Confidentiality and Compliance Agreement

BC Hydro Bioenergy Phase 2 Call – Confidentiality and Compliance Agreement

CONFIDENTIALITY AND COMPLIANCE AGREEMENT

Revised: June 30, 2010

This Confidentiality and Compliance Agreement (the “Agreement”) is made as of ______, 2010 [Note: Date to be completed by BC Hydro at time of signing by BC Hydro.]

BY AND BETWEEN

[INSERT FULL LEGAL NAME OF PROPONENT], of [INSERT FULL ADDRESS WITH POSTAL CODE]

(“Proponent”)

AND

BRITISH COLUMBIA HYDRO AND POWER AUTHORITY, a British Columbia Crown Corporation, having an office at 333 Dunsmuir Street, Vancouver, British Columbia, V6B 5R3

(“BC Hydro”)

(the foregoing may be referred to individually as a “Party” or collectively as the “Parties”)

WHEREAS:

A.BC Hydro has issued a BioenergyPhase 2 Call - Request for Proposals dated May 31, 2010 (as may be amended from time to time) for the supply of Clean or Renewable Biomass Energy by Projects located in British Columbia (the “RFP”);

B.The Proponent has submitted a Registration Form and the associated documents and the Registration Fee under the RFP and intends to participate in the procurement process therein described (the “RFP Process”);

C.The Proponent may submit to BC Hydro a Proposal, and further information relative thereto; and

D.BC Hydro may conduct discussions and negotiations with the Proponent.

NOW THEREFORE, in consideration of the Parties entering into this Agreement and the mutual promises and agreements contained in this Agreement, the Parties agree as follows:

1.DEFINITIONS

1.1Definitions. Capitalized terms used but not defined herein have the meanings given in the RFP. References to the “Proposal” and the “Project” mean the Proponent’s Proposal and the Project described therein, including in both cases any modifications thereto, and “EPA” means the EPA, if any, that may be entered into between the Proponent and BC Hydro.

1.2Confidential Information. “Confidential Information” means the Proposal, or any pre-submission or post-submission information regarding the Proponent, the Proposal, or the Project, whether or not designated expressly as confidential, that is disclosed or expressed, whether orally, in writing, electronically or by any other media, by the Proponent to BC Hydro during the course, or in furtherance, of the RFP Process, but excluding any executed and delivered EPA or related securities delivered thereunder or any agreement collateral thereto, and also excluding information that:

(a)is or becomes in the public domain, other than as a result of a breach of this Agreement by BC Hydro; or

(b)is known to BC Hydro before disclosure to it by the Proponent, or becomes known to BC Hydro thereafter by way of disclosure to BC Hydro by any other person who, to BC Hydro’s knowledge, is not under an obligation of confidentiality with respect thereto.

1.3Discussions. “Discussions” means discussions, including negotiations, between BC Hydro and the Proponent occurring before and after submission of the Proposal and pertaining thereto until such discussions are terminated or an EPA, if any, between the Parties is fully executed and delivered.

2.CONFIDENTIALITY OBLIGATION

2.1Confidentiality Obligation. BC Hydro shall treat as confidential, and shall not disclose to any third person, Confidential Information, and both Parties shall treat as confidential and shall not disclose to any third person, all or any part of the Discussions, provided however that the foregoing obligations, and nothing in this Agreement, prevents or restricts:

(a)disclosure of the fact that Discussions, if any, are occurring, or have occurred, and/or the fact that this Agreement exists and the general nature hereof;

(b)in the case of BC Hydro, disclosure of the Discussions and/or Confidential Information:

(i)to BCTC, or its successor, as BC Hydro, acting reasonably, considers necessary to carry out any evaluation and/or negotiation of the Proposal;

(ii)to any ministers, deputy ministers, servants or employees of the Province of British Columbia; and

(iii)to BC Hydro’s directors, officers, employees, subsidiaries, consultants and advisors;

provided that each of the foregoing to whom Discussions and/or Confidential Information is disclosed is advised of the confidential nature thereof;

(c)in the case of BC Hydro, disclosure of Discussions and/or Confidential Information in any regulatory proceeding, whether in respect of an EPA entered into with the Proponent pursuant to the RFP Process or in respect of other matters, to the extent that BC Hydro considers disclosure necessary or desirable to support its position in any such proceeding, provided that, to the extent reasonably practicable, BC Hydro gives reasonable notice to the Proponent before making the disclosure, and, to the extent requested by the Proponent, requests the relevant tribunal to treat all or any part of the disclosure as confidential or to limit its further disclosure;

(d)in the case of BC Hydro, disclosure:

(i)of the Proponent’s questions in the Q&A process under the RFP without attribution to the Proponent;

