Scottish and Southern

Power Distribution

Horshader Community Development Ltd FAO: Rona Mackay Taigh Cheann a' Locha Isle of Benbecula Western Isles HS7 5PJ
Our reference: Your reference:

Scottish Hydro Electric Power Distribution pic Inveralmond House 200 Dunkeld Road Perth

Date: | 11th March 2010 If telephoning or calling please ask for; Keiron Nicoll Tel. No: i 01738 4565ff 7JIZZZZ1 E-mail: keiron.nicoll@scottish-southern.co.uk

Dear Rona, PROPOSALS TO AMEND THE AGREEMENT TO PROVIDE A CONNECTION FOR EMBEDDED GENERATION AT: HORSHADER WIND GENERATING STATION, DALBEG, ISLE OF LEWIS On 18th August 2009 Scottish Hydro Electric Power Distribution pic ("SHEPD") and Horshader Community Development Ltd entered into an agreement to provide a connection (the "Agreement") for the above embedded generation development.

SHEPD has now completed a review of the distribution works required to connect this development. Accordingly, please find enclosed SHEPD's proposals to amend the Agreement for the above project. These proposals would have the effect of amending the Agreement to incorporate these detailed distribution works and require to be accepted by you to take effect. We seek your acceptance of these proposals within 30 days of the date hereof.

Should you wish to accept these proposals please sign and return both copies of the enclosed document to me at the above address by the due date. Following counter signature I shall return one copy for your records. Should we fail to receive your acceptance of the proposals by the due date then SHEPD, under the provisions of Clause 26 (b) shall refer the matter to Ofgem (the "Authority").

Please note that we are not currently in a position to provide updated information in relation to any required transmission works, if applicable. We continue to liaise closely with both National Grid Electricity Transmission pic (NGET) and the Authority and will contact you within 6 months, if not sooner, to progress matters in respect of these works. When transmission works are known, SHEPD reserve the right to review and amend the terms of the Agreement including, but not limited to the distribution works, costs and date(s).

SSE Power Distribution is a trading name of: SSE Power Distribution Limited Registered in Scotland No. 213459; Scottish Hydro Electric Transmission Limited Registered in Scotland No. 213461; Scottish Hydro Electric Power Distribution pic Registered in Scotland No. 213460; S+S Limited Registered in Scotland No. 214382 |all having their Registered Offices at Inveralmond House 200 Dunkeld Road Perth PH1 3AQ); and Southern Electric Power Distribution pic Registered in England and Wales No. 4094290 having its Registered Off ice at SSVastern Road Reading RG1 8BU which are members of the Scottish and Southern Energy Group www.scottish-southern.co.uk

If you have any questions please contact me on the telephone number or e-mail address detailed above.

Yours sincerely

Keiron Nicoll Major Connections

Enclosed: Amendment of Agreement to Provide an Electricity Connection (2 copies

HORSHADER 900KW WIND GENERATOR

AGREEMENT TO PROVIDE A CONNECTION AMENDMENT AGREEMENT Between SCOTTISH HYDRO ELECTRIC POWER DISTRIBUTION PLC,

and
HORSHADER COMMUNITY DEVELOPMENT LTD

Amendment of Agreement to Provide a Connection

TABLE OF CONTENTS

1 2 3 4

INTERPRETATION VARIATION STATUS GOVERNING LAW AND JURISDICTION

(0

THIS AMENDMENT AGREEMENT IS MADE BETWEEN:

(1)

SCOTTISH HYDRO ELECTRIC POWER DISTRIBUTION PLC, a company registered in Scotland with registered number SC213460 and having its registered office at Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ ("SHEPD"}; and Horshader Community Development Ltd. A company registered in Scotland (Registered No. SC277276), whose registered office is at 38 South Shawbost, Stornoway, Isle of Lewis, HS2 9BJ. (the "Customer") WHEREAS

(A)

SHEPD and the Customer are parties to an Agreement to Provide an Electricity Connection including the Cover Letter dated 18th August 2009 (the "Agreement"); The parties now wish to amend the terms and conditions of the Agreement as set out herein.

(B)

INTERPRETATION Save where the context otherwise requires or as expressly set out in this Amendment Agreement terms and expressions used in the Agreement shall be of the same meaning when used herein.

VARIATION The parties agree that with effect from the last date of execution hereof the terms of the Agreement shall be amended such that the terms and conditions of the Agreement shall be as set out in the schedule hereto.

STATUS This Amendment Agreement is supplemental to the Agreement and the benefit and /or burden of this Amendment Agreement shall only be capable of being assigned or otherwise transferred by SHEPD or the Customer along with the corresponding benefit and/or burden of the Agreement.

GOVERNING LAW AND JURISDICTION This Amendment Agreement is governed by and shall be construed in accordance with the laws of Scotland and the parties hereby submit to the exclusive jurisdiction of the Scottish Courts.

IN WITNESS WHEREOF this page ha been executed as follows:

SUBSCRIBED for and on behalf of SCOTTISH HYDRO ELECTRIC POWER DISTRIBUTION PLC

by
Director/Authorised Signatory

Full name

Date

SUBSCRIBED for and on behalf of Horshader Community Development Ltd

by

Director/Authorised Signatory

Full name

Date

SCHEDULE

This is the Schedule referred to in the HORSHADER GENERATING STATION Agreement to Provide a Connection Amendment Agreement between Scottish Hydro Electric Power Distribution Pic and Horshader Community Development Ltd dated 18th August 2009

Dear Rona,

OFFER TO PROVIDE A CONNECTION FOR EMBEDDED GENERATION AT: HORSHADER 900KW WIND GENERATING STATION, DALBEG, ISLE OF LEWIS

On behalf of Scottish Hydro Electric Power Distribution pic ("SHERD"), I am pleased to enclose SHEPD's Offer for Connection of the above project and wish to highlight the following Offer terms and conditions:

1.

This letter, together with the attached Offer for Connection, forms the terms and conditions under which SHEPD offers to provide an electricity connection (the "Connection") to the Customer for the generation project at Horshader Wind Generating Station, Dalbeg, Isle of Lewis, (the "Offer").

In the event that the Customer accepts this Offer, the terms and conditions of this Offer and the acceptance shall form the agreement between SHEPD and the Customer (the "Agreement") in respect of the provision of the Connection,

2.

Subject to the terms and conditions of this Offer, the estimated date for completion and energisation of the Connection is 31st December 2011. In accepting this Offer, the Customer is entering into binding contractual obligations to commence and make timely progress with the generation project and, where applicable, any Contestable Distribution Connection Works ("CDCW") to enable SHEPD to complete and energise the Connection by this date.

Accordingly, the Customer should note that from receipt of acceptance and any payment then due, SHEPD may immediately commence work and incur expenditure on the provision of the Connection. In the event that the Customer does not adequately progress the generation project and/or (where applicable) any CDCW to the timetable reasonably required to achieve the estimated connection date, SHEPD may exercise its rights to terminate the Agreement for the provision of the Connection. In such event, the Customer will be liable for all abortive costs incurred and/or committed by SHEPD and any other costs related to the same.

Prior to accepting this Offer, the Customer should give particular consideration to its ability to progress the project and (where applicable) any CDCW to meet the contractual obligations within this Offer. If there is significant doubt in this regard or the project is speculative at this point, the Customer has the option not to accept this Offer and make a re-application to SHEPD if/when an appropriate level of contractual commitment can reasonably be made to the connection works for this project.

IsSE Power Distribution i3lhe trading name of: SSE Power Distribution Limited Registered in Scotland No,SC213459; Scottish Hydro Electric Transmission Limited Registered in Scotland No.SC213461; Scottish Hydro Electric Power Distribution pic Registered in Scotland No,SC213460; S+S Limited Registered in Scotland No.SC214382; (all having their Registered Offices at Inveralmond House 200 Dunkeld Road Perth PH1 3AQ); and Southern Electric Power Distribution pic Registered in England & Wales No.4Q94290 having its Registered Office at 55 Vastern Road, Reading, Berkshire, RG1 8BU. These companies are members of the Scottish and Southern Energy Group, www. scottish-southern.co.uk

3.

The completion and energisation of the Connection may be conditional and dependent on the completion of Transmission Construction Works on the GB Transmission System. We continue to liaise closely with both National Grid Electricity Transmission pic (NGFT) and Ofgem and will contact you within 6 months, if not sooner/ to progress matters in respect of these works. When transmission works are known, SHEPD reserve the right to review and amend the terms of the Agreement including, but not limited to the distribution works, costs and date(s).

4.

If this Offer is dependent on Related Offers and/or Dependent Works (see, where applicable, Clauses 2.7(d), 3.5, 3.6 and 5.6.1). In the event that any Related Offers are not accepted, lapse, are withdrawn or are terminated, or any Dependent Works under a Related Offer are delayed, SHEPD reserves the right to amend or terminate this Offer or Agreement.

5.

If this Offer relates to embedded generation with output of 10MW or more, in addition to accepting this Offer the Customer must also enter Into contract(s) with NGET to enable the Connection to be provided and energised. The Customer may also be required to be a party to the GB Connection and Use of System Code (the "CUSC"). SHEPD recommend that, where the scale of the generation project requires, the Customer should contact NGET to establish which contractual arrangements they are required to enter into.

6.

The following documents, which relate to the terms of this Offer, are available to view or download from the SSE Power Distribution website:

(a)

Statement of Charging Methodology for Connection to Scottish Hydro Electric Power Distribution pic's Distribution System;

(b)

Statement of Charging Methodology for Use of Scottish Hydro Electric Power Distribution pic's Distribution System;

(c)

A model/template of the Agreement Relating to the Design, Supply, Installation, Commissioning and Adoption of Electricity Connection and Distribution Equipment (the "Construction Adoption Agreement").

The SSE Power Distribution website address is: www.ssepd.co.uk. The documents concerned are located under the "Technical Info" links.

Alternatively, copies of the documents may be obtained from SHEPD on request (charges may apply).

7.

This Offer does not make any provision for electrical works or equipment required for the Customer's installation, including protection arrangements.

It is the Customer's responsibility to assess their electrical requirements and ensure that the design and construction of the electrical works, equipment and installation, including protection arrangements, conform to all relevant standards. SHEPD circuit breakers or any other SHEPD equipment may not be relied upon as a means of providing protection or operation of the Customer's electrical works, equipment and installation either for routine or non-routine events.

2SSE Power Distribution is the trading name of: SSE Power Distribution Limited Registered in Scotland No.SC213459; Scottish Hydro Electric Transmission Limited Registered in Scotland No.SC213461; Scottish Hydro Electric Power Distribution pic Registered In Scotland No.SC213460; S+S Limited Registered In Scotland No.SC214382; (all having their Registered Offices al Inveralmond House 200 Dunkeld Road Perth PH1 3AQ); and Southern Electric Power Distribution pic Registered in England & Walas No.4Q94290 having its Regislered Office at 55 Vastern Road, Reading, Berkshire, RG1 BBU. These companies ere members of the Scottish and Southern Energy Group.

www.scottish-southern.co.uk

In the event that the Customer wishes to rely on the use of SHEPD equipment for any of these purposes, it shall only be with the express prior written agreement of SHEPD. SHEPD reserves the right to levy charges for any Customer use of its circuit breakers or equipment.

