S T A T E O F M I C H I G A N

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

* * * * *

In the matter of the application of )

UPPER PENINSULA POWER COMPANY )

for approval of a special contract for the sale of ) Case No. U-17227

electric energy to Escanaba Paper Company. )

)

At the March 27, 2013 meeting of the Michigan Public Service Commission in Lansing,

Michigan.

PRESENT: Hon. John D. Quackenbush, Chairman

Hon. Orjiakor N. Isiogu, Commissioner

Hon. Greg R. White, Commissioner

ORDER APPROVING SPECIAL CONTRACT

On March 1, 2013, Upper Peninsula Power Company (UPPCo) filed an application requesting

ex parte approval of a special contract for the sale of electric power to Escanaba Paper Company

(EPC) for the operation of EPC’s paper mill within UPPCo’s service territory. On March 19,

2013, UPPCo filed a letter of agreement amending one provision of the contract.

According to the application, UPPCo currently provides electric power to EPC pursuant to a

special contract executed on March 20, 1997, which was amended on March 15, 2012. The

amendment was approved in Case No. U-16966 and it extended the term of the special contract

until the earlier of: (1) the mutual execution and regulatory approval of a new agreement to

purchase energy; or (2) April 1, 2013.

UPPCo and EPC executed a new power purchase agreement (PPA) on February 28, 2013,

attached as Exhibit A, stating that:

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U-17227

(a) UPPCo will supply electric power generated from the hydro electric generation project

known as the Escanaba River Hydro Electric Project, FERC Project No. 2506 (the

Project), and EPC will purchase all of the energy output of the Project.

(b) EPC will pay a price per megawatt-hour equal to an annual fixed price for each

calendar year based on the average of the Midwest Independent Transmission System

Operator, Inc. (MISO) Commercial Pricing Node UPPC.ESC Day Ahead prices for the

8,760 hour period beginning on HE1 October 1st through HE24 September 30

th

immediately preceding the subject year. Each April immediately following the subject

year, the total amount paid by EPC in the subject year, will be subject to true-up to the

amount that would have been paid if actual day-ahead pricing at the UPPC.ESC node

had been used in the billing calculation.

UPPCo states that the PPA was negotiated in good faith and resulted from arms-length

bargaining between UPPCo and EPC. UPPCo also asserts that its system is capable of continued

service to the EPC paper mill without jeopardizing dependable and adequate electric service to

UPPCo’s other existing customers. Finally, UPPCo states that approval of the PPA will not

increase the existing electric rates of the company’s other customers and, therefore, ex parte

approval is appropriate.

The Commission reviewed the application and amendment, and finds that the PPA is

reasonable and in the public interest, and should be approved. Approval of the PPA and

amendment will not increase the cost of service for any other existing customer. Therefore,

approval of the PPA and amendment may be authorized by the Commission without notice or

hearing as provided by MCL 460.6a.

THEREFORE, IT IS ORDERED that the February 28, 2013 power purchase agreement,

attached as Exhibit A, and the March 19, 2013 amendment, attached as Exhibit B, between

Escanaba Paper Company and Upper Peninsula Power Company are approved.

The Commission reserves jurisdiction and may issue further orders as necessary.

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U-17227

Any party desiring to appeal this order must do so in the appropriate court within 30 days after

issuance and notice of this order pursuant to MCL 462.26.

MICHIGAN PUBLIC SERVICE COMMISSION

________________________________________

John D. Quackenbush, Chairman

________________________________________

Orjiakor N. Isiogu, Commissioner

________________________________________

Greg R. White, Commissioner

By its action of March 27, 2013.

________________________________

Mary Jo Kunkle, Executive Secretary

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POWER PURCHASE AGREEMENT

BETWEEN

Escanaba Paper Company

AND

Upper Peninsula Power Company

EXHIBIT A

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TABLE OF CONTENTS

ARTICLE I DEFINITIONS ........................................................................................................... 1 1.01 Defined Terms. ....................................................................................................... 1

1.02 Rules of Interpretation. ........................................................................................... 6

ARTICLE II REPRESENTATIONS AND WARRANTIES ......................................................... 8 2.01 Representations and Warranties of UPPCo. ........................................................... 8 2.02 Representations and Warranties of EPC. ................................................................ 9

ARTICLE III TERM AND TERMINATION; CONDITIONS PRECEDENT ........................... 10

3.01 Term. ..................................................................................................................... 10 3.02 UPPCo Termination. ............................................................................................. 10

3.03 Conditions Precedent to Seller’s Obligations. ...................................................... 11 3.04 Conditions Precedent to Buyer’s Obligations. ...................................................... 11

ARTICLE IV PURCHASE AND SALE OF PROJECT ENERGY AND

ENVIRONMENTAL ATTRIBUTES .............................................................................. 12

4.01 Purchase and Sale. ................................................................................................ 12 4.02 Compensation for Mill Outages and Divergence.................................................. 12

4.03 True-up, Payment and Interest. ............................................................................. 13

ARTICLE V DELIVERY OF POWER ........................................................................................ 14 5.01 Delivery Point. ...................................................................................................... 14

5.03 Changes in Mill Load............................................................................................ 14 5.04 Delivery Metering. ................................................................................................ 14

5.05 Testing................................................................................................................... 15 5.06 Corrections. ........................................................................................................... 15

5.07 Interconnection and Transmission Facilities. ....................................................... 15

ARTICLE VI RIGHTS AND OBLIGATIONS ........................................................................... 15

6.01 Rights and Obligations of Seller. .......................................................................... 15 6.02 Rights and Obligations of Buyer........................................................................... 16

ARTICLE VII SALE, TRANSFER OR ASSIGNMENT ............................................................ 18 7.01 Mill Transfer ......................................................................................................... 18 7.02 Generally. .............................................................................................................. 18 7.03 Finance Assignments. ........................................................................................... 18

ARTICLE VIII FORCE MAJEURE ............................................................................................ 18 8.01 Force Majeure Defined. ........................................................................................ 18 8.02 Effect of Force Majeure. ....................................................................................... 18

8.03 Deadlines Extended. ............................................................................................. 19 8.04 Termination. .......................................................................................................... 19

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ARTICLE IX RISK OF LOSS, INDEMNIFICATION AND LIMITATION OF

LIABILITY ....................................................................................................................... 20 9.01 Risk of Loss. ......................................................................................................... 20 9.02 Indemnification. .................................................................................................... 20

9.03 Limitation of Liability........................................................................................... 23

ARTICLE X EVENTS OF DEFAULT AND REMEDIES ......................................................... 24 10.01 Events of Default by Seller. .................................................................................. 24 10.02 Events of Default by Buyer................................................................................... 25 10.03 Remedies Upon Default by Seller. ........................................................................ 26

10.04 Remedies Upon Default by Buyer. ....................................................................... 26 10.05 Remedies. .............................................................................................................. 27 10.06 Dispute Resolution. ............................................................................................... 27

10.07 Effect of Termination. ........................................................................................... 28

ARTICLE XI INSURANCE......................................................................................................... 28 11.01 Coverage and Amounts – Seller. .......................................................................... 28

11.02 Insurance Certificates - Seller. .............................................................................. 29 11.03 Coverage For Full Term........................................................................................ 29

11.04 Coverage and Amounts – Buyer. .......................................................................... 29 11.05 Insurance Certificates - Buyer. Upon written request by Seller, ......................... 30

ARTICLE XII MISCELLANEOUS ............................................................................................. 30

12.01 Applicable Law. .................................................................................................... 30 12.02 Notice and Service. ............................................................................................... 30

12.03 Amendment. .......................................................................................................... 31

12.04 Expenses. .............................................................................................................. 31

12.05 Taxes and Other Charges. ..................................................................................... 31 12.06 Maintenance of Records. ...................................................................................... 31

12.07 Confidentiality. ..................................................................................................... 32 12.08 No Partnership. ..................................................................................................... 34 12.09 No Duty To Third Parties. .................................................................................... 34

12.10 Dedication. ............................................................................................................ 34 12.11 Information. .......................................................................................................... 34 12.12 Counterparts. ......................................................................................................... 34 12.13 Severability. .......................................................................................................... 34

12.14 Audit Rights. ......................................................................................................... 34 12.15 Successors and Assigns......................................................................................... 35 12.16 Integration. ............................................................................................................ 35

12.17 Survival. ................................................................................................................ 35

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THIS POWER PURCHASE AGREEMENT is made and entered into as of this 28th

day of February, 2013 (the “Effective Date”), by and between Escanaba Paper Company (“EPC”

or “Buyer”) a Michigan corporation and Upper Peninsula Power Company (“UPPCo” or

“Seller”), a Michigan corporation.

WITNESSETH

WHEREAS, Seller operates certain hydro electric generation project known as the

Escanaba River Hydro Electric Project, FERC Project Number 2506, with a total nameplate

capacity of 9.19 MW, as more particularly described on Exhibit A (the “Project”, which is a

Renewable Facility); and

WHEREAS, the Project qualifies as a “Renewable Energy System” as defined under

Section 460.1011 of the Michigan Statutes; and

WHEREAS, EPC desires to purchase from Seller all of the Energy (defined in Section

1.01 below) output of the Project; and

WHEREAS, the Parties agree that Seller will retain all Environmental Attributes

associated with the Project output; and

WHEREAS, the Parties desire to set forth in writing their respective rights and

obligations with respect to the purchase and sale of such Energy;

NOW, THEREFORE, in consideration of the mutual obligations and undertakings

herein contained, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I

DEFINITIONS

1.01 Defined Terms.

Capitalized terms used herein shall have the meanings ascribed thereto as follows:

“Affiliate” shall mean, as to any Party, (i) any Person that directly or indirectly, through

one or more intermediaries, Controls, is Controlled by, or is under common Control with such

Party, or (ii) any Person that, directly or indirectly, is the beneficial owner of ten percent (10%)

or more of any class of equity securities of, or other ownership interests in, such Party or of

which such Party is directly or indirectly the owner of ten percent (10%) or more of any class of

equity securities or other ownership interests.

“Agreement” shall mean this Power Purchase Agreement, including all exhibit(s) hereto,

and any written amendments hereto that may be made from time to time in accordance herewith.

“Arbitration Rules” shall mean the commercial arbitration rules of the American

Arbitration Association.

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“Associated Party” shall mean, with respect to any Party, any Affiliate of such Party, and

any officer, director, trustee, fiduciary, employee, agent, representative, contractor or

subcontractor of such Party.

“ATC LLC” shall mean the American Transmission Company, LLC, or any successor

thereto.

“Authorization” shall mean any license, permit, approval, filing, waiver, exemption,

variance, clearance, entitlement, allowance, franchise, or other authorization, whether corporate,

governmental or otherwise, but specifically excluding any contractual rights or obligations.

“Bankruptcy Law” shall mean any Law relating to bankruptcy, insolvency,

reorganization, winding-up, or composition or adjustment of debts.

“Buyer” shall have the meaning given in Preamble.

“Buyer’s Premises” shall mean any real property owned, leased, or secured under

easement by Buyer, including, but not limited to the Mill.

“Buyer’s Waste Water Permit” shall mean that certain NPDES permit issued by the

Michigan Department of Environmental Quality and governing the Buyer’s use of the Escanaba

River for purposes related to the Mill.

“Claim” shall have the meaning given in Section 9.02(a).

“Code” shall mean the United States Internal Revenue Code of 1986, as amended from

time to time, and any successor statute.

“Commission” shall mean the Michigan Public Service Commission.

“Contract Term” shall have the meaning given in Section 3.01.

“Control” shall mean the possession, directly or indirectly, of the power to direct or cause

the direction of the management and policies of a Person, whether through ownership of voting

securities, by contract, or otherwise.

“Delivery Month” shall mean a calendar month during the Delivery Term for which

Project Energy is delivered to the Delivery Point.

“Delivery Point” shall mean the point of interconnection between the Project and

Metering Facilities at the Seller’s side of the Buyer-owned transformers located at the Mill

Substation.

“Delivery Term” shall mean the period commencing on March 31, 2013 and continuing

for ten (10) years, unless earlier terminated in accordance with the terms hereof.

“Dispute” shall have the meaning given in Section 10.06(a).

“Easements” shall have the meaning given in Section 6.02(b).

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“Effective Date” shall mean the date set forth in the preamble.

“Energy” shall mean three-phase, sixty (60) Hertz alternating current energy, and the

capacity associated with such energy.

“Environmental Attributes” shall mean the aggregate amount of credits, off-sets,

payments, rights, attributes, tags, green tags, or other derivative benefits of any kind associated

with or arising out of or otherwise corresponding to or arising due to the production of

Renewable Energy from the Project, and the sale, transmission and distribution of such

Renewable Energy by Seller, Buyer or others, including (i) environmental air quality credits, off-

sets or other benefits related to the generation of Renewable Energy from any Project generator

in a manner which reduces, displaces or off-sets emissions resulting from fuel combustion at

another location pursuant to any Law, and (ii) credits, off-sets, green pricing programs,

renewable energy credit trading programs, or any similar program or benefits derived from the

generation, use, sale, purchase, transmission or distribution of Renewable Energy from any

Project generator pursuant to any Law. It is specifically agreed by the Parties that

“Environmental Attributes” shall include, without limitation, all credits, rights and attributes

associated with the Energy produced by Project and useful for satisfying requirements under the

Michigan RPS Laws, including, but not limited to RECs.

