition with its creditors,or the approval by a court of competent jurisdiction of a petition applicable to the Authority in any proceeding for its reorganization instituted under the provisions of the federal bankruptcy act,as amended,or under any similar act in any jurisdiction which may now be in effect or hereafter enacted. (e)If anorder or decree shall be entered,with the consent or acquiescence of the Authority,appointing a receiver or receivers of the Project,or any part thereof, or of the rents,fees,charges or other Revenues therefrom,or if such order or decree, AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 63 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 having been entered without the consent or acquiescence of the Authority,shall not be vacated or discharged or stayed within 90 days after the entry thereof. (f)If judgment for the payment of money shall be rendered against the Authority as the result of the construction,improvement,ownership,control or opera- tion of the Project,and any such judgment shall not be discharged within 90 days after the entry thereof,or an appeal shall not be taken therefrom or from the order,decree or process upon which or pursuant to which such judgment shall have been granted or entered,in such manner as to set aside or stay the execution of or levy under such judgment,or order,decree or process or the enforcement thereof. Section 802 -Account and Examination of Records After Default. (a)The Authority covenants that if an Event of Default shall have happened and shall not have been remedied,the books of record and account of the Authority and all other records of the Project at all times shall be subject to the inspection and use of the Trustee and of its agents and attorneys. (6)|The Authority covenants that if an Event of Default shall have happened and shall not have been remedied,the Authority,upon demand of the Trustee,will account,as if it were the trustee of an express trust,for all Revenues and other moneys,securities and funds pledged or held under this Indenture for such period asshallbestatedinsuchdemand. ection 803 -Application of Revenues and Other Mon After Default. (a)|The Authority covenants that if an Event of Default shall happen and shall not have been remedied,the Authority upon the demand of the Trustee,shall pay over or cause to be paid over to the Trustee (1)forthwith,all moneys,securities and funds then held by the Authority in any Fund or Account under this Indenture,and (2)all Revenues as promptly as practicable after receipt thereof. (b)During the continuance of an Event of Default,the Trustee shall apply all moneys,securities,funds and Revenues received by the Trustee pursuant to any right given or action taken under the provisions of this Article as follows and in the following order: AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 64 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (1)Expenses of Fiduciaries -to the payment of the reasonable and proper fees,charges,expenses (including,but not limited to,fees and expenses of their attorneys)and liabilities of the Fiduciaries. (2)Operating Expenses -to the payment of the amounts required for reasonable and necessary Operating Expenses.For this purpose the books of record and accounts of the Authority relating to the Project shall at ail times be subject to the inspection of the Trustee and its representatives and agents during the continuance of such Event of Default. (3)Principal or Redemption Price and Interest -to the payment of the interest and principal or Redemption Price then due on the Bonds,as follows: (A)'First:Interest -To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments,together with accrued and unpaid interest on the Bonds theretofore called for redemption,and,if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date,then to the payment thereof ratably, according to the amounts due thereon,to the persons entitled thereto, without any discrimination or preference. (B)Second:Principal or Redemption Price -To the payment to the persons entitled thereto of the unpaid principal or Redemption Price of any Bonds which shall have become due,whether at maturity or by call for redemption,in the order of their due dates,and,if the amount available shall not be sufficient to pay in full all the Bonds due on any date,then to the payment thereof ratably,according to the amounts of principal or Redemption Price due on such date,to the persons entitled thereto,without any discrimination or preference. (c)-_Ifand whenever all overdue installments of interest on all Bonds,together with the reasonable and proper fees,charges,expenses,including,but not limited to, fees and expenses of its attorneys and liabilities of the Trustee,and all other sums payable by the Authority under this Indenture,including the principal and Redemption Price of and accrued unpaid interest on all Bonds which shall then be payable by declaration or otherwise,shall either be paid by or for the account of the Authority or provision satisfactory to the Trustee shall be made for such payment,and all defaults AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 65 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 under this Indenture or the Bonds shall be made good or secured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall be made therefor,the Trustee shall pay over to the Authority all moneys,securities and funds then remaining unexpended in the hands of the Trustee (except moneys,securities and funds deposited or pledged,or required by the terms of this Indenture to be deposited or pledged,with the Trustee),and thereupon the Authority and the Trustee shall be restored,respectively,to their former positions and rights under this Indent- ure.No such payment over to the Authority by the Trustee nor such restoration of the Authority and the Trustee to their former positions and rights shall extend to or affect any subsequent default under this Indenture or impair any right consequent thereon. (d)The Trustee shall not take any action which will unreasonably interfere with the performance of the Power Sales Agreement. Section 804 -Appointment of Receiver.The Trustee shall have the right to apply in an appropriate proceeding for the appointment of a receiver of the Project. Section 805 -Proceedings Brought by Trustee. (a)if an Event of Default shall happen and shall not have been remedied, then and in every such case,the Trustee,by its agents and attorneys,may proceed, and upon written request of the Owners of not less than 25 percent in principal amount of the Bonds Outstanding shall proceed,to protect and enforce its rights and the rights of the Owners of the Bonds under this Indenture forthwith by a suit in equity or at law,whether for the specific performance of any covenant herein contained,or in aid of the execution of any power herein granted or any remedy granted under the Act,or for an accounting against the Authority as if the Authority were the trustee of an express trust,or in the enforcement of any other legal or equitable right as the Trustee,being advised by counsel,shall deem most effectual to enforce any of its rights or to perform any of its duties under this Indenture. (6)=All rights of action under this Indenture may be enforced by the Trustee without the possession of any of the Bonds or the production thereof on the trial or other proceedings,and any such suit or proceedings instituted by the Trustee shall be brought in its name. (c)|The Owners of not less than a majority in principal amount of the Bonds at the time Outstanding may direct the time,method and place of conducting any AEA/Unalaska Geothermal Project Trust Indenture AFFO1AB4 Page 66 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 proceeding for any remedy available to the Trustee,or exercising any trust or power conferred upon the Trustee,provided that the Trustee shall have the right to decline to follow any such direction if the Trustee shall be advised by counsel that the action or proceeding so directed may not lawfully be taken,or if the Trustee in good faith shall determine that the action or proceeding so directed would involve the Trustee in personal liability or be unjustly prejudicial to the Bondowners not parties to such direction. (d)|Upon commencing a suit in equity or upon other commencement of judicial proceedings by the Trustee to enforce any right under this