Upon receipt of a request from SHEPD, the Customer shall make available, within 5 working days, copies of risk assessments G'Risk Assessments") they have undertaken or have commissioned for their electrical works, equipment and installation, including their protection arrangements. SHEPD reserves the right to: (a) review and comment on the Risk Assessments; and (b) amend the terms of this or Agreement following such review.

8.

Upon receipt of a request from the Customer, SHEPD shall be pleased to provide a quotation for provision of high voltage switchgear, protection or other equipment required by the Customer.

This Offer is open for acceptance for 30 days from the date hereof and will lapse if not accepted within this period.

Should you wish to accept the Offer, please complete the Offer Acceptance Form and return one copy of the unconditionally accepted Offer to the above address, marked for my attention. If you have any enquiries with respect to this Offer, please contact me on the direct telephone number or e-mail address indicated above.

Yours sincerely

Keiron Nicoll Major Connections

Enclosed: Offer for Connection (2 copies)

3sSE Power Distribution is the trading name of; SSE Power Distribution Limited Registered in Scotland No.SC213459; Scottish Hydro Electric Transmission Limited Registered in Scotland No.SC213461; Scottish Hydro Electric Power Distribution pic Registered in Scotland No.SC213460; S+S Limited Registered in Scotland NO.SC214382; (all having their Registered Offices at Inveralmond House 200 Dunkeld Road Perth PH1 3AQ); end Southern Electric Power Distribution pic Registered in England 8. Wales No.4094290 having its Registered Office at 55 Vastern Road, Reading, Berkshire, RG1 8BU. These companies are members of the Scottish and Southern Energy Group. www. Scottish-southern, co.uk

4sSE Power Distribution Is the trading name of: SSE Power Distribution Limited Registered in Scotland No.SC213459; Scottish Hydro Electric Transmission Limited Registered In Scotland No.SC213461; Scottish Hydro Electric Power Distribution pic Regislered in Scotland No,SC213460; S+S Limited Registered In Scotland No,SC214382; (all having their Registered Offices at Inveralmond House 200 Dunkeld Road Perth PHI 3AQ); and Southern Electric Power Distribution pic Registered In England & Wales No.4094290 having its Registered Office at 55 Vastern Road, Reading, Berkshire, RG1 8BU. These companies are members of the Scottish and Southern Energy Group. www, scotti sh-so uth era co ,u k

Scottish and Southern

Power Distribution

OFFER TO PROVIDE A CONNECTION FOR EMBEDDED GENERATION

at
HORSHADER WIND GENERATING STATION, DALBEG, ISLE OF LEWIS

by
SCOTTISH HYDRO ELECTRIC POWER DISTRIBUTION PLC

For

HORSHADER COMMUNITY DEVELOPMENT LTD

5SSE Power Distribution is the trading name of: SSE Power Distribution Limited Registered in Scotland No.SC213459; Scottish Hydro Electric Transmission Limited Registered in Scotland No.SC213461; Scottish Hydro Electric Power Distribution pic Registered in Scotland No.SC213460; S+S Limited Registered in Scotland No.SC214382; (all having their Registered Offices at Inveralmond House 200 Dunkeld Road Perth PH1 3AQ); and Southern Electric Power Distribution pic Registered in England & Wales No.4094290 having its Registered Office at 55 Vastern Road, Reading, Berkshire, RG1 8BU. These companies are members of the Scottish and Southern Energy Group. www. scottish-southern.co.uk

AMENDMENT AGREEMENT 1 INTERPRETATION 2 VARIATION 3 STATUS 4 GOVERNING LAW AND JURISDICTION

1 1 1 2

CONNECTION OFFER 1. CONDITIONS PRECEDENT 1 2. TYPE AND VOLTAGE OF CONNECTION..... 1 3. CHARGES FOR THE PROVISION OF THE CONNECTION 2 4. PAYMENT TERMS FOR THE CONNECTION 4 5. BASIS OF TERMS 5 6. TIME TO PROVIDE THE CONNECTION 6 7. POINT OF CONNECTION AND EARTHING ARRANGEMENTS 7 8. WAYLEAVES 7 9. OPERATION, PROTECTION AND CONTROL 7 10. METERING 8 11. AGREEMENTS & TECHNICAL CONSIDERATIONS 8 12. FREQUENCY OF AND FLUCTUATIONS CAUSED BY STARTING 10 13. CABLE TRACK 10 14. SWITCHGEAR, PROTECTION AND METERING ACCOMMODATION 10 15. PLANT, CABLE AND/OR EQUIPMENT DAMAGE 11 16. HEALTHS SAFETY 11 17. DISPUTES 12 18. LIABILITIES AND INDEMNITIES 12 19. FORCE MAJEURE 13 20. PERIOD FOR ACCEPTANCE 13 21. TERMINATION 13 22. NOTICE FOR WITHDRAWAL 15 23. ASSIGNMENT 15 24. GOVERNING LAW 15 25. SECURITY AND UNDERWRITING 15 26. VARIATIONS 16 27. WAIVER 17 CUSTOMER ACCEPTANCE FORM 18 APPENDIX 1: DISTRIBUTION CONNECTION WORKS 19 APPENDIX 2A: ALL CONNECTION WORKS PAYMENT SCHEDULE 20 APPENDIX 2B: NON-CONTESTABLE CONNECTION WORKS ONLY PAYMENT SCHEDULE 21 APPENDIX 3: TRANSMISSION CONSTRUCTION WORKS 22 1. THE TRANSMISSION CONSTRUCTION WORKS 23 2. TRANSMISSION CONNECTION WORKS COMPLETION DATE 24 3. SCOPE OF TRANSMISSION CONNECTION WORKS 25 4. PAYMENT SCHEDULE OF CHARGES DUE FOR TRANSMISSION CONNECTION WORKS:.... 26 5. TRANSMISSION INFRASTRUCTURE WORKS 27 6. NGET UNDERWRITING 28 7. ADVANCE SERVICES WORK(S) 29 ; APPENDIX 4: WORKING IN PROXIMITY TO OVERHEAD LINES & UNDERGROUND CABLES. 30 APPENDIX 5: GLOSSARY OF TERMS 31

Page 1

Scottish and Southern

Power Distribution

OFFER TO PROVIDE A CONNECTION FOR EMBEDDED GENERATION AT: HORSHADER WIND GENERATING STATION, DALBEG, ISLE OF LEWIS Date of Offer: 11th March 2010
Ref:

For: HORSHADER COMMUNITY DEVELOPMENT LTD On behalf of Scottish Hydro Electric Power Distribution pic, a company registered in Scotland (Registered No. SC213460), whose registered office is at Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ, ("SHEPD"), I am pleased to Offer to provide Horshader Community Development Ltd. A company registered in Scotland (Registered No. SC277276), whose registered office is at 38 South Shawbost, Stornoway, Isle of Lewis, HS2 9BJ (the "Customer"), for an electricity connection as described in condition 2 below (the "Connection") to their proposed site at Horshader Wind Generating Station, Dalbeg, Isle of Lewis, HS2 9AE for the export and/or import of electricity subject to the following terms and conditions. 1. 1.1 CONDITIONS PRECEDENT Where the Customer does not hold an Approved Credit Rating (as defined in Appendix 5: Glossary of Terms), SHEPD shall not be obliged to commence any work in respect of the provision of the Connection until the Customer has provided security to SHEPD in accordance with the provisions of Clause 25 ("Security"). Where applicable, in the event the Customer wishes to construct Contestable Distribution Connection Works ("CDCW") (such Works, if any, being detailed in Appendix 1) SHEPD shall not be obliged to commence or continue any work in respect of the provision of the Connection until the Customer and their Independent Connection Provider ("ICP") has entered into a Construction Adoption Agreement in respect of the CDCW. The Customer and their ICP shall enter into the Construction Adoption Agreement by 30th September 2010 or such other date as may be stipulated by SHEPD. In the event that the Construction Adoption Agreement is not executed and provided to SHEPD in the required timescale, SHEPD reserves the right to: (a) (b) refuse to commence or continue work on the provision of the Connection; and/or, to terminate this Agreement in which event the provisions of Clause 21.7 shall apply.

1.2

In the event that SHEPD does not exercise its right to terminate this Agreement pursuant to Clause 1.2 (b) but exercises its rights under Clause 1.2 (a) then, without prejudice to the right of SHEPD to terminate at any time pursuant to Clause 1.2(a), SHEPD shall be entitled to amend this Agreement (including, without limitation, any of its Appendices). 2. 2.1 TYPE AND VOLTAGE OF CONNECTION Subject to the terms and provisions of this Offer, the Connection will be provided at the wind farm with the following characteristics: (a) (b) (c) (d) (e) (f) Connection voltage: 11,000 Volts, 3 phase,3 wire Frequency: 50 Hertz Maximum Export (generation) Capacity: 900 kilowatts (kW) Maximum Import (demand) Capacity: 20 .kilowatts (kW) Power factor range: 0.95 Lead - 0.95 Lag at the point of connection. See also clause 9.2.
Page 2

The Customer shall maintain the stated power factor range for all levels of generation output in accordance with the requirements of, where applicable, the Grid Code and the Distribution Code.

2.2

Subject to the terms and provisions of this Offer, a second connection will be provided at the wind farm for the purposes of auxiliary supply with the following characteristics: (a) (b) (c) (d) Connection voltage: 400/230 Volts, 3 phase, 4 wire Frequency: 50 Hertz Maximum Import (demand) Capacity: 50 kilowatts (kW)

2.3 2.4

Energisation shall be conditional on the Customer ensuring their generation output is balanced across all three phases at all times. All works at a distribution voltage necessary for the Connection (the "Distribution Connection Works") which are within SHEPD substations or on existing plant, circuits and equipment will be carried out by SHEPD and are referred to as Non-Contestable Distribution Connection Works. The Non-Contestable Distribution Connection Works and the CDCW in this Offer are detailed within Appendix 1. Transmission Construction Works on the GB Transmission System are required to enable the provision of the Connection. The scope of the Transmission Construction Works are indicated in Appendix 3. All such Works are subject to the provisions of this Offer which allow for their amendment. The provision of the Connection is based on: (a) (b) (c) (i) (ii) (d) SHEPD completing the Non-Contestable Distribution Connection Works and; SHEPD or the Customer (as may be applicable) completing the CDCW; Where applicable, NGET unconditionally and unequivocally confirming in writing to SHEPD that: all Transmission Construction Works (if applicable) have been completed to the extent necessary to enable energisation of the Connection; and, the conditions set out in Paragraphs 6.5.1 and 6.5.2 of NGET's Connection and Use of System Code ("CUSC") have been satisfied. Not used

2.5 2.6

2.7

3. 3.1 3.2

CHARGES FOR THE PROVISION OF THE CONNECTION The Customer shall inform SHEPD, upon acceptance, which of the Distribution Connection Works Connection Options detailed in Clauses 3.8 and 3.9 will apply. If the Customer does not inform SHEPD in writing otherwise Clause 3.8 shall be deemed to be the preferred Distribution Connection Works Connection Option and charges will be made and works carried out for that Distribution Connection Works Connection Option. Where appropriate and in accordance with the "Statement of Charging Methodology for Connection to Scottish Hydro Electric Power Distribution pic's Distribution System", as amended from time to time, the Connection Options detailed in Clauses 3.8 and 3.9 may include charges for the ongoing operation and maintenance of SHEPD connection equipment and plant for the term of the enduring connection agreement.