“Event of Default” shall have the meaning given in Sections 10.01 and 10.02.

“FERC” shall mean the Federal Energy Regulatory Commission.

“Force Majeure” shall have the meaning given in Section 8.01.

“Governmental Authority” shall mean the federal government of the United States, and

any state, county or local government, and any department, body, political subdivision,

commission, agency, instrumentality, ministry, court, judicial or administrative body, taxing

authority, or other authority of any of the foregoing (including any corporation or other entity

owned or controlled by any of the foregoing), any regional reliability council, any regional

transmission organization, or any independent system operator (including but not limited to

Midwest ISO), having jurisdiction over either Party, the Project, or ATC LLC and its

transmission system, whether acting under actual or assumed authority.

“Indemnifiable Cost” shall mean any cost, expense, damage, fine, penalty, liability or

other loss, including reasonable legal, accounting, consulting, engineering, investigatory, expert

witness and other fees and expenses.

“Indemnified Party” shall have the meaning given in Section 9.02(g)(i).

“Indemnifying Party” shall have the meaning given in Section 9.02(g)(i).

“Law” shall mean (i) any law, legislation, statute, act, rule, ordinance, decree, treaty,

regulation, order, judgment, or other similar legal requirement, or (ii) any legally binding

announcement, directive or published practice or interpretation thereof, enacted, issued or

promulgated by any Governmental Authority.

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“Letter of Credit” shall have the meaning given in Section 6.02(g).

“MDNR” shall mean the Michigan Department of Natural Resources or its successor

agency.

“Metering Facilities” means all of the facilities installed for the purpose of

interconnecting the Project to the Delivery Point and metering the Energy delivered to the

Delivery Point, including, but not limited to all Seller-owned transformers and associated

equipment, relay and switching equipment, and safety equipment and revenue quality meters.

“Michigan RPS Laws” shall mean shall mean those Laws codified under M.C.L.A

§460.1001, et seq. and relating to the provision of Renewable Energy by electric providers,

Renewable Energy System certification, generation of Renewable Energy and creation of RECs

(as defined below), as such Laws may be amended from time to time.

“Midwest ISO” shall mean the Midwest Independent Transmission System Operator,

Inc., or any successor thereto.

“MIRECS” shall mean the Michigan Renewable Energy Tracking System, or its

successor as identified by the Commission.

“Mill” shall mean the Buyer’s paper mill and associated facilities located in Escanaba,

Michigan.

“Mill Substation” shall mean the Buyer-owned substation located at the Mill facilities.

“MW” shall mean one megawatt of electric capacity.

“MWh” shall mean one megawatt-hour of electric energy.

“Parties” shall mean UPPCo and EPC.

“Party” shall mean UPPCo or EPC, as applicable.

“Pending Bankruptcy Case” shall mean the bankruptcy proceeding styled “In re

NewPage Corporation, et al.” and docketed as number 11-12804 (jointly administered) in the

United States Bankruptcy Court for the District of Delaware.

“Person” shall mean any legal or natural person, including any individual, corporation,

partnership, limited liability company, joint stock company, association, joint venture, trust,

international body or agency, Governmental Authority, or other entity.

“Prime Rate” shall mean, for any period, the “Prime Rate” per annum, determined as of

the date the obligation to pay interest arises, and adjusted from time to time thereafter, as

reported by the Wall Street Journal as the base rate on corporate loans posted by at least seventy-

five percent (75%) of the nation’s thirty (30) largest banks for such day, as such “Prime Rate”

may change from time to time. In the event the Wall Street Journal ceases to publish the “Prime

Rate,” then UPPCo and Buyer shall agree as to a substitute reference that represents the base rate

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on corporate loans posted by major banks having one or more lending offices in New York, New

York.

“Project” shall have the meaning given in the Recitals and as described in Exhibit A.

“Project Energy” shall mean the Energy produced by the Project.

“Project Energy Purchase Price” shall have the meaning given in Exhibit B Purchase and

Sale of Project Energy.

“Proprietary Information” shall have the meaning given in Section 12.07(f).

“REC” shall mean a Renewable Energy Credit, as defined in M.C.L.A. §460.1011(d), as

amended from time to time, and any successor thereto.

“Renewable Energy” shall have the meaning ascribed to that term in M.C.L.A.

§460.1011(a).

“Renewable Energy System” shall have the meaning given in M.C.L.A. §460.1011(k), as

amended from time to time, and any successor thereto.

“Renewable Facility Certification” shall mean certification of the Project as a Renewable

Energy System by the Commission under M.C.L.A. §460.1001(k), as amended from time to

time, and any successor thereto.

“Renewable Generator” shall mean an individual electrical generating device utilizing a

Renewable Resource to generate Renewable Energy.

“Renewable Resource” shall have the meaning ascribed to that term in M.C.L.A.

§460.1011(i).

“Representatives” shall mean the representatives of EPC and UPPCo designated pursuant

to Sections 6.01(c) and 6.02(a), respectively.

“Seller” shall have the meaning given in the Preamble.

“Substation Market Access Work” shall have the meaning given in Section 6.02(h).

“Tax” shall mean any tax (including franchise tax), charge, fee, levy or other assessment

imposed by any Governmental Authority and based on or measured solely with respect to net

income or profits, including any interest, penalties or additions attributable or imposed with

respect thereto, and any tax, charge, levy, fee or other assessment, including any transfer, gross

receipts, sales, use, service, occupation, ad valorem, property, payroll, personal property, excise,

severance, premium, stamp, documentary, license, registration, social security, employment,

unemployment, disability, environmental (including taxes under Section 59A of the Code), add-

on, value-added, withholding (whether payable directly or by withholding and whether or not

requiring the filing of a tax return therefor), commercial rent and occupancy tax, and any

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estimated tax, deficiency assessment, interest, penalties and additions to tax or additional

amounts in connection therewith, imposed by any Governmental Authority.

“Transferee” shall have the meaning given in Section 12.07(a).

“Transferor” shall have the meaning given in Section 12.07(a).

“Transmission System” means the electric transmission system owned by ATC

LLC.

“UPPCo” shall have the meaning given in the Preamble.

“UPPCo’s Premises” shall mean any real property owned, leased, or secured under

easement by UPPCo.

1.02 Rules of Interpretation. The following rules of interpretation shall apply:

(a) Unless otherwise required by the context in which any term appears:

(i) Capitalized terms used in this Agreement shall have the meanings

given in this Article.

(ii) The singular shall include the plural and the masculine shall

include the feminine and neuter.

(iii) References to “Articles,” “Sections,” or “Exhibits” shall be to

articles, sections, or exhibits of this Agreement, and references to “Paragraphs” or “Clauses”

shall be to separate paragraphs or clauses of the section or subsection in which the reference

occurs.

(iv) The words “herein,” “hereof” and “hereunder” shall refer to this

Agreement as a whole and not to any particular section or subsection of this Agreement; and the

words “include,” “includes” or “including” shall mean “including, but not limited to.”

(v) The term “day” shall mean calendar day, and the term “business

day” shall mean a weekday, excluding holidays under UPPCO’s Cp tariff authorized by the

Commission. The term “week” shall mean a calendar week, and the term “month” shall mean a

calendar month; provided that when a period measured in months commences on a date other

than the first day of a month, the period shall run from the date on which it starts to the

corresponding date in the next month and, as appropriate, to succeeding months thereafter. The

term “quarter” shall mean a calendar quarter, and the term “year” shall mean a calendar year.

Whenever an event is to be performed or a payment is to be made by a particular date and the

date in question falls on a day which is not a business day, the event shall be performed, or the

payment shall be made, by the next succeeding business day, provided, however, that all

calculations shall be made regardless of whether any given day is a business day and whether or

not any given period ends on a business day.

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(vi) The term “negligence” shall mean negligence of a Person,

including negligence arising from or as a result of the negligence of an officer, director,

executive, manager, foreman, or other employee or agent of the Person; and the term “willful

misconduct” shall mean willful misconduct of a Person, including willful misconduct of an

officer, director, executive, manager, foreman, or other employee or agent of the Person.

(vii) The term “knowledge” shall mean the actual knowledge of the

directors, executive officers, managers and members of the specified Person, which directors,

executive officers, managers and members are charged with the responsibility for the particular

function or matter in question as of the date of this Agreement, after reasonable inquiry by them

of selected employees of the specified Person whom they believe, in good faith, to be the persons

generally responsible for the subject matters to which the knowledge is pertinent.

(viii) All accounting terms not specifically defined herein shall be

construed in accordance with Generally Accepted Accounting Principles in the United States of

America, consistently applied.

(ix) All references to a particular entity shall include such entity’s

successors and permitted assigns.

(x) All references herein to any Law or to any contract or other

agreement shall be to such Law, contract or other agreement as amended and supplemented or

modified from time-to-time.

(b) The titles of the articles and sections herein have been inserted as a matter

of convenience of reference only, and shall not control or affect the meaning or construction of

any of the terms or provisions hereof.

(c) This Agreement was negotiated and prepared by both Parties with advice

of counsel to the extent deemed necessary by each Party; the Parties have agreed to the wording

of this Agreement; and none of the provisions hereof shall be construed against either Party on

the ground that such Party is the author of this Agreement or any part thereof.

(d) The exhibit(s) hereto are incorporated in and are intended to be a part of

this Agreement; provided, however, that in the event of a conflict between the terms of any

exhibit and the terms of the rest of this Agreement, the terms of the rest of this Agreement shall

take precedence.

The Parties shall act reasonably and in accordance with the principles of good

faith and fair dealing in the performance of this Agreement. Unless expressly provided

otherwise in this Agreement, (i) where this Agreement requires the consent, approval, or similar

action by a Party, such consent or approval shall not be unreasonably withheld, conditioned or

delayed, and (ii) wherever this Agreement gives a Party a right to determine, require, specify or

take similar action with respect to a matter, such determination, requirement, specification or

similar action shall be reasonable.

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.01 Representations and Warranties of UPPCo. UPPCo makes the following

representations and warranties to EPC, each of which is true and correct on the Effective Date:

(a) UPPCo is a corporation duly organized and in active status under the Laws

of the State of Michigan.

(b) UPPCo is duly qualified to conduct business in each jurisdiction in which

it is required to be so qualified.

(c) UPPCo has all necessary corporate power and authority to enter into and

perform this Agreement and to carry out the transactions contemplated herein.

(d) UPPCo’s execution, delivery and performance of this Agreement have

been duly authorized by, and are in accordance with, its articles of incorporation and by-laws;

this Agreement has been duly executed and delivered for UPPCo by the signatory so authorized;

and this Agreement constitutes its legal, valid, and binding obligation, enforceable against it in

accordance with the terms hereof, except as such enforceability may be limited by applicable

Bankruptcy Laws, or by general principles of equity (regardless of whether such enforcement is

considered in equity or at law).

(e) UPPCo’s execution and delivery of this Agreement will not result in a

breach or violation of, or constitute a default under, any Authorization owned or held by it, or

any contract, lease or other agreement or instrument to which it is a party, or by which it or its

properties may be bound or affected.

(f) UPPCo’s performance of this Agreement will not result in a breach or

violation of, or constitute a default under, any Authorization owned or held by it, or any contract,

lease or other agreement or instrument to which it is a party, or by which it or its properties may

be bound or affected.

(g) No suit, action or arbitration, or legal, administrative or other proceeding

is pending or, to UPPCo’s knowledge, has been threatened against UPPCo that would affect the

validity or enforceability of this Agreement or the ability of UPPCo to perform its obligations

hereunder in any material respect, or that would, if adversely determined, have a material

adverse effect on the business or financial condition of UPPCo. There are no bankruptcy,

insolvency, reorganization, receivership or other arrangement proceedings (with UPPCo or any

of its Affiliates as the debtor) pending against or being contemplated by UPPCo or any of its

Affiliates, or, to UPPCo’s knowledge, threatened against it or its Affiliates.

(h) UPPCo is not in breach of, in default under, or in violation of, any

applicable Law, or the provisions of any Authorization owned or held by it, or in breach of, in

default under, or in violation of, any provision of any promissory note, indenture or any other

evidence of indebtedness or security therefore, lease, contract, or other agreement by which it is

bound, except for any such breaches, defaults or violations which, individually or in the

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aggregate, could not reasonably be expected to have a material adverse effect on the business or

financial condition of UPPCo or its ability to perform its obligations hereunder.

(i) There are no claims pending against UPPCo or, to the knowledge of

UPPCo, threatened against UPPCo for any brokerage commission or any finder’s fee in

connection with this Agreement or the transactions contemplated hereby.

