PowerClip Warranty (3)

2009 Copyright© PowerGuard Specialty Insurance ServicesCA License No. 0B29370

PowerClipPowerClip©©Wind Energy Warranty ProgramWind Energy Warranty Program


PowerClip Warranty ProgramPowerClip Warranty Program

What is PowerGuard?– Specialized MGA and Lloyds Cover

Holder.– Personnel with over 20 years Wind

Farm related Experience.– Exclusive Warranty and Property

Programs.


PowerGuard Ownership StructurePowerGuard Ownership Structure

PowerGuard Specialty Insurance Services

Edgewood Parters Insurance Center

Stone Point Capital LLCJohn Hahn / Dan Francis


Background on Stone Point CapitalBackground on Stone Point Capital

Stone Point Capital is a private equity firm that has been making investments in the global financial services industry for more than twenty years. The firm’s investing activities are focused on businesses in the United States, the United Kingdom, Western Europe and Bermuda. Stone Point Capital has an extensive track record of making investments in various sectors of the financial services industry, including banks and depository institutions, outsourcing service providers focused on financial institutions, mortgage services, insurance underwriting, insurance distribution, specialty lending and other credit opportunities, employee benefits and healthcare, and asset management businesses. Stone Point Capital’s organization is comprised of a highly experienced investment team with a long, successful record of making private equity investments and managing businesses in the financial services industry. The firm is led by Chuck Davis and Steve Friedman and is based in Greenwich, Connecticut. Chuck Davis was a general partner and head of Investment Banking Services at Goldman Sachs prior to his retirement in 1994 and Steve Friedman was Chairman of Goldman Sachs until 1994.


Stone Point CapitalStone Point CapitalPRESS RELEASEFriedman Designated Chair of New York Fed Board, Hughes Redesignated Deputy Chair November 8, 2007

NEW YORK—The Board of Governors of the Federal Reserve System designated Stephen Friedman chairman of the board of directors of the Federal Reserve Bank of New York for 2008. He was also appointed a class C director for a three-year term beginning January 1, 2008. Mr. Friedman is chairman of Stone Point Capital, LLC, a private equity firm.

The Board of Governors Redesignated Denis M. Hughes deputy chairman of the New York Fed’s board of directors for 2008. Mr.Hughes, who is president of New York State AFL-CIO, has served as a class C director since January 2006. He joined the board as a class B director in January 2004. Mr. Friedman joined Stone Point Capital in 1998. He is a retired chairman of Goldman, Sachs & Co. Mr. Friedman is chairman of the President’s Foreign Intelligence Advisory Board and of the Intelligence Oversight Board. From December 2002 to December 2004, he served as assistant to President George W. Bush for economic policy and was director of the National Economic Council. Mr. Friedman joined Goldman, Sachs & Co. in 1966 and became a partner in 1973. He was vice chairman and co-chief operating officer from 1987 to November 1990, and co-chairman or chairman from 1990 to 1994.

Mr. Friedman is currently a board member of The Goldman Sachs Group, Inc., Memorial Sloan Kettering Cancer Center, The Aspen Institute and the Council on Foreign Relations. Prior affiliations include chairman of the board, Columbia University and director of Wal-Mart Stores and Fannie Mae. He received a B.A. degree from Cornell University and an LL.B. from Columbia Law School. Mr. Hughes was elected president of the New York State AFL-CIO in March, 1999. Since his election, he has been successful in helping pass legislation that provides farm workers greater minimum wage benefits, as well as legislation regarding pension benefits for New York’s public sector workers. Following the September 11th tragedy, Mr. Hughes coordinated labor’s successful efforts to secure $20 billion in federal funding to help rebuild New York City and New York State.

Mr. Hughes joined the New York State AFL-CIO as a political director and assistant to the president in 1985 and in February 1990 was appointed executive assistant to the president. Mr. Hughes is a graduate of the Empire State Colleges, Harry Van ArsdaleSchool of Labor Studies with a bachelor of science degree. The board of directors of the Federal Reserve Bank of New York consists of nine members, three of whom are appointed by the Board of Governors of the Federal Reserve System as class C directors. The remaining six (three class A and three class B directors) are elected by member banks in the Second Federal Reserve District. Class A directors are drawn from the banking community. Class B & C directors are individuals chosen from professions outside the banking community and typically represent business, industry, agriculture, labor and consumers.