3.3

PageS

3.4

Use of System Charges 3.4.1 Generation Distribution Use of System charges ("GDUoS"). The Customer's liability for GDUoS charges shall be based on the following criteria: (a) A Customer who applied for Connection to SHEPD up to 31 December 2004 shall not be liable for GDUoS charges until 1st April 2010 unless SHEPD's Charging Methodology is revised, changed and approved by the Authority. A Customer who applied for Connection to SHEPD from 1 January 2005 shall be liable for GDUoS charges from the Connection Start Date (as defined within Appendix 5).

(b)

The value of GDUoS charges are indicated in the "Statement of Charges for Use of Scottish Hydro Electric Power Distribution pic's Distribution System", as amended from time to time. 3.4.2 At the date of this Offer, NGET Use of System Charges ("TNUoS Charges") are not chargeable to generators that are embedded on the Distribution network ("Embedded Generators"). 3.4.3 SHEPD reserves the right to impose a levy on the Customer and the Customer shall be liable to pay any applicable charges for Use of System, including (but not limited to) TNUoS and GDUoS charges on Embedded Generators at any time in the event that the NGET and/or SHEPD Charging Methodology is/are amended and approved by the Authority. 3.5 The provision of the Connection including, but not limited to, the charges for the Connection, is conditional on all other Customers who have applied for a connection to a part or parts of the system accepting their Offers for Connection ("Related Offers"). In the event that any Related Offers are not accepted, lapse, are withdrawn or are terminated or the works thereunder are delayed, SHEPD reserves the right to amend or terminate this Offer or Agreement and any agreement that SHEPD has entered into with NGET in respect of the Connection to which this Offer relates. In the event that the Customer does not accept, allows the lapse of or rejects their Offer for Connection and subsequently submits a further application within twelve months of the original application, SHEPD shall refer such further application to the Gas and Electricity Markets Authority (the "Authority") for their consideration, if in the view of SHEPD, the further application does not represent a significant change from the original application. Connection Option 1 (All Distribution Connection Works) 3.8.1 The Customer will be required to pay the sum of 577,178 (five hundred and seventy seven thousand one hundred and seventy eight Pounds Sterling) to SHEPD in respect of the provision, erection, laying and installation of the necessary SHEPD plant and equipment required for the provision of the Connection. SHEPD will carry out ALL the Distribution Connection Works required, subject to the Customer providing any other works and access arrangements, as specified in Appendix 1. 3.8.2 The value above includes charges of 76,960 (Seventy Six Thousand, Nine Hundred and Sixty Pounds Sterling) (exclusive of VAT) for the ongoing operation and maintenance of SHEPD connection equipment and plant for the duration of the EGCA (the maximum period being 20 years from energisation).

3.6

3.7

3.8

3.9

Connection Option 2 (The Non-Contestable Distribution Connection Works only) 3.9.1 The Customer will be required to pay the sum of 131,895 (one hundred and thirty one thousand eight hundred and ninety five Pounds Sterling) to SHEPD in respect of the Noncontestable Distribution Connection Works required for the provision of the Connection. The Customer will be required to provide the CDCW together with any other works and access arrangements all as specified in Appendix 1. 3.9.2 The value above includes charges of 76,960 (Seventy Six Thousand, Nine Hundred and Sixty Pounds Sterling) (exclusive of VAT) for the ongoing operation and maintenance of SHEPD connection equipment and plant for the duration of the EGCA (the maximum period being 20 years from energisation).

Page 4

3.10 Transmission Construction Works In its role as GB Transmission System Operator, NGET may impose certain conditions and/or provisions including, but not limited to charges and/or underwriting requirements, for Transmission Construction Works and also impose restrictions or modifications on the Connection of the Customer's generation facility. SHEPD reserves the right to vary: (a) (b) (c) the scope of the Connection and/or any restrictions or modifications on the Connection; the scope of the Distribution Connection Works; and, any other provisions of this Offer including, without limitation, the Connection date, the charges for the Connection and security requirements of the Customer,

to take account of any costs, restrictions, conditions, provisions or modifications notified by NGET relating to the Connection. 3.11 SHEPD shall be entitled to recover from the Customer and the Customer agrees to pay to SHEPD, in addition to any charges payable by the Customer to SHEPD in relation to the Distribution Connection Works, the costs detailed in Appendix 3 in respect of the Transmission Construction Works including, without limitation, the Customer's liability for NGET underwriting in the event of termination of this Agreement by either the Customer or SHEPD. The initial estimate of NGET underwriting is indicated in Appendix 3, Item 6. 3.12 Not used

4.
4.1 4.2

PAYMENT TERMS FOR THE CONNECTION

All sums stated within this Offer or Agreement are exclusive of VAT, which will be applied at the applicable rate. The Customer, on returning their acceptance of this Offer, must clearly state which Payment Option they have chosen. Where staged payments apply, SHEPD will send the Customer an invoice for each stage of the appropriate Payment Schedule. Full payment of all invoiced sums must be received by SHEPD within 30 days of the issue date of any invoice. If the Customer fails to make payment of any sums due to SHEPD under the terms of this Agreement, SHEPD reserves the right to: (a) (b) refuse to commence or to continue work on the provision of the Connection until payment is received; and/or to charge interest at 3% above the base lending rate of The Royal Bank of Scotland pic calculated on a daily basis on the outstanding payment(s) over the period they remain unpaid; and/or to terminate this Agreement in which the provisions of Clause 21.7 shall apply.

4.3

(c)

In the event that SHEPD does not exercise its right to terminate this Agreement pursuant to Clause 4.3 (c) but exercises its rights under Clause 4.3 (a) and/or (b) then, without prejudice to the right of SHEPD to terminate at any time pursuant to Clause 4.3 (c), SHEPD shall be entitled to amend this Agreement (including, without limitation, any of its Appendices). 4.4 4.5 SHEPD will require full payment of the charges for the Connection (plus any interest due, where applicable) prior to energisation of the Connection. PAYMENT TERMS FOR THE DISTRIBUTION CONNECTION WORKS

4.5.1 Payment Option 1 for Connection Option 1 (Full Payment of All Distribution Connection Works) The Customer will be required to make full payment of 577,178 (five hundred and seventy seven thousand one hundred and seventy eight Pounds Sterling) to SHEPD in respect of the charges for the Distribution Connection Works on acceptance of this Offer. An invoice for this amount, less any appropriate credits in respect of sums paid to date, will be issued on receipt of acceptance. For the avoidance of doubt, SHEPD shall not commence work on the provision of the Connection until this payment is received.
Page5

4.5.2 Payment Option 2 for Connection Option 1 (Staged Payments of All Distribution Connection Works) 4.5.2.1 The Customer will be required to make an initial payment of 144,295 (one hundred and forty four thousand two hundred and ninety five Pounds Sterling) to SHEPD in respect of part payment of the charges for the Distribution Connection Works on acceptance of this Offer. An invoice for this amount will be issued on receipt of acceptance. For the avoidance of doubt, SHEPD shall not commence work on the Connection until this payment is received. The remaining balance of 432,884 (four hundred and thirty two thousand eight hundred and eighty four Pounds Sterling) of the charges in respect of the Distribution Connection Works will be paid to SHEPD in accordance with the Payment Schedule, which will include credit(s) due for sums paid to date, set out in Appendix 2A of this Offer.

4.5.2.2

4.5.3 Payment Option 1 for Connection Option 2 (Full Payment of the Non-Contestable Distribution Connection Works only) 4.5.3.1 The Customer will be required to make full payment of 131,895 (one hundred and thirty one thousand eight hundred and ninety five Pounds Sterling) to SHEPD in respect of the charges for the Non-Contestable Distribution Connection Works on acceptance of this Offer. An invoice for this amount, less any appropriate credits in respect of sums paid to date, will be issued on receipt of acceptance. For the avoidance of doubt, SHEPD shall not commence work on the provision of the Connection until this payment is received.

4.5.4 Payment Option 2 for Connection Option 2 (Staged Payments of the Non-Contestable Distribution Connection Works only) 4.5.4.1 The Customer will be required to make an initial payment of 32,973 (thirty two thousand nine hundred and seventy three Pounds Sterling) to SHEPD in respect of part payment of the charges for the Distribution Connection Works on acceptance of this Offer. An invoice for this amount will be issued on receipt of acceptance. For the avoidance of doubt, SHEPD shall not commence work on the Connection until this payment is received. 4.5.4.2 The remaining balance of 98,922 (ninety eight thousand nine hundred and twenty two Pounds Sterling) of the charges in respect of the Distribution Connection Works will be paid to SHEPD in accordance with the Payment Schedule, which will include credit(s) due for sums paid to date, set out in Appendix 2A of this Offer.

4.6

PAYMENT TERMS FOR TRANSMISSION CONNECTION WORKS

4.6.1 Payment Option 1 - Full Payment of Transmission Connection Works. 4.6.1.1 To be advised.

4.6.2 Payment Option 2 - Staged Payments of the Transmission Connection Works only 4.6.2.1 4.6.2.2 To be advised. To be advised.

5. 5.1

BASIS OF TERMS The terms of this Offer are based on application information submitted to SHEPD by the Customer. Should any such information be later shown to be incorrect and have a material bearing on the terms of this Offer or Agreement, then SHEPD reserves the right to revise any affected terms including, but not limited to, the charges for the Connection, so as to put SHEPD back in the same position as it would have been had the correct information been known prior to the date hereof.

Page 6

5.2

Upon acceptance of this Offer (subject to the completion of the Connection being dependent upon Transmission Construction Works which may delay commencement of the Distribution Connection Works), SHEPD reserves the right to and the Customer shall commence forthwith their respective elements of the Distribution Connection Works. The parties hereby agree to meet regularly and provide each other with progress updates on their respective elements of the Connection works and the Customer shall also provide progress reports relating to the generation facility and electrical works. A programme of progress meeting dates shall be agreed between the parties respective Project Managers as soon as reasonably practicable after acceptance of the Offer by the Customer. The Electricity (Connection Charges) (Amendment) Regulations 2002 5.3.1 The Customer may qualify to receive a future rebate (the "CCR Rebate) in respect of a proportion of the charges for the initial provision of distribution electrical lines and distribution electric plant required to provide the Connection from a person (the "Subsequent Customer") requiring a subsequent connection and who shall use those lines and plant within 5 years of their initial provision. 5.3.2 A Customer's qualification to receive a CCR Rebate and the value of any CCR Rebate shall be subject to the terms of the Electricity (Connection Charges) (Amendment) Regulations 2002 (the "CCR 2002") (as amended from time to time). For the avoidance of doubt, no CCR Rebate shall be due to the Customer in the event that the CCR 2002 are repealed or superseded.

5.3

5.4

Rules of Cost Apportionment ("RCA"): 5.4.1 Not used.

5.5

Metals Fluctuation 5.5.1 In the event that movement in the price of metals to be used in cable and/or overhead line works (as applicable) results in either decreased or increased charges for the Connection (the "Amended Price") the Customer agrees and hereby undertakes to pay the Amended Price. 5.5.2 SHEPD shall amend the relevant Payment Schedule, where applicable, to take account of the Amended Price and the Customer agrees and hereby undertakes to make payment in accordance therewith.