Indenture,the Trustee shall be entitled to exercise any and all rights and powers conferred in this Indenture and provided to be exercised by the Trustee upon the occurrence of any Event of Default. Section 806 -Restriction on Bondowner's Action. (a)|No Owner of any Bond shall have any right to institute any suit,action or proceeding at law or in equity for the enforcement of any provision of this Indenture or the execution of any trust under this Indenture or for any remedy under this Indenture,unless such Owner shall have previously given to the Trustee written notice of the happening of an Event of Default,as provided in this Article,and the Owners of at least 25 percent in principal amount of the Bonds then Outstanding shall have filed a written request with the Trustee,and shall have offered it reasonable opportunity either to exercise the powers granted in this Indenture or by the Act or by the laws of the State of Alaska or to institute such action,suit or proceeding in its own name,and unless such Owners shall have offered to the Trustee adequate security and indemnity against the costs,expenses and liabilities to be incurred therein or thereby,and the Trustee shall have refused to comply with such request for a period of 60 days after receipt by it of such notice,request and offer of indemnity,it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect,disturb or prejudice the pledge created by this Indenture,or to enforce any right under this Indenture,except in the manner therein provided;and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted,had and maintained in the manner provided in this Indenture and for the equal benefit of all Owners of the Outstanding Bonds,subject only to the provisions of Section 702. AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 67 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (b)Nothing contained in this Indenture or in the Bonds shall affect or impair the obligation of the Authority,which is absolute and unconditional,to pay at the respective dates of maturity and places therein expressed the principal of (and premium,if any)and interest on the Bonds to the respective Owners thereof,or affect or impair the right of action,which is also absolute and unconditional,of any Owner to enforce such payment of his Bond. Section 807 -Remedies Not Exclusive.No remedy by the terms of this Indenture conferred upon or reserved to the Trustee or the Bondowners is intended to be exclusive of any other remedy,but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Indenture or existing at law,including under the Act,or in equity or by statute on or after the date of adoption of this Indenture. Section 808 -Effect of Waiver and Other Circumstances.No delay or omission of the Trustee or any Bondowner to exercise any right or power arising upon the happening of an Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or be an acquiescence therein;and every power and remedy given by this Article to the Trustee or to the Bondowners may be exercised from time to time and as often as may be deemed expedient by the Trustee or by the Bondowners. Section 809 -Notice of Default.The Trustee shall promptly mail written notice of the occurrence of any Event of Default of which it has actual knowledge to each registered Owner of Bonds then Outstanding at his address,if any,appearing upon the registry books of the Authority,and to the Purchaser.The Trustee shall be deemed to have actual notice of any default under Section 801(a)and (b). ARTICLE IX CONCERNING THE FIDUCIARIES Section 901 -Trustee:Appointment and Acceptance of Duties.The Trustee shall be appointed by a Supplemental Indenture.The Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Indenture by executing and delivering to the Authority a written acceptance thereof,and by executing such acceptance the Trustee shall be deemed to have accepted such duties and AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 68 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 'obligations with respect to all the Bonds thereafter to be issued,but only,however, upon the terms and conditions set forth in this Indenture. Section 902 -Paying Agents;Appointment and Acceptance of Duties. (a)|The Authority shall appoint one or more Paying Agents for the Bonds of each Series,and may at any time or from time to time appoint one or more other Paying Agents having the qualifications set forth in Section 913 for a successor Paying Agent.The Trustee may be appointed a Paying Agent. (b)Each Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Indenture by executing and delivering to the Authority and to the Trustee a written acceptance thereof. (c)Unless otherwise provided,the principal corporate trust offices of the Paying Agents are designated as the respective offices or agencies of the Authority for the payment of the interest on and principal or Redemption Price of the Bonds. Section 903 -Responsibilities of Fiduciaries. (a)The recitals of fact herein and in the Bonds contained shall be taken as the statements of the Authority and no Fiduciary assumes any responsibility for the correctness of the same.No Fiduciary makes any representations as to the validity or sufficiency of this Indenture or of any Bonds issued thereunder or as to the security afforded by this Indenture or the Power Sales Agreement,and no Fiduciary shall incur any liability in respect thereof.The Trustee shall,however,be responsible for its representation contained in its certificate of authentication on the Bonds.No Fiduciary shall be under any responsibility or duty with respect to the application of any moneys paid by such Fiduciary in accordance with the provisions of this Indenture to the Authority or to any other Fiduciary.No Fiduciary shall be under any obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect thereof,or to advance any of its own moneys,unless properly indemnified.Subject to the provisions of subsection (b)of this Section 903,no Fiduciary shall be liable in connection with the performance of its duties hereunder except for its own negligence,misconduct or default. (b)The Trustee,prior to the occurrence of any Event of Default and after the curing of all Events of Default which may have occurred,undertakes to perform such AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 69 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 duties and only such duties are specifically set forth in this Indenture.In case an Event of Default has occurred (which has not been cured),the Trustee shall exercise such of the rights and powers vested in it by this Indenture,and use the same degree of care and skill in their exercise,as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.Any provision of this Indenture relating to action taken or to be taken by the Trustee or to evidence of matters upon which the Trustee may rely shall be subject to the provisions of this Section 903. Section 904 -Evidence on Which Fiduciaries May Act. (a)Each Fiduciary,upon receipt of any notice,resolution,request,consent, order,certificate,report,opinion,bond or other paper or document furnished to it _pursuant to any provision of this Indenture,shall examine such instrument to deter- mine whether it conforms to the requirements of this Indenture and shall be protected in acting upon any such instrument believed by it to be genuine and to have been signed or presented by the proper party or parties.Each Fiduciary may consult with counsel,who may or may not be of counsel to the Authority,and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it under this Indenture in good faith and in accordance therewith. (b)|Whenever any Fiduciary shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this indenture,such matter (unless other evidence in respect thereof be herein specifically prescribed)may be deemed to be conclusively proved and established by a certificate of an Authorized Officer of the Authority and such certificate shall be full warrant for any action taken or suffered in good faith under the provisions of this Indenture upon the faith thereof;but in its discretion the Fiduciary may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as to it may seem reasonable. (c)Except as otherwise expressly provided in this Indenture,any request, order,notice or other direction required or permitted to be furnished pursuant to any provision hereof by the Authority to