2.02 Representations and Warranties of EPC. EPC makes the following

representations and warranties to UPPCo, each of which is true and correct on the Effective

Date:

(a) EPC is a corporation, duly formed and organized, validly existing and in

active status under the Laws of the jurisdiction of its formation.

(b) EPC is duly qualified to conduct business in each jurisdiction in which it

is required to be so qualified.

(c) EPC has all necessary corporate power and authority to enter into and

perform this Agreement and to carry out the transactions contemplated herein.

(d) EPC’s execution, delivery and performance of this Agreement have been

duly authorized by, and are in accordance with, its applicable organizational documents and

bylaws; this Agreement has been duly executed and delivered for EPC by the signatory so

authorized; and this Agreement constitutes EPC’s legal, valid, and binding obligation,

enforceable against it in accordance with the terms hereof, except as such enforceability may be

limited by applicable Bankruptcy Laws, or by general principles of equity (regardless of whether

such enforcement is considered in equity or at law).

(e) EPC’s execution and delivery of this Agreement: (i) will not result in a

breach or violation of, or constitute a default under, any Authorization owned or held by it, or

any contract, lease or other agreement or instrument to which it is a party, or by which it or its

properties may be bound or affected; and (ii) do not require any Authorization, or the consent or

notification of any other Person, or any other action by or with respect to any other Person, other

than such Authorizations, consents, notifications and other actions as have already been

obtained, made or taken, as applicable.

(f) EPC’s performance of this Agreement: (i) will not result in a breach or

violation of, or constitute a default under, any Authorization owned or held by it, or any contract,

lease or other agreement or instrument to which it is a party, or by which it or its properties may

be bound or affected; and (ii) does not require any Authorization, or the consent or notification

of any other Person, or any other action by or with respect to any other Person, other than

(A) such Authorizations, consents, notifications and other actions as have already been obtained,

made or taken, as applicable, and (B) such Authorizations, consents, notifications or other

actions which are not required to have been obtained, made or taken, as applicable, prior to the

Effective Date, and which are reasonably expected to be obtained, made or taken on a timely

basis and in due course.

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(g) No suit, action or arbitration, or legal, administrative or other proceeding

is pending or, to EPC’s knowledge, has been threatened against EPC that would affect the

validity or enforceability of this Agreement or the ability of EPC to perform its obligations

hereunder in any material respect, or that would, if adversely determined, have a material

adverse effect on the business or financial condition of EPC. Except for the Pending Bankruptcy

Case, there are no bankruptcy, insolvency, reorganization, receivership or other arrangement

proceedings (with EPC or any of its Affiliates as the debtor) pending against or being

contemplated by EPC or any of its Affiliates, or, to EPC’s knowledge, threatened against it or its

Affiliates.

(h) EPC is not in breach of, in default under, or in violation of, any applicable

Law, or the provisions of any Authorization owned or held by it, or in breach of, in default

under, or in violation of, any provision of any promissory note, indenture or any other evidence

of indebtedness or security therefor, lease, contract, or other agreement by which it is bound,

except for any such breaches, defaults or violations which, individually or in the aggregate, could

not reasonably be expected to have a material adverse effect on the business or financial

condition of EPC or its ability to perform its obligations hereunder.

(i) There are no claims pending against EPC or, to the knowledge of EPC,

threatened against EPC for any brokerage commission or any finder’s fee in connection with this

Agreement or the transactions contemplated hereby.

ARTICLE III

TERM AND TERMINATION;

CONDITIONS PRECEDENT

3.01 Term. The term of this Agreement shall commence on the Effective Date, and

shall continue in effect through the end of the Delivery Term, unless earlier terminated in

accordance with the provisions of Section 3.02 or Article X hereof (the “Contract Term”);

provided, however, that Seller’s obligation to deliver Project Energy pursuant to this Agreement

and Buyer’s obligation to accept Project Energy pursuant to this Agreement shall begin upon the

commencement of the Delivery Term.

3.02 UPPCo Termination.

(a) UPPCo may terminate this Agreement 90 days after UPPCo provides

written notice to Buyer, without liability to UPPCo, except as provided in clause (d) hereof, if

UPPCo receives a notice from Buyer pursuant to Section 5.03(a). (Change in Mill load)

(b) UPPCo may terminate this Agreement upon written notice to Buyer,

without liability to UPPCo, except as provided in clause (d) hereof, if the Mill’s demand for

Energy produced by the Project falls below the Project’s nameplate capacity, as set forth herein,

for any thirty (30) consecutive day period after commencement of the Delivery Term.

(c) UPPCo may (i) terminate or (ii) propose to amend, this Agreement upon

written notice to Buyer, in either case without liability to UPPCo, except as provided in clause

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(d) hereof, if (y) safety-related issues as determined by industry standard engineering practices or

(z) FERC-mandated Project alterations, repairs or improvements prevent UPPCo’s ability to

continue operating the Project, either in whole or in part, or the cost of such alterations, repairs of

improvements render continued operation of the Project uneconomic, either in whole or in part,

as determined by UPPCo in its sole discretion. Any amendment proposed hereunder will

redefine dam generation facilities of the Project, as described in Exhibit A, as well as all relevant

terms and conditions impacted by any such redefinition of the Project and related to the

generation and sale of Project Energy. In the case of any such safety-related issues, UPPCo shall

provide Buyer written notice within ten (10) days of reaching a determination regarding the

materiality of the safety-related issue having risen to the point of triggering the termination or

amendment right provided hereunder, and in the case of any such FERC-mandated change,

UPPCo shall provide Buyer written notice within ten (10) days of receipt of notice from FERC

concerning any such Project work. In either case, UPPCo shall endeavor to provide as much

advance notice of termination or amendment under this Section 3.02(c) as may be reasonable

given any applicable safety-related issues or FERC-mandated timelines.

(d) The termination of this Agreement shall be without prejudice to any rights

or obligations of the Parties arising or incurred under this Agreement prior to such termination,

and the Parties shall retain such rights and remain liable for such obligations accordingly.

3.03 Conditions Precedent to Seller’s Obligations. Notwithstanding anything in this

Agreement to the contrary, the Seller shall have no obligation to deliver Project Energy pursuant

to this Agreement unless and until the following conditions precedent have been satisfied or

waived in writing by Seller.

(a) On or before the Commencement of the Delivery Term, Seller shall have

obtained written authorization from its board of directors approving this Agreement;

(b) On or before commencement of the Delivery Term, Seller shall have

obtained an Authorization for this agreement issued by the MPSC;

(c) On or before the Commencement of the Delivery Term, Buyer shall have

delivered the fully executed Letter of Credit, as defined in Section 6.02(g), to the Seller

(d) Buyer will cooperate in establishing or renewing the Easement rights

reasonably necessary for Seller to perform its obligations under this Agreement, as more

particularly described in Section 6.02(b).

3.04 Conditions Precedent to Buyer’s Obligations. Notwithstanding anything in this

Agreement to the contrary, the Buyer shall have no obligation to accept delivery of Project

Energy pursuant to this Agreement unless and until the following conditions precedent have been

satisfied or waived in writing by Buyer.

(a) On or before the Effective Date, Buyer shall have obtained an authorized

signature on this Agreement.

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ARTICLE IV

PURCHASE AND SALE OF PROJECT ENERGY AND

ENVIRONMENTAL ATTRIBUTES

4.01 Purchase and Sale. Upon commencement of the Delivery Term and continuing

throughout the Delivery Term, Seller shall sell and deliver to Buyer at the Delivery Point, and

Buyer shall purchase and accept from Seller at the Delivery Point, all of the Energy produced by

the Project.

(a) The price per MWh for Project Energy (i) generated and delivered to the

Delivery Point pursuant to this Agreement or (ii) not generated by the Project and/or not

delivered by Seller to the Delivery Point due to circumstances falling under Section 4.02, shall

be equal to the Project Energy Purchase Price (defined in Exhibit B Purchase and Sale of Project

Energy). Provided, however, that (i) if Buyer, because of shutdown of the Plant or other

circumstances, notifies the Seller that Buyer will be unable to accept delivery of Energy for a

period of six consecutive months or more; and (ii) if physically possible under the distribution

and transmission configuration existing at the time of such notice, the Parties shall thereafter take

all commercially reasonable steps to mitigate any losses, including but not limited to making

efforts to sell the Project Energy to third parties, subject to applicable laws or regulations.

(b) If during any month, Seller fails to deliver to Buyer Project Energy in a

manner causing the level of Project Energy delivered to the Buyer to decrease below the Buyer’s

expected delivery of Project Energy, the Buyer may purchase or generate replacement energy for

the Project Energy failed to be delivered by Seller, and Seller shall reimburse Buyer for the

marginal energy costs incurred by Buyer in purchasing or generating such replacement energy.

For the purpose of this provision, the term “marginal energy costs” shall mean the difference

between the then-prevailing Project Energy Purchase Price and either: (i) any replacement

energy that may be purchased (including the cost of transmission and any other charges incurred

by Buyer), in accordance with reasonable and prudent energy procurement methods, by the

Buyer; or (ii) the additional fuel costs and variable operation and maintenance expenses incurred

by Buyer if replacement energy is generated by Buyer. For purposes of this Section 4.01(b), the

Seller shall not have any reimbursement obligation for a decrease in Project Energy delivered to

Seller and attributable to material fluctuations in water levels in the Escanaba River, a Force

Majeure Event, Scheduled Maintenance, FERC-mandated or safety related issues described in

Section 3.02(c) or any other prudent utility practices undertaken by Seller that are necessary for

the maintenance of the Project and/or Seller’s distribution facilities.

(i) The foregoing obligations shall be administered as follows: if

during any one month during a calendar quarter, beginning with the first calendar day of the first

full month after execution of this Agreement, A) Seller fails to deliver to Buyer Project Energy

equal to or greater than 75% of the 5-year rolling average of historical deliveries during the

subject month, Seller shall provide, within ten (10) business days after close of the quarter,

Buyer with documentation for such month or months during that calendar quarter which will

include river water flow and outage data including reasons for the outages during the period; or,

B) if Buyer believes that Seller failed to deliver to Buyer Project Energy equal to the 5-year

rolling average of historical deliveries during the subject month or otherwise has failed to

perform under this Section 4.01(b), Buyer may request and Seller shall provide, within ten (10)

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business days after close of the quarter, documentation for such month or months during that

calendar quarter and such documentation will include river water flow and outage data including

reasons for the outages during the period in question. The above administrative review shall

occur no more frequently than on a calendar quarterly basis. In either case, Seller shall

reimburse Buyer in accordance with this Section 4.01(b) for all marginal energy costs, as defined

above, which were caused by Seller’s failure to adhere to its obligation(s) set forth herein.

4.02 Compensation for Mill Outages and Divergence. In addition to actual Project

Energy delivered to the Delivery Point, except for the specific exclusion in part (c) below, the

Buyer will compensate the Seller for the following:

(a) All Energy that would have been generated by the Project and delivered to

the Delivery Point, but for the Buyer’s inability or unwillingness to accept such Energy for any

reason not caused by acts or omissions of Seller; provided, however, should Seller complete the

Substation Market Access Work, as provided for under Section 6.02(h), such that Seller is able to

access and sell Project Energy in the Midwest ISO market, subject to Section 4.01(a), Buyer’s

obligation under this Section 4.02(a) shall be limited to payment of any positive variance

between the Project Energy Purchase Price and the price which Seller obtained for the Project

Energy in the Midwest ISO market; and

(b) All Energy that would have been generated by the Project but for Buyer’s

request, pursuant to Section 6.02(f), to divert water from any of the Project’s generating units.

(c) In order to accommodate the Buyer’s desire to demolish the building

adjacent to the Mill Substation, the Parties agree to one thirty-eight (38) calendar day (nine

hundred twelve [912 hour]) period during the Delivery Term during which the compensation

provisions in Sections 4.02(a) and 4.02(b) will not apply. The Buyer shall coordinate with the

Seller the timing of the above-mentioned outage for demolition as to limit potential economic

harm to the Seller. The Buyer shall also provide Seller with written notice at least six (6) months

prior to the start of the demolition outage. If the Buyer is unable or unwilling to accept Energy

that would have been generated after the 912th

hour following the start of the demolition outage,

the compensation provisions in Section 4.02(a) shall commence to apply after such time.

Compensation under Sections 4.02(a) and/or 4.02(b) shall be equal to the Project Energy

Purchase Price for every MWh of Energy not generated, as calculated in accordance with Exhibit

C, and in addition, the replacement of Environmental Attributes associated with all such Energy,

in accordance with Section 4.03.