5.6 5.6.1

Other Connection Dependencies The provision of the Connection is based on: 5.6.1.1 The provision and installation of Reactive Power Compensation Equipment ("RPCE") which shall require to be ordered from a specific manufacturer not less than 12 months prior to the commencement of the Connection works. The RPCE is described in Appendix 1; Distribution Connection Works. Accordingly, the cost of Connection indicated in Clause 3.8 and the Connection's Completion Date indicated in Clause 6.1 is dependent on the availability of the RPCE. In the event that SHEPD requires to procure the RPCE under the Offer's Connection Option 1: All Distribution Connection Works and: (i) (ii) (iii) (iv) the RPCE (or an equivalent RPCE) is not available to SHEPD at the required time; or, the cost of said RPCE (or an equivalent RPCE) has increased; or, HM Customs and Excise re-classify the Commodity Code of the RPCE and/or rate of import duty payable; or, there is currency fluctuation or more than plus or minus 2.5 % in the US $/ Pound Sterling exchange rate, such exchange rate being based on the exchange rate applicable at date of issue of this Offer ($1.64/ 1), or, an equivalent currency fluctuation if the RPCE is procured from a non US supplier.

Page?

then SHEPD reserve the right to amend the charges indicated in Clause 3.8 and estimated completion date indicated in Clause 6.1 to take account of costs increases or delays to the programme of Connection Works. 5.7 The Customer in accepting this Offer, or the person acting on their behalf, shall note that S+S Limited may act as the agent of SHEPD with respect to the Distribution Connection Works. TIME TO PROVIDE THE CONNECTION SHEPD estimate that subject to: (a) (b) the provisions and conditions of this Offer; and all necessary wayleaves and consents for the Distribution Connection Works being obtained in sufficient time to allow SHEPD to progress the Connection by the estimated completion date below, and; all necessary site works being at the appropriate stage including (where applicable) the Customer having completed the CDCW or any parts thereof and any other works and all access arrangements as may be specified in Appendix 1 by a dates or dates to be agreed by the Parties (where the parties fail to agree such date(s), the date(s) shall be as stipulated by SHEPD);

6. 6.1

(c)

it can update the Connection by 31 st December 2011. Please note that no plant or equipment will be ordered by SHEPD or works will commence until SHEPD receive unconditional acceptance of this Offer and the initial payment due under the selected Payment Option. SHEPD reserves the right to amend the estimated completion date above at its absolute discretion in the event that a delay occurs in relation to the matters referred to in sub-clauses (b) and (c) above. 7 POINT OF CONNECTION AND EARTHING ARRANGEMENTS (a) Service Details: The point of connection for the 11 kV supply will be the wind farm side terminals of SHEPD's 11 kV metering circuit breaker unit at the wind farm site. The point of connection for the 400/230 volt auxiliary supply will be SHEPD's service cable termination. (b) Earthing Details The Customer shall be responsible for providing the necessary earthing arrangements in line with Engineering Recommendation G59/1 "Recommendations for Embedded Generation" and the latest IEE Regulations. All generating station and substation earthing must comply with statutory requirements and national standards. In the case of the 230 volt auxiliary supply, SHEPD will confirm with the Customer the type of earthing connection on acceptance of this Offer and the type of earthing connection confirmed by SHEPD will be accepted by the Customer. (c) Other Considerations The Customer must comply with Engineering Recommendations 05/4 "Limits for Harmonics and Engineering Recommendation P28 "Planning Limits for Voltage Fluctuation". The Customer must design and install a private high voltage network incorporating suitable provisions to protect and operate their own installation.

Page 8

8. 8.1

WAYLEAVES The provision of the Connection and meeting the estimated completion date(s) will be subject to the Customer granting or securing for SHEPD and/or {if applicable) Scottish Hydro Electric Transmission Limited ("SHETL") in respect of the Transmission Construction Works, free of charge, any wayleaves or other necessary facilities for all electric lines and works required for the purposes of the Connection along a route approved by SHEPD and/or SHETL on, over or through the property owned or leased by the Customer or under the control of the Customer. The Customer shall give advice and assistance to SHEPD, NGET and/or SHETL to the extent reasonably required by the aforesaid for the purposes of obtaining consents, wayleaves or other necessary facilities for all electric lines and works on third party land in respect of the Transmission Construction Works required for the Connection. If any trees on such ground referred to in Clause 8.1 require to be pruned or removed, in order to prevent interference with the construction, maintenance or working of the electric lines, works or other plant, such trees will, when required by SHEPD and/or SHETL, be pruned or removed by the Customer free of charge to SHEPD. The provision of the Connection meeting the completion date(s) will also be subject to SHEPD and/or SHETL securing any wayleaves or other necessary consents including statutory consents or approvals for all electrical lines and works required for the purposes of the Connection along the route approved by SHEPD and/or SHETL on, over or through property not owned, leased by or under the control of the Customer and the obtaining of all necessary statutory consents and regulatory approval. SHEPD reserves the right to amend the terms and conditions of the Agreement in particular as to programme and charges set out in this Offer (but that only to the extent that such non-obtained or delayed wayleaves, statutory consents and other approvals have a material bearing on such programme or charges) in the event SHEPD and/or SHETL is unable (having used reasonable endeavours) to obtain the necessary wayleaves, statutory consents and other approvals, all of which (and any conditions attached thereto) are in terms acceptable to SHEPD and/or SHETL, for all electric lines and works necessary for the Connection. OPERATION, PROTECTION AND CONTROL The generation owned and operated by the Customer will be subject to the terms of the Grid Code and the Distribution Code. The generator output at 11 kV at the metering circuit breaker must not exceed 1.012 per unit (e.g. 11.132 kV). Provision must be made by the Customer to ensure that the generating station can be operated with a fixed programmable power factor that fully complies with SHEPD's operating requirements. SHEPD will provide a local emergency trip facility for the 11kV metering circuit breaker. The 33 kV & 11 kV circuits which will serve the Connection only provide single circuit security. By accepting this Offer based on this configuration, the Customer acknowledges and accepts that if a fault occurs anywhere on these circuits, the Connection will not be available for the full equipment repair time. The Customer acknowledges that under the terms of the Grid Code and the Distribution Code, the Customer's plant may also be subject to operational constraints related to planned or unplanned works on SHEPD's Distribution System and/or the GB Transmission System which result in a depletion of distribution network capacity. SHEPD will use its reasonable endeavours to reduce the impact, but the Customer acknowledges that some constraint is inevitable. SHEPD will not be liable for any loss incurred from generation disconnection as a result of a fault or maintenance on any part of the SHEPD network or any fault or maintenance on the GB Transmission System. The Customer will provide protection and control to comply with Engineering Recommendations G59/1 and G75/1 at the generating station. SHEPD will witness all protection and control testing, including the Customer's generation protection schemes, to ensure compliance with Engineering Recommendations G59/1 and G75/1.

8.2

8.3

8.4

9. 9.1 9.2

9.3 9.4

9.5

9.6

9.7 9.8

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9.9

SHEPD will coordinate protection relay settings with the Customer to ensure discrimination between the respective protection equipment.

9.10 DG Network Unavailability Rebate 9.10.1 Not used. 10. METERING

10.1 The charges for the Connection do not include the cost of the required metering, modem or communications link required for the Connection. The Customer is responsible for meeting all costs associated with the installation of metering. 10.2 The Customer shall be required to enter into a Meter Operator Agreement with a Meter Operator and advise SHEPD which Meter Operator has been appointed prior to energisation of the Connection. 10.3 It may be necessary to have an additional meter installed to record import and if so required the Customer shall be responsible for meeting ail costs associated with the installation of such import metering. 10.4 Metering panels and multicore wiring to connect to the metering voltage and current transformers shall be supplied and installed by SHEPD or the Customer, depending on the Customer's form of acceptance of this Offer. The metering panels shall be located by mutual agreement between the Customer and SHEPD and shall be suitable for the requirements of the appointed Meter Operator. The Meter Operator shall install import/export metering compliant with and installed in accordance with the appropriate Code of Practice. The metering shall be programmable, able to record data at half-hourly intervals, able to be read remotely and capable of recording kW and kVArh for both import and export. 10.5 A modem and communications link for the metering must be provided by the Customer (either by way of a dedicated BT exchange line or an alternative PAKNET radio communication service). The Customer shall be responsible for meeting all costs associated with the installation and rental of such communication links. 10.6 The customer will be responsible for supplying, installing and maintaining a suitable telecommunications link and modem for the Power Quality Data Recorder at no cost to SHEPD. 11. 11.1 AGREEMENTS & TECHNICAL CONSIDERATIONS Prior to the final connection and/or commissioning and/or energisation of the generation facility, the Customer shall be required to enter into or become a party to agreements or Codes which relate specifically to the proposed Connection (and the Customer providing documentary evidence to SHEPD of same or where a party to the CUSC, NGET confirming to SHEPD) including inter alia: (a) (b) (c) An Embedded Generation Connection Agreement ("EGCA") with SHEPD in respect of the Connection; and, An Operating/Site Responsibility Agreement which outlines the operating responsibilities with regard to the Connection; and, In the event the Customer wishes to construct CDCW (where applicable), a Construction Adoption Agreement; SHEPD shall make available to the Customer SHEPD's specifications for CDCW, The Customer shall ensure that any CDCW shall satisfy SHEPD's adoption requirements. The Customer and ICP will be required to enter into the Construction Adoption Agreement by 301h September 2010 or such other date as may be stipulated by SHEPD; (d) Where the Customer will trade the electricity generated at the facility through a Licensed Supplier in SVA, (aa) (bb) a supply agreement with an Authorised Electricity Operator who is a party to the Distribution Connection and Use of System Agreement (the "DCUSA"). a power purchase agreement with an Authorised Electricity Operator who is party to the DCUSA, a party to the Balancing and Settlement Code and a party to the CUSC;

Page 10

(cc) (e) (aa) (bb) (cc) (f)

the CUSC and any supplemental agreement required pursuant to the CUSC. the CUSC and any supplemental agreement required pursuant to the CUSC; the Balancing and Settlement Code a supply agreement with an Authorised Electricity Operator who is a party to the DCUSA; or

Where the Customer will trade independently the electricity generated at the facility in CVA,

Where the Customer will trade the electricity generated by the facility through a consolidator in CVA, (aa) (bb) (cc) where applicable, the CUSC and any supplemental agreement required pursuant to the CUSC; an agreement with a consolidator who is a party to the BSC; and a supply agreement with an Authorised Electricity Operator who is a party to the DCUSA.

(g)

Any further agreements, documentation or arrangements in relation to the Connection which NGET requires or requests the Customer to become a party to or enter into, together with, but not limited to NGET; All necessary agreements must be completed prior to the final connection and/or commissioning of the facility, but nothing herein contained nor any drafts submitted in connection with the above agreements shall be binding on either party as to the final form and content of such agreement until each such agreement is finally agreed and executed by the parties.