(ii)to a third person of Confidential Information that was known by that third person before disclosure thereof by BC Hydro, including information that originated from that third person or that the Proponent or any other person has given to the third person, in either case as indicated on the face of any document or as acknowledged by the Proponent in any Discussions; and

(iii)such information as BC Hydro considers necessary to provide a publicly available report on the conduct and outcome of the RFP Process, including the Proponent’s participation in the RFP Process, the Proponent’s selection as a Preferred Proponent and the conclusion of an EPA with the Proponent (if applicable), the location and capacity of any Project proposed by the Proponent, the firm energy associated with any Project proposed by the Proponent and any pricing associated with any Project proposed by the Proponent, provided that pricing information is not attributed or tied to a particular Proposal or Project;

(e)in the case of the Proponent, disclosure of Discussions to its directors, officers, employees and Affiliates, consultants and advisors, provided that each of the foregoing to whom Discussions are disclosed is advised of the confidential nature thereof and undertakes in writing to respect such confidentiality on the terms of this Agreement, provided that the Proponent shall give to BC Hydro, at its request, a copy of each such undertaking;

(f)without limiting BC Hydro’s disclosure rights under subsection2.1(c) above, disclosures required to be made by BC Hydro or the Proponent by an order of a court or tribunal or under any law, regulatory requirement or requirement of any stock exchange that is binding upon it, provided that, (i) to the extent reasonably practicable, the Party making such disclosure gives reasonable notice to the other Party before making the disclosure, and (ii) limits the disclosure to that required by the applicable order, law, or regulatory or stock exchange requirement;

(g)disclosures in any legal proceedings for the enforcement of this Agreement and/or any EPA or in the defence of any legal proceedings brought by any third person(s) against either or both the Parties in any way relating to the RFP Process; or

(h)disclosures of the Discussions and/or Confidential Information by agreement or consent of both Parties.

2.2Disclosure of EPA. Disclosure of any executed EPA, or any summary thereof or information contained therein, will be governed by the EPA.

2.3Freedom of Information and Protection of Privacy Act. The Proponent acknowledges that BCHydro is subject to the British ColumbiaFreedom of Information and Protection of Privacy Act and associated regulations, and agrees that BCHydro's nondisclosure obligations under this Agreement are subject to the provisions of that legislation, as the same may be amended or replaced from time to time.

2.4Term. BC Hydro’s obligation of confidentiality with respect to Confidential Information expires 90 days after the day on which the last of all electricity purchase agreements awarded in the RFP Process have been fully signed and delivered, as notified by BC Hydro to the Proponent.

3.COMPLIANCE OBLIGATIONS

3.1Not a Call for Tenders. The Proponent acknowledges and agrees that the RFP is not a call for tenders, and the RFP and/or the submission of a Proposal and/or the exercise by BC Hydro of any discretion in the conduct of the RFP Process, including determination of Project eligibility, the review and evaluation of Proposals, and selection of Preferred Proponents, creates no contractual or other legal relationship, liability or obligation whatsoever between BC Hydro and any person, including the Proponent, whether or not such person submits a Proposal, except only the obligations of BC Hydro and each Proponent under this Agreement.

3.2Discretion. The Proponent acknowledges and agrees that to the extent that the RFP (i)requires or permits BC Hydro to make any decision or determination, whether with respect to a Proponent’s compliance, or a Proposal’s conformity, with any term of the RFP, any waiver of non-compliance or non-conformity, the eligibility of any Project, the evaluation of any Proposal, including the application of, or weight ascribed to, any criterion, or other matters, or (ii)indicates by the use of permissive language (such as “may”) that BC Hydro may do or not do, any thing, then BC Hydro may decide, determine, or act or not act, in each case in its sole and unfettered discretion, and without giving any Proponent reasons for doing so, or incurring any liability or obligation whatsoever to any Proponent.

3.3Code of Conduct Guidelines. The Proponent represents and warrants that it has complied, and will comply, with the Code of Conduct Guidelines.

3.4Costs. The Proponent acknowledges and agrees that it is responsible for all costs incurred by it in connection with the RFP, including attendance at all meetings, the cost of any Registration Fee or Proposal Fee, the preparation and, if applicable, negotiation, of any Proposal, and the settlement and execution and delivery of any agreement(s) arising therefrom, whether or not one or more, or no, Proposals are accepted and whether or not the RFP is terminated at any time before acceptance of any Proposals.

3.5No Liability. The Proponent acknowledges and agrees that BC Hydro, its directors, officers, employees, advisors and consultants incur no liability whatsoever to the Proponent, whether such liability is based or claimed to be based upon contract, tort, statute or otherwise, under or in any manner arising out of, or related to, the RFP, including without limitation the exercise by BC Hydro of any discretion under or in relation to this RFP, save and except only, in the case of BC Hydro, and subject to subsection 4.1 of this Agreement, any claims under this Agreement and any liability assumed by BC Hydro under any fully executed and delivered EPA entered into further to the RFP Process.