any Fiduciary shall be sufficiently executed in the name of the Authority by an Authorized Officer of the Authority. Section 905 -Compensation.The Authority shall pay to each Fiduciary from time to time reasonable compensation for all services rendered under this Indenture,and also all reasonable expenses,charges,counsel fees and other disbursements,including AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 70 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 those of its attorneys,agents and employees,incurred in and about the performance of their powers and duties under this Indenture and each Fiduciary shall have a lien therefor on any and all funds at any time held by it under this Indenture.Subject to the provisions of Section 903,the Authority further agrees to indemnify and save each Fiduciary harmless against any loss,expense including attorneys fees and expenses, and liabilities which it may incur in the exercise and performance of its powers and duties hereunder,and which are not due to its negligence,misconduct or default. Section 906 -Certain Permitted Acts.Any Fiduciary may become the owner of any Bonds with the same rights it would have if it were not a Fiduciary.To the extent permitted by law,any Fiduciary may act as depository for,and permit any of its officers or directors to act as a member of,or in any other capacity with respect to, any committee formed to protect the rights of Bondowners or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this Indenture,whether or not any such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. Section 907 -Resignation of Trustee.The Trustee may at any time resign and be discharged of the duties and obligations created by this Indenture by giving not less than 60 days'written notice to the Authority,and mailing notice thereof to each Bondowner,specifying the date when such resignation shall take effect,and such resignation shall take effect upon the day specified in such notice,provided a successor shall have been appointed by the Authority or the Bondowners as provided in Section 909,and has accepted the appointment. Section 908 -Removal of Trustee.The Trustee may be removed at any time by an instrument or concurrent instruments in writing,filed with the Trustee,and signed by the Owners of a majority in principal amount of the Bonds then Outstanding or their attorneys-in-fact duly authorized,excluding any Bonds held by or for the account of the Authority.The Authority may remove the Trustee at any time except during the existence of an Event of Default,for such cause as shall be determined in the sole discretion of the Authority,by filing with the Trustee an instrument in writing signed by an Authorized Officer of the Authority. Section 909 -Appointment of Successor Trustee;Financial Qualifications of Trustee and Successor Trustee. AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 71 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 (a)'In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting,or shall be adjudged a bankrupt or insolvent,or if a receiver,liquidator or conservator of the Trustee,or of its property,shall be appointed, or if any public officer shall take charge or control of the Trustee,or of its property or affairs,a successor may be appointed by the Owners of a majority in principal amount of the Bonds then Outstanding,excluding any Bonds held by or for the account of the Authority,by an instrument or concurrent instruments in writing signed and acknowledged by such Bondowners or by their attorneys-in-fact duly authorized and delivered to such successor Trustee,notification thereof being given to the Authority and the predecessor Trustee;provided,nevertheless,that unless a successor Trustee shall have been appointed by the Bondowners as aforesaid,the Authority by a duly executed written instrument signed by an Authorized Officer of the Authority shall forthwith appoint a Trustee to fill such vacancy until a successor Trustee shall be appointed by the Bondowners as authorized in this Section 909.The Authority shall mail notice to each Bondowner of any such appointment made by it within 20 days after such appointment.Any successor Trustee appointed by the Authority shall, immediately and without further act,be superseded by a Trustee appointed by the Bondowners. (6)-'Ifin aproper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section within 45 days after the Trustee shall have given to the Authority written notice as provided in Section 907 or after a vacancy in the office of the Trustee shall have occurred by reason of its inability to act, removal,or for any reason whatsoever,the Trustee (in the case of its resignation under Section 907)or the Owner of any Bond (in any case)may apply to any court of competent jurisdiction to appoint a successor Trustee.Said court may thereupon, after such notice,if any,as such may deem proper,appoint a successor Trustee. (c)The Trustee appointed under the provisions of this Article or any successor to the Trustee shall be a bank or trust company or national banking association having capital stock and surplus aggregating at least $200,000,000,if there be such a bank or trust company or national banking association willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Indenture. Section 910 -Transfer of Rights and Property to Successor Trustee.Any successor Trustee appointed under this Indenture shall execute,acknowledge and deliver to its predecessor Trustee,and also to the Authority,an instrument accepting such AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 72 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 appointment,and thereupon such successor Trustee,without any further act,deed or conveyance,shall become fully vested with all moneys,estates,properties,rights, powers,duties and obligations of such predecessor Trustee,with like effect as if originally named as trustee;but the Trustee ceasing to act shall nevertheless,on the written request of the Authority,or of the successor Trustee,execute,acknowledge and deliver such instrument of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Trustee all the right,title and interest of the predecessor Trustee in and to any property held by it under this Indenture,and shall pay over, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth.Should any deed,conveyance or instrument in writing from the Authority be required by such successor Trustee for more fully and certainly vesting in and confirming to such successor Trustee any such estates,rights, powers and duties,any and all such deeds,conveyances and instruments in writing shall,on request,and so far as may be authorized by law,be executed,acknowl- edged and delivered by the Authority.Any such successor Trustee shall promptlynotifythePayingAgentsofitsappointmentasTrustee. Section 911 -Merger or Consolidation.Any company into which any Fiduciary may be merged or converted or with which it may be consolidated or any company resulting from any merger,conversion or consolidation to which it shall be a party or any company to which any Fiduciary may sell or transfer all or substantially all of its corporate trust business,provided such company shall be a bank or trust company organized under the laws of any state of the United States of America or a national banking association and shall be authorized by law to perform all the duties imposed upon it by this Indenture,shall be the successor to such Fiduciary without the execution or filing of any paper or the performance of any further act. Section 912 -Adoption of Authentication.In any case any of the Bonds contemplated to be issued under this Indenture shall have been authenticated but not delivered,any successor Trustee may adopt the certification of authentication of any predecessor Trustee so authenticating such Bonds and deliver such Bonds so authenticated;and in case any of the said Bonds shall not have been authenticated,any successor Trustee may authenticate such Bonds in the name of the predecessor Trustee,or in the name of the successor Trustee,and in all cases such certificate shall have the full force which it is anywhere in said Bonds or in this Indenture provided that the certificate of the Trustee shall have. AEA/Unalaska Geothermal Project Trust indenture AFFO1ABA Page 73 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 ion 913 -Resignation or Removal of Paying Agent and A intm