11.2

It is a condition of this Offer that the Customer's installation must be installed, operated and maintained in accordance with the technical engineering requirements of (as applicable) the Grid Code and the Distribution Code and the Customer shall also comply with, inter alia, the following Engineering Recommendations (a) Engineering Recommendation G59/1 ("RECOMMENDATIONS FOR THE CONNECTION OF EMBEDDED GENERATING PLANT TO REGIONAL ELECTRICITY COMPANIES DISTRIBUTION SYSTEM") Engineering Recommendation G75/1 ("RECOMMENDATIONS FOR THE CONNECTION OF EMBEDDED GENERATING PLANT TO PUBLIC DISTRIBUTION SYSTEMS ABOVE 20 kV OR WITH OUTPUTS OVER 5 MW"). Engineering Recommendation G5/4 ("PLANNING LEVELS FOR HARMONIC VOLTAGE DISTORTION AND THE CONNECTION OF NON-LINEAR EQUIPMENT TO TRANSMISSION SYSTEMS AND DISTRIBUTION NETWORKS IN THE UNITED KINGDOM") Engineering Recommendation P28 (PLANNING LIMITS FOR VOLTAGE FLUCTUATIONS CAUSED BY INDUSTRIAL, COMMERCIAL AND DOMESTIC EQUIPMENT IN THE UK)

(b)

(c)

(d)

all as published by the Energy Networks Association, Dean Bradley House, 52 Horseferry Road, London, SW1P 2AF (or its successor) and in force from time to time. 11.3 SHEPD will not energise the Connection until: (a) (b) It is satisfied that the applicable requirements of Clauses 11.1 and 11,2 have been met; Where applicable, the Customer has completed the Use of System Application (Generators) and has entered into a Bilateral Agreement in the appropriate form with NGET and, where the Customer is not already a party to the CUSC, has entered into an Accession Agreement with NGET; or NGET has unconditionally and unequivocally confirmed in writing to the Customer that it does not require the Customer to enter into any such agreements; and the Customer has provided documentary evidence of same to SHEPD; and,

(c)

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(d)

NGET has unconditionally and unequivocally confirmed in writing to SHEPD that (where applicable) all Transmission Construction Works have been completed to the extent necessary to enable energisation of the Connection.

12.

FREQUENCY OF AND FLUCTUATIONS CAUSED BY STARTING

12.1 The voltage depressions experienced by the supply network due to startup loads must not exceed the limits set out in Engineering Recommendation P28 "PLANNING LIMITS FOR VOLTAGE FLUCTUATIONS CAUSED BY INDUSTRIAL, COMMERCIAL AND DOMESTIC EQUIPMENT IN THE UK" and the Customer must establish procedures to ensure adherence to any agreed operational parameters. 12.2 The maximum permissible voltage fluctuation at the Point of Common Coupling (PoCC) is 1% for frequent starting events and 3% for infrequent starting events. Frequent starting is defined as more than one event in a two hour period. This is based on SHEPD guidelines derived from Engineering Recommendation P28. Should a more detailed application of P28 be required, then the Customer shall demonstrate compliance with this standard to SHEPD. 12.3 The PoCC is taken to be the 11 kV metering switchgear at Horshader Wind Generating Station. The minimum fault level at the PoCC is calculated to be 6 MVA which limits the mag. inrush current to 4 arnps at 11 kV for frequent starting events, and 11 amps at 11 kV for infrequent starting events. 13. CABLE TRACK

13.1 The Cost for the Connection is dependent on any cable track works at the premises (as may be further defined within Appendix 1), and as may be further required by NGET and/or SHETL in respect of the Transmission Construction Works, being carried out by the Customer to the reasonable satisfaction of SHEPD's Engineer and at no cost to SHEPD. In the event the Customer fails to carry out the cable track works or provide the necessary earthing arrangements or carry out any other works which affect the provision of the Connection and such failure results in SHEPD being unable to complete or delays the completion of the Connection and/or results in an increase in costs to SHEPD, SHEPD shall not be obliged to continue with any works under the Agreement until the Customer has remedied such failure and/or agreed to pay any necessary and reasonable additional costs incurred by SHEPD as a result of such failure. 14. SWITCHGEAR, PROTECTION AND METERING ACCOMMODATION

14.1 The Customer shall provide a level, substation site and all associated civil works to accommodate the RPCE, SHEPD's 11kV switchgear, GRP enclosure and associated equipment at Horshader Wind Generating Station at no cost to SHEPD. Alternatively, the Customer may construct a suitable switchroom building to accommodate SHEPD's plant and equipment to comply with SHEPD's requirements and at no cost to SHEPD. 14.2 The Customer shall provide to SHEPD an unrestricted right of vehicular and pedestrian access to and egress from the switchroom at no cost to SHEPD. 14.3 A wall space, measuring 1000mm deep x 1500mm high x 1000mm wide, within the Customer's protection and metering enclosure shall be provided to SHEPD by the Customer, at no cost to SHEPD, in a position specified by SHEPD for the positioning of SHEPD's metering and protection equipment and as may be further specified in Appendix 1. 14.4 Not Used.

14.5 Not used.

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15.

PLANT, CABLE AND/OR EQUIPMENT DAMAGE

15.1 SHEPD will undertake the repair of any of its own cable, plant and/or equipment damaged on the site of the Connection works by the Customer or anyone for whom the Customer is responsible in law provided that the Customer will be liable for the reasonable cost of the repair which will be charged to the Customer at the then current rates for time and materials. 15.2 In addition to obligations arising under Clause 15.1 where NGET are required to undertake Transmission Construction Works in relation to the Connection, SHEPD shall procure the repair of any of such Transmission Construction Works including any cable, plant and/or equipment damaged on the site of the Connection Works by the Customer or anyone for whom the Customer is responsible in law provided that the Customer will be liable for the reasonable cost of the repair.. HEALTH & SAFETY

16.

16.1 The Customer shall grant to SHEPD and as may be further required by NGET and/or SHETL (as applicable) in respect of any Transmission Construction Works their respective employees and agents all necessary rights of access to the Customer's premises or site necessary to enable SHEPD to exercise its rights and fulfil its obligations under this Offer provided that any of SHEPD's, NGET's and/or SHETL's employees, agents or contractors and sub-contractors or others for whom they are responsible in law to whom access is given pursuant to this Clause: (a) shall comply with all reasonable directions given by the Customer and its respective appropriately authorised employees and agents in relation to general safety and security rules and procedures in force at the Customer's premises from time to time and which shall have been brought to the attention of SHEPD, NGET and/or SHETL; and shall remain the responsibility of SHEPD, NGET and/or SHETL who shall direct them to act in a proper, safe and workmanlike manner and at all times having regard to any requisite health and safety rules regulations and industry relevant guidelines in respect of the Connection Works.

(b)

16.2 SHEPD, in respect of the Distribution Connection Works, and NGET and/or SHETL (as applicable) in respect of any Transmission Construction Works, reserves the right to stop work and remove all SHEPD, NGET and/or SHETL employees, officers, agents and SHEPD, NGET and/or SHETL equipment from the Customer's premises or site if in SHEPD's, NGET's and/or SHETL's reasonable opinion the Health & Safety at Work Act 1974 and its associated Regulations are not being complied with by the Customer at the relevant premises or site(s). 16.3 SHEPD, in respect of the Distribution Connection Works and NGET and/or SHETL (as applicable) in respect of any Transmission Construction Works will not allow its employees, officers and agents to return to the Customer's premises or site nor to restart the work until satisfied the Customer is complying with the said Act and its associated Regulations. 16.4 The Customer shall bring this requirement to the attention of the Customer's employees, contractors and subcontractors working on the premises or site(s). 16.5 Where the Connection is to be provided for a wind farm development, the Customer shall ensure that the minimum horizontal clearance from the centre of each wind turbine tower to the nearest overhead line conductor is not less than 1.5 times the height of the completed wind turbine, measured from the blade tip at its highest position to normal ground level. 16.6 The Customer shall comply with the other safety requirements indicated in Appendix 4: Working in Proximity to Overhead Lines & Underground Cables attached to this Offer. 16.7 This Offer is made on the basis that the Distribution Connection Works and/or Transmission Construction Works will not be undertaken on contaminated land. SHEPD, SHETL and/or NGET shall be entitled to refuse to commence or continue work in the event that it becomes aware that any of the Works are to be undertaken on land identified as contaminated. The Customer shall be responsible for remedial works on property owned or leased by the Customer or under the control of the Customer, to the reasonable satisfaction of SHEPD, SHETL and/or NGET (as applicable). Where the contaminated land is not on property owned or leased by the Customer or under the control of the Customer, the Customer shall be liable to pay any additional costs incurred by SHEPD, howsoever incurred.

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17.

DISPUTES

17.1 The Customer's attention is drawn to Condition 7 of the SHEPD Distribution Licence which the parties accept without limitation applies to any dispute between SHEPD and the Customer in relation with any of the terms of this Offer including issues relating to the Connection Works and provides that any such dispute may be referred by either SHEPD or the Customer to the Authority for their determination. . 17.2 Nothing contained in this Offer shall prevent or inhibit the Customer in referring any matter or dispute to the Authority for their determination under any applicable terms of the Electricity Act 1989, as amended. 18. LIABILITIES AND INDEMNITIES

18.1 Subject to Clause 18.4 hereof and save where any provision of this Agreement (as defined in Clause 21.1 hereof) provides for an indemnity, the respective liability of SHEPD and the Customer (and their respective officers, employees, contractors or agents) (the "Party Liable") to the other (and its respective officers, employees, contractors or agents) in contract, delict, negligence or otherwise arising out of or in relation to this Agreement shall be limited to one million pounds sterling (1 million) per incident or series of related incidents. 18.2 Nothing in this Agreement shall exclude or limit the liability of the Party Liable for death or personal injury resulting from the negligence of the Party Liable, or any of their officers, employees, contractors or agents, and the Party Liable shall indemnify and keep indemnified the other party, its officers, employees, contractors or agents, from and against all such and any loss or liability which such other party may suffer or incur by reason of any claim on account of death or personal injury resulting from the negligence of the Party Liable or any of its officers, employees, contractors or agents. 18.3 In relation to third party claims for damage to property belonging to that third party only, each of SHEPD and the Customer shall indemnify and keep indemnified the other from and against all losses, damages, costs (including legal costs), claims or other liability that arises as a direct result of the indemnifying party's or its officers', employees', contractors' or agents' negligent or wilful act or omission or breach of this Agreement provided that the indemnified party shall not compromise or settle any such claims, costs, proceedings or demands without the written consent of the indemnifying party (which shall not be unreasonably withheld) and shall permit the indemnifying party to defend the same in the name of the indemnified party at the indemnifying party's expense. 18.4 Subject to Clause 18.3, neither SHEPD nor the Customer (nor any of their respective officers, employees or agents) shall in any circumstances whatsoever (including, without limitation, negligence) be liable to the other, arising out of or in Connection with this Agreement, for any:(a) (b) (c) any direct or indirect loss of profits, business or anticipated savings; or loss of revenue, loss of use, loss of contract or loss of goodwill; or any indirect or consequential loss.

18.5 Each provision of this Clause excluding or limiting liability shall be construed separately, applying and surviving even if for any reason one or other of these provisions is held inapplicable or unenforceable in any circumstances and shall remain in force notwithstanding the expiry or termination of this Agreement. ^ 18.6 Subject to Clauses 18.7 and 18.8 and to the following provisions of this Clause 18.6, each Party (the "Indemnifying Party") will forthwith on demand indemnify the other Party (the "Indemnified Party")(without prejudice to any other right or remedy of the Indemnified Party under this Agreement) against any loss or liability which.the Indemnified party incurs under the CUSC or any Bilateral Agreement or Mandatory Ancillary Services Agreement (each such term as defined within the CUSC) relating solely to the Connection ("Relevant CUSC Agreement"), to the extent that such loss or liability arises directly out of any breach of this Agreement by the Indemnifying Party provided that:(a) (b) the Indemnified Party has taken and continues to take all reasonable steps to minimise the amount of its aforesaid loss or liability; the extent of the Indemnifying Party's liability under this Clause 18.6 shall be reduced to the extent that the Indemnified Party's acts or omissions have contributed to the relevant breach; and
Page 14

(c)

the Indemnified Party shall not compromise or settle any such claims, costs, proceedings or demands without the written consent of the Indemnifying Party (which shall not be unreasonably withheld) and shall permit the Indemnifying Party to defend the same in the name of the Indemnified Party at the Indemnifying Party's expense.