4.03 True-up, Payment and Interest. Compensation will be further subject to an annual

true-up as described in Exhibit B. UPPCo shall measure the Project Energy delivered to the

Delivery Point pursuant to Section 5.04. Seller shall provide a monthly invoice to Buyer

detailing compensation due for each Delivery Month, calculated pursuant to Section 4.01 and

4.02, and payment for each invoice will be due to Seller within twenty (20) days of invoice

receipt. Replacement of Environmental Attributes due and owing Seller in accordance with

Section 4.02 shall be accomplished by Buyer transferring an equivalent number of Buyer’s RECs

into the MIRECS Account designated by UPPCo. If the Buyer disagrees with any amount due

on any such monthly invoice, the Buyer shall give Seller written notice of the disputed portion of

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the invoice, and Buyer shall pay to Seller the undisputed portion of the invoice and may withhold

payment for the disputed portion of the invoice. If (i) the Parties agree that the disputed portion

of the original invoice was correct; or (ii) the Seller prevails in a dispute such that it is awarded

the full value of the of the disputed portion of the invoice, then Buyer shall pay Seller such

disputed amount plus accrued interest equal to the Prime Rate. If Seller is awarded or agrees to

accept less than the full disputed portion of the invoice, Buyer shall tender to Seller the amount

agreed upon or awarded without any accrued interest. Interest at the rate of the Prime Rate plus

one percent (1%) per month shall be charged for any late payments from the due date until paid.

ARTICLE V

DELIVERY OF POWER

5.01 Delivery Point. All Project Energy sold by Seller to Buyer under this Agreement

shall be delivered by Seller to the Delivery Point. Upon notification by either Party of its desire

to change the Delivery Point, the Parties agree to enter into good faith negotiations concerning

alternate delivery point(s). To the extent that identifiable benefits of relocating the Delivery

Point accrue to both Parties, the Parties agree to negotiate in good faith cost sharing

commensurate to the benefits realized by each Party. Both Parties recognize that any change to

the Delivery Point may compromise the economics of this Agreement, and therefore the Parties

recognize and agree that any requested change to the Delivery Point may require the ability for

the Parties to adjust the Project Energy Purchase Price in order to maintain the original

economics of Seller’s continued operation and maintenance of the Project and delivery of Project

Energy to the Mill. The Parties are under no obligation to change the Delivery Point unless,

pursuant to the non-requesting Party’s sole and exclusive discretion, said economic conditions

are maintained.

5.02 Project Maintenance. Seller may discontinue the generation of Energy at the

Project as may be reasonably required to perform maintenance or repairs to the Project facilities,

from time to time.

5.03 Changes in Mill Load. Notwithstanding anything herein to the contrary, Buyer

shall provide Seller with at least ninety (90) days’ prior written notice if:

(a) Buyer plans to cease operations at the Mill; or

(b) Buyer reasonably believes it will have to significantly curtail Mill

operations for any reason whatsoever, such that the operational change would cause the Mill’s

Energy demand to decrease to a point where the Mill could not accept all of the Project Energy.

Provided, however, that Buyer’s notification under this Section 5.03 does not relieve the Buyer

of its obligations under Article IV of the Agreement.

5.04 Delivery Metering.

(a) Project Energy delivered by Seller to Buyer hereunder shall be measured

by the Metering Facilities located at the Delivery Point.

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(b) Seller shall own, operate and maintain the Metering Facilities; provided,

however, that Buyer and Seller shall work together to schedule any maintenance plans for the

Metering Facilities. Buyer shall reasonably accommodate Metering Facilities operation and

maintenance, including by providing reasonable space and access to Seller for maintenance and

testing of Seller’s Metering Facilities and related equipment from time to time during the

Delivery Term.

(c) The Metering Facilities will be read by a Seller automated meter reading

system or other method chosen by Seller and shall be used to determine billing and effect

payment pursuant to Section 4.03. The Metering Facilities shall be sealed, and such seals shall

be broken only by Seller. Seller shall use commercially reasonable efforts to provide Buyer with

advance notice prior to breaking such seals, if Seller concludes in its sole discretion that it is

practical to do so.

5.05 Testing. Meter testing shall be handled in accordance with applicable

Commission rules.

5.06 Corrections. Metering and billing errors shall be handled in accordance with

applicable Commission rules.

5.07 Interconnection and Transmission Facilities. Subject to Section 6.02(b), Seller

shall be solely responsible for all costs associated with the transmission of Project Energy up to

the Delivery Point, including all related capital costs and ongoing maintenance costs

ARTICLE VI

RIGHTS AND OBLIGATIONS

6.01 Rights and Obligations of Seller.

(a) Operation. Throughout the Contract Term, Seller shall use commercially

reasonable efforts to operate and maintain, or cause to be operated and maintained, the Project

and the Metering Facilities on Seller’s side of the Delivery Point in accordance with all material

conditions contained in the FERC license for the Project, all applicable Laws and the terms and

conditions of this Agreement. Seller shall use commercially reasonable efforts to provide

continuous and uninterrupted flow of electricity generated by the Project to the Delivery Point.

(b) Laws and Authorizations. Throughout the Contract Term, Seller shall use

commercially reasonable efforts to comply in all material respects with all applicable Laws and

all Authorizations required for the operation and maintenance of the Project, and with all

applicable Laws and Authorizations applicable to its performance of its obligations hereunder.

Seller shall use commercially reasonable efforts to obtain and maintain all such required

Authorizations in full force and effect, and maintain permitted operation for the Project.

(c) Representative. Seller shall designate one or more duly authorized

representatives (each a “Representative”) to maintain communications with Buyer’s

Representative(s) and to facilitate coordination between Buyer and Seller during the Contract

Term. Seller may change its designated Representative(s) from time to time upon written notice

to Buyer.

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(d) River Divergence. Should Buyer’s Waste Water Permit require

divergence, upon receipt of a request made by Buyer pursuant to Section 6.02(f), the Seller shall

comply with the divergence procedure, as set forth in Exhibit D (the “River Divergence

Procedure”).

(e) River Divergence – Buyer Remote Shutdown Capability. Should Buyer

notify Seller of Buyer’s desire to install equipment necessary for Buyer to remotely shutdown the

Project’s Dam 1 generators (the “Buyer Dam 1 Shutdown Switch”), the Seller shall, at Buyer’s

sole cost and expense, assist Buyer with the installation of Buyer Dam 1 Shutdown Switch and

related equipment. The Buyer Dam 1 Shutdown Switch shall be located in a locked, secure area

with restricted access, and the placement and access restrictions shall subject to Seller’s approval

prior to installation. After any such installation and annually thereafter, Seller shall, upon prior

notification to Buyer be permitted to physically inspect the Buyer Dam 1 Shutdown Switch,

along with Buyer’s controls and protocols for security and access thereto. In the event the Buyer

elects to install the Buyer Dam 1 Shutdown Switch, the River Divergence Procedure shall be

amended, as set forth in Exhibit D-1.

6.02 Rights and Obligations of Buyer.

(a) Representative Buyer shall designate one or more duly authorized

representatives (each a “Representative”) to maintain communications with Seller’s

Representative(s), and to facilitate coordination between Buyer and Seller during the Contract

Term. Buyer may change its designated Representative(s) from time to time upon written notice

to Seller.

(b) Cooperation with Seller. Buyer shall use commercially reasonable efforts

to cooperate with Seller in obtaining any Authorizations, leases, easements or rights-of-way

necessary for the ownership, leasing, operation and/or maintenance of the Project, including, but

not limited to:

(i) the Buyer’s grant of easement rights to Seller, as necessary for

Seller to maintain Seller’s facilities located on Buyer-owned property (the “Easements”). The

Easements include the Transmission Line Easement and the Paper Mill Easement, as those terms

are defined in that certain Conveyance, Assignment and Agreements by and between Buyer and

Seller, dated March 19, 1997 and recorded in Liber 476 of Miscellaneous Records, Pages 653-

668, Delta County Recorder of Deeds; and whereas both the Transmission Line Easement and

Paper Mill Easement expire March 31, 2012, Seller’s obligations under this Section 6.02(b) shall

include (i) the renewal of the Transmission Line Easement and Paper Mill Easement; or (ii) the

granting of new Easements with rights substantially similar to those granted by the Transmission

Line Easement and the Paper Mill Easement; and

(c) Laws and Authorizations. Throughout the Contract Term, Buyer shall use

commercially reasonable efforts to comply, in all material respects, with all applicable Laws and

Authorizations applicable to its performance of its obligations hereunder and with all Laws and

Authorizations required for or applicable to the operation and maintenance of the Mill. Buyer

shall use commercially reasonable efforts to obtain and maintain all such required Authorizations

in full force and effect for operation of the Mill.

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(d) Information and Data. Subject to Section 12.07, Buyer shall use

commercially reasonable efforts to supply Seller with relevant information or data possessed by

Buyer that is required by Seller to comply with the requirements of any applicable Law or

Authorization, or the requirements of any Governmental Authority, and other relevant

information or data that is reasonably requested by Seller from time to time necessary to verify

compliance with the terms and conditions of this Agreement.

(e) Mill Substation Operation. In order to permit the coordination of

scheduled outages, on or before October 1 of each year, Buyer shall deliver to Seller a list of

scheduled Mill Substation maintenance outages for the following calendar year, which Buyer

shall ensure to be reasonably accurate based on information available at the time the list is

compiled, and which list Buyer shall use commercially reasonable efforts to update as soon as

possible to reflect any changes in such scheduled maintenance outages. Seller shall be solely

responsible for all of the costs associated with the maintenance of the Mill Substation.

(f) River Divergence Request Procedure. Should Buyer’s Waste Water

Discharge Permit require it, Buyer may, pursuant to the River Divergence Procedure outlined in

Exhibit D, request Seller to divert water from the powerhouse of Project Dam Number 1 to the

spillway, whereby Seller shall comply with the River Divergence Procedure. In the event the

Buyer elects to install the Buyer Dam 1 Shutdown Switch, the River Divergence Procedure shall

be amended, as set forth in Exhibit D-1.

(g) Credit. In order to ensure the Buyer’s ability to meet its financial

obligations under the Agreement, prior to the Effective Date, the Buyer shall cause its lender or

another financial institution reasonably acceptable to the Seller to deliver a letter of credit to the

Seller in an amount not less than $200,000 (the “Letter of Credit”). The terms and form of the

Letter of Credit shall be subject to the reasonable approval of the Seller and shall include Seller’s

ability to draw on the Letter of Credit in the event the Buyer fails to meet any payment obligation

or otherwise defaults in any obligation under the Agreement. If, at any time during the Term, the

Buyer and the Buyer’s corporate parent are both restored to investment grade credit ratings, and

if Buyer at that time wishes to substitute a parental guaranty for the Letter of Credit, Seller shall

consider and negotiate in good faith for such a substitution.

(h) Substation Market Access Work. The Parties acknowledge that as of the

Effective Time, physical limitations in Seller’s distribution facilities prevent Seller from

transmitting to and selling Project Energy in the Midwest ISO marketplace. In the event Buyer

notifies Seller of an extended Mill shutdown or other unexpected event which will prevent Buyer

from accepting Project Energy, should Seller elect to do address the aforementioned physical

limitations, Buyer agrees to permit Seller’s access to the Mill Substation and other Seller

facilities and to take all other reasonable action requested by Seller as is necessary for Seller to

install equipment, at Seller’s cost and using reasonably and prudent utility practices, necessary

for Seller to safely transmit Project Energy through the Mill Substation and into the Midwest

ISO marketplace (the “Substation Market Access Work”). The foregoing provision does not

require the Seller to complete the Substation Market Access Work, nor does the foregoing

provision limit Buyer’s obligations under Section 4.02.

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ARTICLE VII

SALE, TRANSFER OR ASSIGNMENT

7.01 Mill Transfer. Buyer shall provide Seller with reasonably sufficient notice prior

to any contemplated sale or transfer of the Mill or any portion of the Mill, and the provisions of

Section 7.02, below, shall apply to any sale or transfer of the Mill which contemplates the

assignment of this Agreement.

7.02 Generally.

(a) Subject to Section 7.03, this Agreement may not be assigned, in whole or

in part, by either Buyer or Seller without (i) the prior written consent of the other Party, which

consent shall not be unreasonably withheld, and (ii) the written agreement of the assignee

whereby such assignee expressly assumes and agrees to perform each and every obligation of the

assignor under this Agreement that is assigned to it. Any purported assignment that is not

authorized under the express provisions of this Agreement shall be null and void.

(b) Notwithstanding Paragraph (a), either Party may assign this Agreement to

one of its Affiliates without the consent of the other Party; provided, however, that the assigning

Party shall remain liable for all of its obligations under this Agreement unless and until the

consent of the other Party is secured in accordance with Paragraph (a). The assigning Party shall

notify the other Party prior to the occurrence of any assignment described in this Paragraph.

7.03 Finance Assignments. Seller shall have the right to collaterally assign this

Agreement for security purposes to any lender, lender’s agent or indenture trustee, without the

consent of Buyer.