nt of Successor. (a)Any Paying Agent may at any time resign and be discharged of the duties and obligations created by this Indenture by giving at least 60 day's written notice to the Authority,the Trustee and the other Paying Agents.Any Paying Agent may be removed at any time by an instrument filed with such Paying Agent and the Trustee and signed by an Authorized Officer of the Authority.Any successor Paying Agent shall be appointed by the Authority with the approval of the Trustee,and shall be a bank or trust company organized under the laws of any state of the United States of America or a national banking association,having capital stock and surplus aggregating at least $25,000,000,and willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Indenture. (b)'In the event of the resignation or removal of any Paying Agent,such Paying Agent shall pay over,assign and deliver any moneys held by it as Paying Agent to its successor,or if there be no successor,to the Trustee.In the event that for any reason there shall be a vacancy in the office of any Paying Agent,the Trustee shall act as such Paying Agent. ARTICLE X SUPPLEMENTAL INDENTURES Section 1001 -Supplemental Indentures Effective Upon Execution by the Trustee.For any one or more of the following purposes and at any time or from time to time,a Supplemental Indenture may be authorized by a resolution adopted by the Authority which,upon (a)the filing with the Trustee of a copy of such resolution certified by an Authorized Officer of the Authority,(b)the filing with the Trustee of either a certificate of the Purchaser consenting to such Supplemental Indenture in accordance with Section 9 of the Power Sales Agreement,or a certificate of an Authorized Officer of the Authority that such consent of the Purchaser is not required under the Power Sales Agreement,and (c)the execution and delivery of such Supplemental Indenture by the Authority and the Trustee,shall be fully effective in accordance with its terms: (1)To close this Indenture against,or provide limitations and restrictions in addition to the limitations and restrictions contained in this AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 74 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Indenture on,the authentication and delivery of Bonds or the issuance of other evidences of indebtedness. (2)To add to the covenants and agreements of the Authority in this Indenture,other covenants and agreements to be observed by the Authority which are not contrary to or inconsistent with this Indenture as theretofore in effect. (3)To add to the limitations and restrictions in this Indenture,other limitations and restrictions to be observed by the Authority which are not contrary to or inconsistent with this Indenture as theretofore in effect. (4)To authorize Bonds of a Series and,in connection therewith, specify and determine the matters and things referred to in Section 202,and also any other matters and things relative to such Bonds which are not contrary to or inconsistent with this Indenture as theretofore in effect,including without limitation the form of coupon bonds as provided in Section 301,or to amend, modify or rescind any such authorization,specification or determination at any time prior to the first authentication and delivery of such Bonds. (5)To confirm,as further assurance,any pledge or assignment under,and the subjection to any lien,pledge or assignment created or to be created by,this Indenture,of the Revenues or of any other moneys,securities or funds. (6)To modify any of the provisions of this Indenture in any other respect whatever,provided that (A)such modification shall be,and be expressed to be,effective only after all Bonds of each Series Outstanding at the date of such Supplemental Indenture shall cease to be Outstanding,and (B) such Supplemental Indenture shall be specifically referred to in the next text of all Bonds of any Series authenticated and delivered after the date of such Supplemental Indenture. (7)To appoint the Trustee. Section 1002 -Supplemental Indentures Effective Upon Consent of Trustee.For any One or more of the following purposes and at any time from time to time,a Supplemental Indenture may be authorized by a resolution adopted by the Authority AEA/Unalaska Geothermal Project Trust Indenture AFFOIABS Page 75 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 which,upon (a)the filing with the Trustee of a copy of such resolution certified by an Authorized Officer of the Authority,(b)the filing with the Trustee of either a certificate of the Purchaser consenting to such Supplemental Indenture in accordance with Section 9 of the Power Sales Agreement or a certificate of an Authorized Officer of the Authority that such consent of the Purchaser is not required under the Power Sales Agreement,(c)the filing with the Authority of an instrument in writing made by the Trustee consenting thereto,and (d)the execution and delivery of such Supplemental Indenture by the Authority and the Trustee,shall be fully effective in accordance with its terms: (1)|To cure any ambiguity,supply any omission,or cure or correct any defect or inconsistent provision in this Indenture. (2)To insert such provisions clarifying matters or questions arising under this Indenture as are necessary or desirable and are not contrary to or inconsistent with this Indenture as theretofore in effect. (3)|To make any changes which do not in the sole opinion of the Trustee,materially and adversely affect the rights of the Bondowners. Section 1003 -Supplemental Indentures Effective With Consent of Bondowners.At any time or from time to time,a Supplemental Indenture may be authorize by a resolution adopted by the Authority,subject to consent by Bondowners in accordance with and subject to the provisions of Article XI,which Supplemental Indenture,upon (a)the filing with the Trustee of a copy of such resolution certified by an Authorized Officer of the Authority and (b)the filing with the Trustee of either a certificate of the Purchaser consenting to such Supplemental Indenture in accordance with Section 9 of the Power Sales Agreement or a certificate of an Authorized Officer of the Authority that such consent of the Purchaser is not required under the Power Sales Agreement, (c)compliance with the provisions of said Article XI,and (d)execution and delivery of such Supplemental Indenture by the Authority and the Trustee,shall become fully effective in accordance with its terms as provided in said Article XI. ion1004 -neral Provisions. (a)This Indenture shall not be modified or amended in any respect except as provided in and in accordance with and subject to the provisions of this Article X and Article XI.Nothing in this Article X or Article XI contained shall affect or limit the AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 76 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 right or obligation of the Authority to adopt,make,do,execute,acknowledge or deliver any resolution,act or other instrument pursuant to the provisions of Section 704 or the right or obligation of the Authority to execute and deliver to any Fiduciary any instrument which elsewhere in this Indenture it is provided shall be delivered to said Fiduciary. (b)Any resolution authorizing a Supplemental Indenture referred to and permitted or authorized by Section 1001 and 1002 may be adopted by the Authority without the consent of any of the Bondowners,but such Supplemental Indenture shall be executed and delivered by the Authority and the Trustee and shall become effective only on the conditions,to the extent and at the time provided in said Sections, respectively.Every Supplemental Indenture delivered to the Trustee for execution shall be accompanied by an Opinion of Counsel stating that such Supplemental Indenture has been duly and lawfully authorized by the Authority and executed by the Authority in accordance with the provisions of this Indenture,is authorized or permitted by this Indenture,and will,when executed and delivered by the Trustee,be valid and binding upon the Authority and enforceable in accordance with its terms. (c)The Trustee is hereby authorized to enter into,execute and deliver any Supplemental Indenture referred to and permitted or authorized by Sections 1001, 1002 or 1003 and to make all further agreements and stipulations which may be therein contained,and the Trustee,in taking such action,shall