Exhibit A

of OREGON MSW1 LLC Partnership LETTER AGREEMENT

Expanded discussion of terms provided by Marni Zollinger,

Renewable Energy Developer

This collection of information is not to be considered an exhaustive treatment of the terms, though it may
be relied upon for providing working definitions and pointing to additional sources of information.

144A debt capital securities This is the class of securities that are restricted from trading in
the US for 2 years. They can be traded overseas prior to the 2 year period elapsing. Upon the
2 year restriction elapsing the securities convert to other classes of securities including
“publicly” traded shares or they are sold to sophisticated investors such as QIBs or Qualified
Institutional Buyers of securities (they operate a large portfolio and are exempt from certain
blue sky rules). More info:
http://www.nasdaqomx.com/listingcenter/usmarket/144a/rule144a/
http://www.bowne.com/securitiesconnect/details.asp?storyID=1834

ARC This is Aggregator of Retail Customers. It is essentially a coop of wholesale buyers of

electrical energy. I believe that in Oregon only commercial entities may enter into an ARC.
More info:
http://www.pjm.com/Calendar%20Events/PJM%20Calendars/Meeting%20Events/2009/March/
12/~/media/committees-groups/task-forces/tf719/20090312/20090312-item-04a-aggregation-
of-retail-sites.ashx

Assignment of Proceeds A document or contract transferring all or part of the revenues,

property, assets, liabilities, or other interests and typically are the financial proceeds that are
transferred from a grantor to a grantee or a third party beneficiary. In this case, the third party
beneficiaries would include the City of Troutdale. More:
http://www.businessdictionary.com/definition/assignment-of-proceeds.html

Balancing Authority Makes sure that the volume of electricity input into the transmission
grid or pipeline is equal to the volume of electricity that is output from the grid or else a
balancing penalty ensues. In electrical energy, this is the responsible entity that integrates
resource plans ahead of time, maintains load-interchange-generation balance within a Balancing
Authority Area, and supports Interconnection frequency in real time. In easier English, it is the
authority that handles the trading between electrical generators and consumers so that
electrical energy is used closest to the generation source (it can’t be helped- the transmission
wires aren’t “smart”) even if technically “sold” far away. Tracking of electrical energy (in and
out) is done with meters. More:
http://www.nerc.com/docs/rap/audits/PGE_Readiness_Audit_Report.pdf

Book-entry Does away with paper records and turns them into electronic records. It is a
system of tracking ownership in document-form (rather than sending actual commodities to and

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fro) which allows for easier trading. Usually, the system is completely automated upon an
electronic platform. More:
http://en.wikipedia.org/wiki/Book_entry

City full faith and credit An unconditional commitment to repay P&I on a debt incurred
by or on behalf of a City. More: http://www.yourdictionary.com/finance/full-faith-and-credit

Collateral In finance, it is the “other valuable consideration” offered as security to a lender

in a loan agreement that enables the Lender to be made whole. Collateral substitution and
perfecting an interest in collateral are elements of an ISDA Master Agreement More:
http://en.wikipedia.org/wiki/Collateral_%28finance%29

constructive sale treatment by the IRS In easy terms, it means that the capital gains tax liability
could be exerted in a transaction involving REPO terms (repurchase agreement) which typically
enables cash to be exchanged for securities at the inception then involves whether or not the
exact same securities are returned or the same class of securities. The IRS imposes capital gains
taxes if shares of stocks or bonds are sold and new shares are purchased and returned. We don’t
want this to happen; we want the original securities pledged to be returned without exception
in order to avoid capital gains tax treatment.
http://www.investopedia.com/terms/c/constructivesalerule.asp
http://dictionary.reference.com/browse/constructive+sale+rule

Co-owner In this MOU, a co-owner is one that obtains an Assignment of Proceeds. Note
that IP contributors are not necessarily considered to have any ownership because they merely
receive royalties.

Cure In secured lending, it is usually the plan and authority to cease trying to collect P&I
payments from the debtor who is not performing, in favor of settling the debt through a
reorganization or restructuring of the loan such as conversion to interest only for a period of
time and then converting back to P&I. It can also refer to a work around- if one track of
obtaining something isn’t working, listed acceptable alternative are cures.