ARTICLE VIII

FORCE MAJEURE

8.01 Force Majeure Defined. “Force Majeure” shall mean any event that is beyond the

reasonable control of, and not due to the negligence of, a Party and which wholly or partly

prevents or delays the performance by such Party of any of its obligations arising under this

Agreement, including the following: flood, freeze, hurricane, windstorm, unusually severe

weather, lightning, earthquake or other acts of God, fire, explosion, civil disturbance, act of

terrorism, act of the public enemy, strike, lockout or labor dispute directly affecting the ability of

Seller to produce or Buyer to receive Project Energy; provided, however, that the following acts,

events or causes shall not constitute an event of Force Majeure under any circumstance: (a)

strike, lockout or labor dispute involving employees of a contractor providing services directly to

such Party; or (b) failure of either Party to timely obtain or maintain any permits, licenses or

other Authorizations required to be maintained under Section 6.01 or 6.02, respectively; or (c)

any lack of profitability to a Party or other financial consideration of a Party.

8.02 Effect of Force Majeure. If either Party is rendered wholly or partly unable to

perform its obligations under this Agreement, or its performance is delayed, because of Force

Majeure, that Party shall be excused from whatever performance it is unable to perform or

delayed in performing due to the Force Majeure to the extent so affected, provided that:

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(a) The Party affected by such Force Majeure, as soon as reasonably practical

after the commencement of such affect, gives the other Party oral notice of the occurrence,

followed by a written notice within forty-eight (48) hours after such oral notice, fully describing

the particulars of the occurrence;

(b) Such Force Majeure event, despite the exercise of reasonable diligence,

cannot be or be caused to be prevented, avoided or removed by the affected Party;

(c) The affected Party has taken all reasonable precautions and measures in

order to avoid the effect of such Force Majeure event on such Party’s ability to perform its

obligations under this Agreement and to mitigate the consequences thereof;

(d) The suspension of performance is of no greater scope and of no longer

duration than is required by the Force Majeure;

(e) The Party whose performance is affected by such Force Majeure uses

commercially reasonable efforts to overcome its inability to perform as soon as possible; and

(f) The Force Majeure event must not have been the result of, or caused by or

contributed to by, any negligent act, error or omission or willful misconduct of the affected Party

or any of its Affiliates, and must not be the result of, or caused by or contributed to by, any

failure to comply with any Law or Authorizations by the affected Party or any of its Affiliates, or

any breach or default of this Agreement by the affected Party or any of its Affiliates.

8.03 Deadlines Extended. Whenever either Party is required to commence or complete

any action within a specified period, such period shall be extended by an amount equal to the

duration of any event of Force Majeure occurring or continuing during such period that has an

effect on such action, except as otherwise specifically provided in this Agreement; provided,

however, that (i) in no event shall a Force Majeure extend the Contract Term; and (ii)

notwithstanding any other provision in this Article VIII, no payment obligation arising from

performance under this Agreement prior to the commencement of a Force Majeure event shall be

excused by such event of Force Majeure. The burden of proof as to whether a Force Majeure has

occurred shall be upon the Party claiming the Force Majeure.

8.04 Termination. In the event that any Force Majeure preventing the operation of the

Project or the Mill continues for longer than twelve (12) months, the Party whose performance is

not affected by the Force Majeure may terminate this Agreement at any time during the

continuation of such Force Majeure by written notice to the other Party. In the event of a

termination under this Section, neither Party shall have any further liability to the other except to

the extent provided in Section 12.17.

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ARTICLE IX

RISK OF LOSS, INDEMNIFICATION AND LIMITATION OF LIABILITY

9.01 Risk of Loss.

(a) Seller. As between Buyer and Seller, Seller shall be responsible for and

shall bear the full risk of loss: (i) with respect to any loss of or damage to the Project or any

Seller-owned facilities located on Seller’s Premises; and (ii) with respect to any personal injury

or death, or loss of or damage to any other property of Seller or Seller’s Associated Parties,

arising out of the operation or maintenance of the Project or any Seller-owned property or

equipment; provided, however, that Seller shall not be responsible for any such loss, damage or

injury to the extent that such loss, damage or injury arises out of the negligence or willful

misconduct of Buyer or Buyer’s Associated Parties.

(b) Buyer. As between Buyer and Seller, Buyer shall be responsible for and

shall bear the full risk of loss: (i) with respect to any loss of or damage to any property located

on Buyer’s Premises, including, but not limited to the Mill, and (ii) with respect to any personal

injury or death, or loss of or damage to any other property of Buyer or Buyer’s Associated

Parties, arising out of the construction, ownership, operation or maintenance of any property or

equipment of Buyer or Buyer’s Associated Parties on Buyer’s Premises, including but not

limited to the Mill; provided, however, that Buyer shall not be responsible for any such loss,

damage or injury to the extent that such loss, damage or injury arises out of the negligence or

willful misconduct of Seller or Seller’s Associated Parties.

9.02 Indemnification.

(a) By Buyer. Buyer shall defend, indemnify and hold harmless Seller and

Seller’s Associated Parties against and from any and all Indemnifiable Costs arising out of any

injury, bodily or otherwise, to, or death of, natural person(s), or for damage to, or destruction of,

property belonging to or leased by Seller, Buyer, or others (each a “Claim”), to the extent same:

(A) result from or are attributable to the negligence or willful misconduct of Buyer or any of

Buyer’s Associated Parties, (B) result from or are attributable to the breach of any of Buyer’s

representations or warranties contained herein, or (C) result from, arise out of, or in any way are

connected with the performance of, or failure to perform, Buyer’s obligations under this

Agreement or the ownership, operation or maintenance of the Mill, the Mill Substation or any

other property of Buyer or Buyer’s Associated Parties, including the receipt of Project Energy at

the Delivery Point; excepting, in each case, any such Indemnifiable Cost to the extent it is caused

by the negligence or willful misconduct of Seller or Seller’s Associated Parties.

(i) Buyer’s Waste Water Permit. Without limiting, and in addition to

the Buyer’s indemnification obligations set forth above, and subject to the limitation set forth in

Section 9.02(a)(i)(A), below, Buyer shall defend, indemnify and hold harmless Seller and

Seller’s Associated Parties against and from any and all Indemnifiable Costs, other than as set

forth in Sections 9.02(a)(1)(A) and 9.02(c), below, arising out of any Claim to the extent such

Claim arises from or is related to the Buyer’s Waste Water Permit or any failure of Buyer to

comply therewith.

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A. Waste Water Indemnity Threshold: For any Claim which is

governed by Section 9.02(a)(i) and which is caused by Seller’s failure to divert Escanaba River

water in accordance with Seller’s obligations under Exhibit D and/or Exhibit D-1, the Seller’s

indemnification shall not apply to any such Claim until the aggregate of all such Claims totals

$50,000 (the "Waste Water Indemnity Threshold"), in which event the Buyer’s indemnity shall

apply to all such Claims but only to the extent of the amount in excess of the Waste Water

Indemnity Threshold. Seller indemnifies Buyer for Seller’s failure to divert Escanaba River

water in accordance with Seller’s obligations under Exhibit D and/or Exhibit D-1 until the Waste

Water Indemnity Threshold is reached and paid by Seller. For the avoidance of doubt, Seller

shall have no liability for any such Claims in excess of the Waste Water Indemnity Threshold.

(ii) Buyer’s Dam 1 Shutdown Switch. Should the Buyer elect to cause

the installation of the Buyer Dam 1 Shutdown Switch, without limiting, and in addition to the

Buyer’s indemnification obligations set forth above, Buyer shall defend, indemnify and hold

harmless Seller and Seller’s Associated Parties against and from any and all Indemnifiable Costs

arising out of any Claim to the extent the Claim arises from or is related to Buyer’s use or misuse

of the Buyer Dam 1 Shutdown Switch not in accordance with River Divergence Procedure

outlined in Exhibit D-1.

(iii) For purposes of Sections 9.02(a)(i) and 9.02(a)(ii), the term

“Claim” shall include, in addition to the those matters and items set forth in its definition in

Section 9.02(a), any claims or costs related to environmental contamination and any fines or

penalties resulting from alleged or actual violations of environmental Laws by Buyer.

(c) By Seller. Seller shall defend, indemnify and hold harmless Buyer and

Buyer’s Associated Parties against and from any and all Indemnifiable Costs arising out of any

Claim to the extent same: (A) result from or are attributable to the negligence or willful

misconduct of Seller or any of Seller’s Associated Parties, or (B) result from or are attributable

to the breach of any of Seller’s representations or warranties contained herein; or (C) result from,

arise out of, or in any way are connected with the performance of, or failure to perform , Seller’s

obligations under this agreement or the ownership, operation or maintenance of the Project,

Seller’s Interconnection Facilities or any other property of Seller or Seller’s Associated Parties,

including delivery of Project Energy at the Delivery Point; excepting in each case any such

Indemnifiable Cost to the extent it is caused by the negligence or willful misconduct of Seller or

Seller’s Associated Parties. As set forth in Section 9.02(a)(i)(A), Seller indemnifies Buyer for

Seller’s failure to divert Escanaba River water in accordance with Seller’s obligations under

Exhibit D and/or Exhibit D-1 until the Waste Water Indemnity Threshold is reached and paid by

Seller. For the avoidance of doubt, Seller shall have no liability for any such Claims in excess of

the Waste Water Indemnity Threshold.

(d) By Buyer and Seller. If, due to the joint, concurring or contributory

negligence or willful misconduct of the Parties or their respective Associated Parties, either Party

incurs any Indemnifiable Cost arising out of any Claim, such Indemnifiable Cost shall be

allocated between Seller and Buyer in proportion to their respective degrees of negligence or

willful misconduct contributing to such Claim.

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(e) Employees. Neither Party or such Party’s Associated Parties shall be

deemed to be an employee or an Associated Party of the other Party. Each Party shall be liable

for all claims of its own employees arising under any provision of any Worker’s Compensation

Law.

(f) Notice and Participation.

(i) If any Party entitled to indemnification hereunder (the

“Indemnified Party”) intends to seek indemnification under this Article from the other Party (the

“Indemnifying Party”) with respect to any Claim, the Indemnified Party shall give the

Indemnifying Party notice of such Claim promptly after receipt of actual knowledge or

information by the Indemnified Party of any possible Claim or of the commencement of such

Claim, which notice shall in no event be given later than the later of (i) ten (10) business days

prior to the last day for responding to such Claim or (ii) one-half of the period allowed for

responding to such Claim. The Indemnifying Party shall have no liability under this Article for

any Claim for which such timely notice is not provided, if and to the extent that the failure to

give such timely notice materially impairs the ability of the Indemnifying Party to respond to or

to defend the Claim.

(ii) The Indemnifying Party shall have the right to assume the defense

of any such Claim, at its sole cost and expense, with counsel designated by the Indemnifying

Party and reasonably satisfactory to the Indemnified Party; provided, however, that if the

defendants in any such proceeding include both the Indemnified Party and the Indemnifying

Party, and the Indemnified Party shall have reasonably concluded that there may be legal

defenses available to it which are different from or additional to those available to the

Indemnifying Party, the Indemnified Party shall have the right to select separate counsel to assert

such legal defenses and to otherwise participate in the defense of such Claim on behalf of such

Indemnified Party, and the Indemnified Party shall be responsible for the reasonable fees and

expenses of such separate counsel.

(iii) Should any Indemnified Party be entitled to indemnification under

this Section as a result of a Claim by a third party, and should the Indemnifying Party fail to

assume the defense of such Claim within a reasonable period of time, the Indemnified Party may,

at the expense of the Indemnifying Party, contest (or, with or without the prior consent of the

Indemnifying Party, settle) such Claim.

(iv) Except to the extent expressly provided otherwise herein, no

Indemnified Party shall settle any Claim with respect to which it has sought or is entitled to seek

indemnification pursuant to this Section unless (i) it has obtained the prior written consent to

settlement of the Indemnifying Party, or (ii) the Indemnifying Party has failed to provide, within

a reasonable period of time, security, in a form reasonably satisfactory to the Indemnified Party,

securing the payment of any Indemnifiable Cost, up to the amount of the proposed settlement.

(v) Except to the extent expressly provided otherwise herein, no

Indemnifying Party shall settle any Claim with respect to which it may be liable to provide

indemnification pursuant to this Article without the prior written consent of the Indemnified

Party; provided, however, that if the Indemnifying Party has reached a bona fide settlement

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agreement with the plaintiff(s) in any such proceeding, which settlement includes a full release

of the Indemnified Party for any and all liability with respect to such Claim, and the Indemnified

Party does not consent to such settlement agreement, then the dollar amount specified in the

settlement agreement shall act as an absolute maximum limit on the indemnification obligation

of the Indemnifying Party with respect to the Claim, or portion thereof, that is the subject of such

settlement agreement.

(g) Net Amount. In the event that an Indemnifying Party is obligated to

indemnify and hold harmless any Indemnified Party under this Article, the amount owing to the

Indemnified Party shall be the amount of such Indemnified Party’s actual Indemnifiable Cost, net

of any insurance or other recovery actually received by the Indemnified Party.