18.7 Both Parties acknowledge and agree that their liability under the CUSC and any Relevant CUSC Agreement is limited as provided for in paragraph 6.12 of the CUSC (as amended from time to time). The Parties confirm that, as at the date of this Agreement, within the Relevant CUSC Agreement there are no: (a) (b) (c) (d) additional liquidated damages provisions; additional indemnities, warranties; additional payment or reimbursement provisions, additional

additional provisions which have a similar commercial effect to those described in paragraphs (a) and/or (b) above; or additional provisions which expose the Indemnified Party to any liability in excess of 5 million per incident or series of incidents or to any loss of a nature similar to that envisaged by Clause 18.4;

to those contained within the CUSC {together and separately the "Provisions"). To the extent the preceding confirmation given by the Indemnified Party is incorrect the Indemnifying Party shall have no liability pursuant to Clause 18.6 insofar as the liability arises from any such Provisions. 18.8 The maximum liability of the Indemnifying Party in respect of any event or related series of events shall not exceed that which would have applied had the provisions of paragraph 6.12 of the CUSC applied in respect of such event or related series of events and the loss or liability of the Indemnified Party been limited thereby. 18.9 For the avoidance of doubt, these Clauses 18.6 to 18.9 shall apply to any amendments to the CUSC in accordance with its terms and NGET's Transmission License during the term of this Agreement. FORCE MAJEURE

19.

19.1 Neither SHEPD nor the Customer shall be liable whether in contract, delict or otherwise for any failure to comply with the terms of this Offer to the extent that such failure is caused in relation to that party by any event or circumstance which is beyond the reasonable control of that party and which results in or causes the failure of that party to perform any of its obligations hereunder. It is agreed that lack of funds shall not be interpreted as an event or circumstances beyond the reasonable control of the Customer. 20. PERIOD FOR ACCEPTANCE

20.1 This Offer is open for acceptance for 30 days from the date of issue. 21. TERMINATION

21.1 This Agreement shall take effect from the date of acceptance of this Offer and shall continue in force, unless terminated earlier in accordance with its terms, until energisation of the Connection. 21.2 Without prejudice to any other rights of SHEPD contained within this Agreement, where the Customer is in breach of the Agreement and such breach is capable of being remedied and is not so remedied within seven days after written notice has been given to the Customer then SHEPD may terminate the Agreement, and the provisions of Clause 21.7 shall apply and in such an event the Customer shall pay to SHEPD all sums due hereunder on receiving an invoice.
21.3
If:

(a) (b) (c)

by 30th September 2010 the Customer has not fulfilled the Conditions Precedent detailed in condition 1.2 hereof; or, by 30th September 2011 the Customer has not completed the CDCW to the extent necessary for SHEPD to complete the Non-Contestable Distribution Connection Works; by 30th November 2011 the Customer's premises and/or site(s) works including, without limitation, the Customer's generation facility and/or any CDCW have not been completed; or
Page 15

(d)

at any time following acceptance of this Offer in the opinion of SHEPD (acting reasonably) the Customer has not satisfactorily progressed is not satisfactorily progressing the development of the Customer's generation facility and/or works (including, where applicable, any CDCW) to achieve the estimated Connection date indicated in Clause 6.

then SHEPD (acting reasonably) may at any time thereafter by notice in writing forthwith terminate the Agreement and in that event SHEPD shall have no liability to the Customer in respect thereof save to refund any sums overpaid (if any) in respect of the works carried out to date of such notice. 21.4 At any time prior to the completion of the Connection Works, the Customer may terminate the Agreement by giving not less than 14 days written notice to SHEPD.
21.5
If:

(a) (b)

any sum due by the Customer to SHEPD shall at any time be in arrears and unpaid for more than 28 days after a formal demand for it has been made; or the Customer becomes insolvent within the meaning of the Insolvency Act 1986 as amended or substituted from time to time or has a receiver or administrator appointed or commences to be wound up, other than for the purposes of reconstruction, or enters into any scheme or arrangement with one or more of its creditors; or there shall be any material breach or any persistent contravention of any of the Customer's obligations contained in the Agreement which remain unremedied after reasonable written notice of such breach or contravention,

(c)

then SHEPD may at any time thereafter by notice in writing forthwith terminate the Agreement. 21.6 This Offer supersedes any Offer(s) previously issued to the Customer by SHEPD the terms of said previous Offer(s) hereby being confirmed as having been withdrawn. 21.7 In the event the Agreement is terminated (howsoever) pursuant to this Clause 21 or pursuant to any other provision of this Agreement, the Customer shall remain liable and shall be obliged to pay to SHEPD: (a) in respect of the Distribution Connection Works:(i) (ii) (iii) (b) all costs, charges and expenditure (together with a reasonable allowance for profit) incurred by SHEPD up to the date of termination; and, all costs, charges and expenditure which SHEPD is liable for as a result of this Agreement; and, all costs, charges and expenditure for any additional works required to render existing works safe to the reasonable satisfaction of SHEPD; and

in respect of the Transmission Construction Works (if any), all costs, charges and expenditure which SHEPD is liable to pay NGET as a result of its Agreement with NGET for the provision of the Transmission Construction Works.

SHEPD shall use reasonable endeavours to mitigate its liability to third parties in respect of all costs, charges and expenditure for which it is liable as a result of the termination of this Agreement. 21.8 In the event the Agreement is terminated under this Clause 21, SHEPD may, if so requested by the Customer and subject to requesting any necessary approval from the Authority, issue a new Offer to the Customer, on terms and conditions of SHEPD's Connection and Use of System Charging Methodologies applicable at that time. In the event that NGET terminates its agreement with SHEPD in relation to any Transmission Construction Works relevant to this Agreement, then SHEPD shall be entitled to terminate this Agreement upon written notice to the Customer.

21.9

21.10 Where NGET terminates its agreement with SHEPD in relation to any Transmission Construction Works relevant to this Agreement as a result of SHEPD breaching the terms of such agreement and Clause 21.9 applies then provided such SHEPD breach is not a result of Force Majeure or as a result of the Customer (in any way) causing SHEPD to breach, the Customer shall have no liability to SHEPD pursuant to the terms of Clause 21.7. 21.11 SHEPD shall be entitled to terminate this Agreement in the event Clause 1.2 (b), 4.3 (c) or Clause 25.5 applies.
Page 16

21.12 In the event that NGET reimburses to SHEPD any sum originally paid by the Customer pursuant to Clause 21.7 (b) then SHEPD shall make a similar reimbursement to the Customer. 21.13 The provisions of Clauses 21.7, 21.10, 21.12 and any provision hereunder regarding payment shall survive termination of this Agreement. . 22. NOTICE FOR WITHDRAWAL

22.1 Due to the interaction of offers for connection to the SHEPD network, SHEPD reserves the right to withdraw this Offer at any time prior to acceptance by the Customer on giving notice in writing of such withdrawal to the Customer. The Offer shall be deemed to have been withdrawn on the date of the notice. The withdrawal of the Offer by SHEPD shall be without prejudice to the rights of the Customer to request SHEPD to make a new offer in respect of the Connection. 23. 23.1 ASSIGNMENT Subject to this Clause 23, the Customer may only assign its rights and obligations under this Agreement with the prior written approval of SHEPD (such approval not to be unreasonably withheld or delayed).

23.2 The Customer warrants and undertakes that in the event of it assigning its rights and obligations under this Agreement in accordance with Clause 23.1 it will promptly and without deduction pay all sums (if any) owing under this Agreement up to the date of assignment. 23.3 The Customer acknowledges that SHEPD may, prior to consenting or otherwise to a proposed assignment under this Clause 23, perform credit checks on any proposed assignee to establish such proposed assignee's ability to discharge its payment obligations under this Agreement and may request that such proposed assignee provide a guarantee or other form of bond, in terms acceptable to SHEPD, as a condition of any written consent. 23.4 In the event of an assignment under this Clause 23 the date(s) referred to in Clauses 6 and Clause 21 will apply notwithstanding the date of any such assignment. GOVERNING LAW

24.

24.1 This Offer and any resulting Agreement shall be subject to and construed in accordance with Scottish law and, subject to the terms of the Agreement, the Parties hereby submit to the exclusive jurisdiction of the Scottish Courts. 25. SECURITY AND UNDERWRITING

25.1 This Offer for Connection is conditional upon and subject to the Customer having and maintaining an Approved Credit Rating or, in the absence of such, providing and maintaining security cover or other underwriting arrangements on terms satisfactory to SHEPD (the "Security") particularly in relation (but not limited) to the values of: (a) the Distribution Connection Works to be carried out by SHEPD, which shall include the charges indicated in appendix 2A or 2B (as determined by the Customer's completion of the Customer Acceptance Form within this Offer or Agreement) and, where applicable, the value of CAC stated in Clause 5.4 (the "Distribution Security Amount"); and any Transmission Construction Works, which (if applicable) shall include the value of the Customer's estimated underwriting obligations indicated in Appendix 3 (the "Transmission Security Amount").

(b)

The Distribution Security Amount and the Transmission Security Amount are together or individually the "Secured Liabilities" and are subject to amendment in accordance with the terms of this Agreement, The Customer shall notify SHEPD of it's credit rating upon acceptance of this Offer and shall thereafter notify SHEPD of any changes to its Credit Rating prior to energisation of the Connection. In the event the Customer does not hold an Approved Credit Rating, the Customer shall provide Security to cover the Secured Liabilities in one of the forms specified in Clause 25.2.

Page 17

25.2 Forms of Security 25.2.1 The Customer may provide Security in one of the following forms: (a) (b) (c) a Performance Bond or Letter of Credit from a Qualified Bank for the periodic amount stated as the Secured Liabilities; or, a cash deposit in a bank account for at least the periodic amount stated as the Secured Liabilities; or, a Performance Bond or Guarantee from a Qualified Company for the periodic amount stated as the Secured Liabilities.

All such forms of Security shall be on terms satisfactory to SHEPD in its absolute discretion. 25.3 SHEPD reserves the right to periodically revise the value of the Secured Liabilities at such times as: 25.3.1 25.3.2 SHEPD revises the Distribution Security Amount, in accordance with the terms of this Agreement; and/or SHEPD receives from NGET a revised estimate of the Transmission Security Amount,

25.4 SHEPD shall notify the Customer in writing of the value of the Secured Liabilities and the Customer shall provide Security to the value of or the revised value of the Secured Liabilities within 10 working days of receiving such notification. 25.5 In the event that the Customer does not provide or maintain the required value of the Secured Liabilities in accordance with the terms of this Clause 25, then SHEPD shall at any time thereafter be entitled to (a) (b) to refuse to commence or continue work on the provision of the Connection or to terminate this Agreement in which event the provisions of Clause 21.7 shall apply.