Formation and Funding of EPICFormation and Funding of EPIC

In July 2007, John Hahn, Dan Francis and Stone Point Capital LLC (“Stone Point Capital”) committed $100 million to form Edgewood Partners Insurance Center (“EPIC”). To date, EPIC has acquired three brokerage firms in California and is expectedto close on the acquisition of a leading firm in Northern California in April 2009. In 2008, the Company’s first full year of operation, EPIC generated $30 million in revenues. EPIC is expected to generate in excess of $50 million in revenues in 2009, which will rank the firm among the 50 largest brokers in the U.S. Unlike many of its competitors, EPIC is 100% equity funded and continues to have access to over $50 million in equity capital from Stone Point Capital and the EPIC management team. Stone Point Capital, the manager of the Trident Funds, has invested in a number of insurance and insurance distribution companies, and has a longstanding relationship with the management team of EPIC. Trident IV, the Stone Point Capital fund that has invested in EPIC, has $2.25 billion in committed capital.


PowerGuard Ownership StructurePowerGuard Ownership StructurePowerGuard Sister Companies


PowerClip Warranty CoveragePowerClip Warranty Coverage

Product DefectSerial DefectPower CurveNoiseAvailabilityParts and LaborSIR Cap available


Wind Turbine HistoryWind Turbine History


Turbine Parts BreakoutTurbine Parts Breakout


Issues affecting Wind TurbinesIssues affecting Wind Turbines• Unbalanced turbine blades • Misalignment • Shaft deflections • Mechanical looseness • Foundation weakness • Bearing condition • Gear damage • Generator rotor/stator problems • Resonance problems • Tower vibrations • Blade vibrations • Electrical problems • Inadequate lubrication


The US Turbine Market, Annual Capacity Additions, 2001The US Turbine Market, Annual Capacity Additions, 2001--1313

1,697

410

1,687

353

2,424 2,426

5,243

7,500

5,350

4,3343,683 3,867

4,254

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


The US Wind Turbine Market, The US Wind Turbine Market, Annual Value Forecast, 2003Annual Value Forecast, 2003--13 13

1,482

303

2,5843,005

7,145

11,244

8,8237,862

7,351

8,491

10,275

0

2,000

4,000

6,000

8,000

10,000

12,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


The US Wind Turbine Market, The US Wind Turbine Market, Manufacturers Share, 2008Manufacturers Share, 2008

GE Energy35.0%

Vestas Wind Systems A/S

22.3%

Acciona Energia 2.8%

REpow er Systems AG

3.8%

Mitsubishi Pow er Systems, Inc.

6.3%Siemens AG7.6%

Gamesa Corporacion

Tecnologica, S.A.8.7%

Suzlon Energy Limited10.4%


The US Wind Turbine Market, Average The US Wind Turbine Market, Average Wind Turbine Size, 2001Wind Turbine Size, 2001--0808

0.880.79

1.29

1.121.2 1.24

1.771.85

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2001 2002 2003 2004 2005 2006 2007 2008


The US Wind Turbine Market, The US Wind Turbine Market, Classification of Installed TurbinesClassification of Installed Turbines

>2.0 MW8% 1.51-2.0 MW

11%

1.01-1.5 MW28%

750kW-1.0 MW11%

<750 kW42%


The PowerClip FormThe PowerClip FormContractual Liability Insurance Policy specifically tailored for the wind energy industryPolicy form supports warranty commitments of the Turbine Supply Agreement Simplified policy form, plus the Turbine Supply AgreementContingent or First Party CoveragesFlexible Coverage Design to Meet Clients Needs.Coverage Territory: US and Canada

– Note: International Coverage Available.


PowerClip ApplicationsPowerClip Applications

Wind Turbine Manufacturers– Contingent or First Party Coverage– Balance Sheet Enhancement– Brand Rebuilding After Major Serial Defects– Financial Institution Requirements



Wind Farm Owner / Operator– Extend OEM Warranties with Better

Coverage at Competitive Pricing.– Protected PTC / Cash flows.– Refinancing Gray Market Turbines– Adds Significant Value to Assets Prior to their

Sale.



Financial Institutions / PE Firms– Protect Cash Stream / PTC Revenue– Mitigate Warranty Risk from Turbine

Manufacturers with Weak Balance Sheets.

– Extend Warranty up to 5 years for Refinancing or Asset Purchase.


PowerGuard ContactsPowerGuard Contacts

Mike McMullenManaging Principal

PowerGuard Specialty Insurance Services19000 MacArthur Blvd., Penthouse FloorIrvine, CA 92612Tel: 949-417-9191Cell: 949-697-3470Email: [email protected]

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PowerClip Warranty (3)

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