De minimus This refers to Air Quality rules in states. Because many things emit air pollution
but not all can be directly regulated by the Air Quality office (example- our cars) they often
provide some explicit standards which, if anything new is designed to emit beneath the
standards, no Air Quality permit should be filed. Oregon’s de minimus standards have been
provided. More:
http://filebin.ca/myqnmw/OR_airquality_deminimus.pdf

Derivative forward or futures contract In simple terms, a forward contract is an agreement

that entities will transact at a designated time in the future. “I will buy your rolls in 2010” is a
forward contract. However, this contract is not “bankable” or cannot achieve financing until
and unless the agreement is “marked-to-market” on both sides. The contract must be changed
to, “I will buy your rolls at market prices in 2010, with market-adjusted dollars” and then, a bank
can fund according to Office of the Comptroller Letter # 1051. Many entities enter into non-
derivative forward contracts all the time, but if they are seeking financing upon it, the lack of

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connection to the market will very likely cause the financial participants to be unable to
perform. More:
http://en.wikipedia.org/wiki/Derivative_%28finance%29
http://www.psc.state.fl.us/utilities/electricgas/RenewableEnergy/2008_08_20/2008_8_11_OCC
_interpretiveLetter_1051.pdf

dNPV finance/ing Is financing upon the (discounted) futureflow (as collateral) of a

venture. Technically, it is a calculation of something that will flow in the future, displayed in
today’s money. In rough numbers it looks something like this: Project A will have $10 Million
dollars per year in revenues. Because money in the future is worth less than money today, the
financial institution understands that the actual projected revenues:

$10yr1+10y2+10yr3+10yr4+10yr5+10yr6+10yr7+10yr8+10yr9+10yr10 = $100 Million

must be more reasonably handled, thus a discount rate is applied, as follows:

(Let’s say that the discount rate on this industry is 10%)

$10yr1 + 9yr2 +8yr3 + 7yr4 + 6yr5 + 5yr6 + 4yr7 + 3yr8 +2yr9 +1yr10 = $55 Million
(discount is additive)

More:
http://www.finance-glossary.com/define/net-present-value/1801
http://www.investopedia.com/calculator/NetPresentValue.aspx?viewed=1
http://en.wikipedia.org/wiki/Present_value

All federal financing is based upon the concept of dNPV. It is also called “growth,” “futureflow”
or GDP financing. This kind of financing is usually requires investment grade off-take
agreements or collateral and concerns ventures sufficient large that they might affect available
liquidity. If, for instance, I wanted to construct something like a stadium that suctioned away
$100 Million dollars from a local area into the pockets of a few owners not inclined to push it all
back into the local economy, such a condition could be locally catastrophic to other business.
To prevent shock to the local economy, the venture may have the futureflow of the project
evaluated in order to submit the discounted Net Present Value of that cashflow to the federal
agency or Treasury, as collateral on a draw-down of cash (not tax dollars or program funds, but
“GDP” growth money). When the venture has pushed the money into the local economy this
way, the money can slowly removed over time for debt service (while the local economy enjoys
the use of it for many years). Growth financing protects the communities that host such
facilities from economic implosion. Very few projects are properly financed this way, witnessed
by our very low GDP. The Chinese tend to have better calculations- they injected 17% new
currency to match their projected higher GDP just this year for currency to production. Their
new production does not prey on their old producers or place the all producers under economic
hardship competing for currency, rather they compete in the marketplace in a supportive
“suspense” of available liquidity.

Those who fight against growth finance insist that all production should be limited to current
currency supply (meaning that those who produce tomorrow shall be not able to be
remunerated except to make those holding the cash today, richer by interest). Such parties

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tend to have considered local economics only from the view of state agencies- which in general
do not inject growth money (which can be infinite) but rather default to using finite and
constricting tax revenues. The “tea parties” today want available currency to continue to be
constricted in an effort to save something that can only be saved the other way: the value of the
dollar is backed by all production and if that production cannot achieve remuneration the value
of the asset and production-valuations trend to zero. Sufficient currency must be released in
order for the production to be valuated at past prices (aka, when there was sufficient liquidity to
balance production).

http://www.econ.brown.edu/fac/Ross_Levine/Publication/Forthcoming/Forth_Book_Durlauf_Fi
nNGrowth.pdf

The proponents of this ZESC venture favor growth financing and equitable economic policy
(characterized by sufficient currency to match production) over recessive economic policy
(characterized by insufficient currency to match production) so that all who produce can be
remunerated.