25.6 In the event that SHEPD does hot exercise its right to terminate this Agreement pursuant to Clause 25.5 (b) but exercises its rights under Clause 25.5 (a) then without prejudice to SHEPD's right to terminate at any time pursuant to Paragraph 25.5, SHEPD shall be entitled to amend this Agreement (including, without limitation, any of its Appendices or Schedules). 25.7 The obligations to provide Security under this Clause 25 shall continue until all sums due under this Agreement have been paid in full and shall survive termination of this Agreement. 26. VARIATIONS

The Customer and SHEPD acknowledge and agree: (a) that no variations of this Agreement, except for those expressly provided for within the terms of this Offer, shall be effective unless made in writing and signed by or on behalf of both parties. Each party shall effect any amendment required to be made to this Agreement by the Authority as a result of a change in the Licence or any order made pursuant to the Electricity Act 1989 (as amended) or as a result of settling any of the terms hereof and the Customer hereby authorises and instructs SHEPD to make any such amendment on its behalf and undertakes not to withdraw qualify or revoke such authority or instruction at any time. either party shall at any time be entitled to propose variations to this Agreement by notice in writing to the other party. SHEPD and the Customer shall negotiate in good faith the terms of any such variations but if a variation to the Agreement has not been agreed and put into effect within three months after it has been proposed either Party shall be entitled to refer the matter to the Authority pursuant to SHEPD's Distribution Licence as if the variation were a new Agreement as referred to in that Condition. The parties shall give effect to the determination of the Authority and shall enter into any Agreement supplemental to this Agreement as shall be necessary to give effect to any variation agreed or so determined.

(b)

Page 18

26.2

At this time SHEPD is unable to provide details of the works to be carried out on the transmission system to allow the Customer to connect to SHEPD's Distribution System. Where SHEPD is in receipt of the appropriate information from NGET SHEPD shall, as soon as reasonably practicable, propose to the Customer an Agreement to Vary containing such variations to this Agreement as are necessary to reflect the Transmission Connection Works, including but not limited to, any changes to the Distribution Connection Works, their cost or the Connection Date required to be made as a result of the Transmission Connection Works. The Agreement to Vary shall include the Works, Cost and any other terms and conditions as SHEPD in its absolute discretion requires. If SHEPD is not in receipt of the appropriate information from NGET shall notify the Customer accordingly.

26.3 The Customer undertakes on an annual basis to inform SHEPD of the progress which the Customer is making with its proposed project and its desired Connection Date and to confirm that its requirements remain unchanged. 26.4 The Agreement to Vary referred to in Clause 26,2 above shall be open for acceptance for a period of one month from receipt. If the Customer does not accept such Agreement to Vary within one month of receipt then SHEPD shall be entitled to terminate this Agreement 26.5 With effect from acceptance of such Agreement to Vary the provisions of this Agreement, amended by such Agreement to vary, shall have full force and effect and the provisions of this Clause 1.1 shall cease to have any further force or effect. 26.6 At any time prior to the Customer's acceptance of an Agreement to Vary issued by SHEPD pursuant to Clause 26.2 above, the Customer has the right to terminate this Agreement by written notice to SHEPD. This right expires with effect from the Customer's acceptance of such an Agreement to Vary,

27.

WAIVER

No waiver by any party of any of the requirements hereof or of any of that party's rights hereunder shall be effective unless given in writing and signed by or on behalf of that party and no forbearance, delay or indulgence by any party in enforcing the provisions of this Agreement shall prejudice or restrict the rights of that party nor shall any waiver by any party of any of the requirements hereof or any of that party's rights hereunder release any other party from full performance of that other party's obligations stated herein.

Page 19

CUSTOMER ACCEPTANCE FORM HORSHADER WIND GENERATING STATION, DALBEG, ISLE OF LEWIS I/ We* hereby accept for and on behalf of Horshader Community Development Ltd, SHEPD's Offer, dated 11h March 2010, for the Connection on the terms and conditions contained in said Offer.

Offer for Connection From Clause 3.8: All Distribution Connection Works From Clause 3.9: Non-Contestable Distribution Works only From Clause 3.11: Transmission Connection Works From Clause 4.5.1: Payment Option 1 From Clause 4.5.3: Payment Option 1 From Clause 4.6.1: Payment Option 1

Payment Option * Selected From Clause 4.5.2: Payment Option 2 From Clause 4.5.4: Payment Option 2
Not

From Clause 4.6.2: Payment Option 2

Not

Applicable

Applicable

('Please indicate preference by initialling the Connection option and payment option selected) I / We* wish to appoint Scottish and Southern Energy's Meter Operator Services * / other* as the alternative meter operator for the facility.

(Specify)
(*Delete and complete as required)

Signature:

Witness:

Print name:

Print name:

Chairman/Director/Partner/Company Secretary* (* Please delete and complete as required)

Witness Address:

Date of acceptance:. Signed as an authorised representative for and on behalf of Horshader Community Development Ltd. Note: This Offer should be signed by the applicant personally or if the connection is requested by a company, an appropriate and authorised representative of that company. The signatory's position within the company should be specified together with a statement that he/she is signing on behalf of the company.
Page 20

APPENDIX 1: DISTRIBUTION CONNECTION WORKS 1 1.1 Description of the Distribution Connection Works General Description of the Distribution Connection Works The Distribution Connection Works required for the Connection are: 1.1.1 1.1.1 The generator connection will be provided by teeing onto the Callanish / Barvas 11 kV circuit 012 at overhead line pole 249 and laying approximately 215 metres of 70mm2 Al underground cable to a GRP clad 11kV substation / switchroom building. An LV auxiliary supply will be provided by establishing an 11 kV/LV transformer on pole 249 and laying up to 215m of LV underground cable in the same trench as the 11 kV cable to the 11kV switchroom at the generating station. At Horshader Wind Generator Substation, establish an extensible 11 kV metering Ring Main Unit fitted with NVD protection and remote control facilities. On the Ring Main Unit fit an extensible 11kV circuit breaker and short length of 11kV cable to a fully automatic, containerised STATCOM/D-VAR device and associated 11kV/LV transformer (the "RPCE") located on a suitable plinth provided by the Customer adjacent to the generating station to control the steady state and transient voltage levels on the local 11kV network, Ail cable track excavation and reinstatement works will be provided by the customer from the base of pole 249 to the generator substation and RPCE with SHEPD laying and blinding the cable. For isolation purposes an air break will be erected on pole 249. Establish the necessary communications links and installation of SCADA facilities at the generating station to allow the 11 kV plant and equipment to be remotely monitored and controlled from SHEPD's Control Centre. Carry out project supervision, equipment specification and plant commissioning. The point of supply / commercial boundary will be the generator side terminals of SHEPD's 11kV metering unit at Horshader Wind Generating Station.

1.2

Non-Contestable Distribution Connection Works The Non-Contestable Distribution Connection Works that shall be undertaken by SHEPD are: 1.2.1 All works associated with changing pole 249, erecting 11kV air-break isolator and 11kV/LV auxiliary transformer, including the erection and connection of the pre-terminated contestable 11 kV cable and associated lightning protection system. 1.2.2 The supply, installation and commissioning of the necessary telecommunications links and interfaces to the existing SHEPD SCADA system to allow remote control and monitoring of the 11 kV switchgear/metering unit at Horshader Wind Generating Station. 1.2.3 A review of the voltage control settings on the Callanish 11 kV network. 1.2.4 The design and specification of all connection works. 1.2.5 Obtaining all the necessary wayleave and planning consents required for all connection works.

1.3

Contestable Distribution Connection Works The Distribution Connection Works that may be undertaken by SHEPD or the Customer, depending on the Customer's form of acceptance of the Agreement are: 1.3.1 The supply, installation, testing and commissioning of a suitably rated 11kV extensible Ring Main Unit, with 11kV metering unit and extensible circuit breaker with 11kV metering unit located in a suitably segregated switchroom provided by the Customer at the generating station. The 11 kV metering RMU must be fitted with an actuator on the incoming 11 kV switch that is suitable for remote operation and monitoring by SHEPD. The metering RMU circuit breaker must be fitted with overcurrent, earth fault and Neutral Voltage Displacement protection, and associated metering and protection class C.T's, V.T's and multi-core cabling. The extensible circuit breaker must be fitted with overcurrent and earth fault protection and associated metering and protection class C.T's, V.T's and multi-core cabling.

Page 21

13.2

The supply, installation, testing and commissioning of a continuously variable, harmonic filtered, air cooled, containerised STATCOM/D-VAR type device (RPCE) with a continuous minimum rating of + 400 kVAR (cap) to - 700 kVAr (ind), complete with a fully automatic control system with sub-cycle full range response times and associated 11 kV interface transformer(s) located on a plinth provided by the Customer adjacent to the generator substation at Horshader Wind Generating Station, including the supply, installation, jointing, testing, and commissioning of all associated, AC, DC, control and communications multicore LV cabling systems in trenches excavated, bedded with suitable material, ducted, and permanently reinstated by the Customer. The Customer will be responsible for meeting all costs associated with providing a suitable modem along with the installation, maintenance and rental of a suitable broadband enabled telecommunications link to interface with the control system of the RPCE.

1.3.3 Provision of a detailed cable route survey/schedule with suitable map, full landowner/tenant information, a completed Environmental Impact Assessment or any other information requested by the relevant Planning Authority, in sufficient detail to allow SHEPD to obtain all the necessary wayleave and planning consents for the Contestable Distribution Connection Works. 1.3.4 The supply, installation, jointing, testing and commissioning of up to 215 metres of 3cx70mm2 Al XLPE HkVvUnderground cable in a trench excavated, suitably bedded and permanently reinstated by the Customer, between the cable terminal pole referred to in Clause 1.2.1 and incoming Ring Switch on the 11 kV metering RMU at the Generating Station Substation (with sufficient length to allow SHEPD to erect the cable terminations and lightning arresters within 1.1 metres of the overhead line conductors). The 11kV cable must be installed in 125 mm Black PVC ducts at all positions along the route that will be crossed by vehicular traffic. 1.3.5 The supply, installation, jointing, testing and commissioning of up to 15 metres of 3 core 70 mm2 Al XLPE 11 kV underground cable (including suitable cable bedding material, cable marker and protection tape) between the extensible Circuit Breaker on the 11 kV metering RMU at the Generating Station and the DSTATCOM/D-VAR 11kV interface transformer. 1.3.6 The supply, jointing, testing and commissioning of up to 215m of 4c 95 mm2 Al, Wavecon LV underground cable and 5m of 35sqmm Al, split concentric service cable between pole 249 described in clause 1.1.1 and the auxiliary supply LV cut-out fuse unit at Horshader Wind Generating Station (with sufficient length to allow SHEPD to erect the pre-terminated cable to the LVfuse units of the 11kV/LV transformer). 1.3.7 The supply of suitably rated 11 kV polymeric lightning arresters and earthing conductor for installation by SHEPD on pole 249 referred to in Clause 1.2.1. 1.3.8 The supply, installation and testing of a metering panel suitable for a meter operator to install COP 5 import/export metering, including the supply and installation of the associated multicore cabling to connect to the current and voltage transformers in the 11 kV metering unit detailed in 7.3.1 above. The location of the metering panel will be by mutual agreement. 1.3.9 Any tree and scrub clearing required over the contestable 11kV underground cable route. 1.3.10The supply, installation, testing and commissioning of a 11kV earthing systems associated with the cable installation and the switchgear at the generating station.

Page 22

APPENDIX 2A: PAYMENT SCHEDULES

APPENDIX 2A: ALL WORKS CONNECTION WORKS ONLY PAYMENT SCHEDULE

This is APPENDIX 2A referred to in the Offer by SHEPD to Horshader Community Development Ltd for the Connection at Horshader Wind Generating Station, Dalbeg, Isle of Lewis:

Payment

Payment Date

Value (Excl. VAT)

Credit Advances

Payments received to the date of this Offer from the Customer Invoice at acceptance 31st August 2010 31st August 2011

5,000.