(h) Assertion of Claims. No Claim of any kind shall be asserted against either

Party or such Party’s Associated Parties, whether arising out of contract, tort (including

negligence), strict liability, or any other cause or form of action, unless it is filed in a court of

competent jurisdiction, or a demand for arbitration is made, within the applicable statute of

limitations period for such Claim.

(i) No Release of Insurers. The provisions of this Article shall not be deemed

or construed to release any insurer from its obligation to pay any insurance proceeds in

accordance with the terms and conditions of valid and collectible insurance policies.

(j) Survival of Obligation. The duty to indemnify under this Article shall

continue in full force and effect notwithstanding the expiration or termination of this Agreement,

with respect to any and all Indemnifiable Costs arising out of an event or condition which

occurred or existed prior to such expiration or termination.

9.03 Limitation of Liability. For breach of any provision of this Agreement for

which an express remedy or measure of damages is provided, such express remedy or

measure of damages shall be the sole and exclusive remedy. Notwithstanding anything to

the contrary herein, neither Party shall be liable for any consequential, incidental, punitive,

exemplary or indirect damages, lost profits or other business interruption damages,

whether by statute, in tort or contract or under any other theory of law or equity (except to

the extent that an Indemnifying Party is obligated under Section 9.02 to indemnify against

third party claims for consequential, incidental, punitive, exemplary or indirect damages or

lost profits or business interruption damages; and except for any claims or Claims arising

out of or related to Buyer’s obligations under Section 9.02(a)(i) and 9.02(a)(ii)). The

limitations herein imposed on remedies and the measure of damages are without regard to

the cause or causes related thereto, including the negligence of any Party, whether such

negligence be sole, joint or concurrent, or active or passive. To the extent any damages

required to be paid under this Agreement for a breach are liquidated, the Parties

acknowledge that the liquidated damages are reasonable in light of the anticipated harm

that would be caused by the breach, the difficulties of proof of loss, and the inconvenience

or nonfeasibility of otherwise obtaining an adequate remedy. EXCEPT AS EXPRESSLY

SET FORTH IN THIS AGREEMENT, THERE ARE NO REPRESENTATIONS OR

WARRANTIES, EXPRESS OR IMPLIED, MADE BY EITHER PARTY. BOTH

PARTIES DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS

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FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES ARISING FROM

COURSE OF DEALING OR USAGE OF TRADE, WITH RESPECT TO THE SUBJECT

MATTER OF THIS AGREEMENT.

ARTICLE X

EVENTS OF DEFAULT AND REMEDIES

10.01 Events of Default by Seller. Seller shall be in default under this Agreement upon

the happening or occurrence of any of the following events or conditions, each of which shall be

an “Event of Default” for purposes of this Agreement:

(a) Seller breaches or fails to observe or perform any of Seller’s material

obligations under this Agreement and fails to cure such breach or failure within sixty (60) days

after its receipt of written notice from Buyer specifying the nature of such breach or failure, or, if

such cure cannot reasonably be effected by the payment of money and cannot be completed

within sixty (60) days, Seller fails to commence such cure within sixty (60) days and thereafter

diligently pursue such cure; provided, however, that in any case, such cure must be completed

within ninety (90) days after Seller’s receipt of written notice of the breach or failure from

Buyer.

(b) Seller is dissolved, or Seller’s existence is terminated or its business is

discontinued, unless (i) this Agreement is assigned to a successor pursuant to Article VII, or

(ii) Seller is merged into a successor entity which continues substantially all of Seller’s business

activities relevant to this Agreement.

(c) Any representation or warranty of Seller set forth in this Agreement was

false or misleading in any material respect when made, unless: (i) the fact, circumstance or

condition that is the subject of such representation or warranty is made true within sixty (60)

days after Buyer has given written notice thereof to Seller; provided, however, that if the fact,

circumstance or condition that is the subject of such representation or warranty cannot be

corrected within such sixty (60) day period, and if Seller within such period of sixty (60) days

commences, and thereafter proceeds with all due diligence, to correct the fact, circumstance or

condition that is the subject of such representation or warranty, such period shall be extended for

such further period as shall be necessary for Seller to correct the same with all due diligence, and

(ii) such cure removes any adverse effect on Buyer of such fact, circumstance or condition being

otherwise than as first represented.

(d) Seller shall: (i) file a voluntary petition in bankruptcy or file a voluntary

petition or otherwise commence any action or proceeding seeking reorganization, liquidation,

arrangement or readjustment of its debts or for any other similar relief under any Bankruptcy

Law, or consent to, approve of, or acquiesce in, any such petition, action or proceeding; (ii)

apply for or acquiesce in the appointment of a receiver, liquidator, sequestrator, custodian,

trustee or similar officer for it or for all or any substantial part of its property; (iii) make an

assignment for the benefit of creditors; or (iv) be insolvent or be unable generally to pay its debts

as they become due.

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(e) A proceeding or case is commenced, without the application or consent of

Seller, in any court of competent jurisdiction, seeking: (i) the liquidation, reorganization,

dissolution, winding-up, or composition or adjustment of debts of Seller, (ii) the appointment of

a trustee, receiver, custodian, liquidator or the like, of Seller or of all or any substantial part of its

assets, or (iii) similar relief in respect of Seller under any Bankruptcy Law; and such proceeding

or case shall continue undismissed, or an order, judgment or decree approving or ordering any of

the foregoing shall be entered and continue unstayed and in effect, for a period of sixty (60) days

from commencement of such proceeding or case or the date of such order, judgment or decree.

10.02 Events of Default by Buyer. Buyer shall be in default under this Agreement upon

the happening or occurrence of any of the following events or conditions, each of which shall be

an “Event of Default” for purposes of this Agreement:

(a) Buyer breaches or fails to observe or perform any of Buyer’s material

obligations under this Agreement (other than the obligation to make payment to Seller when

due), and, except for Section 10.02(c) below, fails to cure such breach or failure within sixty (60)

days after its receipt of written notice from Seller specifying the nature of such breach or failure,

or, if such cure cannot reasonably be effected by the payment of money and cannot be completed

within sixty (60) days, Buyer fails to commence such cure within sixty (60) days and thereafter

diligently pursue such cure; provided, however, that in any case, such cure must be completed

within ninety (90) days after Buyer’s receipt of written notice of the breach or failure from

Seller.

(b) Buyer is dissolved, or Buyer’s existence is terminated or its business is

discontinued, unless (i) this Agreement is assigned to a successor pursuant to Article VII, or (ii)

Buyer is merged into a successor entity which continues substantially all of Buyer’s business

activities.

(c) Buyer fails to pay, when due, any amount due hereunder, and such failure

continues for a period of five (5) business days following the receipt by Buyer of a written notice

of such failure from Seller.

(d) Any representation or warranty of Buyer set forth in this Agreement was

false or misleading in any material respect when made, unless: (i) the fact, circumstance or

condition that is the subject of such representation or warranty is made true within sixty (60)

days after Seller has given written notice thereof to Buyer; provided, however, that if the fact,

circumstance or condition that is the subject of such representation or warranty cannot be

corrected within such sixty (60) day period, and if Buyer within such period of sixty (60) days

commences, and thereafter proceeds with all due diligence, to correct the fact, circumstance or

condition that is the subject of such representation or warranty, such period shall be extended for

such further period as shall be necessary for Buyer to correct the same with all due diligence, and

(ii) such cure removes any adverse effect on Seller of such fact, circumstance or condition being

otherwise than as first represented.

(e) Except for the Pending Bankruptcy Case, Buyer shall: (i) file a voluntary

petition in bankruptcy or file a voluntary petition or otherwise commence any action or

proceeding seeking reorganization, liquidation, arrangement or readjustment of its debts or for

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any other similar relief under any Bankruptcy Law, or consent to, approve of, or acquiesce in,

any such petition, action or proceeding; (ii) apply for or acquiesce in the appointment of a

receiver, liquidator, sequestrator, custodian, trustee or similar officer for it or for all or any

substantial part of its property; (iii) make an assignment for the benefit of creditors; or (iv) be

insolvent or be unable generally to pay its debts as they become due.

(f) Except for the Pending Bankruptcy Case, a proceeding or case is

commenced, without the application or consent of Buyer, in any court of competent jurisdiction,

seeking: (i) the liquidation, reorganization, dissolution, winding-up, or composition or

adjustment of debts of Buyer, (ii) the appointment of a trustee, receiver, custodian, liquidator or

the like, of Buyer or of all or any substantial part of its assets, or (iii) similar relief in respect of

Buyer under any Bankruptcy Law; and such proceeding or case shall continue undismissed, or an

order, judgment or decree approving or ordering any of the foregoing shall be entered and

continue unstayed and in effect, for a period of sixty (60) days from commencement of such

proceeding or case or the date of such order, judgment or decree.

10.03 Remedies Upon Default by Seller. Upon the occurrence of an Event of Default

by Seller, Buyer may exercise the following remedies:

(a) For any Event of Default for which an express remedy or measure of

damages is provided, such express remedy or measure of damages shall be the sole and exclusive

remedy.

(b) With respect to other Events of Default, Buyer may exercise any one or

more of the following remedies:

(i) Exercise all remedies available at law or in equity or other

appropriate proceedings, including bringing an action or actions from time to time for damages

and expenses resulting from the Event of Default, which shall include all costs and expenses

reasonably incurred in the exercise of its remedies (including reasonable attorneys’ fees), subject,

however, to Sections 9.03 and 10.06.

(ii) Without recourse to legal process, terminate this Agreement by

delivery of a written notice to Seller declaring termination.

10.04 Remedies Upon Default by Buyer. Upon the occurrence of an Event of Default

by Buyer, Seller may exercise the following remedies:

(a) For any Event of Default for which an express remedy or measure of

damages is provided, such express remedy or measure of damages shall be the sole and exclusive

remedy.

(b) With respect to other Events of Default, Seller may exercise any one or

more of the following remedies:

(i) Exercise all remedies available at law or in equity or other

appropriate proceedings, including bringing an action or actions from time to time for recovery

of amounts due and unpaid by Buyer, and/or for damages and expenses resulting from the Event

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of Default, which shall include all costs and expenses reasonably incurred in the exercise of its

remedies (including reasonable attorneys’ fees), subject, however, to Sections 9.03 and 10.06.

(ii) Discontinue sale of Project Energy to the Buyer at any time until

the Event of Default is cured. Should Seller discontinue sale of Project Energy to the Buyer

pursuant to this Section 10.04, Buyer shall cooperate with all of Seller’s requests for access to

Buyer-owned electric distribution and transmission facilities in order for Seller to deliver Project

Energy to the Transmission System.

(iii) Without recourse to legal process, terminate this Agreement by

delivery of a written notice to Buyer declaring termination.

10.05 Remedies.

(a) Except as expressly limited in this Agreement, each and every right,

power and remedy of a Party, whether specifically stated in this Agreement, or otherwise

existing, may be exercised concurrently or separately, from time to time, and so often and in

such order as may be deemed expedient by the exercising Party, and the exercise or the

beginning of the exercise of any such right, power or remedy shall not be deemed a waiver of the

right to exercise, at the same time or thereafter, any other right, power or remedy. No delay or

omission of a Party in the exercise of any right, power or remedy shall impair or operate as a

waiver thereof or of any other right, power or remedy then or thereafter existing.

(b) Notwithstanding any other provision of this Article, neither Party shall

terminate this Agreement on the basis of an Event of Default by the other Party if, prior to the

defaulting Party’s receipt of a notice of such termination, and notwithstanding the expiration or

unavailability of any cure period provided under this Agreement, the defaulting Party shall have

cured the Event of Default.

(c) In the event that this Agreement is terminated pursuant to Section 10.03(b)

or 10.04(b), the non-defaulting Party may seek a remedy based on its direct actual damages

associated with the termination.

10.06 Dispute Resolution.

(i) General Provisions. Every dispute of any kind or nature between

the Parties arising out of or in connection with this Agreement (each a “Dispute”) shall be

resolved in accordance with this Section, to the extent permitted by Law. The Parties agree to

attempt informally to resolve all Disputes arising hereunder, or out of or in relation to the

interpretation or performance of the Agreement, through meetings of representatives of the

Parties. In the event of a Dispute, either Party shall provide a notification of Dispute to the other

Party. Each such notification shall be made in good faith and not for the purpose of delay or

harassment. The notification shall state the nature of the Dispute, the facts relied upon, and the

specified provisions of the Agreement and/or applicable Law which support the notifying Party’s

position. Within thirty (30) days after the other Party’s receipt thereof, the Parties shall meet, by

telephone or otherwise, in an attempt to settle the Dispute. During such thirty-day period the

Party receiving notification may, but shall not be required to, submit a written response. If any

Dispute is not resolved through these meeting(s) within sixty (60) days after the Dispute

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notification is received, the Parties may proceed to attempt to resolve the Dispute through any

other available means, including mediation, arbitration or litigation.