DSCR Debt Service to Credit Ratio: If income is 2 and debt service is 1, then you have a DSCR
or 2/1 or 2.0. If your income and your debt service are the same, you have a 1/1 ratio and a
DSCR of 1.0. Many home lenders say that a good rule of thumb to qualify for a home-loan is
that the pending debt service should be equal to no less than 1/3 of your total income. This
translates to 3 total income to 1 debt service or 3/1 or a DSCR of 3.0. More:
http://www.investopedia.com/terms/d/dscr.asp

Electronic platform This is a communication and tracking system that tracks commodities
that are submitted and settled “book-entry”-style. More:
http://www.derivativesstrategy.com/magazine/archive/1999/1299col2.asp

EWG Exempt Wholesale Generator is a category of Market Rate Base Authority that has been
granted finally to independent operators by the FERC in 2008. This allows independents to
participate in the wholesale electricity market. More:
http://library.findlaw.com/1999/Dec/1/126289.html

FERC 523 bond authority An authority granted by the FERC to issue Market Rate Based
securities. More: http://www.ferc.gov/whats-new/comm-meet/052505/E-47.pdf

FMV or Fair Market Value The price that something may be sold at, assuming buyer and
seller are not forced. Calculating a current value is often a combination of dNPV minus
liabilities. Technically, the value of all things change as often as the market for the product
does, however ventures may establish FMV evaluations prior to transactions of ownership.
More: http://www.investorwords.com/1878/fair_market_value.html

cross-collateralization The poor practice of having everything owned serve as collateral (i.e.
the plant in Troutdale is collateral for the plant in Las Vegas) under in two or more financial
commitments, which opportunity is created by lenders exerting a LTV ratio that leaves value
unmonetized. For instance, if property worth $10 Million is used as collateral in a transaction
but the Lender gives a LTV Loan to Value ratio of 20%- or only $2 Million, the owner may feel
“gypped”. Technically, $8 Million of value was unmonetized in the loan, which may tempt the

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owner of the land to cross-collateralize with another lender who may also agree with the
evaluation that the land is worth 10 Million, and agree to an LTR of 30% - or an additional $3
Million. In fact, both loans may be retired without incident. However, while technically the
landowner is only monetizing his value, his is also pledging the land twice- if either loan fails that
bank will seize the whole property. The ZESCs and Principals are forbidden to “double pledge”
any collateral.
More: http://en.wikipedia.org/wiki/Cross-collateralization

GAAP and FASB Generally Accepted Accounting Principles and the Financial Accounting
Standards Board (who adjust the GAAP from time to time)
http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles
http://asc.fasb.org/
http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176154526495

Green-e Certified RECs Renewable Energy Credits that have the Green-e Certificate upon them,
providing easier sale of the tax-credits. Green-e is the nation’s leading independent certification
and verification program of renewable energy tax credits. http://www.green-
e.org/getcert_re_6steps.shtml

Interconnect A point at which there is a custody transfer as in a point of entry into the grid or
a point of embarkation from the grid. Typically this is where energy can be input or taken out of
the wholesale transmission grid. One state’s system:
http://www.energy.ca.gov/distgen/interconnection/california_requirements.html

Interim finance The first loan upon a project, it is often called the construction loan. In housing,
the interim financing is the financing that gets the house built, and the permanent financing
replaces or “takes out” the interim/construction loan. In our case we use the word interim
because our agreement with pending permanent loan partners is that the interim period will be
slightly extended beyond construction to allow for a longer shake down and observation period
of six months. Thus, even though the facility design is new, the permanent lender will be able
to present their debt investors with a performance track record. More:
http://www.businessfinance.com/interim-financing.htm

ISDA Master Agreement International Swaps and Deliveries Association Master

Agreement is a contract which provides the framework for commodities contracts. I have
described it as the “scale” in which a buyer and a seller agree to transact in the future, the scale
adjusts both sides of the agreements to values of the traded items on/near the date of sale.
More: http://en.wikipedia.org/wiki/International_Swaps_and_Derivatives_Association
http://filebin.ca/wunpyn/ISDAmaster.pdf
http://filebin.ca/pqbqdj/ISDA_Power_Annex.pdf

Mark-to-market A derivatives contract which forward or future prices the collateral since
commodities, stocks and bonds change value over time this is a way to ensure that the contract
is balanced. This is an accounting method that spot values and future values involved in trades
are made equal according to the current fair market price at various intervals, which method is
supported by Generally Accepted Accounting Practices
More: http://en.wikipedia.org/wiki/Mark-to-market_accounting

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Model Form Operating Agreement A type of operating agreement that has been favored by
Oil & Gas, Refining and the Movie Industry which need to allocate the party performing or in
charge of the day to day operations. The Plant Manager or Project Operator is charged with
exploiting the BTU values of the feedstock at the plant and the flow and sales of materials,
products, or finished goods from the plant. This authority and the cost of operations are held
accountable under this type of agreement. MFOP are particularly favored because they allow
the developers to address duties, rights and obligations of operators versus non-operators
(holders of assignments).
More: http://contracts.onecle.com/ivanhoe/discovery.jv.2001.03.05.shtml
http://consusgroup.com/previews/138018/
http://filebin.ca/xwdkjj/MFOP_PPT.ppt

MRF Materials Recovery Facility (also called a recycling center) pronounced “merf”

MSW Municipal Solid Waste. The facility is specifically designed today to process Class I
Household waste but may be modified to process additional material.