be fully protected in relying on an Opinion of Counsel that such Supplemental Indenture is authorized or permitted by the provisions of this Indenture., (d)No Supplemental Indenture shall change or modify any of the rights or obligations of any Fiduciary without its written assent thereto. ARTICLE XI AMENDMENTS Section 1101 -Mailing.Any provision in this Article for the mailing of a notice or other paper to Bondowners shall be fully complied with if it is mailed postage prepaid only to each registered owner of Bonds then Outstanding at his address,if any,appearing upon the registry books of the Authority and each Fiduciary. AEA/Unalaska Geothermal Project Trust Indenture AFFOIABS Page 77 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Section 1102 -Powers of Amendment.Any modification or amendment of this Indenture and of the rights and obligations of the Authority and of Owners of the Bonds thereunder,in any particular,may be made by a Supplemental Indenture,with the written consent given as provided in Section 1103 of the Owners of at least a majority in principal amount of the Bonds Outstanding at the time such consent is given,and (ii)in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment,of the Owners of at least a majority in principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given,and (iii)in case the modification or amendment changes the terms of any Sinking Fund Installment,of the Owners of at least a majority in principal amount of the Bonds of the particular Series and maturity entitled to such Sinking Fund Installment and Outstanding at the time such consent is given;provided, however,that if such modification or amendment will,by its terms,not take effect so long as any Bonds of any specified like Series and maturity remain Outstanding the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under this Section.No such modifications or amendment shall permit a change in the terms of redemption or maturity of the principal of any Outstanding Bond or any installment of interest thereon or a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon without the consent of the Owner of such Bond,or shall reduce the percentages or otherwise affect the classes of Bonds the consent of the Owners of which is required to effect any such modification or amendment,or shall change or modify any of the rights or obligations of any Fiduciary without its written assent thereto.For the purposes of this Section, a Series shall be deemed to be affected by a modification or amendment of this Indenture if the same adversely affects or diminishes the rights of the Owners of Bonds of such Series.The Trustee may in its discretion determine whether or not in accordance with the foregoing powers of amendment Bonds of any particular Series or maturity would be affected by any modification or amendment of this Indenture and any such determination shall be binding and conclusive on the Authority and all Owne- rs of Bonds. Section 1103 -Consent of Bondowners.The Authority may at any time authorize a Supplemental Indenture making a modification or amendment permitted by the provisions of Section 1102 to take effect when and as provided in this Section.A copy of such Supplemental Indenture (or brief summary thereof or reference thereto in form approved by the Trustee),together with a request to Bondowners for their consent thereto in form satisfactory to the Trustee,shall be mailed by the Authority to AEA/Unalaska Geothermal Project Trust Indenture AFFOIAB4 Page 78 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Bondowners (but failure to mail such copy and request shall not affect the validity of the Supplemental Indenture when consented to as in this Section provided).Such Supplemental Indenture shall not be effective until (a)there shall have been filed with the Trustee (1)the written consents of Owners of the percentages of Outstanding Bonds specified in Section 1102 and (2)an Opinion of Counsel stating that such Supplemental Indenture has been duly and lawfully executed and delivered by the Authority and the Trustee in accordance with the provisions of this Indenture,is authorized or permitted by this Indenture,and is valid and binding upon the Authority, the Fiduciaries and the Owners of Bonds and enforceable in accordance with its terms,and (b)a notice shall have been mailed as hereinafter in this Section 1103 provided.Each such consent shall be effective only if accompanied by proof of the ownership,at the date of such consent,of the Bonds with respect to which such consent is given,which proof shall be such as is permitted by Section 1202.A certifi- cate or certificates executed by the Trustee and filed with the Authority stating that it has examined such proof and that such proof is sufficient in accordance with Section 1202 shall be conclusive that the consents have been given by the Owners of Bonds described in such certificate or certificates of the Trustee.Any such consent shall be binding upon the Owners of Bonds signing such consent and,anything in Section 1202 to the contrary notwithstanding,upon any subsequent Owner of such Bonds and of any Bonds issued in exchange (whether or not such subsequent Owner has notice thereof)provided however that any consent may be revoked in writing by any Owner of such Bonds by filing with the Trustee,prior to the time when the written statement of the Trustee hereinafter in this Section 1103 provided for is filed,such revocation. The fact that a consent has not been revoked may likewise be proved by a certificate of the Trustee filed with the Authority to the effect that no revocation thereof is on file with the Trustee.At any time after the Owners of the required percentages of Bonds shall have filed their consents to the Supplemental Indenture,the Trustee shall make and file with the Authority a written statement that the Owners of such required percentages of Bonds have filed such consents.Such written statements shall be conclusive that such consents have been filed.At any time thereafter,notice stating in substance that the Supplemental Indenture (which may be referred to as a Supplemental Indenture executed and delivered by the Authority and the Trustee on a stated date,a copy of which is on file with the Trustee)has been consented to by the Owners of the required percentages of Bonds,and will be effective as provided in this Section 1103,may be given to Bondowners by the Authority by mailing such notice to Bondowners (but failure to mail such notice shall not prevent such Supplemental Indenture from becoming effective and binding as in this Section 1103 provided).The Authority shall file with the Trustee proof of the mailing of such notice AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 79 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 to Bondowners.A record,consisting of the certificates or staternents required or permitted by this Section 1103 to be made by the Trustee,shall be proof of the matters therein stated.Such Supplemental Indenture making such amendment or modification shall be deemed conclusively binding upon the Authority,the Fiduciaries and the Owners of all Bonds at the expiration of 40 days after the filing with the Trustee of the proof of the mailing of such last mentioned notice,except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Indenture in a legal action or equitable proceeding for such purpose commenced with- in such 40 day period;provided,however,that any Fiduciary and the Authority during such 40 day period and any such further period during which any such action or pro- ceeding may be pending shall be entitled in their absolute discretion to take such action,or to refrain from taking such action,with respect to such Supplemental Indenture as they may deem expedient. Section 1104 -Modifications by Unanimous Consent.This Indenture and the rights and obligations of the Authority and of the Owners of Bonds hereunder may be modified or amended in any respect by a Supplemental Indenture effecting such modification or amendment and the consents of the Owners of all the Bonds then Outstanding,each such consent to be accompanied by proof of the ownership at the date of such consent of the Bonds with respect to which consent is given.Such Supplemental Indenture shall take effect upon its execution and delivery by the Authority and the Trustee,and the filing (a)with the Trustee of (1)a copy of