(b) Continued Performance. During the conduct of dispute resolution

procedures pursuant to this Section, (i) the Parties shall continue to perform their respective

obligations under this Agreement, and (ii) neither Party shall exercise any other remedies

hereunder arising by virtue of the matters in dispute; provided, however, that nothing in this

Section shall be construed to prevent Seller from suspending its performance in the event Seller

has not been paid undisputed amounts due and owing from the Buyer under this Agreement.

10.07 Effect of Termination. No termination of this Agreement based upon an Event of

Default shall relieve the defaulting Party of its liability and obligations arising hereunder prior to

such termination, and the non-defaulting Party may take whatever action at law or in equity may

appear necessary or desirable to enforce performance and observance of any such obligations

under this Agreement, subject to Sections 9.03 and 10.06.

ARTICLE XI

INSURANCE

11.01 Coverage and Amounts – Seller. For the duration of the Contract Term, Seller

shall procure, pay premiums for and maintain in full force and effect the insurance coverages

described below with insurance companies having an A.M. Best rating of “A-“ or higher. With

the exception of the coverages required by Sections 11.01(a) and (d), all such insurance

coverages shall include Buyer as an additional insured and shall be primary in all instances

without regard to like coverage, if any, maintained by Buyer. Such coverages shall, if legally

available, contain a waiver of subrogation in favor of Buyer.

(a) Worker’s Compensation insurance as required by the Laws of the State of

Michigan, and Employer’s Liability insurance with limits of at least $1,000,000 for bodily injury

by accident and $1,000,000 for bodily injury from disease, provided that Seller may, at its option

and in accordance with applicable Law, meet the requirements of this Clause by self-insurance.

(b) Occurrence or Claims Made Form Commercial General Liability

insurance, including coverage for liability arising from (a) premises/operations, (b) independent

contractor, (c) products and completed operations, (d) liability assumed under an insured contract

(including the tort liability of another assumed in a business contract), and (e) personal and

advertising injury, all with limits of not less than $5,000,000 each occurrence, $10,000,000

general aggregate, and $10,000,000 products / completed operation aggregate. Such coverage

can be made up of a combination of primary and excess coverage policies. There shall be no

endorsement or modification of the Commercial General Liability form arising from explosion,

collapse, underground property damage, or work performed by subcontractors.

(c) Business Automobile Liability Insurance, covering all licensed vehicles

and automobiles whether owned, leased or rented when used in connection with performance of

this Agreement and including coverage for Bodily Injury and Property Damage in an amount not

less than $1,000,000 combined single limit, provided that Seller may, at its option and in

accordance with applicable Law, meet the requirements of this Clause by self-insurance.

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(d) All Risk Property Coverage against damage to the Project during the

Contract Term in an amount not less than the full replacement cost of the Project, with

commercially reasonable sublimits.

11.02 Insurance Certificates - Seller. Upon written request by Buyer, Seller shall

provide Buyer with certificates of insurance evidencing that the insurance coverages required

herein are maintained, to the extent not maintained through self-insurance. Buyer shall be given

thirty (30) days’ prior written notice by the Seller, of any cancellation or material change and ten

(10) days’ prior written notice due to cancellation for non-payment of premiums in any required

coverage.

11.03 Coverage For Full Term. All required coverages shall remain in full force and

effect throughout the Contract Term. If required coverage under Section 11.01(b) is on a Claims

Made form, Seller shall maintain the coverage or provide an extended reporting period for two

years after end of the Contract Term, with a retroactive date no later than the inception of the

Contract Term. Seller’s liability under this Agreement shall not be limited or affected by the

amount or terms of the insurance coverages required in this Article XI.

11.04 Coverage and Amounts – Buyer. For the duration of the Contract Term, Buyer

shall procure, pay premiums for and maintain in full force and effect the insurance coverages

described below with insurance companies having an A.M. Best rating of “A-“ or higher. With

the exception of the coverages required by Sections 11.04(a) and 11.04(d), all such insurance

coverages shall include Seller as an additional insured and shall be primary in all instances

without regard to like coverage, if any, maintained by Seller. Such coverages shall, if legally

available, contain a waiver of subrogation in favor of Seller.

(a) Worker’s Compensation Insurance as required by the Laws of the State of

Michigan, and Employer’s Liability insurance with limits of at least $1,000,000. Buyer may at its

option and in accordance with applicable Law, meet the requirements of this Clause by self-

insurance.

(b) Occurrence Form Commercial General Liability insurance, including

coverage for liability arising from (a) premises/operations, (b) independent contractor, (c)

products and completed operations, (d) liability assumed under an insured contract (including the

tort liability of another assumed in a business contract), and (e) personal injury, all with limits of

not less than $5,000,000 each occurrence and $10,000,000 in the aggregate. Such coverage can

be made up of a combination of primary and excess coverage policies. There shall be no

endorsement or modification of the Commercial General Liability form arising from explosion,

collapse, underground property damage, or work performed by subcontractors.

(c) Business Automobile Liability Insurance, covering all licensed vehicles

and automobiles whether owned, leased or rented when used in connection with performance of

this Agreement or operation of the Mill and including coverage for Bodily Injury and Property

Damage in an amount not less than $1,000,000 combined single limit, provided that Buyer may,

at its option, and in accordance with applicable Law, meet the requirements of this Clause by

self-insurance

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(d) All-risk Property Coverage insuring against property damage to the Mill

with commercially reasonable sub-limits.

11.05 Insurance Certificates - Buyer. Buyer shall provide Seller with certificates of

insurance evidencing that the insurance coverages required herein are maintained, to the extent

not maintained through self-insurance Seller be given thirty (30) days’ prior written notice by

the Buyer, of any cancellation or material change and ten (10) days’ prior written notice due to

cancellation for non-payment of premiums in any required coverage.

10.06 Coverage For Full Term. All required coverages shall remain in full force and

effect throughout the Contract Term. Buyer’s liability under this Agreement shall not be limited

or affected by the amount or terms of the insurance coverages required in this Article XI.

ARTICLE XII

MISCELLANEOUS

12.01 Applicable Law. This Agreement is executed in accordance with and is intended

to be construed under the Laws of the State of Michigan, excluding any Law related to conflict

or choice of Law which would result in the application of any Law to this Agreement other than

the Laws of the State of Michigan. Subject to Section 10.06, Each party irrevocably and

unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of

the State of Michigan sitting in Marquette County and of the United States District Court for the

Western District of Michigan, and any appellate court from any thereof, in any suit, action,

proceeding, claim or counterclaim brought by or on behalf of any party related to or arising out

of this Agreement. Each party irrevocably and unconditionally waives, to the fullest extent

permitted by applicable law, (i) any objection which it may now or hereafter have to the laying

of venue, (ii) the defense of an inconvenient forum and (iii) any right to trial by jury.

12.02 Notice and Service. Any notice, demand, request, consent, approval,

confirmation, communication or statement which is required or permitted under this Agreement

shall be in writing, except as otherwise provided herein, and shall be given or delivered by

personal service, telecopy, Federal Express or comparable overnight delivery service, or by

deposit in any United States Post Office, postage prepaid, by registered or certified mail,

addressed to the Party to be notified at the address set forth below. Changes in such address

shall be made by notice similarly given.

If to UPPCO:

Wisconsin Public Service Corporation

700 North Adams

Green Bay, WI 54307-9001

Attn: General Manager – Wholesale Electric & Renewable Energy

Facsimile Number: 920-433-2279

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If to Buyer:

Escanaba Paper Company/NewPage Corporation

7100 County 426 M.5 Road

PO Box 757

Escanaba, MI 49829-0757

Attention: Mill Manager

And:

Escanaba Paper Companay/NewPage Corporation

8540 Gander Creek drive

Miamisburg, OH 45432

Attn: General Counsel

doug.cooper@newpagecorp.com

Notices shall be deemed to have been received, and shall be effective, upon receipt. Notices of

changes of address by either Party shall be made in writing no later than ten (10) days prior to

the effective date of such change.

12.03 Amendment. No amendment or modification of the terms of this Agreement shall

be binding on either Buyer or Seller unless such amendment is reduced to writing and signed by

both Parties, and no course of dealing or course of performance shall be deemed to modify this

Agreement.

12.04 Expenses. Except as specifically set forth otherwise in this Agreement, Buyer

shall be responsible for Buyer’s expenses related to the Mill and performance of its obligations

under this Agreement, and Seller shall be responsible for Seller’s expenses related to the Project

and performance of its obligations under this Agreement.

12.05 Taxes and Other Charges.

(a) Seller’s Taxes. Seller shall be solely responsible for any Tax relating to

the construction, ownership or leasing, operation or maintenance of the Project or its components

or appurtenances; provided, however, that Seller shall not be responsible for any sales, excise or

other Tax, not measured by Seller’s net income, imposed on or with respect to the sale of Project

Energy to Buyer. Seller shall be solely responsible for any Tax measured by Seller’s net income

that is imposed upon it.

(b) Buyer’s Taxes. Buyer shall be solely responsible for any Tax relating to

its purchase of Project Energy from Seller, and any Tax measured by Buyer’s net income that is

imposed upon it.

12.06 Maintenance of Records. Both Seller and Buyer shall keep a record of all

invoices, receipts, charts, electronic data and/or computer printouts related to the volume or price

of sales of Project Energy made under this Agreement. Such records shall be made available for

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inspection by either Party from time to time upon reasonable notice at the principal place of

business of the non-requesting Party during regular business hours. All such materials shall be

deemed to be Proprietary Information, and shall be kept on record for a minimum of five (5)

years after the date of their preparation.

12.07 Confidentiality.

(a) Any Proprietary Information of a Party (the “Transferor”) which is

disclosed to or otherwise received or obtained by the other Party (the “Transferee”) incident to

this Agreement is disclosed, and shall be held, in confidence, and the Transferee shall not

(subject to Paragraph (b)) publish or otherwise disclose any Proprietary Information of the

Transferor to any Person for any reason or purpose whatsoever, or use any Proprietary

Information for any purpose other than performance under this Agreement, without the prior

written approval of the Transferor, which approval may be granted or withheld by the Transferor

in its sole discretion. Without limiting the generality of the foregoing, each Party shall observe

at a minimum the same safeguards and precautions with regard to the other Party’s Proprietary

Information which such Party observes with respect to its own information of the same or similar

kind, but in no event less than reasonable safeguards and precautions.

(b) Each Party agrees that it may make available Proprietary Information

received from the other Party to (i) its own Associated Parties; (ii) its lenders, investors or other

financial agents; and (iii) its consultants, attorneys and tax professionals, only on a need-to-know

basis, and that all Persons to whom such Proprietary Information is made available will be made

aware of the confidential nature of such Proprietary Information, and will be required to agree to

hold such Proprietary Information in confidence under terms substantially identical to the terms

hereof.

(c) Notwithstanding the foregoing:

(i) A Transferee may provide any Proprietary Information of the

Transferor to any Governmental Authority having jurisdiction over or asserting a right to obtain

such information, provided that (i) such Governmental Authority orders that such Proprietary

Information be provided, and (ii) the Transferee, when not prohibited by law, promptly advises

the Transferor of any request for such information by such Governmental Authority and

cooperates in giving the Transferor an opportunity to present objections, requests for limitation,

and/or requests for confidentiality or other restrictions on disclosure or access, to such

Governmental Authority.

(ii) Either Party may disclose such Proprietary Information regarding

the terms of this Agreement as such Party deems necessary to enable it to comply with the

Securities Exchange Act of 1934, or the rules, regulations and forms of the Securities and

Exchange Commission issued thereunder, or the applicable rules of any stock exchange.

(d) In the event of a breach or threatened breach of the provisions of this

Section by any Transferee, the Transferor shall be entitled to an injunction restraining such Party

from such breach. Nothing contained herein shall be construed as prohibiting the Transferor

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from pursuing any other remedies available at law or equity for such breach or threatened breach

of this Agreement, subject to Section 9.03.

(e) The restrictions contained in Section 12.07(a) shall continue in full force

and effect throughout the Contract Term and for a period of three (3) years thereafter,

notwithstanding the expiration or termination of this Agreement.

(f) Definition of Proprietary Information:

(i) The term “Proprietary Information” means all information, written

or oral, which has been or is disclosed to the Transferee by the Transferor, or by any Associated

Party of such Transferor, or which otherwise becomes known to the Transferee, or to any

Associated Party of such Transferee, or any other Person in a confidential relationship with the

Transferee, and which: (A) relates to matters such as patents, trade secrets, research and

development activities, draft or final contracts or other business arrangements, books and

records, budgets, cost estimates, costs, pro forma calculations, engineering work product,

environmental compliance, vendor lists, suppliers, manufacturing processes, energy

consumption, pricing information, private processes, and other similar information, as they may

exist from time to time, or (B) the Transferor expressly designates in writing at the time of

disclosure to be confidential. For the sake of clarity, neither the terms and conditions of this

Agreement, nor the existence of the Agreement shall constitute Proprietary Information of either

Party.