3.6No Collusion. The Proponent shall prepare any Proposal, including the determination of all pricing, and other Proposal terms the disclosure of which could reasonably be expected to impair competition in the RFP Process, (collectively “Proposal information”) independently from, and without collusion with, any other proponent registered in the RFP Process or any Affiliate of such other proponent, or their respective directors, officers, employees, consultants, advisors, representatives or agents (collectively an “other proponent”). The Proponent, its Affiliates and their respective directors, officers, employees, consultants, advisors, representatives and agents shall not disclose, directly or indirectly, any Proposal information to, or collude with, any other proponent at any time before completion of the RFP Process and full execution and delivery of all EPAs. The foregoing does not restrict disclosure of Proposal information on a “need to know” basis to Supporting Parties, provided that the Proponent and the Supporting Parties comply with subsection 14.13 of the RFP.

3.7No Lobbying. The Proponent shall direct all communications to BC Hydro relative to the RFP strictly to the person, and in accordance with the communication instructions, set out in subsection 14.6 of the RFP. The Proponent shall not engage, and will cause its Affiliates and their respective directors, officers, employees, consultants, advisors, representatives or agents not to engage, in lobbying, or otherwise communicating directly to, any other director, officer, employee or agent of BC Hydro, any consultant or advisor to BC Hydro, or any member of the Government of British Columbia, in each case for the purpose of influencing or attempting to influence the terms, or outcome of the RFP, or the exercise of any discretion by BC Hydro under or in relation to the RFP. The foregoing does not preclude the Proponent or its Affiliates from normal course communications with BC Hydro and/or the Government of British Columbia as required to further Project permitting and other Project planning and development.

3.8Disclosures. The Proponent represents and warrants that it has made the disclosures required by the Disclosure Statement, including those required under the Code of Conduct Guidelines, and that it will promptly notify BC Hydro of any update to those disclosures to the date of signing any EPA resulting from the RFP Process, and that all such disclosures will be true, correct and complete. The Proponent acknowledges that BC Hydro may require that the Proponent confirm or implement policies and/or measures to avoid any actual or perceived conflict of interest and/or unfair advantage that may arise from any relationship required to be disclosed on the Disclosure Statement.

3.9Ownership of Documents. The Proponent acknowledges and agrees that BC Hydro acquires ownership of any Proposal and any other document submitted by the Proponent and is not obliged to return or destroy any such documents, provided however, that BC Hydro does not acquire ownership or copyright in any intellectual property rights embedded therein.

4.MISCELLANEOUS

4.1Liability Exclusion. In no event will either Party be liable to the other Party in connection with any breach of this Agreement for any indirect, incidental or consequential damages, including loss of profits.

4.2Governing Law. This Agreement shall be interpreted, governed and construed under the laws of the Province of British Columbia and the laws of Canada applicable therein as if it were executed, and to be performed wholly, within the Province of British Columbia.

4.3Equitable Relief. Each Party agrees that in the event of a breach of this Agreement, or to prevent a breach or contemplated breach, by that Party, the other Party shall be entitled to equitable relief, including injunction and specific performance, in addition to all other remedies available at law or equity.

4.4Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes and cancels all prior agreements and communications relative to such subject matter.

4.5No Implied Terms. No terms or conditions whatsoever may be implied in this Agreement.

4.6Amendments. This Agreement shall not be modified, except by a written agreement dated after the date of this Agreement and signed by both Parties.

4.7Assignment. This Agreement may not be assigned by either Party without the prior written consent of the other Party, provided that BC Hydro may require that if the Proponent’s registration under the RFP is assigned as permitted thereunder, this Agreement will be assigned concurrently by the Proponent to the assignee, without releasing the liabilities and obligations of the Proponent hereunder.

4.8Enurement. This Agreement is binding upon and enures to the benefit of the Parties and their respective successors and permitted assigns.

4.9Execution In Counterparts. This Agreement may be executed in counterparts, and each counterpart shall for all purposes be an original, and all such counterparts shall together constitute one and the same Agreement.

4.10Facsimile Signature. This Agreement may be executed and delivered by signatures transmitted by facsimile or other electronic means.

4.11Relationship. Entering into this Agreement shall in no way be construed to:

(a)preclude in any way either Party from pursuing any business opportunities;

(b)establish any relationship between BCHydro and the Proponent with respect to such business opportunities; or

(c)establish any other relationship between BCHydro and the Proponent with respect to the Project.

IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first above written.

BRITISH COLUMBIA HYDRO AND
POWER AUTHORITY

By:

Name:

Title:

______
Full legal name of Proponent

Signature

Name:

Title:

Revised June 30, 20101