the resolution authorizing the Supplemental Indenture certified by an Authorized Officer of the Authority,(2)such consents and accompanying proofs and (3)the Counsel's Opinion referred to in Section 1103,and (b)with the Authority and the Trustee of the Trustee's written statement that the consents of the Owners of all Outstanding Bonds have been filed with it.No mailing of any Supplemental Indenture (or reference thereto or summary thereof)or of any request or notice shall be required.No such modification or amendment,however,shall change or modify any of the rights or obligations of any Fiduciary without its written assent thereto. Section 1105 -Exclusion of Bonds.Bonds owned by or for the account of the Authority shall not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Article XI,and the Authori- ty shall not be entitled with respect to such Bonds to give any consent or take any other action provided for in this Article.At the time of any consent or other action taken under this Article,the Authority shall furnish the Trustee a certificate of an AEA/Unalaska Geothermal Project Trust Indenture AFFO1AB4 Page 80 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 'Authorized Officer of the Authority upon which the Trustee may rely,describing all Bonds so to be excluded. Section 1106 -Notation on Bonds.Bonds authenticated and delivered after the effective date of any action taken as in Article X or Article XI provided may,and if the Trustee so determines,shall,bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to such action,and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presenta- tion of his Bond for the purpose at the principal corporate trust office of the Trustee or upon any transfer or exchange of any Bond Outstanding at such effective date, Suitable notation shall be made on such Bond or upon any Bond issued upon any such transfer or exchange by the Trustee as to any such action.If the Authority or the Trustee shall so determine,new Bonds so modified as in the opinion of the Trustee and the Authority to conform to such action shall be prepared,authenticated and delivered,and upon demand of the Owner any Bond then Outstanding shall be exchanged,without cost to such Bondowner,for Bonds of the same Series and maturity then Outstanding,upon surrender of such Bonds. ARTICLE XII MISCELLANEOUS Section 1201 -Defeasance. (a)If the Authority shall pay or cause to be paid,or there shall otherwise be paid,to the Owners of all Bonds the principal or Redemption Price,if applicable,and interest due or to become due thereon,at the time and in the manner stipulated therein and in this Indenture,then the pledge and assignment of any Revenues and other moneys and securities pledged under this Indenture and all covenants, agreements and other obligations of the Authority to the Bondowners,shall thereupon cease,terminate and become void and be discharged and satisfied.In such event, the Trustee shall cause an accounting for such period or periods as shall be requested by the Authority to be prepared and filed with the Authority and,upon the request of the Authority shall execute and deliver to the Authority all such instruments as may be desirable to evidence such discharge and satisfaction,and the Fiduciaries shall pay over or deliver to the Authority all moneys or securities held by them pursuant to this Indenture which are not required for the payment of principal or Redemption Price,if applicable,and interest on Bonds.If the Authority shall pay or AEA/Unalaska Geothermal Project Trsst indenture AFFOIAB4 Page 81 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 'cause to be paid or there shall otherwise be paid,to the Owners of all Outstanding Bonds of a particular Series,or of a particular maturity within a Series,the principal or Redemption Price,if applicable,and interest due or to become due thereon,at the times and in the manner stipulated therein and in this Indenture,such Bonds shall cease to be entitled to any lien,benefit or security under this Indenture,and all covenants,agreements and obligations of the Authority to the Owners of such Bonds shall thereupon cease,terminate and become void and be discharged and satisfied. (b)Bonds or interest installments for the payment or redemption of which moneys shall have been set aside and shall be held in trust by the Paying Agents (through deposit by the Authority of funds for such payment or redemption or other- wise)at the maturity or redemption date thereof shall be deemed to have been paid _within the meaning and with the effect expressed in subsection (a)of this Section 1201.Prior to the maturity or redemption date thereof,Bonds shall be deemed to have been paid within the meaning and with the effect expressed in subsection (a)of this Section 1201 if (1)in case any of said Bonds are to be redeemed on any date prior to their maturity,the Authority shall have given to the Trustee irrevocable in- structions accepted in writing by the Trustee to mail as provided in Article IV notice of redemption of such Bonds on said date,(2)there shall have been deposited with the Trustee either moneys (including moneys withdrawn and deposited pursuant to subsection (d)of Section 507)in an amount which shall be sufficient,or Federal Obligations (including any Federal Obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America)which shall not contain provisions permitting the redemption thereof other than at the option of the holder the principal of and the interest on which when due will provide moneys which,together with the moneys,if any,deposited with the Trustee at the same time, shall be sufficient to pay when due the principal or Redemption Price,if applicable, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof,as the case may be,and (3)the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail,as soon as practicable,a notice to the Owners of such Bonds that the deposit required by (2) above has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with this Section 1201 and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or Redemption Price,if applicable,and interest on said Bonds.Neither Federal Obligations nor moneys deposited with the Trustee pursuant to this Section 1201 nor principal or interest payments on any such Federal Obligations shall be withdrawn or used for any purpose other than,and shall be held in trust for,the payment of the AEA/Unalaska Geothermal Project Trust Indenture AFFOLABS Page 82 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 principal or Redemption Price,if applicable,and interest on said Bonds;provided that any cash received from such principal or interest payments on such Federal Obligations deposited with the Trustee,(A)to the extent such cash will not be required at any time for such purpose,after verification by a certified public accountant,shall be paid over to the Authority as received by the Trustee,free and clear of any trust, lien,pledge or assignment securing said Bonds or otherwise existing under this Indenture,and (B)to the extent such cash will be required for such purpose at a later date,shall,to the extent practicable,be reinvested in Federal Obligations maturing at times and in amounts sufficient to pay when due the principal or Redemption Price, if applicable,and interest to become due on said Bonds,on or prior to such redemption date or maturity date thereof,as the case may be,and interest earned from such reinvestment shall be paid over to the Authority as received by the Trustee, free and clear of any trust,lien,pledge or assignment securing said Bonds or otherwise existing under this Indenture.For the purposes of this Section 1201, Federal Obligations shall mean and include only such Federal Obligations which shall not be subject to redemption prior to their maturity other than at the option of the holder thereof. (c)Anything in this Indenture to the contrary notwithstanding,any moneys held by a Fiduciary in trust for the payment and discharge of any of the Bonds which remain unclaimed for six years after the date when such Bonds have become due and payable,either at their stated maturity dates or by call for earlier redemption,if such moneys were held by the Fiduciary at such date,or for six years after the date of deposit of such moneys if deposited with the Fiduciary after the said date when such Bonds became due and payable,shall,at the written request of the Authority,be