Net Revenue Interest or NRI This is the amount of revenue that is had after the facility
satisfies its Costs of Goods Sold (COGS) including royalties or overriding royalties.
http://www.glossary.oilfield.slb.com/Display.cfm?Term=net%20revenue%20interest
http://dictionary.babylon.com/NET_REVENUE_INTEREST
http://en.mimi.hu/business/revenue.html

Non-recourse This phrase actually means “not-to-attach-to-you” --- all the ZESC debt is non-
recourse to the Principals. A non-recourse loan is always secured by a pledge of some kind of
collateral. More:
http://en.wikipedia.org/wiki/Nonrecourse_debt
http://www.investopedia.com/terms/n/nonrecoursedebt.asp

NPR No Permit Required – a status that may be granted to a de minimus project after it is
determined that assurances are in place that the project will never emit above a de minimus
rate. Example:
http://www.oregon.gov/ODF/STATE_FORESTS/docs/Special_Forest_Products_Personal_Use.pdf

Owner In this agreement, owners are those who obtain ownership of LLC Assignments of
Proceeds. The LLC’s primary job is to distribute Net Revenue Interests properly. The District,
not the LLC, owns the ZESC Facility. The LLC only owns the net revenue streams.

Permanent finance The second loan, obtained after the construction and operation are
stabilized, of a venture. Typically, this is a lower-interest loan as the greatest risk period is
judged to be over and so terms on the established asset are long. More:
http://www.investorwords.com/3673/permanent_financing.html
https://www.wellsfargo.com/com/realestate_fin/cmo/products/

Pro-rata Means “according to the proportions” that value was contributed. More:
http://en.wikipedia.org/wiki/Pro-rata

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RECs A tax credit that is earned as the physical properties (sometimes called an
environmental properties) attendant in the creation of a RPS-compliant 1 MWh of electrical
energy. This means that every “green” MW of electrical energy creates at least two products-
the electrical energy and also the separate “greentag” or certificate which is a tax credit. Both
the electricity and the REC are tracked upon electronic platforms.
http://www.epa.gov/greenpower/gpmarket/rec.htm
http://www.epa.gov/greenpower/gpmarket/rec_chart.htm

Remarketing Selling something differently in its most-market attractive form.

http://www.answers.com/topic/remarketing

Reverse repurchase agreement One of the oldest forms of secured finance in the world-
placing up collateral against a loan with the intention to return at a specific time with full P&I.
The Lender understands that if the terms of P&I are not met, the Lender may seize the
collateral. It is typically called a Reverse REPO or sometimes just REPO. All transactions at the
Federal Reserve Discount Window (source of our nation’s backstop liquidity) are of this type.
More:
http://en.wikipedia.org/wiki/Repurchase_agreement
http://www.bloomberg.com/apps/news?pid=20601087&sid=ax.FBWNLB5_o

RRED In Oregon, this is a countywide or citywide designation where applicable types of

development receive standard Enterprise Zone exemption if otherwise qualified.
http://www.oregon.gov/OBDD/thezones/home.shtml
http://www.oregon4biz.com/p/RREDZsample.pdf
http://www.oregon.gov/DOR/PTD/docs/303-029.pdf

SCADA Supervisory Control and Data Acquisition- it is a mature technology that can be
summarized as “monitoring and running something by remote control” – multiple measurement
devices reported in real time help to give the plant operator information on sub-functioning
systems before they completely collapse. Also, those with interest in the facility may monitor it
in real-time. SCADA is the compromise made with some state agencies for the NPR status- if the
facility ever emits the state environmental agency can shut down the plant from afar (“deadman
switch”). More:
http://en.wikipedia.org/wiki/SCADA

Take Out The act of satisfying an interim loan with a substitute or permanent loan.
Typically, collateral and all other terms or conditions are modified at this point as well.