(ii) Notwithstanding anything to the contrary in Clause (i), Proprietary

Information shall exclude information falling into any of the following categories:

A. Information that, at the time of disclosure hereunder, is in the

public domain, other than information that entered the public domain by breach of this

Agreement by Transferee or its Associated Parties;

B. Information that, after disclosure hereunder, enters the public

domain, other than information that enters the public domain by breach of this Agreement by

Transferee or its Associated Parties;

C. Information, other than that obtained from third parties, that prior

to disclosure hereunder, was already in Transferee’s possession, either without limitation on

disclosure to others or subsequently becoming free of such limitation;

D. Information obtained by Transferee from a third party having an

independent right to disclose the information;

E. Information that is derived by Transferee through independent

research without use of or reference or access to the Proprietary Information of the Transferor; or

F. Information that Seller is required to provide in Seller’s annual

filing of FERC Form 1 and any other required Seller regulatory filings.

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12.08 No Partnership. Notwithstanding any provision of this Agreement to the contrary,

Seller and Buyer do not intend to create hereby any lease, joint venture, partnership, association

taxable as a corporation, or other entity. Neither Party shall have any right, power or authority to

enter into any agreement or undertaking for, or act on behalf of, or to act as or be an agent or

representative of, or to otherwise bind, the other Party. Seller and Buyer agree to take, on a

timely basis, all voluntary action as may be necessary to be excluded from treatment as a

partnership under the Code, and, if it should appear that one or more changes to this Agreement

would be required in order to prevent the creation of such a business entity, Seller and Buyer

agree to negotiate promptly in good faith with respect to such changes.

12.09 No Duty To Third Parties. Except as provided in Article VII, this Agreement is

for the sole benefit of the Parties hereto, and nothing in this Agreement nor any action taken

hereunder shall be construed to create any duty, liability or standard of care to any Person not a

Party to this Agreement. Except as specifically provided otherwise herein, no Person shall have

any rights or interest, direct or indirect, in this Agreement or the services to be provided

hereunder, or both, except Buyer and Seller. Except as provided in Article VII, the Parties

specifically disclaim any intent to create any rights in any Person as a third-party beneficiary to

this Agreement or the services to be provided hereunder, or both.

12.10 Dedication. No undertaking by one Party to the other under this Agreement shall

constitute the dedication of that Party’s system or any portion thereof to the other Party or to the

public.

12.11 Information. Subject to Section 12.07, each Party shall make available to the

other such other information relative to the Project or the Mill as may be reasonably required to

carry out the terms of this Agreement.

12.12 Counterparts. This Agreement may be executed simultaneously in two (2) or

more counterparts, each of which shall be deemed an original but all of which together shall

constitute one and the same instrument.

12.13 Severability. If any provision of this Agreement shall be determined to be

unenforceable, invalid, void or otherwise contrary to Law, or in the event that any of the

provisions, or portions or applications thereof, of this Agreement are held unenforceable or

invalid by any court of competent jurisdiction or arbitral panel, such condition shall in no manner

operate to render any other provision of this Agreement unenforceable, invalid, void or contrary

to Law, and this Agreement shall continue in force in accordance with the remaining terms and

provisions hereof; provided, however, that Seller and Buyer shall negotiate in good faith to

attempt to implement an equitable adjustment in the provisions of this Agreement with a view

toward effecting the purposes of this Agreement by replacing the provision that is unenforceable,

invalid, void or contrary to Law with a valid provision the economic effect of which comes as

close as possible to that of the provision that has been found to be unenforceable, invalid, void or

contrary to Law.

12.14 Audit Rights. Subject to Section 12.07, the Parties shall have the right from time

to time throughout the Contract Term, upon reasonable prior notice, to audit the other Party’s

books and records to the limited extent necessary to verify the basis for any claim by either of the

Parties for payments hereunder or to determine the other Party’s compliance with the terms of

this Agreement. The audited Party shall make such records available at its office during normal

business hours and the auditing Party shall reimburse the other Party for reasonable costs

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incurred by the audited Party by the audit, as supported by appropriate documentation. Any

information learned during the course of any such audit shall be deemed to be Proprietary

Information.

12.15 Successors and Assigns. Except to the extent otherwise stated herein, all the

rights, benefits, duties, liabilities and obligations of the Parties hereto shall inure to the benefit of

and be binding upon their respective successors and permitted assigns.

12.16 Integration. There are no understandings between the Parties as to the subject

matter of this Agreement other than as set forth herein, and this Agreement represents the entire

understanding between the Parties in relation to the subject matter hereof. This Agreement

supersedes any and all prior agreements, arrangements and discussions between the Parties

(whether written or oral) in respect of the subject matter hereof, all of which are hereby

abrogated and withdrawn.

12.17 Survival. The applicable provisions of this Agreement shall continue in effect

after the expiration or termination of the Contract Term, to the extent necessary to provide for

final billing and adjustments, and to make other appropriate settlements hereunder. Those

provisions of this Agreement that by their express terms or nature are intended to survive

expiration or termination shall so survive, including without limitation Articles IX, X and XII.

[The Remainder of This Page Intentionally Blank]

IN WITNESS WHEREOF, the Parties have caused the signatures of their authorized

representatives to be affixed as of the day and year first above written.

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LIST OF EXHIBITS

Exhibit A - Description of the Project

Exhibit B - Purchase and Sale of Project Energy

Exhibit C - Calculation of Energy Not Delivered

Exhibit D - River Divergence Procedure

Exhibit D-1 - River Divergence Procedure with Buyer Dam 1 Shutdown Switch

Exhibit E - FERC Order Modifying Run of the River Plan

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EXHIBIT A

DESCRIPTION OF ESCANABA HYDRO PROJECT

The Project consists of three (3) separate and distinct hydroelectric facilities with a

combined generator nameplate of 9,190 kW, as described below.

Dam No. 4 (Boney Falls)

o Generator #1 – 1,360 kW

o Generator #2 – 1,700 kW

o Generator #3 – 1,680 kW

Dam No. 3

o Generator #1 – 1,250 kW

o Generator #2 – 1,250 kW

Dam No. 1

o Generator #1 – 700 kW

o Generator #2 – 700 kW

o Generator #3 – 550 kW

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EXHIBIT B

PURCHASE AND SALE OF PROJECT ENERGY

“Project Energy Purchase Price” shall mean the price per MWh for Project Energy that

Seller delivers, or as provided for in Section 4.02 of the Agreement, attempts to deliver and is

unable to deliver due to Buyer actions to the Delivery Point under the Agreement; and shall be

equal to an annual fixed price for each calendar year based on the average of the Midwest ISO

Commercial Pricing Node UPPC.ESC (or successor node or equivalent point) Day Ahead prices

for the 8,760 hour period beginning on HE1 October 1 through HE 24 September 30th

immediately preceding the subject year.

Each April immediately following the subject year, the total amount paid by Buyer in the subject

year will be subject to true-up (Subject Year True-up) to the amount that would have been paid if

actual day-ahead pricing at the UPPC.ESC node had been used in the billing calculation.

To avoid potential confusion, the following example is provided below for reference.

Example

Project Energy Purchase Price (PEPP) = Ave [DA LMP UPPC.ESC]HE1 Oct – HE 24 Sep 30

PEPPSubjectYear = $35.00

Hydro GenerationSubjectYear = 20,000 MWhs

UPPCO Sales to EPCSubjectYear = PEPPSubjectYear * Hydro GenerationSubjectYear

= $35.00 / MWh * 20,000 MWhs

= $700,000

Subject Year True-up = ∑(Actual Hourly Hydro Generation * Actual DA LMP

UPPC.ESC) – UPPCO Sales to EPCSubjectYear

= $695,000 - $700,000

= ($5,000) UPPCO Payment to EPC

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EXHIBIT C

CALCULATION FOR ENERGY NOT DELIVERED

PURSUANT TO SECTION 4.02(a) and 4.02(b)

The calculations for lost generation due to EPC requests to divert water at Dam 1, or lost

generation caused by mill outages are based on each generating unit regression analysis as filed

by EPC in the Escanaba Hydroelectric Project (FERC No. 2506-007) Order Modifying and

Approving Run-of-River Monitoring Plan dated October 29, 1996 (attached as Exhibit E). To

account for the delta in the drainage basin between the generating facility and the Cornell Gage,

flow data for each generating facility will be adjusted based on the Drain Basin Multiplier as

defined below. Drain Basin Area (DBA)

DBACornell Gage = 870 square miles

DBABoney Falls = 770 square miles

DBADam #3 = 907 square miles

DBADam #1 = 919 square miles

Drain Basin Multiplier (DBM)

DBMBoney Falls = DBABoney Falls / DBACornell Gage

= (770 square miles / 870 square miles)

= 0.8851

DBMDam #3 = DBADam #3 / DBACornell Gage

= (907 square miles / 870 square miles)

= 1.0425

DBMDam #1 = DBADam #1 / DBACornell Gage

= (919 square miles / 870 square miles)

= 1.0563

Lost Generation (MWh)

Lost GenerationBoney Falls = [(((Q * DBMBoney Falls) – CBoney Falls) / XBoney Falls)] / 1000

Where: Q = hourly average discharge in cubic feet per second at the Cornell Gage

DBMBoney Falls = 0.8851

XBoney Falls = 0.31

CBoney Falls = 35.61

Lost GenerationDam #3 = [(((Q * DBMDam #3) – CDam #3) / XDam #3)] / 1000

Where: Q = hourly average discharge in cubic feet per second at the Cornell Gage

DBMDam #3 = 1.0425

XDam #3 = 0.49

CDam #3 = 80.14

Lost GenerationDam #1 = [(((Q * DBMDam #1)– CDam #1) / XDam #1)] / 1000

Where: Q = hourly average discharge in cubic feet per second at the Cornell Gage

DBMDam #1 = 1.0563

XDam #1 = 0.72

CDam #1 = 40.90

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EXHIBIT D

RIVER DIVERGENCE PROCEDURE

1. EPC will notify Seller’s Real Time Operation’s Desk via phone call to 920-433-1214 and

will also provide email notification to: WPSM_Realtime@wisconsinpublicservice.com

in advance of water flows reaching flow rates requiring a diversion event in accordance

with EPC’s waste water discharge permit.

2. Within fifteen (15) minutes of Seller’s receipt of any such request made in accordance

with Par. 1, above, Seller shall (i) if Seller’s remote shutdown capability is available, shut

down Dam 1 generators from the Seller’s Real Time Operations Desk using said remote

capability; or (ii), should the Seller’s remote capability be unavailable, dispatch Seller

personnel to personally shut down the Dam 1 generators at the Project.

3. EPC shall notify Seller’s Real Time Operation’s Desk when water no longer needs to be

diverted at Dam 1, and Seller will thereafter restart Dam 1 generators within a reasonable

time period and subject to availability of Seller personnel.

4. Before and throughout the Delivery Term, each of Buyer and Seller shall keep one

another apprised of any required updates to this Procedure, including updating contact

any contact information.

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EXHIBIT D-1

RIVER DIVERGENCE PROCEDURE

WITH BUYER DAM 1 SHUTDOWN SWITCH INSTALLED

1. EPC will notify Seller’s Real Time Operation’s Desk via phone call to 920-433-1214 and

will also provide email notification to WPSM_Realtime@wisconsinpublicservice.com

in advance of water flows reaching flow rates requiring a diversion event in accordance

with EPC’s waste water discharge permit.

2. Within fifteen (15) minutes of Seller’s receipt of any such request made in accordance

with Par. 1, above, Seller shall (i) if Seller’s remote shutdown capability is available, shut

down Dam 1 generators from the Seller’s Real Time Operations Desk using said remote

capability; or (ii), should the Seller’s remote capability be unavailable, dispatch Seller

personnel to personally shut down the Dam 1 generators at the Project.

3. If, after completion of Steps 1 and 2, above, Buyer determines, within its reasonable

discretion, the Dam 1 Project generators have not been shutdown within the time period

necessary for compliance with Buyer’s Waste Water Permit, Buyer may employ the

Buyer Dam 1 Shutdown Switch to cause a Dam 1 shutdown. Immediately thereafter,

Buyer shall notify Seller of Buyer’s use of the Buyer Dam 1 Shutdown Switch and

confirm with Seller whether the Dam 1 generators shutdown occurred.

4. EPC shall notify Seller’s Real Time Operation’s Desk when water no longer needs to be

diverted at Dam 1, and Seller will thereafter restart Dam 1 generators within a reasonable

time period and subject to availability of Seller personnel.

5. Before and throughout the Delivery Term, each of Buyer and Seller shall keep one

another apprised of any required updates to this Procedure, including updating contact

any contact information.

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EXHIBIT E

ESCANABA HYDROELECTRIC PROJECT (FERC NO. 2506-007) ORDER

MODIFYING AND APPROVING RUN-OF-RIVER MONITORING PLAN DATED

OCTOBER 29, 1996

[ATTACHED]

EXHIBIT B