repaid by the Fiduciary to the Authority for payment into the Revenue Fund,and shall be deemed "other available funds"within the meaning of Section 712 to be used for the payment of amounts required to be paid therein,and the Fiduciary shall thereupon be released and discharged with respect thereto and the Bondowners shall look only to the Authority for the payment of such Bonds. Section 1202 -Evidence of Signatures of Bondowners_and Ownership of Bonds. (a)Any request,consent,revocation of consent or other instrument which this Indenture may require or permit to be signed and executed by the Bondowners may be in one or more instruments of similar tenor,and shall be signed or executed by such Bondowners in person or by their attorneys appointed in writing.Proof of the execution of any such instrument,or of any instrument appointing any such attorney, AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 Page 83 | DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 shall be sufficient for any purpose of this Indenture (except as otherwise herein expressly provided)if made in the following manner,or in any other manner satisfactory to the Trustee,which may nevertheless in its discretion require further and other proof in cases where it deems the same desirable. The fact and date of the execution by any Bondowner or his attorney of such instruments may be proved by a guarantee of the signature thereon by a bank or trust company or by the certificate of any notary public or other officer authorized to take acknowledgements of deeds,that the person signing such request or other instrument acknowledged to him the execution thereof,or by an affidavit of a witness of such execution,duly sworn to before such notary public or other officer.Where such execution is by an officer of a corporation or partnership,such signature guarantee, certificate or affidavit shall also constitute sufficient proof of his authority. (6)The ownership of Bonds and the amount,numbers and other identification,and date of holding the same shall be proved by the registry books. (c)|Any request or consent by the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Authority or any Fiduciary in accordance therewith. Section 1203 -Moneys Held for Particular Bonds.The amounts held by any Fiduciary for the payment of the interest,principal or Redemption Price due on any date with respect to particular Bonds shall,on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto. Section 1204 -Preservation and Inspection of Documents.All documents received by a Fiduciary under the provisions of this Indenture shall be retained in its possession and shall be subject at all reasonable times during regular hours with reasonable notice to the inspection of the Authority,any other Fiduciary,and any Bondowner and their agents and their representatives,any of whom may make copies thereof. Section 1205 -No Recourse on the Bonds.No recourse shall be had for the payment of the principal of or interest on the Bonds or for any claim based thereon or on this Indenture against any member of the Board of Directors or officer of the Authority or any person executing the Bonds. AEA/Unalaska Geothermal!Project Trust indenture AFFOIAB4 Page 84 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 Section 1206 -Severability of Invalid Provisions.If any one or more of the covenants provided in this Indenture on the part of the Authority or any Fiduciary to be performed should be contrary to law,then such covenant or covenants or agreement or agreements shall be deemed severable from the remaining covenants and agreements,and shall in no way affect the validity of the other provisions of this Indenture. Section 1207 -Holidays.If the date for making any payment or the last date for performance of any act or the exercising of any right,as provided in this Indenture, shall be a legal holiday or a day on which banking institutions in the city in which is located the principal office of the Trustee are authorized by law to remain closed,such payment may be made or act performed or right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are not authorized by law to remain closed,with the same force and effect as if done on the nominal date provided in this Indenture. Section 1208 -Notices.It shall be sufficient service of any notice,request,complaint, demand or other paper on the Authority or the Trustee,as the case may be,if the same shall be duly mailed by registered or certified mail and addressed to it at Alaska Energy Authority,P.O.Box 190869,Anchorage,Alaska 99519-0869,Attention: Executive Director,or to such other address as the Authority may from time to time file with the Trustee (in respect of the Authority)or ,Attention:,or at such other address as the Trustee may from time to time file with the Authority (in respect of the Trustee). ARTICLE Xl BOND FORM Section 1301 -Form of Bonds and Trustee's Certificate of Authentication.Subject to the provisions of this Indenture,the form of the Bonds of each Series and the Trustee's Certificate of Authentication,shall be substantially of the following tenor with such variations,omissions and insertions with respect to capital appreciation bonds and otherwise as are required or permitted by this Indenture and as fixed by or pursuant to Supplemental Indenture. AEA/Unalaska Geothermal Project Trust Indenture AFFOIAB4 Page 85 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 ALASKA ENERGY AUTHORITY , Power Revenue Bonds,1992 Series (Unalaska Geothermal Project) %Due 1, $No. ALASKA ENERGY AUTHORITY (herein called the ""Authority"),a public corporation of the State of Alaska organized and existing under and by virtue of the laws of the State of Alaska,acknowledges itself indebted to,and for value received hereby promises to pay to or registered assigns,on the first day of ;,the principal sum of Dollars in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts,upon presentation and surrender of this bond at the principal corporate trust office of or (such banks and any successors thereto being referred to herein as the "Paying Agents"),at the option of the registered owner hereof,and to pay to the registered owner the interest on such principal sum in like coin or currency from the date hereof,at the rate per annum specified above,payable on the first days of and in each year,until the Authority's obligation with respect to the payment of such principal sum shall be discharged by check or draft mailed to the registered owner of record hereof as of the 15th day of the calendar month next preceding such interest payment date at the address of such owner appearing on the registration books maintained by the Authority for such purpose at the principal corporate trust office of - ,in the City of ,as bond registrar. This bond is one of a duly authorized issue of bonds of the Authority designated as its "Power Revenue Bonds,Series "(herein called the "Series Bonds"),in the aggregate principal amount of $ issued pursuant to the Alaska Energy Authority Act (AS 44.83)(herein called the "Act"),are equally and ratably secured under an Indenture,dated as of 3 19__,from the Authority to as trustee (the "Trustee"),and a Supplemental Indenture authorizing the Series Bonds (said Indenture and Supplemental!Indenture being herein called the "Indenture'). AEA/Unalaska Geothermal Project Trust Indenture AFFOIABA Page 86 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 As provided in the Indenture,the Bonds are direct and general obligations of the Authority for the payment of which the full faith and credit of the Authority is pledged,which are secured as to payment of the principal and redemption price thereof,and interest thereon,in accordance with their terms and the provisions of the Indenture by (a)the proceeds of the sale of the Bonds,(b)the Revenues (as defined in the Indenture,and (c)all funds established by the Indenture including the investments,if any,thereof,subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture.Copies of the Indenture are on file at the office of the Authority and at the principal corporate trust office of the Trustee,and reference to the Indenture and any and all supplements thereto and modifications and amendments thereof and to the Act is made for a description of the pledge and assignment and covenants securing the Bonds,the nature,extent and manner of enforcement of such pledge and assignment,the