OPTION AND LEASE
AGREEMENT STRUCTURE

Horizon works with landowners interested in long-term business relationships. There are two phases to this relationship: the option phase and the lease phase.

The option phase gives Horizon Wind Energy the option to exercise the lease once the project is ready to be constructed. The option period usually does not last more than seven years. In some cases, the option is excercised more quickly, but in other cases an extended option period is needed due to regulatory variations at the state or federal level, or due to slower growth of the market for wind energy in the area. Landowners are typically compensated on a per acre versus a per turbine basis during the option phase because the number of turbines on a particular landowner's property could change depending on the wind resource assessment and evolving turbine technology.

Lease terms range from 30-40 years, with escalating royalty schedules and detailed damage provisions. We make frequent visits to the site during the option/lease negotiation phase to ensure good communication between Horizon Wind Energy and the landowners.