TARP’s TALF program

The interim construction collateral is anticipated to be monetized by a Reverse Repurchase
derivative’s transaction instigated under the auspices of an ISDA Master Agreement (with a right
of collateral substitution). This is the structure utilized to substitute the “future flow” of MBR
wholesale grid deliveries that will repay the debt incurred in constructing the ZESC Facility.

UDA Utility Development Agreement- the first draft of this agreement was provided to the
City in March 09 prior to the first meeting. The Draft has since been modified to describe the
conversion of the agreement from the City to the (unspecified-type) District, to allow the costs

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of the creation of the District to be rolled into the Allowable Costs under “legal” and to provide
cures to the City in case of facility abandonment.

RPS Renewable Portfolio Standard which means, energy that is created from a source that is
judged to be compliant with a standard of renewable energy generation portfolio. Yes, it is
rather badly named but it seems to have stuck. There currently isn’t a national RPS legislation
although Cap and Trade requires RPS energy certificates in order to operate. The RPS-
compliant energy creates one Renewable Energy (Tax) Credit also called a “REC” for one
Megawatt/hr. Thus, currently the states are individually creating state standards to obtain a
federal tax credit. This may change shortly.
http://www.energyjustice.net/rps/
http://www.repp.org/rps_map.html
http://en.wikipedia.org/wiki/Renewable_Energy_Certificates

Vertically integrated additional sources of cash flow Just means an additional product that
serves a separate niche market.
http://en.wikipedia.org/wiki/Vertical_market

Vest To re-set the values in accordance with the future or forward financial target, according
to the analysis of the derivatives contract. The vesting procedure also conveys rights to a
holder of an asset at the trigger point assuming that forward terms are met or not met which
defaults to the terms of the trade at the sell or buy price and sets the new price or value at that
time.
http://financial-dictionary.thefreedictionary.com/vest

Working capital The money contributed to a venture, related to day to day capital
required to operate the business not the capital for inventory or feedstocks. More:
http://en.wikipedia.org/wiki/Working_capital

WREGIS Western Renewable Energy Generation Information System, The local electronic
tracking system (book-entry) platform for RECs. More:
http://www.epa.gov/greenpower/gpmarket/tracking.htm
http://www.wregis.org/

Additional References Provided:

Videos upon deltas *in the ZESC facility

The waste shredding into small manageable pieces:
http://www.youtube.com/watch?v=4RndD0f2-
0chttp://www.youtube.com/watch?v=onwV9R6A2EI&feature=channel

Waste grinded to powder for proper fuel prep for the plasma combustor and maximum
efficiency (surface area):
http://www.youtube.com/watch?v=xxuM7xWL5RQ&feature=player_embedded

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 High efficiency ZESC Reverse Vortex Tornado Plasma Combustor:
http://tdzesc.ning.com/video/zesc-rvtc-combustor

Videos showing deltas available *appending to ZESC facility = > DSCR

Manufacturing and Industry:

1. Dr. Henry Liu – Green Brick facility and use the clean fly ash from the facility to produce
more cost effective products.
http://www.youtube.com/watch?v=frgK35vbozIhttp://www.youtube.com/watch?v=1RNjNF4-95U
2. Prefabricated fly ash concrete homes
a. http://video.google.com/videoplay?docid=3890395760672475680#

Tech Comp in 1 pending ZESC

location- Troutdale,
Wind Solar
OR
Most ZESC
Ave. DSCR <12 <13 <IPPs4 2.8
Groundwater No No Yes Yes
Greenhouse Gas No No No Yes
Plan for Solid Waste landfill landfill Flyash-> Flyash->
landfill GrnBrick
BTU Stockpile/reserve No No Yes Yes
City Bonds (full faith & credit)? Yes Yes No No
Ave. Debt Service Term 25 yr 20yr ? 10yr
Permanent 0 0 40-50? 100+
JOB CREATION – TD, OR
Thermal Efficiency na na 20%1 >80+%
$Millions per 1.755 Highly Tipping .25-.35
Megawatt(hour) variabl fee6
Offered Revenues to the City =/<45%
• http://dels.nas.edu/besr/docs/Michaels%20NAS.pdf
• http://www.windustry.com/debt-service-coverage-ratio-dscr
• http://www.jstor.org/pss/1801673
• http://iis-db.stanford.edu/evnts/4199/Report.pdf a survey of 210 WTE projects found to be lower
than other energy projects
• http://www.windustry.org/how-much-do-wind-turbines-cost
• http://www.seas.columbia.edu/earth/wtert/faq.html