rights and remedies of the registered owners of the bonds with respect thereto,the limitations on such rights and remedies and the terms and conditions upon which the Bonds are issued and may be issued thereunder. As provided in the Indenture,Bonds of the Authority may be issued from time to time pursuant to supplemental indentures in one or more series,in various principal amounts,may mature at different times,may bear interest at different rates and may otherwise vary as in the Indenture provided.The aggregate principal amount of Bonds which may be issued under the Indenture is not limited except as provided in the Indenture,and all Bonds issued and to be issued under the Indenture are and will be equally secured by the pledge and assignment and covenants made therein, except as otherwise expressly provided or permitted in the Indenture. To the extent and in the manner permitted by the terms of the Indenture,the provisions of the Indenture,or any indenture amendatory thereof or supplemental thereto,may be modified or amended by the Authority,with the written consent of the owners of at least a majority in principal amount of the bonds then outstanding under the Indenture,and,in case less than all of the Series of bonds would be affected thereby,with such consent of at least a majority in principal amount of the bonds of each Series so affected then outstanding under the Indenture,and,in case such modification or amendment would change the terms of any sinking fund installment, with such consent of at least a majority in principal amount of the bonds of the particular Series and maturity entitled to such sinking fund installment then outstand- ing;provided,however,that,if such modification or amendment will,by its terms,not take effect so long as any bonds of any specified like Series and maturity remain out- AEA/Unalaska Geothermal Project Trust indenture AFFOIABA Page 87 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 'standing under the Indenture,the consent of the owners of such bonds shall not be required and such bonds shall not be deemed to be outstanding for the purpose of the calculation of outstanding bonds.No such modification or amendment shall permit a change in the terms of redemption or maturity of the principal of any out- standing bond or of any installment of interest thereon or a reduction in the principal amount or redemption price thereof or in the rate of interest thereon without the consent of the owner of such bond,or shall reduce the percentages or otherwise affect the classes of bonds the consent of the owners of which is required to effect any such modification or amendment,or shall change or modify any of the rights or obligations of the Trustee or of any Paying Agent without its written assent thereto. This Bond is transferable as provided in the Indenture,only upon the books of .the Authority kept for the purpose at the above-mentioned office of the Trustee,by the registered owner hereof in person,or by his duly authorized attorney,upon surrender of this bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney,and thereupon a new registered Bond or Bonds,and in the same aggregate principal amounts,shall be issued to the transferee in exchange therefor as provided in the Indenture,and upon payment of the charges therein prescribed.The Authority,the Trustee and any Paying Agent may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment of,or on account of,the principal or redemption price hereof and interest due hereon and for all other purposes. The Bonds of the issue of which this Bond is one are subject to redemption prior to maturity,upon notice as hereinafter provided,(a)by operation of the Principal Account established under the Indenture to satisfy sinking fund installments,on any interest payment date on and after at the principal amount thereof together with accrued interest to the redemption date,and (b)otherwise,asawhole,or in part in maturities,at any time on or afterattherespectiveredemptionprices(expressed as percentages of the principal amount of the bonds or portions thereof to be redeemed)set forth below,in each case together with accrued interest to the redemption date: Period During Which Redemption (both dates inclusive)Prices AEA/Unalaska Geothermal Project Trust indenture AFFOIABS Page 88 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 If less than all the bonds of like maturity are to be redeemed,the particular bonds to be redeemed shall be selected by lot by the Trustee. (Further Redemption provisions per the Indenture and Supplemental Indenture) The Bonds of the issue of which this bond is one are payable upon redemption at the above-mentioned offices of the Paying Agents.Notice of redemption,setting forth the place of payment,shall be mailed by first class mail to each registered owner not less than 30 days nor more than 60 days prior to the redemption date,all in the manner and upon the terms and conditions set forth in the Indenture.If notice of redemption shall have been given as aforesaid,the Bonds or portions thereof specified in said notice shall become due and payable on the redemption date therein fixed,and if,on the redemption date,moneys for the redemption of all the Bonds and portions thereof to be redeemed,together with interest to the redemption date,shall be available for such payment on said date,then from and after the redemption date interest on such Bonds or portions thereof so called for redemption shall cease to accrue and be payable. Neither the State of Alaska nor any political subdivision thereof,other than the Authority,nor any member of the Authority nor the Purchaser (as defined in the Indenture)is obligated to pay the principal,premium,if any,or interest on this bond and the issue of which it is one and neither the faith and credit nor the taxing power of the State of Alaska or any political subdivision thereof is pledged to the payment of the principal of,premium,if any,or interest on this bond or the issue of which it is one. It is hereby certified and recited that all conditions,acts and things required by law and the Indenture to exist,to have happened and to have been performed precedent to and in the issuance of this bond,exist,have happened and have been performed and that the issue of bonds of which this is one,together with all other indebtedness of the Authority,complies in all respects with the applicable laws of the State of Alaska,including,particularly,the Act and is within every debt and other limit prescribed by said laws of the State of Alaska. This bond shall not be entitled to any benefit under the Indenture or be valid or become obligatory for any purpose until this bond shall have been authenticated by the execution by the Trustee of the Trustee's Certificate of Authentication hereon. AEA/Unalaska Geothermal Project Trust Indenture AFFO1AB4 Page 89 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 IN WITNESS WHEREOF,ALASKA ENERGY AUTHORITY has caused this bond to be signed in its name and on its behalf by the facsimile signature of its Chairman or its Vice Chairman,and its corporate seal (or facsimile thereof)to be hereunto af- fixed,imprinted,engraved or otherwise reproduced and attested by the facsimile signature of its Secretary or its Assistant Secretary. DATED: ALASKA ENERGY AUTHORITY By (Vice)Chairman ATTEST: (Assistant)Secretary [FORM OF CERTIFICATE OF AUTHENTICATION ON ALL BONDS] TRUSTEE'S CERTIFICATE OF AUTHENTICATION This bond is one of the Series Bonds delivered pursuant to the within mentioned Indenture. Trustee, By Authorized Officer AEA/Unalaska Geothermal Project Trsst indenture AFFO1AB4 Page 90 DRAFT October 28,1991 3610.2014 TFK/cf Rev.#4 7 IN WITNESS WHEREOF,the Authority has caused these presents to be signed in its name and behalf by its Executive Director and its official seal to be hereunto affixed and attested by an Authorized Officer;and to evidence its acceptance of the trusts hereby crated the Trustee has caused these presents to be signed in its name and behaif by one its Authorized Signatories,it corporate seal to be hereunto affixed, and the same to be attested by one of its Authorizing Signatories,all as of the first day of ,19_-«. [SEAL] ATTEST: Authorized Officer [SEAL] ATTEST: Assistant Secretary AEA/Unalaska Geothermal Project Trust indenture AFFO1AB4 ALASKA ENERGY AUTHORITY By Executive Director as Trustee By Vice President Page 91