PowerClip Warranty (3)

PowerClip©
Wind Energy Warranty Program

2009 Copyright© PowerGuard Specialty Insurance Services
CA License No. 0B29370

PowerClip 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 Structure

Stone Point Capital LLC
John Hahn / Dan Francis

Edgewood Parters Insurance Center

PowerGuard Specialty Insurance Services


Background 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 Capital
PRESS RELEASE
Friedman 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 Arsdale
School 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 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 expected
to 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 Structure
PowerGuard Sister Companies


PowerClip Warranty Coverage

Product Defect
Serial Defect
Power Curve
Noise
Availability
Parts and Labor
SIR Cap available


Wind Turbine History


Turbine Parts Breakout


Issues 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, 2001-13

8,000 7,500

7,000

6,000 5,350
5,243
5,000 4,334 4,254
4,000 3,683 3,867

3,000 2,424 2,426

2,000 1,697 1,687

1,000 410 353

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


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

12,000 11,244
10,275
10,000
8,823
8,491
7,862
8,000 7,145 7,351

6,000

4,000 3,005
2,584

2,000 1,482

303
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


Manufacturers Share, 2008

REpow er Systems
Mitsubishi Pow er AG
Systems, Inc. 3.8%
Siemens AG 6.3%
7.6% Acciona Energia
2.8%
Gamesa
Corporacion
Tecnologica, S.A.
8.7%

GE Energy
Suzlon Energy 35.0%
Limited
10.4% Vestas Wind
Systems A/S
22.3%


The US Wind Turbine Market, Average
Wind Turbine Size, 2001-08

2 1.85
1.77
1.8

1.6

1.4 1.29
1.2 1.24
1.2 1.12

1 0.88
0.79
0.8

0.6

0.4

0.2

0
2001 2002 2003 2004 2005 2006 2007 2008


Classification of Installed Turbines

>2.0 MW
8% 1.51-2.0 MW
11%
<750 kW
42%

1.01-1.5 MW
28%
750kW-1.0 MW
11%


The PowerClip Form
Contractual Liability Insurance Policy specifically
tailored for the wind energy industry
Policy form supports warranty commitments of the
Turbine Supply Agreement
Simplified policy form, plus the Turbine Supply
Agreement
Contingent or First Party Coverages
Flexible Coverage Design to Meet Clients Needs.
Coverage Territory: US and Canada
– Note: International Coverage Available.


PowerClip 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 Contacts

Mike McMullen
Managing Principal
PowerGuard Specialty Insurance Services
19000 MacArthur Blvd., Penthouse Floor
Irvine, CA 92612
Tel: 949-417-9191
Cell: 949-697-3470
Email: mmcmullen@powerguardins.com


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