Payment 1

144,294

Payment 2

283,589

Final Paymant

144,295

Total

577,178

Notes to the Payment Schedule: (1) (2) All payments are due within 30 days of invoice. All sums due from the Customer must be paid in full prior to energisation of the Connection.

Page 23

APPENDIX 2B: NON-CONTESTABLE CONNECTION WORKS ONLY PAYMENT SCHEDULE This is APPENDIX 2B referred to in the Offer by SHEPD to Horshader Community Development Ltd for the Connection at Horshader Wind Generating Station, Dalbeg, Isle of Lewis:

Payment

Payment Date

Value (Excl. VAT)

Credit Advances

Payments received to the date of this Offer from the Customer Invoice at acceptance 31st August 2010 31s' August 2011

5,000 32,973 60,948

Payment 1 Payment 2

Final Paymant

32,974

Total

131,895

Notes to the Payment Schedule: (1) (2) All payments are due within 30 days of invoice. All sums due from the Customer must be paid in full prior to energisation of the Connection.

Page 24

APPENDIX 3: TRANSMISSION CONSTRUCTION WORKS 1. THE TRANSMISSION CONSTRUCTION WORKS 1.1 SHEPD have in this Offer informed the Customer that certain Transmission Construction Works require to be completed and commissioned before the Customer's generation facility can be connected to the SHEPD Distribution network and the Connection energised. 1.2 Security may be required via a form of collateral approved by SHEPD to cover costs for Transmission Construction Works chargeable by NGET to SHEPD in the event the Customer terminates this Offer prior to energisation ("NGET Underwriting"). In the event of the Customer terminating this Agreement, the Customer shall be liable for the value of NGET Underwriting and charges applicable at the time of termination. 1.3 The Customer should take due account when planning and undertaking the CDCW (if applicable) and the generation facility works that regardless of whether SHEPD's or the Customer's works have been completed, the Customer's generation facility cannot be connected to the SHEPD Distribution network: 1.3.1 until all appropriate agreements indicated in Clause 11,1 have been executed; and, 1.3.2 until NGET confirm, in accordance with Clauses 11.2 and 11.3 of this Agreement, that all Transmission Construction Works are completed to the extent necessary to enable energisation. 1.4 The following items indicate the scope of the Transmission Connection and/or Infrastructure Works, the estimated charges for such works and the programme date and timescales in relation to the Connection. The Customer shall be deemed to accept the parameters below, in the event they accept this Offer, subject to SHEPD's rights to vary the Agreement.

2. TRANSMISSION CONNECTION WORKS COMPLETION DATE Completion Date for Transmission Connection Works: To be advised

3. SCOPE OF TRANSMISSION CONNECTION WORKS (a.) Transmission Connection Works To be advised (b.) Other Distribution Works To be advised

4.

PAYMENT SCHEDULE OF CHARGES DUE FOR TRANSMISSION CONNECTION WORKS; Payment Schedule 4.1: Transmission Connection Works Milestone Description Offer Acceptance Contract Placement of Main Plant Items Mobilisation Commencement of Transmission Connection Installation Completion of Transmission Connection Installation Completion of Testing and Commissioning Total Capital Contribution Charge SHEPD Payment Date To be advised SHEPD Payment Value To be advised
1!

ti ii ii n ii

II

II

"

II

it

Page 25

Notes to Payment Schedule 4.1: The SHEPD Payments set out in the above are indicative and to a schedule of charges due from SHEPD to NGET in respect of Transmission Connection Works required for the Connection. SHEPD reserves the right to revise the charges to the Customer to reflect any changes to the charges advised to SHEPD by NGET. (iii) When invoiced these charges shall be subject to adjustment by a factor equal to the movement in RPI between the effective date of the relevant agreement between NGET and SHEPD and the month immediately preceding the date of such invoice. All sums indicated above are exclusive of VAT, which will be applied at the applicable rate at the date of the invoice. Where applicable, SHEPD may issue invoices to the Customer at least 30 days in advance of the SHEPD Payment Date. All payments from the Customer will be due within 30 days of Invoice. All sums due from the Customer must be paid in full prior to energisation of the Connection.

(iv) (v) (vi)

5. TRANSMISSION INFRASTRUCTURE WORKS User Triggered To be advised (a) Transmission Infrastructure Works (H1):

(b)

Wider Transmission Infrastructure Works (H2):

To be advised

(c)
(d) (e) (f)

NGET Works Seven Year Statement Works Third Party Works One Off Works Additional Works required in order to comply with any Consents in relation to any of the works in Items (a) - (f) inclusive above.

To be advised To be advised To be advised To be advised To be advised

(g)

Page 26

6. NGET UNDERWRITING Pursuant to Clause 25, NGET Underwriting shall be due and payable by the Customer immediately on termination of this Agreement under Clause 21, if such termination occurs prior to the completion of the Connection and its commissioning. NGET Underwriting is any amount(s) payable by SHEPD to NGET on termination of this Agreement in respect of the Transmission Construction Works required for this Connection. The initial forecast of the Customer's liability and charges for NGET Underwriting is indicated in Table 6.1 below: Table 6.1 : Forecast of NGET Underwriting Period Sum (Including VAT)

To be advised
u
II II II

"
II

Values to be advised " " " " 11 ,

11

11

"

Expand as necessary Notes: 1. 2. The above charges include (where applicable) the Costs of Advance Services Work indicated in this Appendix 3, Item 7, Advance Services Work(s). The charges specified in Table 6.1 above are stated at (to be advised) prices. When invoiced they shall be subject to adjustment by a factor equal to the movement in RP| between the effective date of the relevant agreement between NGET and SHEPD and the month immediately preceding the date of such invoice.

The above Table 6.1 may have initial only or no forecast NGET Underwriting values indicated. SHEPD shall notify the Customer of the applicable forecast NGET Underwriting values as soon as reasonably practicable after SHEPD receives notification of such values from NGET.

7. ADVANCE SERVICES WORK(S) The Advance Services Work(s) are as follows: (i) To be advised

Page 27

APPENDIX 4: WORKING IN PROXIMITY TO OVERHEAD LINES & UNDERGROUND CABLES 1. The Customer shall, pursuant to the Construction (Design and Management) Regulations (2007), ensure that they comply with the requirements of the following Health and Safety Executive documents, HSG47 "Avoiding Danger from Underground Services" and GS6 "Avoidance of Danger from Overhead Electric Power Lines". These documents are available from HSE Books, PO Box 1999, Sudbury, Suffolk C010 2WA (Order hotline: 01787 881165) or from http://www.hsebooks.co.uk. 2. Customers, or their contractors, may use SHEPD's freephone service on 0800 300 999 to obtain information on the location of SHEPD's underground cables and existing overhead lines. It would be helpful if callers provide the Post Code or the National Grid map reference of their development.

SHEPD shall use reasonable endeavours to provide further information upon request.

Page 28

APPENDIX 5: GLOSSARY OF TERMS

"Advance Services Work(s)" the works set out in this Appendix 3: Item 7, Advance Services Work(s) any one of the following: (a) a credit rating for long term debt of A- and A3 respectively as set by Standard and Poor's or Moody's respectively; (b) an indicative long term private credit rating of A- and A3 respectively as set by Standard and Poor's or Moody's respectively; (c) a short term rating by Standard and Poor's or Moody's which correlates to a long term rating of A- and A3 respectively; "Authority" means the Gas and Electricity Markets Authority (GEMA), the regulatory body for the gas and electricity industries established under Section 1 of the Utilities Act 2000; means Contestable Distribution Connection Works; means the date when the generation facility shall be liable for GDUoS charges, which shall be when all associated network connection works, any infrastructure reinforcement works and the EGCA necessary for the commercial operation of the Customer's generation facility are in place so that the SHEPD distribution network is capable of accepting output from the generating facility to the authorised export capacity stated within the EGCA in respect of the premises; means the NGET Connection and Use of System Code; means the Distribution Connection and Use of System Agreement; means the Distribution Code of the Licensed Distribution Network Operators (DNOs) of Great Britain; means the Embedded Generation Connection Agreement, the agreement between the Customer and SHEPD governing the arrangements between the parties following energisation of the Connection; the charges levied by NGET in relation to the Transmission Construction Works under this Agreement; means GB System Operator; means Generator Distribution Use of System Charges; means the Grid Code that is required to be drawn up by the GB System Operator and approved by the Authority; means a guarantee in favour of SHEPD and in such form as may be acceptable to SHEPD at its absolute discretion and which is provided by a Qualified Company which holds an Approved Credit Rating; means Independent Connections Provider; means an unconditional irrevocable standby letter of credit, in such form as SHEPD may approve at its absolute discretion, issued in favour of SHEPD by a Qualified Bank allowing for partial drawings and providing for the payment to SHEPD forthwith on demand; means the Electricity Distribution Licence granted to SHEPD under the Act; means National Grid Electricity Transmission pic, the company which owns and maintains the electricity transmission system in England and Wales and operates the system across Great Britain in the capacity of GB System Operator; Page 29

"Approved Credit Rating"

"CDCW"

"Connection Start Date"

"CUSC" "DCUSA"
"Distribution Code"

"EGCA"

"Engineering Charges"

"GBSO" "GDUoS"
"Grid Code"

"Guarantee"

"ICP" "Letter of Credit"

"Licence"

"NGET"

"NGET Works"

where applicable, those works to be undertaken by NGET and described as such in this Agreement at Appendix 3, Item 5 (c); where applicable, the works described as such in this Agreement at Appendix 3, Item 5 (g); an on first demand without proof or conditions irrevocable performance bond or performance guarantee executed as a deed in a form satisfactory to SHEPD at its absolute discretion but in any case allowing for partial drawings and providing for the payment to SHEPD on demand forthwith and against SHEPD's delivery to the issuer thereof of a notice of drawing of the amount demanded therein; any United Kingdom clearing bank or any other bank which in each case has a long term debt rating of not less than single "A" by Standard and Poor's or by IVloody's, or such other bank as SHEPD may approve and which shall be available for payment at a branch of the issuing bank;

"One Off Works" "Performance Bond"

"Qualified Bank"

"Qualified Company" "Qualifying Company"

or

means a public company or a private company within the meaning of section 1(3) of the Companies Act 1985 and which is either a shareholder of the Customer or any holding company of such shareholder (the expression "holding company" having the meaning defined in Section 1159 of the Companies Act 2006) and which throughout has the validity period of the Performance Bond or Guarantee holds an Approved Credit Rating; and in Appendix 3 which are required to be completed before the Connection Date; where applicable, the works specified . at Appendix 3, Item 5 (f) (Third Party Works);

"Seven Year Works"

Statement where applicable, the works set out in the NGET Seven Year Statement

"Third Party Works"

"Transmission Works"

Connection where applicable, as defined in Appendix 3, Item 3; means: (a) Transmission Connection Works; (b) (c) (d) (e) Transmission Infrastructure Works; Seven Year Statement Works; One Off Works; and such additional works as are required in order to comply with any relevant Consents in relation to any of the works in (a) - (d) above;

"Transmission Construction Works"

"Transmission Infrastructure Works"

where applicable, as defined in Appendix 3, Items 5 (a) and (b).

Page 30